Andreas Fier

Publicly Funded R&D Collaborations and Patent Outcome in Germany

The stimulation of co-operations and networks has become very popular in R&D policies in recent years. This study examines the development and the impact of publicly funded R&D consortia in Germany. The paper describes the history of R&D funding in Germany with a focus on the development of measures encouraging collaborative R&D activities among firms and public research institutions. Due to a recent shift of policies to more competitive procedures in awarding public funds for R&D, we investigate empirically the impact of such measures on patenting activity at the firm level. The microeconometric results show that collaborating firms are more likely to patent than others. Within the group of collaborating firms, participants in publicly sponsored R&D consortia exhibit a higher propensity to patent than firms in non-sponsored networks. Especially SMEs seem to benefit from spillovers which makes their application for patents more likely.

Die Evolution der bundesdeutschen Forschungs- und Technologiepolitik: Rückblick und Bestandsaufnahme

Abstract We consider the development of German federal research and technology (R&T) policies since the 1960s and sketch the evolution of todays highly differentiated and complex set of policy instruments. Advances from economic theory and empirical results are reflected in this evolution, but have not necessarily been the driving force. In some instances, innovative policy instruments have been introduced in order to accommodate the state of the art in economic analysis; in other cases, such innovations have preceded a thorough analysis of the respective policy instruments. A major point of concern is the lack of comprehensive evaluation and cost-benefit analyses in R&T policies. In this regard, German policy practice lags behind well-established procedures in other countries.

The Internationalisation of Young High-Tech Firms

Established theories in international business come to different conclusions when specifically applied to the analysis of the international activities of start-up companies in high-technology industries. Using a new dataset of 495 British and German start-ups operating in high-technology industries, we analyse the differences between those companies that have built up international activities and those which only compete in their home country. Our findings suggest that the key discriminatory variables are: age, the extent to which the product requires customisation, regularity of R&D activities, and the international professional experience of the founders. These findings suggest that internationalisation of New Technology Based Firms is best explained by adopting elements from a number of different theoretical frameworks.

Internationalisation of High-Tech Start-Ups and Fast Growth - Evidence for UK and Germany

For firms acting in technological niches the expansion into foreign markets can be a way to increase sales and to thus to recover initial sunk costs over a shorter time frame. Our research, based on survey data for nearly 600 British and German high-tech start-ups, examines whether internationalisation leads to faster growth among high-tech start-ups. Results show that firms with international sales have higher sales growth than firms that sell only domestically. We find that technological sophistication of products and the experience of entrepreneurs has a positive impact on growth. In addition, intense competition and shorter windows of opportunity increase the pressure to grow rapidly to appropriate the returns from innovation. The findings suggest that high tech firm founders should be more determinedly international in their vision and strategies from the very start of their business to increase the economic success of their efforts.

Does R&D-Infrastructure Attract High-Tech Start-Ups?

Our research, based on the ZEW-Foundation Panel East, examines whether high-tech start-ups are mainly founded in scientific and infrastructural well suited regions or not. Estimation results on the level of postcode areas confirm the hypothesis that specific human capital, knowledge spillovers at higher-education institutions are more important for founding a firm in one of the high-tech sectors compared with the effects of other publicly financed institutions. The existence of large companies in the manufacturing sector has a considerable effect for start-up activities in this region in general. Moreover, high-tech start-ups are more concentrated within or near technology and foundation centres.

Review Essay: Regional Venture Capital Policy: UK and Germany Compared1

The government has become an important ‘player’ in the provision of early-stage, venture capital finance to nascent and growing businesses. Public funds have been invested by government agencies both directly to client firms and indirectly via investment in the funds of existing venture capital organisations. With the demise of technology stocks post 2000, governments have felt the need to become more involved in the provision of early-stage finance as private investors have increasingly withdrawn from equity markets that have produced unattractive longer-term returns to technology investments. Europe is in the forefront of designing programmes by which the state may intervene to address allegedly supply-side failures in the market for risk capital. Martin et al. (2003) analyse the regional Venture Capital policies of the UK and Germany reviewing the interactions between central governments and regional authorities. They conclude that there are significant regional venture capital gaps in both countries particularly at the earliest stages of investment. In this review, the major findings of their scientific study, key policy implications and future research implications are discussed.

The Effect of Internationalisation on the Rate of Growth of High-Tech Start-Ups: Evidence for the UK and Germany

Much attention in empirical research on entrepreneurship has been devoted to the growth and survival of young enterprises. Economic policy-makers too are increasingly attempting to improve the climate for the genesis and growth of new businesses. Arguably, this is due to a widespread belief of the large potential for job creation by successful, new businesses. More recently, the rapid internationalisation of high-tech start-ups has generated increasing attention. It is argued that a global markets presence is essential for a high-tech firm’s long term success, including its ability to reap acceptable profits from innovation. Case study evidence suggests that early internationalisation contributes to success in high-tech markets. The step from home to foreign markets is often associated with increased growth prospects. 70 percent of UK firms (and 60 percent of German firms) in our sample of high-tech start-ups consider the potential of foreign markets for long-term company growth as their main motive for international business activities. Exploitation of the potential of foreign markets appears especially important for young firms acting in technological niches with typically short product life cycles.They often have to recover considerable initial R&D expenses and investments in human/capital assets in relatively short periods of time. Invariably, international business activities are more costly and time consuming for a small firm than the alternative of exclusively serving a local or national home market. A perverse result of rapid internationalisation is that it may initially actually retard firm growth. Therefore, the growth-enhancing effects of international business activities may be seen as ambiguous — at least in the short run

Description of Methodology

The rationale of this research project is to address the lack of specifically European- based knowledge about the international activities of start-up companies in high-tech industries. To this end, we have adopted a two-stage, research methodology. During Stage I which lasted from January to July 1998, a large scale, postal survey was carried out in order to collect data from the founders/senior management of high-technology start-ups (NTBFs) in both Germany and the UK. Subsequent to the postal survey, in Stage 2, a number of the original respondents in both countries were selected for further investigation based on a set of variables deemed important to the study. These firms were then invited to take part in a series of 40 case studies.

Theoretical Background and the Operationalisation of the Hypotheses

We will now briefly describe the dominant theories in the field of international business. From the discussion of these theories, we derive a serie s of hypotheses with regard to the determinants of different dimensions of internationalisation. In addition to these theoretical models, our analytical framework was based on existing exploratory studies on the international activities of high-technology startups.

Descriptive Analysis of the Data Set

The goal of this chapter is twofold. First, it presents a general description of the processes of firm formation and subsequent internationalisation in technologyintensive industries. This is valuable in its own right given that it allows the specific characteristics of high-tech start-ups or new technology-based firms (NTBFs) to be highlighted. Further, these data enable us to compare our sample with selected data from other NTBF studies. Second, by employing an international and comparative perspective, we are able to identify and investigate differences between German and UK firms . How such differences might influence their international orientation is a major focus of this study. The empirical survey data on which this comparison is made comprise firm-specific information and founderspecific characteristics as well as details of essential features of the main products and/or processes of the firms . The questionnaire from which these data were obtained are in Appendix B.