Benefitting from Learning Networks in “Open Innovation”: Spin-off Firms in Contrasting City Regions

Abstract

R&D and innovation increasingly take place in networks that extend beyond the boundaries of a single firm, with customers in an important role in the learning processes involved. This phenomenon is captured by the term  “open innovation”. Advantages of open innovation encompass cost reduction and an increased competitiveness. Spatial innovation theory however indicates that the potential of open innovation is not the same for all urban regions, there may be differences between large metropolitan areas and small cities. In this context, the authors compare university spin-off firms in two contrasting urban regions in Europe, Delft in the Netherlands and Trondheim in Norway (a metropolitan area versus an isolated city) with regard to the profile of their learning networks and the contribution of these networks to growth. Learning networks appear to differ in structure and strength, in spatial configuration and also in the influence on job growth. Thus, networks in Delft (in a large metropolitan area) tend to be stronger compared to those in Trondheim (isolated city), whereas the influence of network strength on growth tends to be negative in Delft but positive in Trondheim. Overall, firms in Trondheim tend to rely more on own resources and capabilities and less on learning networks in open innovation.

Acknowledgements

Part of the present analysis was made possible by a financial grant from NICIS (Netherlands Institute of City Innovation) consortium, in particular from the municipality of Delft.

Notes

Data description--We delineated the population of spin-offs from TU Delft and NTNU on the basis of the following criteria. First, the firms needed to satisfy the condition of commercializing knowledge created at a university and were to be found in Delft/Trondheim or their surrounding regions. Further, the firms had to satisfy the condition of “survived in 2006”, be no older than 10 years, and enjoy at least one type of support from the incubation organization/university. We approached all firms in this population (150) and obtained an overall response rate of 66.7% (100 firms). Data were collected using a semi-structured questionnaire in personal face-to-face interviews with entrepreneurs, carried out by the two authors in the period 2005 to mid-2006. Excluding non-survivors is a common source of bias in the results of studies like the current one, however, it appears that mortality rates among university spin-off firms are relatively low in the European Union. Mustar et al. (2007) suggest that 75% have survived after 6 years. Local experts in Delft even suggest 80–90% (personal communication).