Knowledge Transfer Through Inheritance: Spin-Out Generation, Development, and Survival.

Abstract

We investigated how the knowledge capabilities of industry incumbents affected the generation, development, and performance of "spin-outs" (entrepreneurial ventures of ex-employees). Analyses of 1977-97 data from the disk drive industry supported our hypothesis that incumbents with both strong technological and market pioneering know-how generate fewer spin-outs than firms with strength in only one of these areas. Also, an incumbent's capabilities at the time of a spin-out's founding positively affect the spin-out's knowledge capabilities and its probability of survival.

Exploiting Entrepreneurial Opportunities: The Impact of Entrepreneurship on Growth

“…Furthermore, a major number of entries in knowledge-intensive or technology-intensive industries could be the result of spin-offs from existing firms, an example of employee mobility and knowledge diffusion. Especially, firms with an abundant amount of underexploited knowledge act as seedbed for spin-offs (Agarwal et al, 2004) and are a playground for new founders (Franco and Filson, 2000).…”

“…Christensen (1993) analyzed entry in the U.S. disk drive industry between 1976 and 1989; he found that spin-offs were more successful in surviving and that they generated more revenues than the nonspin-off entrants. Agarwal et al (2004) found that higher technological know-how positively affects the survival chance of entrants in the disk drive industry between 1977 and 1997.…”

“…If the founders of new ventures worked for incumbent firms or universities before commercializing their new knowledge, they inherit knowledge from their former employer. Studies on spin-offs have found that the reasons that cause individuals to leave their employer and to create their own firm are mainly frustration with their current employer and the expectation of greater financial rewards (Klepper, 2001;Klepper and Sleeper, 2005;Agarwal et al, 2004 for an overview). Agarwal et al (2004) found that, in particular, incumbent firms with abundant underexploited knowledge represent seed beds for spin-offs.…”

“…Entrepreneurial opportunities particularly arise if existing organizations do not capitalize knowledge to the full extent. Therefore, firms engaged in R&D activities that do not exploit their generated knowledge to the full extent may serve as seedbed for new ventures (Agarwal et al, 2004;Franco and Filson, 2000;Klepper and Sleeper, 2005). This paper analyzes the relationship between the exploitation of entrepreneurial opportunities, namely start-up activity, and regional economic growth.…”

Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective

“…Industries with highly successful spin-offs include historical cases such as automobiles (Klepper, 2002) and tires (Buenstorf and Klepper, 2005), but also modern high-tech industries such as semiconductors (Moore and Davis, 2004), disk drives (Agarwal et al, 2004), and lasers (Buenstorf, 2005;Klepper and Sleeper, 2005). Not all spinoffs perform equally well, but the top performers are concentrated among the spin-offs of leading incumbent firms.…”