The R&D-Based Start-Up

The R&D-Based Start-Up

DOI: 10.4018/978-1-7998-5685-6.ch002
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In this chapter the concept of the difference between a technological start-up and a complete firm is introduced. The discussion explains the characteristics of the technological start-up (TSU) and the reasons these have developed as part of a strategic fit of the TSU to its specific tasks and environment. The discussion relates that the characteristics of the TSU, structure, culture, and activities have an impact on management capabilities and their development. The discussion along these three aspects also denotes the literature in the field in support of the claims made. However, the discussion is not entirely theoretical but includes also references to practical aspects.
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Start-Ups (SU) and Technological Start-Ups (TSU) have been of interest for some time for policy makers, as they have been recognized as economic growth engines (EU, 2003).

The interest in the TSUs and the environment supporting their formation and growth have therefore also been the topic of wide research as well as of practical interest for some time (EU, 2003; Porath, 2010). However, while in former years the main obstacles for research regarded the formation of SUs and the supporting environment, with the maturing of the sector of TSUs a new issue is slowly becoming interesting – the move or transformation from a TSU to a complete firm. In order to analyze the transformation, it is first important to understand the special characteristics of the TSU, and how the TSU differs from the classical idea of a complete firm (Penrose,1959). In this chapter, the TSU characteristics, their origin and how they relate to the environment are discussed. Thus, the foundation for the main discussion of the book is presented in this chapter.

Key Terms in this Chapter

Complete Firm: This is a for profit business-oriented company, economically supported mainly by the income generated from its business (can also be supported by investments). This is what we normally refer to as firms, or companies. It has the full complement of activities and the managerial ability to manage them required to generate the income it needs to sustain itself and its operation potentially forever.

Advisory Board (AD): The AD is an organ of the firm that can be used to advise the manager on different issues where decisions or the ability to reach new contacts are required.

Technological Start-Up (TSU): A special case of the SU characterized by being based mostly on technology and preoccupied by performing mainly technological R&D and being economically supported mainly by investment and not by income generated from business activity. In may researches and publications it is this type that is referred to as Start-Up. For our discussion it is important to differentiate between a TSU and a general SU which can be a social or business-oriented entity not dealing with technology or R&D at all.

Ecosystem: The economic, social, and regulatory environment that the TSU come into interactions with. This includes funding sources, employment, and social laws, as well as other relevant regulatory measures pertaining to the activity and livelihood of the TSU.

Start-Up (SU): A general reference to a new enterprise whether for profit or not. It is mostly used for new companies or businesses formed and referrers to the early stages of their lives.

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