Global Networked Entrepreneurship


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Global networked entrepreneurship accelerates innovation by linking talent, technology, capital and know-how.

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Global Networked Entrepreneurship

  1. 1. Global Networked Entrepreneurship: Linking The World’s Technopoleis for Shared Prosperity at Home and Abroad Dr. David V. Gibson, Senior Research Fellow and Chris Stiles, Research Associate IC2Institute The University of Texas at Austin ABSTRACT growth.’ In 1983 the passage of the technopolis law resulting in twenty-year economic This paper presents Global Networked development plans. In May 1986 the Japanese Entrepreneurship as a strategy for linking the government approved MITISRegional Research world’s technopoleis for shared prosperity at Core Concept which called for the establishment home and abroad. Traditionally research on of 28 research centers or technopoleis. The technopoleis has focused on fostering regionally- program passed by the Japanese Diet promoted based technology-intensive wealth and job four types of research facilities (Tatsuno, 1986): creation. However, increasingly the emphasis, from the public and private sectors, has shifted 1. Experimental research institutes for toward international collaboration. This paper joint industrylacademiclgovernment suggests that as the world’s technopoleis move research into the 2 lstCentury the linking of talent, technology, capital, and business know-how 2 . New research training and educational through global networked entrepreneurship will facilities become a reality. Furthermore, globally-based “experiential learning laboratories” will be 3. The creation of conference and considered fundamentally important to shortened exhibition halls, and data base systems product development and commercialization for improved access to technical cycles. information INTRODUCTION 4. Venture business incubators Strategies for building and sustaining successful Ample funding and meticulous, long-term plans high technology regions have been proposed and lead to the emergence of Tsukuba (about 70 implemented worldwide ever since leaders from miles north of Tokyo) and Kansai (outside of business, government, and academia began to Osaka). While attractive buildings have been take notice of the wealth creation potential and constructed and beautiful parks landscaped, the technology spurred growth of such pioneering creation of wealth and high value jobs has not “technopoleis” as Silicon Valley, California and been as dramatic as expected. While basic Route #128 Boston, MA (Rogers and Larsen, research has been a primary stated objective in 1984, Botkin, 1986). However, outside of a few these “science cities,” issues of science and select and important visionaries, such as technology commercializationand return on Professor Frederick Terman at Stanford investment (ROI) are becoming more University, these initial and perhaps most pronounced. For example, a ten year survey of successful technopoleis were not planned nor Kansai revealed there have been no spin-out were they managed as strategic regions. They were primarily fostered by entrepreneurial behavior in universities and in businesses which Some technopoleis are the result of long-term often led to spin-out and fast-growth companies. planning and varying degrees of public/private collaboration, such as Tsukuba and Kansai Japan was one of the first nations to engage in science cities, Japan; Bari, Italy; Sophia- long-term planning and managed high-tech Antipolis, France; and Raleigh-Durham, North Carolina.1060-3425/98 $10.000 1998 IEEEProc. 31st Annual Hawaii International 291Conference on System Sciences
  2. 2. companies and no profit for Keihanna Plaza(Honjo, 1997). And universities in Osaka andTokyo are beginning to offer courses inentrepreneurshipand technology venturing.Smilor, Gibson, and Kozmetsky (1988) suggestthat four factors are fundamental to thedevelopment of a region as a technopolis leadingto the creation of wealth and high value jobs: (1)the achievement of scientific preeminence intechnology-based research, ( 2 ) the developmentof new technologies for emerging industries, (3)the attraction and retention of major technologycompanies, and (4) the creation and nurturing of Wheel Framework for Global Networked Figure 1: The Technopol~shome-grown technology companies. Many Entrepreneurshipscholars, practitioners, and government leaderswould argue that three underlying phenomena arecritical and necessary to achieve these four While this paper supports the importance of afactors: regional focus it also emphasizes the fostering and leveraging of global linkages through 1. A world-class research university with regionally-based research universities, large and top programs in emerging technology small companies, local government, and support areas to train the needed talent and to groups. For the more established as well as research new and emerging emerging worldwide technopoleis/science cities, technologies. wealth and job creation in a sustainable environment increasingly depend on globally 2. A “smart infkastructure” or the linked publidprivate collaboration. A major managerial, entrepreneurial, legal, challenge facing high tech regions, and the firm’s financial, manufacturing, sales, and that reside in these regions, is how to effectively distribution talent and infrastructure and efficiently acquire, transfer, and needed to commercialize emerging commercializ science and technology- technologies and innovative business technology that is developed worldwide at ideas. research universities, federal laboratoriedinstitutes, and consortia. Often these 3. A high quality of life to attract and R&D facilities are physically and culturally retain talented people. separate from organizations that seek to apply and commercialize the technologies.IC2 Institute researchers offer the framework of GLOBAL NETWORKEDthe Technopolis Wheel to assess the impact of ENTREPRENEURSHIPcritical components in regionally-basedhightechnology development (Figure 1). The sectorsare as folIows: Quality education with anemphasis on the research university, largecompanies, start-ups and spin-outs, federal, state. high degree of communication with a system’sand local government, and support groups. external environments), ( 2 ) opinion leadersEmphasis i s placed on the importance of regional (individuals who are able to influence othercollaboration as well as competition within and individuals’ attitudes or overt behavior), and (3)across these sectors. This regional collaboration liaisons (individuals who connect otherwiseis fostered by 1st and 2ndlevel influencers from separate communication networks). The personalacademia, business, and government.* communication networks of first- and second- level influencers tend to be outward looking and - global, as opposed to closed and provincial. The2 First- and second-level influencers are success of GNE is to a large degree dependent onidentified in the communication literature as (1) the networking activities of such influencers fromcosmopolites (individuals who have a relatively different sectors of the technopolis wheel. 292
  3. 3. This paper builds on the above perspectives growth, diversification, and new businesswhile focusing on Globally Networked development.Entrepreneurship (GNE) and the related conceptof “Innovation Boot Camps.” Technology Talent without ideas is like seed without water.entrepreneurship as described by IC2Institute in When talent is linked with technology, whenthe early 1990s focused on regionally linking people facilitate the push and pull of viable ideastalent-people, technology-ideas, capital-financial to commercialization,the entrepreneurial processresources, and business know-how (see Figure is underway. Every dynamic process needs fuel,2). GNE focuses on having small and emerging and here the fuel is capital. Capital is the catalysthigh tech companies globally linked to talent, in the technology venturing chain, capital, and know-how throughpersonal networks and information highways. Know-how is the ability to leverage business orIdeally such globalization occurs as firms are scientific knowledge by linking talent,launched and as they grow and not after they are technology, and capital in emerging andestablished and large. The Innovation Boot expanding enterprises. It finds and appliesCamp centers on taking seasoned executives out expertise in a variety of areas, making theof established corporations, locating them in an difference between success and failure. Thisentrepreneurial environment, and teaming them expertise, or “smart infrastructure”, involvesnationally and globally. management, marketing, finance, accounting, production, manufacturing, sales and“No matter what field you are talking distribution, as well as legal, scientific, andabout - electronics, medical, engineering, the environment,entertainment - the global marketplace GNE argues for the importance of globallyopens up more opportunities than I have sourcing and linking of these sectors as firms areseen in my lifetime. Very few launched and as they grow. In short, firms do notgenerations throughout history, perhaps wait until they dominate local or domesticnot since the Renaissance, have been markets before they go global. Start-up firmsaccorded the opportunities this period with specialized technologies use globalprovides. It is a profoundly different networks to seek out niche markets and” For example, GNE suggests that while a regionally-based start-up may have an excitingDr. George Kozmetsb, Chairman of the Board, niche technology and exceptional entrepreneurialICz Institute, 1993 winner of the National Medal talent it may lack sufficient capital and businessof Technology Quoted in Inc. mazazine, 1996. know-how to market this technology globally. Perhaps the local market is too competitive or too small. The challenge is to globally access talent, technology, capital, and business know- how as the company struggles to survive and grow. Barriers to a global strategy for small start-up firms that are considered generic to all countries include:Figure 2: Critical Success Factors for The small, entrepreneurial staffTechnology-Based Entrepreneurship being pre-occupied with local markets and challengesEntrepreneurial talent results from the 0 Limited personnel, resources, andperception, drive, tenacity, dedication, and hard timework of special types of individuals-people who Limited tolerance for the addedmake things happen. Where there is a pool of challenges a global perspectivesuch talent, there is opportunity for economic brings such as intellectual property protection, trade and labor issues 293
  4. 4. The challenge of assessing foreign challenges are nurturing the right opportunities and ignorance of interpersonal skills and being able to possible benefits as well as assimilate different cultures.” challenges to a global perspective Kun-Hee, Lee Sumsung GroupGNE is made possible through globally Chairman on the dedication ofnetworked teams that include technologists and the billion dollar Sumsungentrepreneurs as well as managers, finance, legal, semiconductorfacility insales, and distribution personnel. International Austin, Texas Austin Americancollaborations are seen to be important for Statesman, November 15, 1996overcoming challenges of local language, culture,legal, and policy differences. Challenges that 3M is often touted as being one of the world’scan quickly overwhelm and defeat a small most innovative companies. The company hascompany. International GNE teams are seen to thousands of products, a great percentage ofbe a way to rapidly provide local expertise and which have been introduced within the past threeknowledge. The objective is to solve regionally- years. Employees are encouraged tobased problems faster shortening learning curves communicate freely across functional areas andand to minimizing the threat of costly business they are encouraged to spend time on innovativeand marketing mistakes. projects that they champion. Stories like the “chaotic” productization of the Post-It Notes abound. Still the company is challenged toBenefits to GNE can include: accelerate its search for creative and innovative Niche market dominance and technologies and emerging global markets. growth Access to needed talent, technology, capital, and know-how IC2 Institute and 3M Corporation are forming a Minimizing costly mistakes and strategic partnership on what has been labeled an ‘‘Innovation Boot Camp.” The focus is on mis-spent resources technology innovation and commercialization. Shortening the learning curve and The Boot Camp is designed for senior executives solving problems faster responsible for new product development, R&D laboratories, technology commercialization andLarge technology-intensiveinternational other areas that rely on innovation. Thecompanies have long been going abroad for argument is that in large corporations, even thoseinexpensive labor and manufacturing as well as as innovative as 3M, managers and techniciansmarket expansion. However, these same tend to loose their entrepreneurial and creativecompanies increasingly have a global orientation instincts over time. They tend to becomein their search for capital, managerial talent, and overwhelmed with the immediacy of events andtechnology. Major challenges for large firms are bureaucracy. They tend to loose sight of the(1) the sourcing of new technology and (2) new, exciting and perhaps breakthroughmaintaining an entrepreneurial spirit among opportunities at hand.employees. There is increasing pressure to befaster and more efficient in globally accessing The ICZ-3MInnovation Boot Camp is beingtechnology, taking it to commercial application, designed to stimulate new behavior, thoughtand successfully marketing resulting products processes, and skills consistent with those ofand services. While there are considerable successful technology entrepreneurs. The Bootchallenges to achieving such goals nationally, the Camp is to sharpen global intrapreneurialchallenges increase dramatically, as these f m s instincts-the foundation for innovationattempt to shorten product development and leadership. Technology innovation andmarketing cycles globally. commercialization must be viewed within a global context. For example, ideas, expertise,“If we fall behind in globalization we materials and components for a proposed newwill self-destruct. In the 21st Century product might originate at many differentisolation means digression and possible locations globally. The Boot Camp will employdestruction. As challenging as the following unique characteristics:technology transfer will be, the real 294
  5. 5. ’ Develop innovative ways to regionally and Immersion: Executives will be placed in globally leverage capital, talent, technology, The Austin Technology Incubator for two to ~ and ‘know-how’ resources three years. They will be partnered with 0 Leverage R&D to: non-3M technologists, managers, and I -Achieve early success entrepreneurs. 1 -Contribute to newer industries and smart Global Interaction: The Boot Camp Team will participate in global innovation and commercialization projects through geographically distributed innovation teams. business, and government sectors across national boundaries. Experiential Learning: The executives will learn by being engaged in real-life, real-time innovation and commercializationprojects. Follow Through: During the Boot Camp the Transferring “R&D” with executives will transfer the “lessons learned’ * Market Rrrcarch know h w back to their counterparts and others at 3M * F i n a n a d hnow-hov Lseal k n o a - h o w and, if the experiment succeeds, they will P r o d u c t m hnon h o x D i l n b u t i o n PSISI and I C ~ ~ E nou LL ham launch new products and even new divisions around Boot Camp technology. Figure 3: Crossing the Technology Transfer Gap with Know-HowIncubators have traditionally been a way to foster Figure 3 depicts how the regional and globalpublic/private collaboration at the regional level know-how networks of a Globally Linked-to spur economic development, fill vacant Incubator cross the technology transfer gapoffice space, train entrepreneurs, and create high- between research strength and marketvalue jobs. At their best such incubators have applications leading to wealth creation. Theacted as “lightening rods” at the regional level primary drivers are entrepreneurs andlinking talent, technology, capital, and business technology, which come from the private sector,know-how to market needs. And the incubator universities, federal laboratories, and R&Dcan serve as a “learning laboratory” for local consortia nationally or globally. The challengecolleges and universities as well as regionally- is to foster the global linking of cutting-edgebased professionals. research and technology with venture financingGlobal Networked Entrepreneurship seeks to and the realities of the international marketplace.foster the global linking of incubators. As a Whereas technology reports, patents, andregionally-based incubator can fill the technology technology licenses are often the output of R&Dtransfer gap between applied R&D and product environments, they are considered inputs to thecommercialization local and national sources of due diligence and business plans required at theR&D and local and national markets, it can also Globally Linked Incubator. GNE strives toserve as an effective bridge across the academic, shorten product development cycles by broadening tenant entrepreneurs’ global know- how in market research, finance, advertising,Global Networked Incubators Can Act as a quality issues, management, sales, and service.Catalyst to: The entrepreneurial culture emphasizes the importance of intangibles (e.g., business know-0 Promote partnerships between large how and learning from each other) over tangibles companies and entrepreneurial firms (e.g., a modem expensively furnished facility) regionally and globally and it reinforces resource leveraging and0 Foster collaborations across academic, spending hard to get cash on things that add business, government sectors globally value, speed globally networked0 Promote and support entrepreneurial vision entrepreneurship and productlprocess and leadership commercialization (Figure 4). 295
  6. 6. EnhaneL its associated Fellows that are located in the C r a d i b i l i n and Trust on G l o b a l N c w o r k r I academic, business, and government sectors globally. These communication networks have centered on research and education in the area of science and technology commercialization. International and multi-disciplinary teams haveFigure 4: Globally Networked Incubator worked on "unstructured problems" in such areas as technopolis and regional economic development, entrepreneurship and technologyFOSTERING VIABLE GLOBAL venturing, and critical success factors forENTREPRENEURIAL NETWORKS technology incubators and capital networks.Fostering viable communication networks is key I P S locally-based learning laboratories includedto realizing benefits to GNE and the Innovation the Austin Technology Incubator, The CapitalBoot Camp. Advanced communication Network, and the Austin Technopolis. Based ontechnologies can facilitate such regional and the lessons learned from these "learningglobal networks. Whether the fax, better phone laboratories" innovative concepts andconnections, e-mail, the WWW, or economical management techniques were transferredand reliable two-way interactive video, nationally to such organizations as NASAsadvanced technologies are bringing to reality the Ames Research Center in Sunnyvale, CA and themeans to achieve the global village. However, Johnson Space Center in Houston Texas. MoreIC2 Institute research has shown that recently IC2 Institute is working with theimplementing these enabling technologies is not National Oceanic and Atmosphericsufficient for a viable global network. Administration (NOAA) to launch and operate the Center for Technological Innovation inThe Institutes most successful global Charleston, SC. The Institute has globalcollaborations are primarily based on personal partners to facilitate GNE in Japan, China,relationships with locally respected and active Korea, Taiwan, Australia, Mexico, Brazil,champions. Long-term personal relationships Russia, Ukraine, and Portugal.based on trust and mutual benefit are consideredessential. Short-term relations are not sufficientbecause to realize sufficient win-win scenarioscollaborators often must overcome, in the shortterm, loose-win and win-loose situations. Short- Bra211 Cumlba Chinaterm gains and loses, for all parties in the Shanghsi Hccr R"**B !.orsowcollaboration, must be balanced with longer term Ukraine TalWa" Klr"visions that all parties can support. Hlnrsh" South Korea iaeion Japan OS*hPersonal chemistry among collaborators should Lisbon POItUgd Chilenot be discounted. On-site visits need to occur 5antmg.a Romaniadespite frequent technology-mediated IkII MeXlCD MO"tW,SYcommunication. Mutual trust is essential as is an Figure 5: Globally Networked Entrepreneurshipunderstanding of the "real world" constraints that Partners Linked by Talent, Technology, Capitalface the global partners. Constraints that inhibit and Know-How"ideal" behavior and outcomes. Such a globalunderstanding requires an appreciation of the The challenge is to foster and maintain viablenorms and values, policies, and informal business entrepreneurial and professional networks forenvironments of all participants. accessing and leveraging global talent by specialization; technology by area of expertise;IC2 INSTITUTES STRATEGY FOR capital by type (e.g., seed, venture, businessFOSTERING GNE angels, banks, government); and know-how (e.g., marketing, legal, sales and distribution,Since its founding in 1977, IC2 Institute has management, manufacturing). A current IC2fostered global partnerships and alliances thought research project is to completethe matrix (shown 296
  7. 7. in Figure 5 ) for specific technologies with regard support institutions representing academia,to specific global partners. business, and government.M.S. Degree Program CONCLUSIONIn 1996 IC2Institute, The University of Texas atAustin launched an innovative MS Degree Technology continues to shrink the world. ThereProgram in Science and Technology is no choice other than to participate in the globalCommercialization. A pressing challenge is to community. Science and technology is toeffectively leverage the Institute’s national and precious a resource to be restricted from drawingglobal “learning laboratories” for educational the world together. That is what the 21” Centuryand research advancements as well as to foster is all about.regionally-based economic development.Classes for this innovative one-year degree Dr. George Kozmetskyprogram are held simultaneously in Austin, Chairman of the BoardTexas and Fort Belvoir, Virginia. Two-way ICz Instituteinteractive video and e-mail is used to link thesegeographically separate sites. The Austinstudents emphasize their experiences in smalland large technology companies while the The 1990s were argued to be the era ofVirginia students bring government and policy boundaryless, virtual corporations that areperspectives to class. Teams composed of composed of networks of independent companiesstudents from both locations work on “real-life’’ linked by advanced information technology. Thetechnology commercialization projects. In objective is to share skills and costs and to accessaddition to US citizens, students enrolled in the one another’s technology and markets. Suchprogram are from Mexico, Japan, and Brazil. collaborations were to be temporary andEarly on it was realized that the benefits of responsive to rapid changes in the globalbringing a professionally and “situationally” marketplace. A communication super-highway isdiverse group of students together overwhelmed to permit far-flung units of different companiesthe challenges of teaching across professional to quickly locate supplies, designers, andand functional differences and geographic manufacturers through an informationdistances. clearinghouse. Once connected, these virtual corporations were expected to sign “electronicIn the next phase of MS Degree Program contracts” to speed linkages without legaldevelopment, the Institute seeks to teach students headaches. Advanced technology was the key toon-site in other countries. This will be making this happen. Years of “lessons learned”accomplished through two-way video, e-mail, have demonstrated to even the most ardentand on-site faculty visits. ICz’s first global technologists that there are significantpartners in this experiment are the Instituto organizational challenges to establishing andSuperior Tecnico (IST) in Lisbon, Portugal and maintaining such “technologically sophisticated”The Academy of National Economy, Moscow. collaborative alliances. Advanced technologyThe program will involve participants from the has not caused organizations, communities, andInnovation Boot Camp and emphasize strategic regions to become more collaborative.experiential learning in global enterprise Advanced technology is an important tool thatinnovation and commercialization-global team can facilitate the process. The real challenges arebuilding on actual innovation and behavioral and managerial.commercializationprojects. ICz’s global partnersfrom academia, business, and government willcontribute to curriculum design and testing. The REFERENCESglobal classroom will to a certain extent exist incyber space where internationalteams of [l] Botkin, James (1986), “Route 128: Itsentrepreneurs will collaborate to access needed History and Destiny,” in (1988), Creating thetalent, technology, capital, and know-how. Technopolis: Linking TechnologVHowever, this “space” will be anchored by Commercialization and Economic Development,incubators with walls and their regionally-based Cambridge, MA: Ballinger. 297
  8. 8. [2] Gibson, David V. and E.R. Rogers (1994),R&D Collaboration on Trial: TheMicroelectronics and Computer TechnologyCorporation. Boston, MA: Harvard BusinessSchool Press.[3] Gibson, David V. and Raymond Smilor(December, 199I), “Key Variables inTechnology Transfer: A Field-Study BasedEmpirical Analysis,” Journal of Engineering andTechnology Management, Vol. 8, pp. 287-3 12.[4] Gibson, David V., George Kometsky, andRaymond W. Smilor, eds. (1992). TheTechnopolis Phenomenon: Smart Cities, FastSystems, and Global Networks. Savage, MD:R o m a n & Littlefield.[5] Rogers, Everett M. and Judith K. Larsen(1984), Silicon Valley Fever: Growth of High-Tech Culture, New York, Basic Books.[6] Smilor, Raymond W., David V. Gibson, andGeorge Kometsky (eds.) (1988), Creating theTechnopolis: Linking TechnologyCommercialization and Economic Development,Cambridge, MA: Ballinger.[7] Tatsuno, Sheridan (1986). The TechnopolisStrategy. Englewood Cliffs, NJ: Prentice-Hall. 298