Open innovation among university spin-off firms: what is in it for them, and what can cities do?

Abstract

R&D and innovation increasingly take place in networks beyond the boundaries of a single firm with customers in a more important role than in previous times. This new innovation model has been labelled as open innovation. In studies on innovation, learning mechanisms have largely remained a black box, causing difficulty in assessing what the benefits of open innovation might be. This paper examines a particular category of high-tech firms, university spin-offs, and illustrates resources that are missing and the level of openness in learning networks to gain these resources. Spin-off firms from Delft University of Technology, The Netherlands, are taken as a case study. Resource deficiency among these firms mainly concerns understanding and accessing the market, whereas the learning networks point to a negative impact of relatively closed networks (strong relationships, mainly local/regional orientation), thereby confirming the need for more open innovation. Next, the paper turns to an assessment of the potentials of certain types of open innovation to further enhance the growth of spin-off firms. The paper also identifies various new (or renewed) roles of city governments in promoting open innovation in a new scenario.

Keywords:

• university spin-off firms
• job growth
• learning networks
• open innovation
• cities' roles

Acknowledgment

The NICIS Institute is acknowledged for financing the current research, together with the municipality of Amsterdam, Delft, Eindhoven and Maastricht, and TU Delft.

Notes

1. The population of spin-offs from TU Delft was delineated on the basis of the following criteria: commercializing knowledge created at a university and found in Delft or surrounding region, “survived in 2006”, no older than 10 years, and enjoying at least one type of support from the incubation organization/university. All firms in this population were approached, which led to an overall response rate of 70% (59 firms). Data were collected using a semi-structured questionnaire in personal face-to-face interviews with entrepreneurs, carried out in the period 2005 and 2006. Note that excluding nonsurvivors 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 six years. Local experts in Delft even suggest 80–90% after five years (personal communication).