Technology-based

entrepreneurship and regional

development: the case of Sweden
A

sa Lindholm Dahlstrand
School of Business and Engineering, Halmstad University, Halmstad, Sweden
Abstract
Purpose The purpose of this paper is to analyse technology-based entrepreneurship and its
importance for economic growth. Firstly, it discusses the concept of technology-based entrepreneurship,
and, secondly, it moves on to question if the phenomenon is important for regional growth. New
technology-based rms (NTBFs) can inuence economic growth both directly, by their own growth, and
indirectly, for example, by providing specialised input to other rms. Quite frequently those indirect
effects are established within a regional context.
Design/methodology/approach This paper contributes knowledge about the relatively
successful Swedish case. Based on several of the authors earlier studies, some empirical data are
used to illustrate some characteristics of the Swedish case. The background and origin of Swedish
NTBFs, as well as the growth of these rms, are discussed. Since, technology-based entrepreneurship
is a strongly regional phenomena special attention will be paid to one of Swedens major regions; the
Gothenburg region.
Findings The paper shows that the number of technology-based new rms corresponds to a small
share of general entrepreneurship. Technology-based entrepreneurship is a highly regional
phenomenon, where local large rms are important for the training and breeding of future
entrepreneurs. Spin-off processes are likely to enhance regional knowledge development and learning
processes because it involves the diffusion and sharing of technological and managerial expertise
within the region.
Practical implications The results suggests that a country like Sweden, with high R&D
spendings and innovative activities, should be encouraged to increase its entrepreneurial activities in
order to benet even further from its R&D and technology development.
Originality/value Is of value by adding to the knowledge on technology-intensive rms how
they tend to grow, how frequent they are and their role in economic growth.
Keywords Technology led strategy, Organizational proles, Entrepreneurialism, Sweden
Paper type Conceptual paper
Introduction
Technology-based entrepreneurship is a phenomenon that has become increasingly
important during the last decades. One of the most important reasons for this is the role
The current issue and full text archive of this journal is available at
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An earlier version of this paper was prepared for and presented to the Expert Group on
Constructing Regional Advantage, DG Research, European Commission, Brussels, 2004 to 2006.
The author is grateful for the comments and encouragement received from the group during this
work. The study, upon which the paper is based, is linked to a larger research program at the
RIDE centre, at IMIT and Chalmers University of Technology. It has also links to a new research
programme headed by Professor Bengt Johannisson and himself at The Swedish Foundation for
Small Business Research. The author is also grateful for the valuable comments and suggestions
provided by the editor and two anonymous reviewers of this journal. The author thanks them all
for their support!
Technology-based
entrepreneurship
373
European Business Review
Vol. 19 No. 5, 2007
pp. 373-386
qEmerald Group Publishing Limited
0955-534X
DOI 10.1108/09555340710818969
played for industrial renewal and economic growth. While mature and traditional
industrial sectors have witnessed a declining importance, new technology- and other
knowledge-based sectors have instead been expanding rapidly. The transformation
from industry and manufacturing to creative and knowledge-based activities is
sometimes argued to be as great as the industrial revolution.
The interest in entrepreneurship and small rms has grown steadily ever since
Birch (1981) found that it is the new and expanding small rms that are creating a high
share of net new jobs. In his extensive analysis of all US rms, and their number of
employees, for the period between 1969 and 1976, the main nding was that small
rms were responsible for 81 per cent of the net new job creation. Later, his nding has
been reconrmed in many other countries. For example, in Sweden, Davidsson et al.
(1994) were the rst to come to a similar conclusion. They could demonstrate that
around 70 per cent of net-new-jobs in the second half of the 1980s were created in rms
with less than 200 employees. Of this, around 1/3rd was created by the establishment
of new rms, and 2/3rds by the expansion of small rms. However, it is often a small
number of rms that are generating the major part of the growth. For example, in the
UK, Storey (1994) found that relatively few new rms expand, but that these few
expanding rms are responsible for a substantial part of the growth. It is usual that we
talk about such rms as gazelles. It is relatively often that these gazelles are found in
new knowledge-based industries, and that these rms are technology-based new rms.
Today, it is well known that technological development has a major role for economic
development and growth, and that technology-intensive industries play an
increasingly important role in international trade (OECD, 2001). Combined, the
importance of technology as well as entrepreneurship, have increased the focus on
technology-based entrepreneurship (Figure 1).
Taken together, it is easy to jump to the conclusion that technology-intensive
entrepreneurial rms ought to have a key role for economic growth. This might,
however, not necessarily be the case. In order to analyze this we need for example to
have some knowledge on how frequent the phenomenon is, and to what extent the
technology-based entrepreneurial rms tend to grow.
Much of the interest in technology-based entrepreneurship has its roots in the
development in the USA. Also, early research on technology-based entrepreneurship
was mainly conducted in the USA. In Europe the subject has gained in importance
during the last 20 years. Both here and in other parts of the world, the number of new
technology-based rms (NTBFs) has increased drastically (Autio, 1997; Keeble et al.,
1998). Even so, technology-based entrepreneurship is still a relatively unexplored topic
Figure 1.
Why care about
technology-based
entrepreneurship?
A) Technology
intensive industries
play an increasingly
important role
B) Entrepreneurial firms (new
establishments and
expanding new firms) are
creating a high share of net
new jobs
C) Technology-based
entrepreneurship
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(Shane and Venkataraman, 2003) and, for several reasons, there is still limited
knowledge about its effect on economic growth and development. This paper will
contribute with some knowledge about the relatively successful Swedish case. Based
on several of the authors earlier studies, some empirical data will be used to illustrate
some characteristics of the Swedish case. The background and origin of Swedish
NTBFs, as well as the growth of these rms, are discussed. Since, technology-based
entrepreneurship is a strongly regional phenomena (Dahlstrand, 1997; Venkataraman,
2004) special attention will be paid to one of Swedens major regions; the Gothenburg
region. The paper ends with some conclusions and implications for policy makers in
the nal section. First, however, in the next section, a general discussion about
technology-based entrepreneurship and regional development will be presented.
What is technology-based entrepreneurship?
In general, it can be argued that creating and maintaining diversity in products and
technologies is central to the process of economic growth. Diversity is created in
essentially two ways; by diversication of large rms (domestic or foreign) or by the
start-up of NTBFs. NTBFs can inuence economic growth both directly, by their own
growth, and indirectly, for example, by providing specialised input to other rms
(either for their production or innovation process). Quite frequently those indirect
effects are established within a regional context. One reason is that the majority of all
NTBFs are set up in a region where the entrepreneur already lives or works. Most
NTBFs are spin-offs from existing organisations, and, thus, technology-based
entrepreneurship is a highly regional phenomenon.
Still, the existing knowledge on both technology-based entrepreneurship and the
regional aspects of it are quite limited. Even though the importance and interest of
technology-based entrepreneurshipis increasing, and technology-based newrms tendto
get a lot of attention in, e.g. media and among policymakers, the available research-based
knowledge is still limited. Existing research can provide some answers and ideas, but
there is still a need for further research. This section of the paper will summarize what can
be learnt from existing research on technology-based entrepreneurship. Moreover, it will
also point to some problems in existing research, and areas where further studies are
needed. Research on technology-based entrepreneurship is still a young subject.
Technology-based newrms have a lot in common with other newrms, but there are
also some special features that make them a bit different. One problem for researchers
studyingtechnology-based entrepreneurship is to agree on what it is. There is no common
denition of the concept, and, thus, systematic analysis is lacking. One special problemof
dening technology-based entrepreneurship is that it is a combination of two other
concepts, i.e. both technology-based and entrepreneurship. None of these have a
widespread and accepted denition. For example, an entrepreneur is sometimes dened
in the Schumpeterian way, i.e. the entrepreneur is also the innovator. To others, the
entrepreneur is a risk-taker (Knight) or a middleman (Kirzner) who balances
inequalities on the market. Still others are more pragmatic and consider the entrepreneur
to be the person who establishes and runs a new rm (i.e. he/she does not have to be the
innovator). There is noconsensus onwhenthis entrepreneur insteadbecomes a manager
and/or owner.
The second problem is that of dening technology-based. Most common is to
dene a technology-based rm as a rm that is depending on technology for its
Technology-based
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375
development and survival. Most often this does not mean that the technology has to be
new or innovative. A NTBF is a new rm that is depending on technology. Innovative
rms or rms developing new technology are a special category that has gained a
considerable attention. Some researchers have used the concept high technology to
try to capture this. However, this concept is not easy to dene. For example, some
denitions are based on purely subjective criteria and others on surrogate measures
like investment in R&D and proportion of employees in R&D. Many studies are using
the OECD classication of high-technology (and sometimes also medium-high
technology). This measure, however, is also based on input measures, and limited to a
few industries. Thus, these studies are mainly analysing industrial sectors which
spend considerable resources on R&D.
International estimations in the global entrepreneurship monitor (GEM) suggests
that less than 10 per cent of the new rms can be classied as Science, Technology
and High Potential (Reynolds et al., 2002). If we use Sweden as an example, we can see
that during the last ten years around 35,000 to 45,000 new rms are established each
year. Unfortunately, there is no reliable statistics on how many of these are to be
considered as knowledge- and/or technology-based. Data from Statistics Sweden and
ITPS (2006) shows that approximately 33-35 per cent of the new Swedish rms can be
found in knowledge-intensive industries and an additional 15-18 per cent in the
manufacturing industry. Not all of these are to be considered as technology-based, even
though it is likely that a substantial share should be depending on technology for its
development and survival. A rough estimation would suggest that the Swedish
technology-based entrepreneurship is likely to represent something like 15 per cent of
the general entrepreneurial activities, and at the same time somewhat more than the
international average.
As was argued above, technology-based entrepreneurship is a young research topic,
why it is still fruitful and benecial to allow for and use many different kinds of
measures and studies[1]. Even if a common denition of technology-based
entrepreneurship is lacking, earlier research has been able to point to some common
characteristics of NTBFs. These rms differ from other entrepreneurial rms since
they for example:
.
relatively often have a growth potential;
.
have a need for external nancing when product development takes time;
.
often focus on niche markets with a high need of internationalization;
.
tend to cluster in specic regions;
.
tend to be spin-offs from existing organisations (universities as well as
established rms);
.
tend to benet from an establishment in an incubator or science park;
.
tend to contribute to technology transfer within a region;
.
tend to be founded by teams of founders; and
.
tend to be established by entrepreneurs with higher education.
In 2005 Autio presented the 2005 Report on High-Expectation Entrepreneurship of
the GEM. The empirical data in the report is based on answers from entrepreneurs
(nascent or baby business) that are expecting to employ over 20 persons in ve
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years time. He nds that this kind of entrepreneurship is rare, only around 3-17 per
cent of all entrepreneurial activity consists of so-called High-Expectation
Entrepreneurial Activity (HEA). Comparing this with the 10 per cent Science,
technology and High Potential entrepreneurship (Reynolds et al., 2002), or the 15 per
cent Swedish technology-based entrepreneurship in this paper, suggests there may be
some similarities. Also, some of these similarities get clearer, when Autio points out
that the highest relative prevalence rates of high-expectation entrepreneurship can be
seen in manufacturing sectors and in business services (Autio, 2005, p. 40). The fact
that Autio could use the GEM data, based on 505,000 interviews in 44 countries for ve
years, makes the report almost uniquely rich in data. Moreover, for some questions,
Autio is presenting data for individual countries, including Sweden. This, of course,
makes the report very valuable when discussing Swedish entrepreneurship.
Autio (2005) found that only some 0.2-1.6 per cent of the adult-age population is
actively participating in HEA. In general, countries with a high-total entrepreneurial
activity also have a high HEA. But, interestingly, Sweden, with its low general
entrepreneurial activities, performs relatively well when HEAis measured (12.4 per cent
of the total entrepreneurial activity is to be considered HEA). Still the share of adults
participating in entrepreneurial activities, in general as well as in high-expectation
entrepreneurship, is low in an international comparison. The explanation seems to be
that high income countries with a low general entrepreneurial activity often have a
relatively high share of high-growth expectation new rms. Both technology-based
and high-expectation new rms are often found in manufacturing and business
services, often created by entrepreneurs that already have a job, for example by the
creation of new spin-offs.
The regional perspective
Both the form of production and the innovation process has changed in recent years.
Firms are becoming more dependent on external knowledge and technology sources
(Granstrand and Sjolander, 1990; Lindholm, 1996; Chesbrough, 2003), and the need of
sourcing innovations and technology makes rms participate in innovation networks.
NTBFs are important in these networks since they provide specialised and often
science-based inputs. Several studies, partly originating from Marshalls (1920) concept
of the industrial district, have stressed the regional aspects of these networks (Storper,
1993; 1995; Castells and Hall, 1994; Cooke, 1996; Garnsey, 1996; Sternberg, 1996).
The location of new technology-based industries depends greatly on access to
knowledge and different learning processes, new rms tend to spin-off from and
cluster around universities, research organisations and existing rms (Cooper, 1971;
Oakey, 1995; Keeble and Oakey, 1997; Dahlstrand, 1997). As a result, there is a natural
tendency towards a substantial and probably growing disparity between regions that
already possess indigenous high-technology activities, and those that do not. This
means that we cannot expect that this source of industrial renewal is evenly spread
through economic space, instead, with respect to its strength; substantial regional
disparities are to be expected. There has been a build-up of local, technologically
dynamic and export-oriented clusters of specialised NTBFs in several places. The most
famous of them are still the Silicon Valley and Route 128 in USA (Saxenian, 1994;
Storper, 1993; Castells and Hall, 1994), but also places like Cambridge in the UK;
Technology-based
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377
Munich in Germany, Bangalore in India, and Tel Aviv in Israel are all well known.
Many policy makers around the world dream of creating a similar high-tech cluster.
Earlier studies have concluded that clusters tend to be especially important for
NTBFs. One reason is that entrepreneurs tend to set up the new rm where he/she lives
and have a personal network of contacts. Another reason is that the small and new rm
is often depending on externalities, and for technology-based entrepreneurial rms it is
often critical to have, for example, access to: skilled labour, specialized inputs, capital,
knowledge spillovers, and local customers.
Venkataraman (2004) discusses the role of technological entrepreneurship in
regional transformation. His main argument is that there are seven intangibles
necessary for the emergence of virtuous cycles, and that entrepreneurial talent and
regional leadership are the main ingredients. In general, he argues, talent is drawn
towards admired positions in successful institutions, and if a region has been
successful in weeding out the multitudes in variety and instead created very successful
institutions and rms, it is these organisations that will attract the talent. Talent gets
sucked into the prevailing institutions, preventing outside the box innovation from
taking place, especially those that might challenge the products and values of the
dominant institutions (Venkataraman, 2004, p. 159).
Technology-based entrepreneurship: the Swedish case
In this section some ndings from my own research on Swedish technology-based
entrepreneurship are presented; this includes an analysis of both national and regional
(Gothenburg) conditions. A rst thing to note about Sweden is its relatively low
general entrepreneurial activities. Repeated measurements in the GEM (Minniti et al.,
2005; Acs et al., 2004; Reynolds et al., 2002; Delmar and Aronsson, 2000) show that
Sweden is among the countries in the world with the lowest entrepreneurial activities
among its adult population. At the same time, Sweden is performing relatively well
when, e.g. R&D, technology, innovation and similar measures are compared for
different countries (EU Innovation Scoreboard, 2005; Florida and Tinagli, 2004). Thus,
in short, Sweden is a country with a weak entrepreneurial culture, but a strong focus on
innovation and technology. Taken together, these two facts create a relatively high
technology-based entrepreneurship, with both opportunities and problems for the new
rms.
As was argued in the introduction of this paper, in order to assess the importance of
technology-based entrepreneurship, there is a need to know how frequent the
phenomenon is, and to what extent and which technology-based entrepreneurial
rms tend to grow. In a study of some 350 Swedish NTBFs, Dahlstrand (2001, 2004)
found that 2/3rds of the new rms were established as entrepreneurial spin-offs from
some other organization; almost half of the rms were spin-offs from established
private rms, and an additional sixth were either directly or indirectly spun-off from
universities (Figure 2). The remaining third had originated either from the founders
own idea, or were based on an externally acquired ideas.
Thus, with around 15 per cent of all new Swedish rms being technology-based, this
suggests that approximately 8 per cent of all new rms are corporate spin-offs (CSOs),
and a corresponding 2.6 per cent are directly or indirectly spun-off from universities.
In a direct university spin-off the entrepreneur is a former academic researcher setting
up a new rm based on his/her own university research. An indirect university spin-off
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(ISO) is instead a newly established rm which is based on an idea originating in a
university, but not until the academic founder(s) have been working an additional
period in the private industry. A gure of 2-3 per cent university spin-offs is well in line
with the ndings reported for several other countries in the OECD (Callan, 2001).
In the same Swedish study, Dahlstrand (2001, 2004) also found that the CSOs are
outperforming other spin-offs in terms of company growth. The ISOs grow faster than
the direct university-spin-offs (USOs), but they could not show as high growth as the
CSOs. Thus, there were nothing to support the hypothesis that ISOs are able to take
advantage of a mixed entrepreneurial origin in order to create a high-growth and
high-innovative rm. However, in comparison to direct university spin-offs, the
indirect spin-offs were able to generate a higher growth. Possibly then, the founders of
ISOs have been able to complement their knowledge to compensate for some of the
growth disadvantages of direct university spin-offs. Also, in relation to their size, the
direct university spin-offs were found to have a signicantly higher degree of
innovativeness than all other NTBFs. Since, NTBFs tend to network and contribute
knowledge to other corporations, innovations created in university spin-offs are often
exploited outside the rm itself, and the economic potential of this may indirectly
benet the economy. It is likely that a substantial part of this knowledge transfer is
made on a regional basis, and, thus, contributing to regional development.
Academic entrepreneurship in the Gothenburg region
In the university-sector, creating and exploiting new commercial ideas is not part of the
traditional core operations. At the same time, radically new ideas often have a
university origin, and in the post-world-war-two period there has been an increased
emphasis on different ways of exploiting and commercialising such inventions.
This interest of policy makers is also reected in a large amount of earlier studies
focusing on academic entrepreneurship and university spin-offs (Roberts and Wainer,
1968; Dorfman, 1983; Roberts, 1991; Olofsson and Wahlbin, 1993; Klofsten and
Jones-Evans, 1996; Callan, 2001; Colyvas et al., 2002; Shane, 2004; Marman et al., 2005;
Clarysse et al., 2005). In Sweden, with its relatively strong technology focus and
substantial resources invested in R&D, public research funding overwhelmingly
supports university research, why it is not surprising that government bodies try to
encourage commercialisation and exploitation of university research as an economic
Figure 2.
Where do the NTBFs
originate from?
Own idea
19%
External
idea
15%
CSO
49%
direct USO
5%
indirect
USO
12%
Notes: CSO: Corporate Spin-offs, ISO indirect
university spin-off, USO: University spin-off
Technology-based
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379
development tool. About a decade ago the Swedish government has stipulated a
so-called third task for universities, giving them the responsibility to transfer the
results of university research into the private business and production sector. The
creation of a strong innovation system implies transfer of university research into
industrial use, but also mechanisms for the transfer of technology from large high-tech
corporations to other rms.
For some years a main concern of Swedish policy has been to create more
high-growth rms. A lot of the Swedish debate and policy initiatives, as well as
research, have focused on how to improve the growth of new rms. In order to achieve
this, research-based new rms and seed nancing are prioritized. For example, in 2004
the rst Innovation strategy of the Swedish Government highlights the importance
of increasing the commercialisation of research results (Regeringskansliet, 2004). It is
claimed that:
. . . efforts are needed to: Transform research results and ideas more effectively into
businesses and enterprises, Increase nancing at early stages of business and company
development, Design workable ground rules and promote the use of intellectual property
protection rights, Create sound conditions for competition that favour the growth of new
enterprises (pp. 31-2).
This focus was conrmed in the most recent Science Policy Proposition (Regeringen,
2005), where much attention is given to incentives for:
.
academics to become entrepreneurs;
.
to the role of holding companies in supporting commercialization efforts; and
.
to the provision of risk capital.
Also the creation of the new organization Innovationsbron (innovation bridge)
underlines this prioritisation. The ambition of Innovationsbron is to help researchers,
innovators and entrepreneurs with business development and commercialisation, and
to increase knowledge transfer and sharing between industry and university (www.
innovationsbron.se). When introducing this new organisation, the Swedish Minister of
Industry wrote that During a ten year period, Innovationsbron ABwill spend 1.8 billion
SEK to enhance the conditions for commercialising research results and ideas in
industry (DN, 2005).
The focus on research- and technology-based entrepreneurship is something
Sweden shares with many other countries and regions. But, again, Sweden has a
special feature in its heavy investments in R&D and innovation (EU Innovation
Scoreboard, 2005). In the Swedish debate it is often claimed that the countrys high
investments in R&D are not resulting in a correspondingly high-economic growth.
Sometimes it is argued that Sweden is not able to benet economically from
commercialising academic research (less than 1 per cent of GDP is spent on academic
research, private industry spends almost three times that amount). Among other
possible explanations we can also nd the lack of an entrepreneurial culture, or what
Venkataraman (2004) called vicious cycles where talent is attracted to successful and
existing corporations.
University research is not only important in itself by bringing a potential for
scientic and technological renewal; universities also has as one of its major tasks to
educate students and researchers who themselves may transfer new knowledge from
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the university into industry. University knowledge and research may, thus, be
transferred into industrial use by individuals leaving the university, either as
employees in other organisations or by setting up rms of their own.
In a few earlier studies (Dahlstrand, 1997, 1999; Dahlstrand and Jacobsson, 2003) the
universities and large rms in the Gothenburg-region were analysed as sources of local
new technology intensive rms. The analysis provides some empirical evidence on the
extent of regional collective learning through mobile individual entrepreneurs who
leave the local parent organisations universities, industrial corporations, or a mix of
these to establish new spin-off rms. The ndings clearly demonstrate that there are
two main sources of new entrepreneurs of technology-intensive SMEs in Gothenburg
region: Chalmers University and the well established large and medium-sized
industrial rms (Table I). Almost all new entrepreneurs come from within the region,
or are former students returning to the region. Thus, local technology-based SMEs are
almost exclusively established by entrepreneurial founders who were previously
working for another local rm or university. Local spin-offs, and the transfer of
entrepreneurs and knowledge, from a well-established organisation into a new
independent enterprise seem to be one of the main processes of intra-regional learning
in Gothenburg. The region, like other Swedish metropolitan areas, has a higher
frequency of entrepreneurial spin-offs than the national average (Table I). In a process
which has been ongoing since the 1960s, these new start ups are the basis of the
Gothenburg regional cluster of technology intensive SMEs. However, it should also be
remembered that the region has an old industrial tradition with several large and
dominating manufacturing rms.
In order for a regional cluster to be, and function as, a regional network, local
interaction and collective learning processes are necessary. The local spin-off process is
only one rst step in establishing a regional network. The study by Dahlstrand (1999)
provides strong evidence of the existence of two very important local collective
learning processes in the Gothenburg region. The rst is, of course, the spin-off of new
rms from local parent organisations. The second is the high level of local technology
staff recruitment and mobility, and hence movement of embodied technological
expertise and know-how, within the regional labour market. Both processes result in
the diffusion and combination of technological competencies between local rms and
organisations such as Chalmers University, and hence the development and
strengthening of a local collective learning capacity. The unanswered question still
is whether or not such a pattern is typical of any large town with a long industrial
tradition and large manufacturing rms, or if this is what characterises an innovative
milieu involving a regional network of technology intensive SMEs.
Origin of idea Sweden (per cent) Gothenburg (per cent)
University (directly) 5 10
Mix of university and private rm 12 21
Private rm 49 42
External 15 8
Own idea 19 19
Total 100 100
Table I.
The origin of NTBFs in
the Gothenburg region
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381
Another important aspect of the role played by universities is put forward by
Dahlstrand and Jacobsson (2003). They argue that the university has a special and
critical role for regional technological renewal. In addition to varying across space, the
extent to which, and how, universities contribute to technical change also differ between
knowledge elds (Faulkner and Senker, 1994; Salter and Martin, 2001). In their study of
Gothenburg NTBFs and university education and research Dahlstrand and Jacobsson
(2003) concluded that the technological prole and responsiveness of a (strong)
university will inuence the technological entrepreneurship and prole of a region.
As a nal remark on technology-based entrepreneurship in the Gothenburg-region,
it should be noted that while 10 per cent of the NTBFs were direct university spin-offs,
twice as many were indirect university spin-offs in that they were based on university
research, but not established until the founder(s) had gained additional working
experience in a private employment. If Venkataramans (2004) vicious cycles where
talent is attracted to existing corporations and destroying the entrepreneurial culture,
are avoided, existing organisations and corporations can play a critical role as a
training ground for future technology entrepreneurs within a regional innovation
system. Thus, even though large corporations recruit a substantial part of the
university graduates, these graduates may very well sometime in the future continue to
contribute to the technology-based entrepreneurship in a region.
Concluding remarks and implications for policymakers
In this paper, it has been argued that the general entrepreneurial activities, the creation of
gazelles, and the expansion of newly established rms, all have their contribution to
economic growth. Not only is it important to have a high number of new rms, also the
quality of the entrepreneurial activities matter, and it seems like many high-expectation
newbusinesses, as well as gazelles, can be found among innovative and technology-based
new rms.
Summarizing what have been found in this paper it is clear that technology-based
and high-growth new rms correspond to a small share of general entrepreneurial
activities. Moreover, they are often established as spin-offs from private companies in
the manufacturing and business service sectors. Technology-based entrepreneurship
is a highly regional phenomenon, where local large rms are important for the training
and breeding of future entrepreneurs as well as other key personnel. Spin-off processes
are likely to enhance regional knowledge development and learning processes because
it involves the diffusion and sharing of technological and managerial expertise within
the region.
As argued by Cooke innovation and entrepreneurship requires talent and crucially
the means for producing talent (Cooke, 2005, p. 6). Talking about technology-based
entrepreneurship it is usually assumed that some technical-, marketing-, and business
knowledge is required in connection to certain entrepreneurial characteristics. Often
education and work experience are pointed out as means to acquire different kinds of
knowledge. In the Gothenburg case, the importance of the Chalmers University of
Technology was underlined both for creating university spin-offs, but also for educating
students to be employed by existing organizations and corporations. In turn, these
existing organizations often have a critical role as training ground for future technology
entrepreneurs creating corporate- or indirect university spin-offs.
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It has also been argued that knowledge- and technology-based entrepreneurship has
become increasingly important in recent years. Despite low general entrepreneurial
activities, it was found that Sweden has a relatively high share of technology-based
entrepreneurship, both as spin-offs from private industry and from universities. But, if
these rms are to play a key role for future economic growth and development, it is
essential that their numbers and birth-rate are (becoming) high enough. Thus, with a low
entrepreneurial activity, it might not be enough to have a high share of knowledge- and or
technology-based entrepreneurship. The ndings of this paper suggests that encouraging
an increase of Swedens general entrepreneurial activities, is likely to result also in an
increased birth rate of technology-based and high-growth rms. Thus, a country like
Sweden, with high R&D spendings and innovative activities, should be encouraged to
focus on both entrepreneurship and innovation, and to increase its entrepreneurial
activities to benet even further from its R&D and technology development.
In the GEM 2004 report (Acs et al., 2004) it was concluded that changing the
entrepreneurial mindset was one of the most important challenges in the European
Union. It is suggested that entrepreneurship should be given a more prominent place in
educational programmes and that cultural support and social norms, via, e.g. media
and role models, must be enhanced. The less positive attitude towards
entrepreneurship (i.e. compared to other OECD countries) was found to be linked to
a relatively high-employment security and an ageing population. Also, they argue,
complex regulations hinder the creation, growth and expansion of new businesses in
the EU; and that the pervading culture and reward system penalize the
commercialization of knowledge created in research institutions.
Also the ambition of designing a policy encouraging knowledge- and/or
technology-based entrepreneurship, as well as creating new high-growth rms (i.e.
sometimes called a picking-the-winners SME policy) might prove problematic for
encouragingeconomic development andgrowth. International researchsuggests that a lot
of resources are needed if research-based rms will be able to become gazelles (Mustar,
2001; Clarysse et al., 2005). In order to secure resources and create high-growth
research-based rms, substantial amounts of seed and venture capital is usually needed.
Very few rms are able to nd this, and it usually also means giving up the ownership of
the rm, often to international investors. Thus, shifting away from a general
encouragement of a high number of new start-ups, into a policy targeting future high
growth rms, might be quite expensive if it is to succeed (Dahlstrand, 2005). Instead a
balancing of entrepreneurial and innovation policies seems to be necessary for the future.
Note
1. There is also no single research method that is usually preferred. The research area includes
a mix of methodological approaches; quantitative, qualitative, and a mix of both.
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About the author
A

sa Lindholm Dahlstrand is Professor in Entrepreneurship at Halmstad University.

The overriding theme in her research is technology-based entrepreneurship and industrial
dynamics, which essentially means the study of the renewal processes involving the creation and
development of innovations and rms. Her specic research interest includes studying new and
small technology-based spin-offs and the role of incubators and entrepreneurs in the
development of companies and economies.A

sa Lindholm Dahlstrand can be contacted at:

lindholm.dahlstrand@set.hh.se
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