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- Journals and periodicals: 88-517-XGeography: CanadaDescription:
New firms are seen to play a key role in the innovation process, especially in certain key sectors of the economy. This study therefore examines the differences in the profiles of successful new firms in science-based industries and other industries. The firms that are examined are entrants who survey into their early teen years. The study examines numerous factors that are seen to influence the success of new businesses. These include the competitive environment, business strategies and the financial structure of the businesses.
Successful new firms in science-based industries are found to differ in a number of dimensions from new firms in other industries. They are more likely to be exporters. They face greater technological change and intense competition with regards to the rate at which new products are being introduced. They tend to put more emphasis on quality, the frequent introduction of new products and the customization of products. They make greater use of information technology. They place more stress on new technology development, research and development facilities and the use of intellectual property. They are much more likely to innovate and they place more importance on recruiting skilled labour and on training. Finally, they are more likely to use non-traditional financial measures to evaluate performance and they are less likely to rely on secured credit for financing both their research and development activity and their machinery and equipment that are firms in other sectors.
Release date: 1999-03-31 - 2. Are There High-tech Industries or Only High-tech Firms? Evidence from New Technology-based Firms ArchivedArticles and reports: 11F0019M1998120Geography: CanadaDescription:
Considerable attention has been directed at understanding the structural changes that are generating an increased need for skilled workers. These changes are perceived to be the result of developments associated with the emergence of the new knowledge economy, whose potential is often linked to the growth of new technology-based firms (NTBFs). Where are these firms to be found? Related work on changes in technology and innovativeness has been accompanied by the creation of taxonomies that classify industries as high-tech or high-knowledge, based primarily on the characteristics of large firms. There is a temptation to use these taxonomies to identify new technology-based firms only within certain sectors. This paper uses a special survey that collected data on new firms to argue that this would be unwise.
The paper investigates the limitations of existing classification schemes that might be used to classify industries as high- or low-tech, as advanced or otherwise. Characteristically unidimensional in scope, many of these taxonomies employ conceptual and operational measures that are narrow and incomplete. Consequently, previous rankings that identify sectors as high- or low-tech using these measures obscure the degree of innovativeness and human capital formation exhibited by certain industries. In a policy environment wherein emotive 'scoreboard' classifications have direct effects on resource allocation, the social costs of misclassification are potentially significant.
Using a comparative methodology, this study investigates the role that conceptualization plays in devising taxonomies of high- and low-tech industries. Far from producing definitive classifications, existing measures of technological advancement are found to be wanting when their underpinnings are examined closely. Our objective in the current analysis is to examine the limitations of standard classification schemes, particularly when applied to new small firms, and to suggest an alternative framework based on a competency-model of the firm.
Release date: 1998-12-08
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- Journals and periodicals: 88-517-XGeography: CanadaDescription:
New firms are seen to play a key role in the innovation process, especially in certain key sectors of the economy. This study therefore examines the differences in the profiles of successful new firms in science-based industries and other industries. The firms that are examined are entrants who survey into their early teen years. The study examines numerous factors that are seen to influence the success of new businesses. These include the competitive environment, business strategies and the financial structure of the businesses.
Successful new firms in science-based industries are found to differ in a number of dimensions from new firms in other industries. They are more likely to be exporters. They face greater technological change and intense competition with regards to the rate at which new products are being introduced. They tend to put more emphasis on quality, the frequent introduction of new products and the customization of products. They make greater use of information technology. They place more stress on new technology development, research and development facilities and the use of intellectual property. They are much more likely to innovate and they place more importance on recruiting skilled labour and on training. Finally, they are more likely to use non-traditional financial measures to evaluate performance and they are less likely to rely on secured credit for financing both their research and development activity and their machinery and equipment that are firms in other sectors.
Release date: 1999-03-31 - 2. Are There High-tech Industries or Only High-tech Firms? Evidence from New Technology-based Firms ArchivedArticles and reports: 11F0019M1998120Geography: CanadaDescription:
Considerable attention has been directed at understanding the structural changes that are generating an increased need for skilled workers. These changes are perceived to be the result of developments associated with the emergence of the new knowledge economy, whose potential is often linked to the growth of new technology-based firms (NTBFs). Where are these firms to be found? Related work on changes in technology and innovativeness has been accompanied by the creation of taxonomies that classify industries as high-tech or high-knowledge, based primarily on the characteristics of large firms. There is a temptation to use these taxonomies to identify new technology-based firms only within certain sectors. This paper uses a special survey that collected data on new firms to argue that this would be unwise.
The paper investigates the limitations of existing classification schemes that might be used to classify industries as high- or low-tech, as advanced or otherwise. Characteristically unidimensional in scope, many of these taxonomies employ conceptual and operational measures that are narrow and incomplete. Consequently, previous rankings that identify sectors as high- or low-tech using these measures obscure the degree of innovativeness and human capital formation exhibited by certain industries. In a policy environment wherein emotive 'scoreboard' classifications have direct effects on resource allocation, the social costs of misclassification are potentially significant.
Using a comparative methodology, this study investigates the role that conceptualization plays in devising taxonomies of high- and low-tech industries. Far from producing definitive classifications, existing measures of technological advancement are found to be wanting when their underpinnings are examined closely. Our objective in the current analysis is to examine the limitations of standard classification schemes, particularly when applied to new small firms, and to suggest an alternative framework based on a competency-model of the firm.
Release date: 1998-12-08
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