A discrete choice experiment to explain knowledge acquisition strategies of SMEs
Frank van Rijnsoever Sander Kempkes Introduction Internal or external R&D?
Aim: to compare the influence of attributes of an innovation project on the choice for a knowledge acquisition strategy for different latent classes of firms How does this work? Knowledge acquisition strategies
Internal R&D Buy Collaborate Attributes Characteristic Explanation Level Speed to market
Are you ahead of your competitors? First mover Second mover Risk The likeliness the project will fail, does not yield the expected results in the end. Low risk more than 50% chance succes High risk less than 50% chance succes Development time The timescale of the project. Short time: two times as fast Long time: normal time Knowledge source Where do you get the knowledge to develop your idea to a proof of concept from? None Supplier Competing firm Non-competing firm Buyer University or public research institute Private research institute Your intellectual property (IP) How is your IP ownership arranged? Free IP Shared IP License IP Full ownership Attributes Characteristic Explanation Level Access to a network Access to new contacts you gain by choosing a specific strategy to other partners. No Scientific Business Scientific & Business Access to Office/Specialized equipment Free access to an office and/or specialized equipment (e.g. laboratory, field test facilities) Office Specialized equipment Office & Specialized equipment Access to Training/Coach Free access to a coach and/or training such as master classes and workshops. Coaching includes advisory boards, mentors and other coaches. Coach Training Coach & Training Funding model The way the project is financed. Subsidy from the government Loan from a bank Crowd funding Investor Family & Friends Own investment Example choice task Discrete choice experiment
Respondents receive 9 choice tasks Experimental design Data collection 427 entrepreneurs that founded or owned inmanufacturing SMEs in the UK (284) or Germany(143) Online panel, 20 minute questionnaire Attribute Wald 2 Sig. Level class 1 class 2 class 3 class 4 Knowledge acquisition strategy 53,66 *** Internal R&D -8,08 ** 16,93 -1,61 0,75 Buy 3,95 -17,61 -8,16 -0,15 Collaborate 4,12 0,68 9,77 -0,60 Speed to market 76,85 First mover -0,33 0,03 2,23 0,23 Second mover 0,33 -0,03 -2,23 -0,23 Risk 133,85 Small 0,82 0,13 2,24 -0,05 Large -0,82 -0,13 -2,24 0,05 Development time 32,38 Short 0,00 -0,12 0,85 0,51 Long 0,12 -0,85 -0,51 Knowledge source 96,24 Buyer 0,16 -0,26 0,28 0,15 Competing firm -0,80 0,08 -0,93 0,04 Private research institute 0,22 0,62 * -0,46 Non-competing firm 0,77 0,44 1,30 -0,27 Supplier 0,17 0,11 -0,43 University or public research institute -0,08 -0,59 -0,84 IP 86,06 No IP -0,16 -0,20 0,35 0,18 Full ownership 0,01 0,96 1,53 License IP -0,38 -1,54 0,25 Shared IP -0,35 -0,10 Network 48,37 None -0,14 -0,36 Business 0,38 0,19 -1,82 0,39 Scientific 0,10 -0,31 Scientific & business -0,01 -0,19 1,18 Office & specialized equipment 49,10 -0,17 -0,50 Office 0,34 -0,40 0,07 Specialized equipment 0,02 -0,30 0,93 -0,24 -0,04 0,66 Training & coach 49,91 -0,25 -0,97 Training -0,28 1,43 Coach 0,32 0,47 -0,22 -0,21 -0,09 Funding model 207,07 Own investment 0,71 3,02 Family & friends 0,09 0,90 -0,06 Investor -0,47 0,43 Loan (bank) 0,37 -1,16 -2,06 -0,42 Crowd funding -0,77 -2,51 0,72 Subsidy (government) 2,59 Results: latent class analysis
KAS Collaborate, Buy Internal R&D Collaboration Change in KAS? From collaborate to buy No Yes! Market speed Second mover First mover Firm characteristic Wald 2 Sig. Category class 1 class 2 class 3 class 4 External R&D Internal R&D Collaborate Flexible Intercept 12,12 ** 1,48 -0,55 -1,28 * 0,35 R&D 16,61 *** Yes -0,80 0,40 0,07 0,33 a Patent stock 20,07 0,21 -0,23 0,51 -0,49 1-2 0,16 0,32 -0,42 -0,06 3-10 0,52 -0,53 -0,04 0,04 >10 -0,90 0,44 -0,05 Product innovations 20,31 -0,11 0,12 0,10 1 -0,31 0,02 2 -0,35 0,36 -0,27 0,27 3 0,37 -0,60 0,50 >3 0,15 0,42 Past use of KAS: suppliers 16,41 Buy -0,17 0,14 0,08 0,41 -0,01 0,09 Not used -0,25 -0,13 Past use of KAS: competing firm 14,50 0,68 0,22 -0,92 0,01 -0,41 0,48 -0,46 0,18 -0,16 Past use of KAS: non-competing firm 14,21 0,34 0,43 -0,26 -0,48 0,23 -0,08 0,00 Past use of KAS: customers 11,27 0,05 -0,61 0,55 -0,09 0,03 -0,14 0,17 -0,07 Past use of KAS: Universities & Public knowledge institutes 8,71 -0,47 0,56 Past use of KAS: Private knowledge institutes 6,88 -0,28 0,31 0,20 -0,20 -0,03 Size 24,13 Micro -0,12 Small 0,47 -0,43 Medium 0,62 -0,91 Medium-large -0,82 0,99 McFadden R2 Results: latent class analysis
KAS Collaborate, Buy Internal R&D Collaboration Change in KAS? From collaborate to buy No Yes! Market speed Second mover First mover First Mover R&D Yes Patents Some Innovative Not that much A bit Interesting for collaboration? Mwa Yes, but unlikely Yes, and doing so Yes, and you can get them to do so! Conclusions Label, risk and funding are important
Knowledge institutes are unpopular partners Heterogeneity matters! Four latent classes Difference in preferences and likelihood to change Preferences are grounded in past behavior (routines?) 22% already collaborates 26% percent can be seduced into collaboration Practical implications
Resource endowments like subsidies, mentorship,coaches, laboratories, office, etc. have a limitedeffect. But can still be useful! Since firm history is matters, it is important tocreate firms that are externally oriented from thestart. Focus on collaboration in entrepreneurship education andacceleration programs Questions