Abstract
Technology-based firms are a key driver for the growth potential of a country due to their capacity to introduce radical innovations and value into the economy. In this chapter, the authors propose a definition for technology-based firms based on strategies that makes possible to identify the companies with advanced use of technology (including knowledge) in all the sectors of the economy. This refined definition helps to identify this kind of companies and to orientate special public policies to foster their development. For follower countries in terms of technology and innovation, as it is the case of Spain, technology-based firms may be a significantly different collective compare with advanced technological countries. Thus, the authors propose a method to detect technology-based firms in not only high technology sector using a Technological Innovation Panel (PITEC) in Spain. This chapter confirms that there are technology-based firms in many activities outside the high technology sectors that can be of interest for public institution and investors.
TopIntroduction
Over the last twenty-five years, Technology-based firms (TBFs) have attracted economists’ attention because they seem to combine two key requirements for company survival and growth: innovation through the transfer of scientific knowledge from the academic world to the market environment, and strategic positioning in new market niches (Autio & Yli-Renko, 1998; Coad & Reid, 2012; Coeurderoy & Murray, 2008; Colombo & Grilli, 2010; Granstrand, 1998; J. J. Wu & Atkinson, 2017; L.-Y. Wu & Wang, 2007).
The concept of competitiveness is increasingly related to knowledge (technology) transfer. At both macroeconomic and microeconomic levels, the transformation of knowledge into innovation seems to be the links that ensure economic and corporate growth. At a microeconomic level, competitiveness involves remaining in the market through processes, products, organisations or market practices that ensure a sustainable competitive edge over competitors. At a macroeconomic level, innovation can overcome the stationary periods and enhances international competitiveness.
It is widely accepted that a company cannot remain in a competitive market without being innovative. Thus, the capacity to transform knowledge into innovation is another resource for business to increase productivity and growth (Hall, Lotti, & Mairesse, 2009). Indeed, TBFs try to combine cutting-edge scientific knowledge and transform it into innovation. Similarly, TBFs are able to create and develop new market opportunities, based on new knowledge or technological platform. This kind of companies demand qualified jobs, connect high education centre with the market, and provide additional societal value (Autio, 2017). Hence, TBFs consolidation and study are essential from both, macro and microeconomic perspective (Groen, Cook, & Van der Sijde, 2015; L.-Y. Wu & Wang, 2007)
Nevertheless, it is not easy to define, and scope, TBFs since the term comprises companies of different nature, from a diversity of sectors, difficult to identify and quantify (Autio, 1997; Storey & Tether, 1998). The lack of a clear definition of TBFs is symptomatic that they are a heterogeneous group. This is partly solved by categorizing economic sectors (instead of companies), in relation to technology. The U.S. Bureau of Labor Statistics (BLS) classifies an industry as technology-based if its share of science, technology, engineering, and mathematics (STEM) workers is twice the national average. The Organization for Economic Co-operation and Development (OECD) categorizes the economic sectors in high, medium and low technology-based using the technological intensity concept (R&D expenditure over the sales volume of the enterprise). Then, researchers select TBFs in high technology sectors assuming high technological intensity of those companies (Groen et al., 2015; Li, Qian, & Qian, 2012; Onetti, Zucchella, Jones, & McDougall-Covin, 2012; Tsvetkova, Thill, & Strumsky, 2014).
Thus, even though technological intensity is defined at the enterprise level (the technological effort of the company), it is applied to the sector. In the case of follower countries in the fields of technology and innovation (such as developing countries, service-oriented countries or countries that develop other types of industries), this selection method implies accepting that TBFs are exceptions within the business structure of such countries. For example, a company that is dedicated to adapt new knowledge of artificial intelligence in new or innovative products for autonomous driving, would be classified outside high technology sector (according to NACE classification), and hence not detected as TBF.
Key Terms in this Chapter
Knowledge Transfer: Process that enables the socioeconomic use of humanistic, scientific and technical knowledge by means of interaction with third parties in contracted research activities or collaborations, consulting and technical services, in the protection of the research results, licenses, rights of use, and in the creation of spin-offs, including technology transfer.
Technological Innovation Support Centers: Non-profit making entities, legally established and resident in Spain, that have their own legal personality and are created with the main objective, explicitly mentioned in their statutes, of facilitating the application of knowledge generated in research agencies, technology centers included, by acting as an interface between the research agencies and enterprises, offering innovation support services.
Technology-Based Firm: Any independent organisation, established through knowledge transfer that operates within the market and uses continuous research and the implementation of advanced scientific and technical knowledge as the main tools to obtain sustainable competitive advantage on the goods and services they provide.
Spin-Off/Out: In the context of research centers, a spin-off/out is a new company that bases its business on the knowledge that is generated at the university or public research organisation. In many cases, although not necessarily, personnel from the university are involved in the new company. They can also be referred to as TBF modes.
Start-Up: A start-up is a new company created by entrepreneurs that may come from a university background but is not based on the knowledge generated at the university or public research organisation (thus excluding spin-offs). They can also be referred to as TBF modes.
Technology Centers: Non-profit making entities, legally established and resident in Spain, that have their own legal personality and are created with the main objective, explicitly mentioned in their statutes, of contributing to the overall benefit of society and to the improvement of enterprise competitiveness through the acquisition of technological knowledge, the development of innovation activities and their application.
Experimental or Technological Development: Systematic studies, based on existing knowledge, derived from research and/or practical experience, directed towards the production of new materials, products or devices; towards the establishment of new processes, systems or services, or towards the improvement of existing ones. This may also include the conceptual formulation and design of other products, processes or services and initial demonstration projects or pilot projects, provided that such projects cannot be converted or used for industrial applications or commercial exploitation. Routine or periodic changes made to products, production lines, manufacturing processes, existing services and other operations are not included, although they may result in improvements.
Experimental or Technological Research and Development: Research and experimental development comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications. The term R&D is applied to three activities: basic research, applied research, and experimental development.
Scientific or Technology Park: Areas where companies, universities, research institutions, and associated services are located to promote and develop the knowledge-based economy. They have a management unit appointed to promote innovation generation activities, which may belong to the park developer.
Intangible Disembodied Technology: Technology in relation to industrial property rights, including rights of use of patents, licenses, designs, or know-how.