University Spin-Out (USOs) companies are becoming an increasingly popular means of commercialising academic research, and have thus attracted a great deal of attention on behalf of researchers and practitioners alike.
While the literature on academic spin-outs has made considerable progress, insights on how they evolve and expand into international markets are limited. This gap is surprising, particularly given the widespread attention devoted to international growth of Small and Medium-sized Entreprises (SMEs) in the broader entrepreneurship literature.
The present study addresses this particular gap by exploring how the pre-foundation period of USOs might influence their international activities, understood here in terms of exports. In particular, this study focuses on two aspects of the pre-foundation period: Entrepreneurial Proactiveness and Social Capital.
Research Aim:
Entrepreneurial Proactiveness, traditionally viewed by the entrepreneurship literature as one of the three dimensions of Entrepreneurial Orientation (EO), is understood as an organisation’s ability to recognise and aggressively pursue opportunities ahead of competition. Studies have shown that, in an effort to establish and maintain their competitive position in foreign markets, it is critical for firms to identify profitable opportunities abroad, thereby making Proactiveness a critical strategic posture for internationalising firms.
The purpose of this study is to investigate whether Proactiveness during the pre-foundation period of USOs influences the firm’s international expansion.
RQ1: How does Entrepreneurial Proactiveness during the pre-foundation period influence USO internationalisation?
Additionally, this study explores the mediating role of the firm’s pre-foundation Social Capital (SC) on the firm’s Proactiveness to internationalise, where SC can be understood as the value embedded in the organisation’s networks of relationships.
This second research question stems from the numerous studies demonstrating that Social Capital can compensate for the shortcomings in Human Capital and Entrepreneurial Orientation. Given the strong academic background of University Spin-Out founders, who thus tend to have low levels of entrepreneurial orientation, social capital is likely to take a more prominent role in the process of firm internationalisation.
RQ2: How does pre-foundation Social Capital mediate between the USO’s Proactiveness and its internationalisation?
Methodology:
The methodology adopted for this study is qualitative, employing a case study methodology of two Italian engineering-focused universities. Italy was selected as the context for this study, firstly due to the small size of the market, thereby rendering it more likely for USOs to internationalise; secondly, due to the dearth of studies focusing on the evolution of Italian USOs. A total of 33 interviews were carried out, and later transcribed and translated by the authors. The interviewees involved international and non-international USO founders, senior management representatives of incubators, Technology Transfer Offices, external investors, industrial partners, and a range of market agencies.
Results:
Thematic analysis of the data has shown USO Proactiveness supports the firm’s international expansion and that, in fact, it accelerates the process. Furthermore, social networks – industrial partners in particular - are shown to increase USO proactiveness to pursue international growth by assisting with opportunity identification and exploitation, by contributing a range of commercial skills, and by financially supporting the venture.
