Transnational Acceleration of Local Startups: Portugal's Building Global Innovators (BGI) Model

Introduction

Over the last decade and a half, fostering local entrepreneurial growth has been a major policy objective in Europe. Scholars and policy makers alike agree that technology and knowledge-intensive startups are a key pillar of sustainable economic growth. Given this agreement, it is not surprising that the European Union, in its Entrepreneurship 2020 Action Plan, pushes for “decisive action to unleash Europe's entrepreneurial potential, to remove existing obstacles and to revolutionise the culture of entrepreneurship in Europe”. This focus on promoting entrepreneurial growth by promoting knowledge-based and high-technology ventures may seem obvious, but represents a sizable departure from traditional strategies focused on the discovery and funding of large corporations capable of undertaking ambitious research and development projects and the attraction of foreign direct investment (Acs et al., 2008). In recent years, however, several policy makers and think tanks have increasingly recognized early stage high-technology ventures as the key to unlock innovation and economic growth (Audretsch, Keilbach, & Lehmann, 2006; Samila & Sorenson, 2011).

The debate surrounding the relationship between firm size and innovation dates back to the classic work of Schumpeter (1942). Scholars have found mixed evidence regarding the effect of firm size on innovation (Acs & Audretsch, 1987; Cohen & Levin, 1989). While startups typically suffer less from bureaucratic bottlenecks and are thus quick and agile, they often lack the capital and customer access resources of larger corporations. Therefore, there is a growing recognition that successful startups cannot rely solely on internal-to-the-firm capabilities but also need to rely on their external environment (Feldman & Kogler, 2011; Getler, 2003). Consequently, location emerges as a key driver of startup success, a relationship epitomized by the concentration of successful startups in places such as Silicon Valley.

Startups located in high-performing hubs like Silicon Valley benefit from these places’ entrepreneurial spirit and from several localized features associated with “being there” (Gertler, 2003), such as access to specialized skills, infrastructure, potential clients, competitors and networks (e.g. Feldman & Kogler, 2011). The success of the “Silicon Valley model” and Michael Porter´s influential book on The Competitive Advantage of Nations (1990) sparked an influential stream of entrepreneurship policy focused on embedding startups in “clusters” and local networks of companies and other organizations, as well as on the development of incubators and technology parks. Yet, there is very little evidence that such a recipe actually works across different countries, regions and industries (Martin & Sunley, 2003; Burfitt & McNeill, 2008). In fact, most if not all of the attempts to replicate “Silicon Valley everywhere” have been failing dramatically (Hospers, 2009). In this chapter, we explore the drivers of success (and failure) of startup acceleration models in regions that lack the access to market knowledge and capital that exists in central hubs like Silicon Valley. In particular, our goal is to discuss an emerging model for high-technology entrepreneurship in peripheral European regions.