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New technology-based firms in the 1990s
Published
Technovation, 16(2) (1996) 97-98 by Elsevier Science Ltd. Printed in Great Britain 0166-4972196
$15.00 + 0.00
ELSEVIER
ADVANCED
Book reviews NewTechnology-Based Finnsinthe 1990s by R. Oakey (ed.). Paul Chapman Publishing, London, 1994, 218 pp., ISBN l-85396274-0, $39.95. The first annual High Technology Small Firms Conference was held at Manchester Business School in June 1993. Ray Oakey has produced an edited selection of the best papers at that conference. Beginning in the late 1970s there was a stirring of both academic and governmental interests about new technology-based firms (NTBFs). They were seen as developing new firms, generating employment and linking universities with business interests. Ray Oakey in his introduction provides a very useful review and overview of the unfolding of events through the 1980s and into the early 1990s. The book then continues with seventeen papers usefully organized in four thematic sections: 0 Entrepreneurship and vation Management, 0 Finance, 0 Intellectual Property, 0 Policy.
Inno-
Such thematic coverage provides many valuable perspectives for those starting up and managing NTBFs along with those who are trying to establish a supportive economic environment at the local and national policy level. Unfortunately, in the early 1980s there was the widespread political belief that NTBFs were the best alternative to declining traditional industries and that NTBFs would be profitable over the short term, thereby attracting private sector venture capital and at the same time creating high quality new jobs. But overarching this, as Oakey asserts in his introduction (p. 2): “Probably the most misguided belief
among political and media commentators during this period was that NTBFs would thrive in the non-interventionist ffree market’ conditions established by the United Kingdom government. ...[While in] this introduction and the wealth of evidence in the following chapters, amply proves this assumption to be simplistic in the extreme. ”
Given such damning conclusions, what can be usefully learned? Here Oakey has marshalled the contributions of some twenty-five authors broadly covering many parts of Europe, through to India, Taiwan and America. This allows the reader to be able to compare and contrast on a very wide basis many of the finer details which can lead to the success or failure of NTBFs. Like the innovation process itself, the success or failure of NTBFs does not have a simple or single-factored explanation. Significantly, Roy Rothwell has written the lead article in this book and it neatly outlines the whole problem and much of the direction for its solution. It is titled The changing nature of the innovation process: implications for SMEs in general and
NTBFs in particular. Rothwell powerfully argues that we have moved on from the simple models of the innovation process such as technology push or market pull. We now have a fifth-generation model which is based on systems integration and networking (p. 13): “Fully integrated parallel development. Use of expert systems and in R&D. simulation modelling Strong linkages with leading edge customers (‘customer focus’ at the forefront of strategy). Strategic integration with primary suppliers including co-development of new products and linked CAD systems. Horizontal linkages: joint ventures; collaborative research groupings; collaborative marketing arrangements, etc. Emphasis on corporate flexibility and speed of development (time-based stategy). Increasedfocus
on quality and other non-price factors. ”
Given that the nature of the innovation process has changed, then similarly the nature of NTBFs must change. NTBFs must be systems integrators and networkers if they are to be successful. In another recent book, Whittington [l] has argued that the strategic survival of all types of firm will be based on their ability to be systems integrators and networkers. This is all very powerful evidence for how NTBFs must innovate and behave, in the future, if they are to survive. Oakey sums up the policy section with the important observation (p. 9) that “While it would be presumptuous in the extreme for academics to expect governments to follow their policy prescriptions without question, it is reasonable to expect governments to take note of clearly identijied problems with the current environment for NTBFs. The purpose of this book, and the annual conference from which it has emanated, is to provide government with continuing and evolving focus on both the problems faced by NTBFs, and suggestions for their amelioration. The 1980s have provided us with enough accumulated evidence of the needs of NTBFs to allow better informed policies that will help ensure that the 1990s will not repeat the lost opportunities of the previous decade. ”
Let us hope that the next book of proceedings from the MBS conference on High Technology Small Firms will begin to show a positive way forward. Paul Gardiner The Open University May 1995
REFERENCE What is stratand does it matter? Rout-
1 R. Whittington. egy -
ledge, London, 1993, 165 pp. Tedmvation
Vd. 16 No. 2 97
Technovation, 16(2) (1996) 97-98 by Elsevier Science Ltd. Printed in Great Britain 0166-4972196
$15.00 + 0.00
ELSEVIER
ADVANCED
Book reviews NewTechnology-Based Finnsinthe 1990s by R. Oakey (ed.). Paul Chapman Publishing, London, 1994, 218 pp., ISBN l-85396274-0, $39.95. The first annual High Technology Small Firms Conference was held at Manchester Business School in June 1993. Ray Oakey has produced an edited selection of the best papers at that conference. Beginning in the late 1970s there was a stirring of both academic and governmental interests about new technology-based firms (NTBFs). They were seen as developing new firms, generating employment and linking universities with business interests. Ray Oakey in his introduction provides a very useful review and overview of the unfolding of events through the 1980s and into the early 1990s. The book then continues with seventeen papers usefully organized in four thematic sections: 0 Entrepreneurship and vation Management, 0 Finance, 0 Intellectual Property, 0 Policy.
Inno-
Such thematic coverage provides many valuable perspectives for those starting up and managing NTBFs along with those who are trying to establish a supportive economic environment at the local and national policy level. Unfortunately, in the early 1980s there was the widespread political belief that NTBFs were the best alternative to declining traditional industries and that NTBFs would be profitable over the short term, thereby attracting private sector venture capital and at the same time creating high quality new jobs. But overarching this, as Oakey asserts in his introduction (p. 2): “Probably the most misguided belief
among political and media commentators during this period was that NTBFs would thrive in the non-interventionist ffree market’ conditions established by the United Kingdom government. ...[While in] this introduction and the wealth of evidence in the following chapters, amply proves this assumption to be simplistic in the extreme. ”
Given such damning conclusions, what can be usefully learned? Here Oakey has marshalled the contributions of some twenty-five authors broadly covering many parts of Europe, through to India, Taiwan and America. This allows the reader to be able to compare and contrast on a very wide basis many of the finer details which can lead to the success or failure of NTBFs. Like the innovation process itself, the success or failure of NTBFs does not have a simple or single-factored explanation. Significantly, Roy Rothwell has written the lead article in this book and it neatly outlines the whole problem and much of the direction for its solution. It is titled The changing nature of the innovation process: implications for SMEs in general and
NTBFs in particular. Rothwell powerfully argues that we have moved on from the simple models of the innovation process such as technology push or market pull. We now have a fifth-generation model which is based on systems integration and networking (p. 13): “Fully integrated parallel development. Use of expert systems and in R&D. simulation modelling Strong linkages with leading edge customers (‘customer focus’ at the forefront of strategy). Strategic integration with primary suppliers including co-development of new products and linked CAD systems. Horizontal linkages: joint ventures; collaborative research groupings; collaborative marketing arrangements, etc. Emphasis on corporate flexibility and speed of development (time-based stategy). Increasedfocus
on quality and other non-price factors. ”
Given that the nature of the innovation process has changed, then similarly the nature of NTBFs must change. NTBFs must be systems integrators and networkers if they are to be successful. In another recent book, Whittington [l] has argued that the strategic survival of all types of firm will be based on their ability to be systems integrators and networkers. This is all very powerful evidence for how NTBFs must innovate and behave, in the future, if they are to survive. Oakey sums up the policy section with the important observation (p. 9) that “While it would be presumptuous in the extreme for academics to expect governments to follow their policy prescriptions without question, it is reasonable to expect governments to take note of clearly identijied problems with the current environment for NTBFs. The purpose of this book, and the annual conference from which it has emanated, is to provide government with continuing and evolving focus on both the problems faced by NTBFs, and suggestions for their amelioration. The 1980s have provided us with enough accumulated evidence of the needs of NTBFs to allow better informed policies that will help ensure that the 1990s will not repeat the lost opportunities of the previous decade. ”
Let us hope that the next book of proceedings from the MBS conference on High Technology Small Firms will begin to show a positive way forward. Paul Gardiner The Open University May 1995
REFERENCE What is stratand does it matter? Rout-
1 R. Whittington. egy -
ledge, London, 1993, 165 pp. Tedmvation
Vd. 16 No. 2 97