Creating Communities of Practice: Entrepreneurial Learning in a University-Based Incubator (International Studies in Entrepreneurship, 46) 3030629619, 9783030629618

Table of contents :
Contents
Abbreviations
List of Figures
List of Tables
Chapter 1: Introduction: An Overview of the Research
1.1 Introduction
1.2 The Study of INNOSPACE
References
Chapter 2: Business Incubation
2.1 Introduction and Background
2.2 Definitions of Business Incubation
2.3 Examining Business Incubation
2.4 University-Based Incubation (UBI)
2.4.1 UBIs and the Management Team
2.5 Summary
References
Chapter 3: Entrepreneurship, Opportunities and Entrepreneurial Learning
3.1 Introduction
3.2 Defining Entrepreneurship
3.2.1 Defining Opportunity Identification
3.2.2 Prior Knowledge
3.3 Perspectives on Entrepreneurial Learning
3.3.1 Entrepreneurial Learning
3.3.2 Experiential Learning Theory
3.4 Entrepreneurial Learning in the Context of an Incubator
3.4.1 Learning in Communities of Practice
3.4.2 A Learning Model
3.5 Summary
References
Chapter 4: Research Methods
4.1 Introduction
4.2 Researching Entrepreneurship
4.3 Research Approach
4.3.1 The Case Study Organisation
4.4 Interviews with Incubatees and the Management Team
4.5 Data Analysis
4.6 Summary
References
Chapter 5: The INNOSPACE Experience
5.1 Introduction
5.2 Six Individual Pathways
5.2.1 Andy´s Experience: INNOSPACE as a Transitional Phase
5.2.2 Jane´s Experience: INNOSPACE Separating Work and Home
5.2.3 Ian´s Experience: INNOSPACE as a Physical and Social Space
5.2.4 Tony´s Experience: INNOSPACE as a Talent Pool
5.2.5 Paul´s Experience: INNOSPACE as a Resource Repository
5.2.6 Kath´s Experience: INNOSPACE as a Driver of Entrepreneurial Spirit
5.3 Analysis: The Incubation Process
5.3.1 Pathways Through INNOSPACE
5.3.2 Business Support
5.3.3 The Social Aspects of Business Incubation
5.3.4 Collaboration Between Tenants
5.4 Summary
References
Chapter 6: The Role of Prior Knowledge in Opportunity Identification
6.1 Introduction
6.2 Prior Knowledge
6.2.1 Prior Knowledge of Markets
6.2.2 Prior Knowledge of Customer Problems
6.2.3 Personal Interests
6.2.4 Prior Knowledge of Markets and Customer Problems
6.2.5 Prior Knowledge of Markets and Means to Serve Markets
6.2.6 Prior Knowledge of Markets and Personal Interests
6.2.7 Prior Knowledge of Customer Problems and Means to Serve Markets
6.2.8 Prior Knowledge of Markets, Customer Problems and Means to Serve Markets
6.2.9 Prior Knowledge of Markets, Customer Problems and Personal Interests
6.3 Analysis: Prior Knowledge and Opportunity Identification
6.3.1 Stream 1: Change and Innovation
6.3.2 Stream 2: Knowledge Transfer
6.3.3 Stream 3: Knowledge Replication
6.4 Summary
References
Chapter 7: Learning and Opportunity Development in INNOSPACE
7.1 Introduction
7.2 Opportunity Development and Entrepreneurial Learning
7.2.1 Andy: Learning About Customer Problems
7.2.2 Jane: Learning New Business Skills
7.2.3 Ian: Learning About Networking
7.2.4 Tony: Learning How to Serve Customers
7.2.5 Paul: Learning About Markets
7.2.6 Kath: Learning from Others
7.3 Analysis: Entrepreneurial Learning and Opportunity Development
7.3.1 The Exploitation of Prior Knowledge
7.3.2 Transformation of Identity and Opportunities
7.3.3 Acquisition of Skills and Competencies
7.4 Summary: The INNOSPACE Learning Community
References
Chapter 8: Discussion: The INNOSPACE Community of Practice
8.1 Introduction
8.2 Entrepreneurial Learning and Business Incubation
8.2.1 The Business Incubation Process
8.2.2 Entrepreneurs, Prior Knowledge and Opportunity Identification
8.2.3 Entrepreneurial Learning in a Business Incubator
8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development
8.3.1 INNOSPACE as a Community of Practice
A Physical and Social Space to Start a Business
A Trusted Place to Forge Collaborations and Alliances
A Resource Harbour
A Learning Space for Acquiring Knowledge, Information and Skills
A Catalyst for Developing Business Ideas
A Learning Community where Incubatees Become Entrepreneurs
A Source of New Businesses and Jobs for the Region
8.4 Summary
References
Chapter 9: Conclusion: Contribution, Implications and Future Research
9.1 Introduction
9.2 Contribution to Knowledge
9.3 Implications of the Research
9.3.1 Implications for Incubation Managers (IM)
9.3.2 Implications for Prospective and Existing Incubatees
9.3.3 Implications for PolicyMakers
9.4 Reflexive Research Account
9.5 Summary and Future Research
References
Chapter 10: Postscript: Creating and Managing a University-Based Incubator
10.1 Introduction: Initiating INNOSPACE
10.2 The Evolution of INNOSPACE
10.3 Managing INNOSPACE
10.4 INNOSPACE: Envisioning a Community of Practice
10.5 INNOSPACE: The Move to Maturity (2014-2019)
10.6 INNOSPACE Case Studies
10.6.1 Lee McAteer: Invasion Camp Group
10.6.2 Fiona McKay: Lightbulb Leadership Solutions
10.6.3 Nick Richardson: The Insights People
10.6.4 Jamie Bettles: Pagoda Projects
10.6.5 Dan Sodergren: Great Marketing Works and YourFLOCK
10.6.6 Rob Woollen: Rightway Wellbeing Ltd.
10.6.7 Summary: Building Successful Companies
10.7 Conclusion: Fulfilling the Original Vision?
References
Appendix A: Interview Schedule for Incubatees
Appendix B: Interview Schedule for Management Team/Steering Group
Appendix C: First Coding Template
Appendix D: Final Coding Template
Appendix E: The Incubation Process
Appendix F: Dimensions of Prior Knowledge and Personal Interests
Appendix G: Director´s Welcome to INNOSPACE Launch Event
Appendix H: Letter to Advisory Board

Citation preview

International Studies in Entrepreneurship

Oswald Jones PingPing Meckel David Taylor

Creating Communities of Practice Entrepreneurial Learning in a University-Based Incubator

International Studies in Entrepreneurship Volume 46

Series Editors Zoltan J. Acs, George Mason University, Fairfax, VA, USA David B. Audretsch, Indiana University, Bloomington, IN, USA

More information about this series at http://www.springer.com/series/6149

Oswald Jones • PingPing Meckel • David Taylor

Creating Communities of Practice Entrepreneurial Learning in a UniversityBased Incubator

Oswald Jones University of Liverpool Management School University of Liverpool Liverpool, UK

PingPing Meckel University of Central Lancashire Preston, UK

David Taylor Business School Manchester Metropolitan University Manchester, UK

ISSN 1572-1922 ISSN 2197-5884 (electronic) International Studies in Entrepreneurship ISBN 978-3-030-62961-8 ISBN 978-3-030-62962-5 (eBook) https://doi.org/10.1007/978-3-030-62962-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Chapters One to Nine were written by Oswald Jones and PingPing Meckel. David Taylor co-authored Chapter Ten with Oswald Jones.

Contents

1

Introduction: An Overview of the Research . . . . . . . . . . . . . . . . . 1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 The Study of INNOSPACE . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . .

1 1 4 8

2

Business Incubation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Introduction and Background . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Definitions of Business Incubation . . . . . . . . . . . . . . . . . . . . . . 2.3 Examining Business Incubation . . . . . . . . . . . . . . . . . . . . . . . . 2.4 University-Based Incubation (UBI) . . . . . . . . . . . . . . . . . . . . . 2.4.1 UBIs and the Management Team . . . . . . . . . . . . . . . . 2.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13 13 17 19 23 28 30 33

3

Entrepreneurship, Opportunities and Entrepreneurial Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Defining Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Defining Opportunity Identification . . . . . . . . . . . . . . 3.2.2 Prior Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Perspectives on Entrepreneurial Learning . . . . . . . . . . . . . . . . 3.3.1 Entrepreneurial Learning . . . . . . . . . . . . . . . . . . . . . 3.3.2 Experiential Learning Theory . . . . . . . . . . . . . . . . . . 3.4 Entrepreneurial Learning in the Context of an Incubator . . . . . 3.4.1 Learning in Communities of Practice . . . . . . . . . . . . . 3.4.2 A Learning Model . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 41 42 45 47 51 52 53 58 60 63 65 66

. . . . . . . . . . . . .

vii

viii

Contents

4

Research Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Researching Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Research Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 The Case Study Organisation . . . . . . . . . . . . . . . . . . 4.4 Interviews with Incubatees and the Management Team . . . . . . 4.5 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . .

77 77 79 81 83 85 87 90 91

5

The INNOSPACE Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Six Individual Pathways . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Andy’s Experience: INNOSPACE as a Transitional Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Jane’s Experience: INNOSPACE Separating Work and Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Ian’s Experience: INNOSPACE as a Physical and Social Space . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 Tony’s Experience: INNOSPACE as a Talent Pool . . . 5.2.5 Paul’s Experience: INNOSPACE as a Resource Repository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.6 Kath’s Experience: INNOSPACE as a Driver of Entrepreneurial Spirit . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Analysis: The Incubation Process . . . . . . . . . . . . . . . . . . . . . . 5.3.1 Pathways Through INNOSPACE . . . . . . . . . . . . . . . 5.3.2 Business Support . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.3 The Social Aspects of Business Incubation . . . . . . . . 5.3.4 Collaboration Between Tenants . . . . . . . . . . . . . . . . . 5.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . .

95 95 96

.

96

.

98

6

. 101 . 103 . 105 . . . . . . . .

108 110 111 113 114 114 115 117

The Role of Prior Knowledge in Opportunity Identification . . . . . . 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Prior Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.1 Prior Knowledge of Markets . . . . . . . . . . . . . . . . . . . . 6.2.2 Prior Knowledge of Customer Problems . . . . . . . . . . . 6.2.3 Personal Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.4 Prior Knowledge of Markets and Customer Problems . . . 6.2.5 Prior Knowledge of Markets and Means to Serve Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.6 Prior Knowledge of Markets and Personal Interests . . . 6.2.7 Prior Knowledge of Customer Problems and Means to Serve Markets . . . . . . . . . . . . . . . . . . . . 6.2.8 Prior Knowledge of Markets, Customer Problems and Means to Serve Markets . . . . . . . . . . . . . . . . . . . .

119 119 120 121 123 124 125 126 127 128 129

Contents

ix

6.2.9

Prior Knowledge of Markets, Customer Problems and Personal Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Analysis: Prior Knowledge and Opportunity Identification . . . . 6.3.1 Stream 1: Change and Innovation . . . . . . . . . . . . . . . 6.3.2 Stream 2: Knowledge Transfer . . . . . . . . . . . . . . . . . 6.3.3 Stream 3: Knowledge Replication . . . . . . . . . . . . . . . 6.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

8

9

. . . . . . .

130 131 133 133 134 135 137

Learning and Opportunity Development in INNOSPACE . . . . . . . . 7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Opportunity Development and Entrepreneurial Learning . . . . . . 7.2.1 Andy: Learning About Customer Problems . . . . . . . . . 7.2.2 Jane: Learning New Business Skills . . . . . . . . . . . . . . . 7.2.3 Ian: Learning About Networking . . . . . . . . . . . . . . . . . 7.2.4 Tony: Learning How to Serve Customers . . . . . . . . . . . 7.2.5 Paul: Learning About Markets . . . . . . . . . . . . . . . . . . . 7.2.6 Kath: Learning from Others . . . . . . . . . . . . . . . . . . . . 7.3 Analysis: Entrepreneurial Learning and Opportunity Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.1 The Exploitation of Prior Knowledge . . . . . . . . . . . . . . 7.3.2 Transformation of Identity and Opportunities . . . . . . . . 7.3.3 Acquisition of Skills and Competencies . . . . . . . . . . . . 7.4 Summary: The INNOSPACE Learning Community . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

139 139 140 141 142 143 144 145 146

Discussion: The INNOSPACE Community of Practice . . . . . . . . . 8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Entrepreneurial Learning and Business Incubation . . . . . . . . . . 8.2.1 The Business Incubation Process . . . . . . . . . . . . . . . . 8.2.2 Entrepreneurs, Prior Knowledge and Opportunity Identification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.3 Entrepreneurial Learning in a Business Incubator . . . . 8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.1 INNOSPACE as a Community of Practice . . . . . . . . . 8.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173 173 174 175

. . . .

147 148 152 167 169 170

. 177 . 179 . . . .

181 185 188 189

Conclusion: Contribution, Implications and Future Research . . . . . 9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Contribution to Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Implications of the Research . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.1 Implications for Incubation Managers (IM) . . . . . . . . . 9.3.2 Implications for Prospective and Existing Incubatees . . . 9.3.3 Implications for PolicyMakers . . . . . . . . . . . . . . . . . . .

195 195 196 198 199 200 201

x

Contents

9.4 Reflexive Research Account . . . . . . . . . . . . . . . . . . . . . . . . . . 202 9.5 Summary and Future Research . . . . . . . . . . . . . . . . . . . . . . . . . 205 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 10

Postscript: Creating and Managing a University-Based Incubator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Introduction: Initiating INNOSPACE . . . . . . . . . . . . . . . . . . . 10.2 The Evolution of INNOSPACE . . . . . . . . . . . . . . . . . . . . . . . 10.3 Managing INNOSPACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4 INNOSPACE: Envisioning a Community of Practice . . . . . . . 10.5 INNOSPACE: The Move to Maturity (2014–2019) . . . . . . . . . 10.6 INNOSPACE Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . 10.6.1 Lee McAteer: Invasion Camp Group . . . . . . . . . . . . . 10.6.2 Fiona McKay: Lightbulb Leadership Solutions . . . . . . 10.6.3 Nick Richardson: The Insights People . . . . . . . . . . . . 10.6.4 Jamie Bettles: Pagoda Projects . . . . . . . . . . . . . . . . . 10.6.5 Dan Sodergren: Great Marketing Works and YourFLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.6.6 Rob Woollen: Rightway Wellbeing Ltd. . . . . . . . . . . 10.6.7 Summary: Building Successful Companies . . . . . . . . 10.7 Conclusion: Fulfilling the Original Vision? . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . .

211 211 212 215 218 220 224 224 225 226 226

. . . . .

227 228 229 230 232

Appendix A: Interview Schedule for Incubatees . . . . . . . . . . . . . . . . . . . 233 Appendix B: Interview Schedule for Management Team/Steering Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Appendix C: First Coding Template . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 Appendix D: Final Coding Template . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 Appendix E: The Incubation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Appendix F: Dimensions of Prior Knowledge and Personal Interests . . . 253 Appendix G: Director’s Welcome to INNOSPACE Launch Event . . . . . 259 Appendix H: Letter to Advisory Board . . . . . . . . . . . . . . . . . . . . . . . . . 261

Abbreviations

ATDC BEIS BI CfE CoP CSES DfES DTI ELT ERDF ESF EU FDI GEM IM IPR KIBS KPI KTP LPP MBA MEF MMU MMUBS NECI NES NESTA NSTBF OECD ONS

Advance Technology Development Center Business, Energy and Industrial Strategy (Department of) Business incubator Centre for Enterprise Community of practice Centre for Strategy & Evaluation Services Department for Education & Science (no longer in existence) Department of Trade & Industry (no longer in existence) Experiential learning theory European Regional Development Fund European Social Fund European Union Foreign direct investment Global Entrepreneurship Monitor Incubator manager Intellectual property rights Knowledge intensive business services Key performance indicators Knowledge transfer partnerships Legitimate peripheral participation Masters in Business Administration Mechanical engineering firms Manchester Metropolitan University Manchester Metropolitan University Business School National Entrepreneurship Context Index New Entrepreneur Scholarship National Endowment for Science, Technology and the Arts New science and technology-based firms Organisation for Economic Co-operation and Development Office for National Statistics xi

xii

PR R&D RBV SEC TMT UBI UK USI UTBI VC

Abbreviations

Public relations Research and Development Resource-based view Science enterprise challenge Top management team University-based incubator United Kingdom University science incubator University technology business incubators Vice-chancellor

List of Figures

Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 5.4 Fig. 5.5 Fig. 5.6 Fig. 5.7 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 6.5 Fig. 6.6 Fig. 6.7 Fig. 6.8 Fig. 6.9 Fig. 6.10 Fig. 6.11 Fig. 8.1

The experiential learning cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extending Kolb’s experiential learning cycle . .. . .. . .. .. . .. . .. . .. . .. Entrepreneurial learning in a University-based Incubator (UBI) . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . Andy’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jane’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ian’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tony’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paul’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kath’s INNOSPACE experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business incubation pathways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior knowledge of markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior knowledge of customer problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal interests . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . Prior knowledge of markets and customer problems . . . . . . . . . . . . . . Prior knowledge of markets and means to serve markets . . . . . . . . . Prior knowledge of markets and personal interests . . . . . . . . . . . . . . . . Prior knowledge of customer problems and means to serve markets .. . . .. . . .. . . . .. . . .. . . . .. . . .. . . . .. . . .. . . . .. . . .. . . .. . . . .. . . .. . . . .. . Prior knowledge of markets, customer problems and means to serve markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior knowledge of markets, customer problems and personal interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The role of prior knowledge in opportunity identification . . . . . . . . . Distribution of prior knowledge and personal interests . . . . . . . . . . . . The business incubation process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54 56 64 97 100 102 105 107 109 116 122 124 125 126 127 128 129 130 130 132 135 184

xiii

List of Tables

Table 2.1 Table 3.1 Table 4.1 Table 4.2 Table 4.3 Table 5.1 Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 8.1 Table 10.1

UK private sector businesses (2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Generic entrepreneurial competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sources of information on participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profiles of participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of interviews . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . Idea development in INNOSPACE . . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . Knowledge development in INNOSPACE . . . . . . . . . . . . . . . . . . . . . . . Transformation of entrepreneurial identities . . . . . . . . . . . . . . . . . . . . . . Transformation of opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of skills and competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . The Kolb cycle (quotes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recent INNOSPACE licensees (tenants) . . . . . . . . . . . . . . . . . . . . . . . . .

14 50 84 86 87 111 150 153 160 168 182 221

xv

Chapter 1

Introduction: An Overview of the Research

1.1

Introduction

In the early years of the twenty-first century, a number of UK reports stressed the importance of universities making a bigger contribution to economic development and growth (DfES 2003; DTI 1998, 2000; Lambert 2003). Incorporation of the ‘third mission’ (Clark 1998; Lambert 2003; Van Vught 1999), which encouraged universities to become integral to regional economic development, formalised a process that was widely adopted in the USA (Etzkowitz 1998; Henry 1998). In addition, changes to UK government funding regimes promoted ‘the third mission’ to the top of the agenda for Vice-Chancellors (Woollard et al. 2007). For example, involvement with the New Entrepreneur Scholarship (NES) enabled a number of universities to develop innovative programmes designed to support individuals from disadvantaged backgrounds start their own businesses (Jayawarna et al. 2011). More recently, Paolini et al. (2019: 197) stressed the importance of ‘relational capital’ as the means by which universities ‘promote and emphasise the effectiveness of the third mission’. Etzkowitz (2003) uses the term ‘entrepreneurial university’ to define those institutions committed to regional economic development. It has been adopted by academics and policymakers to describe universities that effectively deliver on their ‘third mission’. Developing a more entrepreneurial culture is regarded as the essential mechanism through which universities become effectively involved in economic development (Hagen 2002; Fairweather 1990; Liu and Dubinsky 2000). Etzkowitz and Leydesdorff (2000) describe the evolution of tripartite relationships between university, industry and government through the Triple Helix III model which, they claim, most countries are trying to achieve. Other work on university–industry links emphasises the role of higher education institutes in regional systems of innovation as the primary driver of economic development (Bercovitz and Feldman 2006). There is a large degree of agreement with the view that active relationships within the Triple Helix system helps develop an entrepreneurial culture within universities © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_1

1

2

1 Introduction: An Overview of the Research

(Etzkowitz et al. 2000; Wonglimpiyarat 2016). Increased understanding of universities in economic development provides a useful framework to assist managers and administrators create strategies for their institutions to become more entrepreneurial and innovative (Woollard et al. 2007; Horner et al. 2019). Recently, Galvão et al. (2019: 815) identified the emergence of quadruple and quintuple models (Carayannis and Campbell 2009), which add civil society and the ‘natural environments of society’. According to the quintuple helix approach, the natural environment of societies and economies drive the production of knowledge and innovation (Carayannis et al. 2012; Carayannis and Campbell 2011, 2012; Carayannis and Rakhmatullin 2014). Incorporating the ecological helix can be linked to the ecosystem approach in which end-users and stakeholders combine to develop innovation in a real-world environment (Alsos et al. 2011; Baccarne et al. 2016). In addition to the ‘third mission’ and engagement with business, an increasingly important element of any entrepreneurial university is a strong commitment to enterprise education (Hyams-Ssekasi and Caldwell 2018; Lourenco et al. 2013; Pittaway and Cope 2007) and the support of graduate entrepreneurship through the provision of incubation facilities (McAdam and Marlow 2008). The UK government, like most other developed and developing countries, has encouraged the creation of business incubators to enhance technology transfer from universities as a way of improving economic performance (Cooper and Park 2008; McAdam et al. 2009; Redondo and Camarero 2019a). US universities have also been heavily involved in the development of business incubators (Hackett and Dilts 2004; Temali and Campbell 1984). Such facilities enable universities to engage in technology transfer as well as providing support for nascent entrepreneurs (Mascarenhas et al. 2019; Markman et al. 2005; Rothaermel and Thursby 2005a). This emphasis on incubation coincided with an increase in university courses designed to promote entrepreneurship to undergraduate and postgraduate students (Herrmann et al. 2008). Pittaway and Cope (2007), based on their systematic review of the literature, suggest there are areas where there is a critical mass of knowledge related to enterprise education. These areas include ‘student propensity, pedagogy, management education development and work on the enterprising university’ (Pittaway and Cope 2007: 498). The authors also suggest that there are significant gaps in the knowledge based including a lack studies that provide a better understanding of the impact enterprise education has on the ‘performance’ of those choosing to pursue entrepreneurial careers. Enterprise education is aimed at ‘achieving a learning culture’ which will equip greater numbers of students to engage in business start-up activities (Kothari and Handscombe 2007). This commitment to enterprise education is based on the idea that entrepreneurship can make a real economic difference by creating new firms and new jobs as well as innovating new products and services. The authors describe the role of Sheffield’s White Rose Centre for Enterprise (WRCE) in embedding enterprise skills within the University’s curriculum. Science Enterprise Challenge (SEC) helped promote the importance of links between universities, enterprise education and business (Handscombe 2003; Handscombe et al. 2009). SEC was reinvented as

1.1 Introduction

3

‘Enterprise Education UK,1 and continues to promote the benefits of student entrepreneurship. Champions of academic enterprise suggest that student education needs to shift away from a traditional learning mode of study to an approach that immerses students in enterprise activities (Gibb 2011). For example, Lorenco and Jones (2006) describe the importance of enterprise educators adopting active learning techniques such as role-play, field trips and scenario planning alongside conventional classroom pedagogy. Enterprise education is only effective if it encourages some members of the student population to consider starting their own businesses. Many UK universities offer pre-incubation or ‘hatchery’ facilities to help students make the transition into entrepreneurship (Voisey et al. 2013). Recent graduates engaged in business startups have a number of significant disadvantages including, of course, the likelihood that they will have accumulated substantial debts during their studies. Most are unlikely to have any real business experience although they will have limited social networks and lack credibility with resource providers. Incubation can help overcome such liabilities in a number of different ways. For example, being based in a university incubator is consistent with the idea that entrepreneurial learning is experiential in nature. Incubation provides an ideal opportunity for learning-bydoing as well as social learning through engaging with others who are involved in the start-up process. Becoming part of a ‘community of practice’ (Lave and Wenger 1991) helps nascent entrepreneurs acquire knowledge and engage in active learning. In addition, incubation provides access to key knowledge brokers such as incubation managers who can link young and inexperienced entrepreneurs to those with greater experience (Van Weele et al. 2018), as well as potential resource providers in the form of larger companies, business angels and, eventually, venture capitalists (McAdam et al. 2016). In a study of university technology business incubators, Patton and Marlow (2011) argue that to gain real benefit entrepreneurs have to actively engage with support offered by incubation managers (Kakabadse et al. 2020). Equally, incubation managers have to work within the existing ‘institutional logics’ to ensure that incubators provide integrated services for those engaged in business start-up (Dee et al. 2015; Redondo and Camarero 2017). Battisti and McAdam (2012) examine how graduate entrepreneurs develop their social capital while based in a university science incubator. They found that family and friends were the most important resource-providers for graduates at the start-up stage. More surprisingly, these strong ties still dominated after more than 2 years of incubation. This suggests that the incubator offered a limited brokerage role in helping these inexperienced entrepreneurs link into broader networks (Eveleens et al. 2017).

1

https://www.enterprise.ac.uk/. Accessed 14 August 2020.

4

1.2

1 Introduction: An Overview of the Research

The Study of INNOSPACE

The catalyst for this book was the involvement of the first author in the founding of the incubator based in Manchester Metropolitan University Business School’s (MMUBS) Centre for Enterprise [CfE] (see Chap. 10). Staff in the Centre had been involved in a number of projects supporting young entrepreneurs attempting to start their own businesses. However, on leaving their academic studies there were few avenues to obtain support while they developed their business ideas. Another influence was a doctoral study that compared nascent entrepreneurs from the NES programme (managed by CfE staff) with students participating in SEC (Science Enterprise Challenge) at Manchester University (Lee 2009, 2017). SEC students were based in a business incubator that provided working space for those attempting to establish new businesses and helped create ‘a community of practice’ amongst the students (Lee 2009). The SEC incubator stimulated interest in the potential for a similar facility in MMUBS. INNOSPACE was founded using support from MMUBS, in the form of a large space in which to house the incubator, and ERDF funding, which was used to convert and equip the building to provide support for at least 100 students and graduates from all Faculties within the University. INNOSPACE was viewed as part of the University’s commitment to ‘third mission’ rather than a commercial enterprise (this issue is discussed in more detail in Chap. 10). From the outset, the vision was to encourage the development of a ‘community of practice’ within INNOSPACE, which would lead to knowledge-creation and knowledge-sharing amongst all incubatees. Staff from the CfE (Centre for Enterprise), as well as from MMUBS, were encouraged to participate in various activities within INNOSPACE. As academic members of the CfE were all active researchers, they were also aware that setting up INNOSPACE provided a unique opportunity to examine the effectiveness of the incubator in creating a true learning community. Therefore, soon after the incubator was founded, a Ph.D. student (second author) was recruited to research the operation of INNOSPACE. The doctoral candidate was embedded in the incubator and became an active member of the Steering Group, which oversaw the progress of all incubatees. This book draws on extensive qualitative data and documentary evidence from a range of stakeholders associated with INNOSPACE. The process of opportunity development within the business incubator is explored by combining experiential and social learning theories as heuristic tools. This leads to a nuanced conceptualisation of business incubation as a learning process that begins with prior knowledge at the opportunity identification phase, progresses through the acquisition of the skills and knowledge necessary to develop an opportunity and concludes with a transformation phase where new knowledge is created (business ideas and opportunities). Unlike many earlier studies that examine business incubators (BIs) from management’s point of view, we focus on the incubation process from the perspectives of incubatees. In particular, to understand the role played by university-based incubators (UBIs) in enhancing entrepreneurship, we explore

1.2 The Study of INNOSPACE

5

incubatees’ learning activities associated with their INNOSPACE tenancy. The research outcomes suggest that being located in INNOSPACE helped incubatees obtain specialist knowledge and skills while developing their business ideas. A novel finding of the book is that the incubatees used INNOSPACE as a ‘fast-track’ to acquire additional skills by forging alliances with other incubatees. Developing skills in this way helped incubatees to start up and grow their businesses more quickly than when working alone. The findings indicate that knowledge alone cannot fully explain the entrepreneurial process (Gartner 1985; Reynolds 2011). The dynamics of learning offer a fuller understanding of how information, experience, skills and identity can be transformed into new knowledge, which in turn leads to opportunity identification and development. Crucial to this process is a supportive learning community where incubatees receive relevant information in an atmosphere of trust. Incubator management teams should create a supportive environment, where incubatees will not give up too early as they learn throughout the process to become entrepreneurs. As for prospective and existing incubatees, the outcomes of the study highlight the importance of the transformational process (experience, knowledge and identity) that takes place in an incubator. Learning is key to the entrepreneurial process as incubatees obtain relevant information and combine it with their prior knowledge to create new knowledge. The study has a number of implications for policymaker and incubator managers. Developing a deeper understanding of how incubatees explore, identify and develop opportunities suggests a fresh approach to the policy agenda. First, scarce resources should be focused on providing relevant information and encouraging an atmosphere of learning and mutual support. Secondly, a less ‘managerial’ approach should be adopted by managers acting as mentors to support and encourage incubatees. Thirdly, recruitment practices should be revised to include a more holistic appreciation of potential incubatees’ contribution to the incubator learning community as well as an assessment of their business plans. For policymakers, the study suggests that successful business incubators do not necessarily require a large financial investment in state-of-the-art premises or technologies. Appropriate management training, together with carefully selected incubatees, can create an effective learning community where opportunities are developed and transformed into enterprises and individuals into entrepreneurs. Ultimately, the growth in entrepreneurship will have an impact on the regional economy. Crucial to a successful UBI is the management team and incubatees working together to build an effective learning community. At the conceptual level, this study links entrepreneurial learning within an incubator to the concept of ‘communities of practice’ (Lave and Wenger 1991). Handley et al. (2007) claim that, originally, situated learning in communities of practice (CoP) was associated with relatively small groups of learners with similar skills (tailors and midwives for example). Gradually, the focus shifted to what Soekijad et al. (2011: 1005) describe as ‘geographically distributed groups of individual members, who might neither know one another nor meet face-to-face (Brown and Duguid 1991)’. As pointed out by Agterberg et al. (2010: 86), most research on networks of practice (NOPs) has focused on intra-organisational

6

1 Introduction: An Overview of the Research

learning in large companies such as Shell (Wenger et al. 2002). This study is very different, unlike earlier firm-level studies and more recent work (Lefebvre et al. 2015), which focus on formal CoP (communities of practice) networks, the INNOSPACE ‘community’ was characterised by a diverse, informal group of would-be entrepreneurs who were pursuing a range of business opportunities. This study also builds on earlier work which examines entrepreneurial learning (Patton and Marlow 2011), the significance of social capital (Battisti and McAdam 2012; Taylor et al. 2004) and networking (McAdam and Marlow 2008) in the context of university incubators. In extending work on entrepreneurial learning and communities of practice, we are able to demonstrate how a diverse group of individuals were encouraged to create an effective learning community. Business incubators are used by policymakers around the world as tools to encourage early entrepreneurial activities, promote business start-ups and encourage regional economic development (Harper-Anderson and Lewis 2018; Mian et al. 2016). Indicators of success are often based on agreements with funders and typically require quantitative data recording start-up survival and success rates, turnover and jobs created. However, conceptualising success in terms of conventional, quantifiable outcomes fails to capture softer measures of success such as learning, knowledge and experience that are arguably equally important in building and sustaining entrepreneurship (Gabrielsson and Politis 2015). Importantly it says little about the complex and nuanced journey that entrepreneurs undertake during the incubation process (Mian 2014). To redress this imbalance, business incubation researchers (Lukeš et al. 2019; Mian et al. 2016; Theodorakopoulos et al. 2014) have called for more process-orientated studies that explore softer measures of success, such as learning within a business incubator (BI). This book will address this gap in knowledge by exploring the incubation experience from the perspective of the incubatees, drawing on theories from both entrepreneurship and learning frameworks. The overall aim of the research is to examine the role of a university-based incubator (UBI) in developing a learning community of practices that supports entrepreneurship. In order to do so, we draw on rich qualitative data collected from various actors associated with INNOSPACE. The book is organised as follows; Chap. 2 sets the context for the study by charting the development of business incubation through the existing literature. It is evident that definitions of business incubation evolve with the development of this literature. However, a general consensus emerges which suggests that the study of business incubators should shift from a focus on outputs to the incubation process itself. In order to achieve this, it is proposed that viewing incubation through the lens of entrepreneurial learning will contribute to a more robust understanding of the business incubation process. Chapter 3 builds on this work by reviewing literature in the fields of entrepreneurship, opportunity identification and entrepreneurial learning. The chapter begins by highlighting the interplay between entrepreneur and opportunity in contemporary definitions of entrepreneurship. Recent developments in the entrepreneurship literature, which shift views from the notion that ‘opportunities are discovered’ to the

1.2 The Study of INNOSPACE

7

idea that ‘opportunities are created’ are then examined. Accepting that opportunities can be created opens up the possibility of exploring the interplay between the entrepreneur and the opportunity as a learning process. The chapter builds on this approach by drawing on literature related to entrepreneurship, learning and communities of practice to develop a framework for studying the business incubation process. Chapter 4 sets out the research methods and establishes the philosophical stance underpinning the research. The research approach is then outlined together with details on the study sample as well as the techniques used for data collection, data management and analysis. Chapter 5 explores the process of business incubation by presenting in-depth lived experiences of the participants. Using narratives as a tool, the chapter presents six detailed and distinctive pathways of business incubation. These pathways provide a context for the study and allow a deeper understanding of the process through which individuals start-up and nurture their businesses in INNOSPACE, as well as the role played by the incubator management team. Chapter 6 examines the interaction between entrepreneur and opportunity by focusing on the role of prior knowledge in opportunity identification. In total, 23 opportunities were identified amongst the 20 participants and the relationship between each opportunity and the incubatee’s prior knowledge are explored. The chapter builds on Shane’s (2000) three types of prior knowledge and proposes the inclusion of a fourth (personal interests), based on the work of Ardichvili et al. (2003). The chapter extends the current understanding of the role of prior knowledge by detailing the impact of each combination of these forms of prior knowledge and identifying three outcomes that prior knowledge can have on opportunity identification. Chapter 7 builds on the work presented in Chaps. 5 and 6. The process of opportunity identification and development is investigated in greater detail. Using experiential learning theory, we explore how the new information and skills were acquired through INNOSPACE, which lead to opportunity development. In addition, the chapter investigates the transformation process of individuals, specifically in relation to ‘becoming entrepreneurs’ and joining the INNOSPACE community. Both information and skills are crucial for incubatees to develop their business ideas. Belonging to INNOSPACE provides a fast-track for incubatees to acquire new skills by creating a friendly, supportive and informal learning community, forging alliances and building partnerships with other incubatees. Chapter 8 draws the work together by setting out how the book has addressed the research question described in Chap. 4 and assesses the contribution to knowledge. Drawing on an abductive approach to the research, we also develop a revised model of the incubation process. Chapter 9 summarises the study and outlines the implications for incubation managers, incubatees and policymakers. Our reflexive account of undertaking this study is presented together with suggestions for future research. Chapter 10, Postscript: Creating and Managing a University-based Incubator, provides a narrative account of how INNOSPACE was originally founded and

8

1 Introduction: An Overview of the Research

where the idea of a community of practice originated. We also bring the story up-todate by outlining recent developments in the incubator together with details of outcomes such as the total number of incubatees nurtured over a 13-year period. In addition, we provide a number of case studies to illustrate some of the most successful businesses to have emerged from INNOSPACE.

References Agterberg, M., van den Hooff, B., Huysman, M., & Soekijad, M. (2010). Keeping the wheels turning: The dynamics of managing networks of practice. Journal of Management Studies, 47 (1), 85–108. Alsos, G., Hytti, U., & Ljunggren, E. (2011). Stakeholder theory approach to technology incubators. International Journal of Entrepreneurial Behavior and Research, 17(6), 607–625. Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18, 105–123. Baccarne, B., Logghe, S., Schuurman, D., & De Marez, L. (2016). Governing quintuple helix innovation: Urban living labs and socio-ecological entrepreneurship. Technology Innovation and Management Review, 6(3), 22–30. Battisti, M., & McAdam, M. (2012). Challenges of social capital development in the university science incubator: The case of the graduate entrepreneur. Entrepreneurship and Innovation, 13 (4), 261–276. Bercovitz, J., & Feldman, M. (2006). Entrepreneurial universities and technology transfer: A conceptual framework for understanding knowledge-based economic development. Journal of Technology Transfer, 31(1), 175–188. Brown, J. S., & Duguid, P. (1991). Organizational learning and communities-of-practice: Toward a unified view of working, learning and innovation. Organization Science, 2(1), 40–57. Carayannis, E. G., & Campbell, D. F. (2009). ‘Mode 3’and ‘Quadruple helix’: Toward a 21st century fractal innovation ecosystem. International Journal of Technology Management, 46 (3–4), 201–234. Carayannis, E. G., & Campbell, D. F. (2011). Open innovation diplomacy and a 21st century fractal research, education and innovation (FREIE) ecosystem: Building on the quadruple and quintuple helix innovation concepts and the ‘mode 3’ knowledge production system. Journal of the Knowledge Economy, 2(3), 327–372. Carayannis, E. G., & Campbell, D. F. (2012). Triple helix, quadruple helix and quintuple helix and how do knowledge, innovation and the environment relate to each other? International Journal of Social Ecology and Sustainable Development, 1(1), 41–69. Carayannis, E. G., & Rakhmatullin, R. (2014). The quadruple/quintuple innovation helixes and smart specialisation strategies for sustainable and inclusive growth in Europe and beyond. Journal of the Knowledge Economy, 5(2), 212–239. Carayannis, E. G., Barth, T. D., & Campbell, D. F. J. (2012). The Quintuple Helix innovation model: Global warming as a challenge and driver for innovation. Journal of Innovation and Entrepreneurship, 1(1), 1–12. Clark, B. R. (1998). Creating entrepreneurial universities: Organizational pathways to transformation. Oxford: International Association of Universities and Elsevier Science Ltd.. Cooper, S. Y., & Park, J. S. (2008). The impact of “incubator” organizations on opportunity recognition and technology innovation in new, entrepreneurial high-technology ventures. International Small Business Journal, 26, 27–56. Dee, N., Gill, D., Weinberg, C., & McTavish, S. (2015). Startup support programmes: What’s the difference? London: Nesta. https://www.nesta.org.uk/report/startup-support-programmeswhats-the-difference/.

References

9

DfES. (2003). The Future Of Higher Education. London: HMSO. DTI. (1998). Our competitive future: Building the knowledge driven economy. London: HMSO. DTI. (2000). Excellence and opportunity: A science and innovation policy for the 21st century. London: The Stationery Office. Etzkowitz, H. (1998). The norms of entrepreneurial science: Cognitive effects of the new university–industry linkages. Research Policy, 27, 823–833. Etzkowitz, H. (2003). Research groups as ‘Quasi-firms’: The invention of the entrepreneurial University. Research Policy, 32(1), 109–121. Etzkowitz, H., & Leydesdorff, L. (2000). The dynamics of innovation: From national systems and “Mode 2” to a triple helix of university-industry-government relations. Research Policy, 29(2), 109–123. Etzkowitz, H., Webster, A., Gebhardt, C., & Terra, B. R. C. (2000). The future of the university and the university of the future: Evolution of ivory tower to entrepreneurial paradigm. Research Policy, 29, 313–330. Eveleens, C. P., van Rijnsoever, F. J., & Niesten, E. M. (2017). How network-based incubation helps start-up performance: A systematic review against the background of management theories. Journal of Technology Transfer, 42, 676–713. Fairweather, J. S. (1990). The University’s role in economic development: Lessons for academic leaders. Journal of the Society of Research Administrators, 22(3), 5–11. Gabrielsson, J., & Politis, D. (2015). Modes of learning and entrepreneurial knowledge. International Journal of Innovation and Learning, 18(1), 101–122. Galvão, A., Mascarenhas, C., Marques, C., Ferreira, J., & Ratten, V. (2019). Triple helix and its evolution: A systematic literature review. Journal of Science and Technology Policy Management, 10(3), 812–833. Gartner, W. B. (1985). A conceptual framework for describing the phenomenon of new venture creation. The Academy of Management Review, 5(4), 696–706. Gibb, A. (2011). Concepts into practice: Meeting the challenge of development of entrepreneurship educators around an innovative paradigm: The case of the International Entrepreneurship Educators’ Programme (IEEP). International Journal of Entrepreneurial Behavior and Research, 17(2), 146–165. Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation research. Journal of Technology Transfer, 29, 55–82. Hagen, R. (2002). Globalization, university transformation and economic regeneration: A UK case study of public/private sector partnership. International Journal of Public Sector Management, 15(3), 204–218. Handley, K., Clark, T., Fincham, R., & Sturdy, A. (2007). Researching situated learning: Participation, identity and practices in client-consultant relationships. Management Learning, 38(2), 173–191. Handscombe, R. D. (2003). The promotion of an entrepreneurial culture in universities: Capturing change in the cultural web. Industry and Higher Education, 17(3), 219–222. Handscombe, R. D., Rodriguez-Falcon, E., & Patterson, E. A. (2009). Embedding enterprise in engineering. International Journal of Mechanical Engineering Education, 37(4), 263–274. Harper-Anderson, E., & Lewis, D. A. (2018). What makes business incubation work? Measuring the influence of incubator quality and regional capacity on incubator outcomes. Economic Development Quarterly, 32(1), 60–77. Henry, E. (1998). The norms of entrepreneurial science: Cognitive effects of the new university– industry linkages. Research Policy, 27, 823–833. Herrmann, K., Hannon, P., Cox, J., Ternouth, P., & Crowley, T. (2008). Developing entrepreneurial graduates. London: Putting Entrepreneurship at the Centre of Higher Education. Horner, S., Jayawarna, D., Giordano, B., & Jones, O. (2019). Strategic choice in universities: Managerial agency and effective technology transfer. Research Policy, 48(5), 1297–1309.

10

1 Introduction: An Overview of the Research

Hyams-Ssekasi, D., & Caldwell, E. F. (Eds.). (2018). Experiential learning for entrepreneurship theoretical and practical perspectives on enterprise education. Cham, Switzerland: Palgrave Macmillan. Jayawarna, D., Jones, O., & Macpherson, A. (2011). New business creation and regional development: Enhancing resource acquisition in areas of social deprivation. Entrepreneurship and Regional Development, 23(9–10), 735–761. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. Kothari, S., & Handscombe, R. D. (2007). Sweep or seep? Structure, culture, enterprise and universities. Management Decision, 45(1), 43–61. Lambert, R. (2003). Lambert review of business-university collaboration. London: The Stationery Office. Lave, J., & Wenger, E. (1991). Situated learning: Legitimate peripheral participation. New York: Cambridge University Press. Lee, R. (2009). Social capital and business and management: Setting a research Agenda. International Journal of Management Reviews, 11(3), 247–273. Lee, R. (2017). The social capital of entrepreneurial newcomers: Bridging, status-power and cognition. London: Palgrave Macmillan. Lefebvre, V., Radu Lefebvre, M., & Simon, E. (2015). Formal entrepreneurial networks as communities of practice: A longitudinal case study. Entrepreneurship and Regional Development, 27(7–8), 500–525. Liu, S. L., & Dubinsky, A. J. (2000). Institutional entrepreneurship—A panacea for universities-intransition. European Journal of Marketing, 34(11/12), 1315–1337. Lorenco, F., & Jones, O. (2006). Developing entrepreneurship education: Comparing traditional and alternative teaching approaches. International Journal of Entrepreneurial Education, 4, 111–140. Lourenco, F., Jones, O., & Jayawarna, D. (2013). Teaching sustainable development: The role of enterprise education. International Small Business Journal, 31(8), 841–865. Lukeš, M., Longo, M. C., & Zouhar, J. (2019). Do business incubators really enhance entrepreneurial growth? Evidence from a large sample of innovative Italian start-ups. Technovation, 82, 25–34. Markman, G. D., Phan, P. H., Balkin, D. B., & Gianiodis, P. T. (2005). Entrepreneurship and university-based technology transfer. Journal of Business Venturing, 20, 241–263. Mascarenhas, C., Marques, C. S., Galvão, A. R., Carlucci, D., Falcão, P. F., & Ferreira, F. A. (2019). Analyzing technology transfer offices’ influence for entrepreneurial universities in Portugal. Management Decision, 57(12), 3473–3491. McAdam, M., & Marlow, S. (2008). A preliminary investigation into networking activities within the university incubator. International Journal of Entrepreneurial Behavior and Research, 14 (4), 219–241. McAdam, R., McAdam, M., & Brown, V. (2009). Proof of concept processes in UK university technology transfer: An absorptive capacity perspective. R&D Management, 39(2), 192–210. McAdam, M., Miller, K., & McAdam, R. (2016). Situated regional university incubation: A multilevel stake-holder perspective. Technovation, 50–51, 69–78. Mian, S. (2014). Chapter 15: Business incubation and incubator mechanisms. In A. Fayolle (Ed.), Handbook of research on entrepreneurship: What we know and what we need to know (pp. 335–366). Cheltenham: Edward Elgar. Mian, S., Lamine, W., & Fayolle, A. (2016). Technology business incubation: An overview of the state of knowledge. Technovation, 50–51, 1–12. Paoloni, P., Cesaroni, F. M., & Demartini, P. (2019). Relational capital and knowledge transfer in universities. Business Process Management Journal, 25(1), 185–201.

References

11

Patton, D., & Marlow, S. (2011). University technology business incubators: Helping new entrepreneurial firms to learn to grow. Environment and Planning. C, Government & Policy, 29(5), 911–926. Pittaway, L., & Cope, J. (2007). Simulating Entrepreneurial Learning: Integrating experiential and collaborative approaches to learning. Management Learning, 38, 211–233. Redondo, M., & Camarero, C. (2017). Dominant logics and the manager’s role in university business incubators. The Journal of Business and Industrial Marketing, 32(2), 282–294. Redondo, M., & Camarero, C. (2019a). University business incubators: Mechanisms to transform ideas into businesses. In A. Fayolle, D. Kariv, & H. Matlay (Eds.), The role and impact of entrepreneurship education: Methods, teachers and innovative programmes. Cheltenham: Edward Elgar. Reynolds, P. D. (2011). Informal and early formal financial support in the business creation process: Exploration with PSED II data set. Journal of Small Business Management, 49(1), 27–54. Rothaermel, F. T., & Thursby, M. (2005a). Incubator firm failure or graduation? The role of University linkages. Research Policy, 34(3), 1076–1090. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Soekijad, M., van den Hooff, B., Agterberg, M., & Huysman, M. (2011). Leading to learn in networks of practice: Two leadership strategies. Organization Studies, 32(8), 1005–1027. Taylor, D. W., Jones, O., & Boles, K. (2004). Building social capital through action learning: An insight into the entrepreneur. Education and Training, 46(5), 226–235. Temali, M., & Campbell, C. (1984). Business incubator profiles: A national survey. Minneapolis: University of Minnesota, Hubert H. Humphrey Institute of Public Affairs. Theodorakopoulos, N. K., Kakabadse, N., & McGowan, C. (2014). What matters in business incubation? A literature review and a suggestion for situated theorising. Journal of Small Business and Enterprise Development, 21(4), 602–622. Van Vught, F. (1999). Innovative universities. Tertiary Education and Management, 5(4), 347–355. Van Weele, M. A., Steinz, H. J., & Van Rijnsoever, F. J. (2018). Start-up communities as communities of practice: Shining a light on geographical scale and membership. Journal of Economic and Social Geography, 109(2), 173–188. Voisey, P., Jones, P., & Thomas, B. (2013). The pre-incubator: A longitudinal study of 10 years of university pre-incubation in Wales. Industry and Higher Education, 27(5), 349–363. Wenger, E., McDermott, R., & Snyder, W. (2002). Cultivating communities of practice. Boston, MA: Harvard Business School Press. Wonglimpiyarat, J. (2016). The innovation incubator, university business incubator and technology transfer strategy: The case of Thailand. Technology in Society, 46, 18–27. Woollard, D., Zhang, M., & Jones, O. (2007). Academic enterprise and regional economic growth: Towards an enterprising University. Industry and Higher Education, 21(6), 387–403.

Chapter 2

Business Incubation

2.1

Introduction and Background

Researchers associated with the Global Entrepreneurship Monitor (GEM) 2011 Global Report interviewed over 140,000 adults in 54 economies and found that 388 million entrepreneurs were actively engaged in starting and running new businesses (Kelley et al. 2012). Entrepreneurship continues to be a global phenomenon regarded as the key to economic growth, social development, innovation and labour force dynamics. Bosma and Kelley (2018) describe GEM’s most recent initiative, the National Entrepreneurship Context Index (NECI), which ranks 54 countries based on a range of factors including: finance, Government policies, entrepreneurship education, R&D transfer, physical infrastructure as well as culture and social norms. Interestingly, the UK is ranked 34th of 54 countries on the NECI lagging other European countries such as the Netherlands (3rd), France (10th) and Germany (19th) as well as the USA, which is ranked in 6th place. In 2018, the UK business population was 5.7 million, which represented a fall of 27,000 businesses from 2017. Small businesses still account for 99.3% of all private sector firms, 60% (16.3) of all private sector employment and 52% (£2.0 trillion) of private sector turnover in the UK (Department of Business, Energy and Industrial Strategy,1 2019). As shown in Table 2.1, self-employment accounts for over 75% of those 5.7 million businesses with micro-firms (1–9 employees) accounting for a further 20.0%. Consequently, small, medium and large firms in the UK represent only 4.4% of the total business population. According to recent ONS2 (Office for National Statistics) figures, business birth rates grew steadily from 269,000 in 2012

1 https://www.gov.uk/government/collections/business-population-estimates. Accessed 2 July 2020. 2 https://www.ons.gov.uk/businessindustryandtrade/changestobusiness/ businessbirthsdeathsandsurvivalrates. Accessed 15 July 2020.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_2

13

14

2 Business Incubation

Table 2.1 UK private sector businesses (2018) Size Self-employed 1–9 Employees 10–49 Employees 50–249 Employees >250 Employees a

Businesses 4,278,225 1,137,290 209,650 34,835 7510

Employment 4,643,000a 4,159,000 4,083,000 3,399,000 10,743,000

Turnover £274,917 m £533,323 m £590,263 m £595,004 m £1,868,106 m

Includes some companies with a single employee—who are assumed to be directors

to 414,000 in 2016 and declined to 381,000 in 2018.3 For all 6 years, business birth rates exceeded ‘death rates’ meaning that the stock of firms continued to rise. As pointed out by (Anyadike-Danes et al. 2015) business start-ups are important to both the UK’s employment and economic growth. The authors conclude that very small firms are responsible for creating the majority of new jobs in the UK. However, Jones et al. (2014: 197) state that very few UK start-ups develop into rapidly growing ‘gazelles’, with the potential to have a major impact on longer-term economic growth. Since the advent of New Labour in 1997, successive UK governments have been committed to encouraging graduate entrepreneurs to establish new business start-ups (Hannon 2005; Jones et al. 2014). Nevertheless, enterprise-related education only proves effective if students are given support to start their own businesses. Therefore, many universities began to offer incubation or ‘hatchery’ facilities to help students make the transition into entrepreneurship (McAdam and McAdam 2006; McAdam and Marlow 2007). New businesses also need access to finance and business support if they are to transform from self-employment and microenterprises into larger companies. Patton and Marlow (2011: 913) summarise the purpose of university-based incubators (UBIs) that focus on graduates attempting to start their own businesses: Thus, an incubation process that addresses a founder’s inexperience, facilitates their ability to acquire appropriate knowledge, and supports the integration of such knowledge into the business context has the potential to have a positive impact on the performance of novice entrepreneurs.

In many countries, business incubators have become an increasingly popular policy instrument to encourage economic growth and employment and to help entrepreneurs succeed (OECD 1999). Blok et al. (2017) claim that there has been a vast increase in the number of BIs, up to an estimated population of 1250 incubators in the USA, and 7000 worldwide in 2012. A recent report by Bone et al. (2017: 7) for NESTA4 (National Endowment for Science, Technology and

3 The Coronavirus crisis of 2020 is likely to have a huge impact on the number of smaller businesses and the self-employed. 4 https://www.nesta.org.uk/. Accessed 4 August 2020.

2.1 Introduction and Background

15

the Art) suggests that there are a range of different organisations offering incubationtype services in the UK: Our data shows that there are currently 205 incubators, 163 accelerators, 11 pre-accelerators, 7 virtual accelerators and 4 virtual incubators active in the UK. A number of related organisations were identified, such as coworking spaces, active venture capital funds and makerspaces; several of these referred to themselves as accelerators or incubators, but did not meet our definitions and therefore were not included in the report/dataset.

Bone et al. (2019) confirm that the number of UK business incubators and accelerators has grown rapidly over the last few years. They go on to claim that between £20 and 30 million of public funding (UK and EU) per year facilitates the growth of UK incubators and accelerators. It is also estimated by the authors of the BEIS5 report that UK incubators currently support 6900 businesses at any one time. Bone et al. (2019) review a range of studies that have measured the impact of incubators. Some are criticised for not controlling for programme selectivity (Amezcua et al. 2013; Rothaermel and Thursby 2005a). Some have measured the impact of incubators by using matched control groups of similar firms (Colombo and Delmastro 2002; Lasrado et al. 2016; Schwartz 2009). The overall findings are summarised as follows (Bone et al. 2019: 5): Through a survey of 428 start-ups that have previously or are currently attending (i.e., received some combination of support from) an incubator or accelerator, we find that most start-ups consider the contribution of the incubator or accelerator as significant or vital to their success. Those that attended an incubator are slightly more likely (73%) to report attendance as being significant or vital to their success than those that attended an accelerator (64%).

The business incubation phenomenon has attracted the attention of policymakers, practitioners and academics across the globe (Allen and McCluskey 1990; Autio and Klofsten 1998; Lalkaka and Abetti 1999; Lee and Osteryoung 2004; Peters et al. 2004; Merrifield 1987; OECD 1999; Thierstein and Wilhelm 2001). However, because of the rapid development of incubators, much research in this field is ‘atheoretical’ (Hackett and Dilts 2004). Hence, studies attempt to describe what incubators are and identify important factors in their success but fail to develop an understanding of the role the incubators play in developing entrepreneurship. Based on a systematic review of the business incubation (BI) literature, Tavoletti (2013: 438–439) confirms that there is no ‘viable theory’ of incubation and he develops the following four principles: 1. Protect weak-but-promising ventures from the market and do not emulate the market in the incubator. 2. Take the region fully into account: when deciding about establishing the incubator, when selecting ventures, when providing business support to the selected ventures.

5 https://www.gov.uk/government/organisations/department-for-business-energy-and-industrialstrategy. Accessed 14 April 2020.

16

2 Business Incubation

3. Consider business incubation as a process, option-driven, relational and networkbased, not as a tangible investment. 4. Take advantage of new technologies and a ‘virtual incubation’ approach to bring public supported business incubation into regions that cannot support a business incubator. As the author goes on to say, ‘The four principles are an attempt to provide a set of guidelines and criteria in order to decide when a business incubator can be established and how it should be run, under the assumption that the main stakeholder, and thus the goal, is public and regional’ (Tavoletti 2013: 441). Based on a review of 149 articles ‘published in high-ranked scholarly journals’, Mian et al. (2016: 3) identified a range of different theoretical approaches to the study of BIs: new venture creation, resource-based view, stakeholder’s view, structural contingency theory, social networks, real options, dyadic theory and institutional theory. However, the authors suggest that a ‘generalisable’ theory of BI may not be possible because of the ‘idiosyncrasies’ of science parks, incubators and accelerators as well as variations in geographic, political, social and economic systems (Mian et al. 2016: 3). According to Hausberg and Korreck (2020), open innovation and social capital theory increasingly complement the resource-based view as key theoretical approaches (see Ahmad 2014; Albort-Morant and Ribeiro-Soriano 2016). Recent interest in BIs have heightened the need to develop a deeper understanding of the role of incubators in supporting new businesses (Lukeš et al. 2019; Mian et al. 2016). In order to do this, it is important to analyse the BI process by focusing on the role of incubation managers in supporting incubatees to ensure they succeed (Theodorakopoulos et al. 2014). Based on a study of 16 Dutch BI managers, Blok et al. (2017) identify the key factors in what they describe as the incubation process. The process begins with the selection of a feasible business idea, followed by regular formal and informal monitoring, development of business skills, creation of internal and external synergies and access to appropriate forms of finance (Blok et al. 2017: 18). The authors also mention that, with the exception of factor one, the remaining five factors are not necessarily sequential. Surprisingly, Davidsson and Gruenhagen (2020: 8) in their recent literature review focusing on the ‘new venture creation’ process make the following claim: ‘Numbers for sampling from incubators, accelerators, and the like are low because this is a recent practice which is likely to grow in the future’. In this chapter, we examine the literature on business incubators and incubation. We begin with a definition of business incubators to establish boundaries for the research. The chapter continues by looking at the development of business incubation literature in order to identify the key issues, challenges and problems facing incubators. We then examine the specific case of university-based incubators (UBIs) and the management team in encouraging graduates to become entrepreneurs. In the final section of the chapter, we discuss how BIs should be studied and considerations on developing a more coherent BI literature are presented.

2.2 Definitions of Business Incubation

2.2

17

Definitions of Business Incubation

Business incubators emerged in 1959, due to a major shift in regional economic development strategy and dynamic changes in the social environment (Bøllingtoft and Ulhøi 2005). However, major development of BIs have taken place in two waves. The first period occurred in the 1980s and 1990s when incubators were recognised as tools for local economic development. The second wave followed in 2000 and was mainly concerned with the growth and diversification of incubators. Although, Theodorakopoulos et al. (2014: 606) suggest that there have been three generations of business incubation. The first generation (1980–1990) concentrated on affordable space and shared facilities; the second generation (1991–2000) added various support services including business advice and networking; the third generation (2001 onwards) introduced mentoring/coaching, business acceleration and network development to the provisions of generations one and two. Despite the first business incubator being established in 1959, according to Hackett and Dilts (2004), it was not until 1984, with the publication of Temali and Campbell’s (1984) survey of US incubators that they came to the attention of academics. Brooks (1986: 24) provides an early definition: a multi-tenant facility which provides entrepreneurs with: (1) flexible leases on small amounts of inexpensive space; (2) a pool of shared support services to reduce overhead costs; (3) some form of professional and managerial assistance; and (4) access to or assistance in acquiring seed capital.

Brooks (1986) identifies three major elements of a successful incubator: appropriate support networks, pooled support services and links to a university. In fact, he asserts that ‘there needs to be a very strong and formalized relationship between the university and the incubator for this to provide value’ (Brooks 1986: 28). Writing slightly later, Allen and McCluskey (1990: 61) describe an incubator as a tool for enterprise development: Business incubators provide affordable space, shared office services, and business development assistance in an environment conducive to new venture creation, survival, and earlystage growth.

Adapting Brooks’ (1986) framework, Allen and McCluskey (1990) develop a business incubator continuum, which categorises BIs by their primary and secondary objectives. To populate their continuum, Allen and McCluskey (1990) draw on data from a survey of 127 incubators conducted in 1987 in the USA, which examined incubator structures, policies and services. The continuum is used to categorise incubators into four types: for-profit property development incubators, non-profit development corporation incubators, academic incubators and for-profit seed capital incubators (Allen and McCluskey 1990). The role of incubators ranges from one end of the spectrum, realising real estate value, to the other end as a business development tool. While in reality, there can be a mix of objectives and tenants, which has led to ‘the hybrid incubator’ (Gao and Hu 2017). Nevertheless, the framework provides a useful tool for conceptualising various types of incubator (see Barbero

18

2 Business Incubation

et al. 2012, 2014; Nicholls-Nixon and Valliere 2020). In practice, BIs usually have more than one aim and, in most cases, objectives have broadened to include improving local and regional development by increasing the rate of business startups with above-average innovation potential as well as contributing to general labour market goals by creating new jobs (Thierstein and Wilhelm 2001). However, as Treanor and Henry (2010) point out in their study of female entrepreneurship and university incubators, the majority of existing BI studies are conducted in the USA and UK university-based incubators remain under-researched. A recent NESTA report (Bone et al. 2017) provides their definitions of the terms ‘start-up’, ‘business incubator’ and a more recent initiative known as ‘accelerators’ (see Goswami et al. 2018; Miller and Bound 2011; Politis et al. 2019; Seet et al. 2018). According to the authors, the term ‘start-up’ refers to ‘young, innovative firms with growth ambition’ (Bone et al. 2017: 11). The widely used GEM definition of a ‘nascent entrepreneur’ is someone who is attempting to start a new business but has not been paid a salary for more than 3 months. While most of those engaged in the business start-up process lack access to resources this will certainly be exacerbated in university incubators aimed at students or recent graduates (Patton and Marlow 2011). Dee et al. (2011), in an earlier NESTA report, define incubators as physical spaces, available on flexible terms, that provide a range of services such as entrepreneurial training, access to networks and specialist equipment. According to Bone et al. (2017), the history of accelerators can be traced to 2005 when a US programme was established to support new digital companies (see Miller and Bound 2011). In contrast to business incubators, accelerators are highly selective and have intensive programmes including business planning, investor pitching, prototyping and market testing (Pauwels et al. 2016). Accelerators are more growth-driven and the basic premise is that companies will scale in size rapidly or fail fast (Bone et al. 2017). Bone et al. (2017: 10) summarise the purpose of incubation as follows: Accelerators and incubators support young businesses through the early and fragile stages of growth. This support can—in theory—help them avoid the mistakes of others, save time and money and increase survival rates. This, in turn, has consequences for job creation, regional development, innovation and economic growth.

With regard to the type of support offered by incubators there is, according to Bone et al. (2019), ‘moderately strong evidence’ that networking opportunities (Amezcua et al. 2013) and mentoring (Ozgen and Baron 2007) are important to incubatees. The authors also point out that there is ‘weak evidence’ that management training can be beneficial (Amezcua et al. 2013) but other forms of support such as office space, direct funding and demo days appear to have limited impact. Based on their recent review of the literature, Ratinho et al. (2020: 77) point out that ‘business training and learning represent the main type of support associated with business incubators’. Such training is usually based on business coaching and encouraging entrepreneurs to establish effective networks (Arlotto et al. 2011; Ratinho et al. 2020).

2.3 Examining Business Incubation

2.3

19

Examining Business Incubation

A central strand running through the literature is the roles played by BIs in developing entrepreneurship and how success in this respect can be measured. Literature on BIs developed through incubator-centred studies (Allen and McCluskey 1990; Allen and Weinberg 1988; Autio and Klofsten 1998; Brooks 1986; Campbell 1989; Cooper 1985; Chandra and Fealey 2009; Fry 1987; Lumpkin and Ireland 1988) to incubatee development studies (Hackett and Dilts 2004; Schwartz 2009; Zhang and Sonobe 2011), and incubator–incubation impact centred studies (Bøllingtoft and Ulhøi 2005; CSES 2002; Hannon 2005; McAdam and McAdam 2006; Voisey et al. 2006, 2013). Hard indicators refer to tangible figures including the total number of incubatees, number of graduating firms plus their sales value as well as longer-term measures of growth (employees, sales, value of the firm). In contrast, soft indicators or soft measures include ‘benefits such as increased business knowledge and skills, more business awareness and increased client networking’ (Voisey et al. 2006: 465). Grimaldi and Grandi (2005) argue that, rather than developing a standardised set of indicators, context-specific hard measures should be used to examine BI performance. They suggest that different types of incubators should be measured with varying criteria. Public BIs should focus on reducing start-up costs for new businesses and strengthening local networks to promote economic growth. Private incubators should be measured by their ability to accelerate the start-up process of high-growth enterprises. As for university-based incubators, Grimaldi and Grandi (2005) believe they should be measured by their capacity to reduce start-up costs, strengthen local and national economies and promote knowledge transfer between the university and incubation centres. Vanderstraeten and Matthyssens (2012) state that the services offered by incubators should align external and internal demands to provide the best possible value to tenants (Al-Mubaraki and Busler 2010). Based on a study of Chinese BIs, Gao and Hu (2017) suggest that incubation subdivision, or hybridisation, could be one solution to operating for-profit and not-for-profit processes at the same time. It is evident that literature related to the use of hard measures to understand the role of BIs remains divergent (see Torun et al. 2018). In a literature review, Mian et al. (2016) found that BI research has intensified since 2002. Perhaps surprisingly, most papers were qualitative (54%) and only 15% actually evaluated BI performance. It is widely acknowledged that evaluating BI outcomes is challenging (Hackett and Dilts 2004). This is exacerbated by different types of incubators and a fragmented literature using a range of definitions and performance criteria (Albort-Morant and Ribeiro-Soriano 2016). It is argued by Lukeš et al. (2019: 27) that academic studies ‘remain relatively rare and the question of what the “performance” of an incubator really means has not been answered in a straightforward manner’. An overview of BI performance measures reveals that firm-specific hard measures, including sales revenue, employment growth and the time to graduate are the most widely used (Voisey et al. 2006). Lukeš et al. (2019) suggest that there is not enough systematic evidence to determine whether business

20

2 Business Incubation

incubators are efficient tools for promoting wealth and job creation (Bruneel et al. 2012). Following earlier work by Ensley and Hmieleski (2005) and Dvouletý et al. (2018), there needs to be empirical research that compares matched groups of innovative start-ups supported by a business incubator (‘on-incubator’ firms) with those that have received no such support (‘off-incubator’ firms), to allow sound conclusions informing policy on high-growth entrepreneurship (Lukeš et al. 2019). Based on a longitudinal study of 2544 innovative Italian start-ups including 606 that were incubated, Lukeš et al. (2019: 33) conclude that ‘convincing evidence was not found that would justify the spending of public money on business incubator support in the short run, despite some indication that incubated innovative start-ups may experience faster revenue growth during their third or fourth year’. They were particularly critical of the tendency for BI managers to ‘pick winners’ and then provide them with a sheltered environment. The authors suggest that such a strategy often leads to complacency and low-performance when entrepreneurs are accepted into an incubator (Coad et al. 2014; Freel 1998). Consequently, it is essential that BIs have rigorous selection criteria and that they impose ‘growth-related’ milestones for continued occupancy of the incubator (Autio and Rannikko 2016). It is particularly important when incubators are supported by public funding (Coad et al. 2014), to eliminate BIs acting as ‘too-safe harbours’ where start-ups are able to persistently underperform (Lukeš et al. 2019). Bruneel et al. (2012) also found that ‘slack’ selection criteria and lack of a clear exit route hampers the performance of many incubators. A number of business incubators have developed into communities that facilitate entrepreneurship by providing a variety of services including knowledge transfer and skills development. This is particularly the case with academic, or campus-based incubators (Treanor and Henry 2010). While the success of for-profit incubators might arguably be judged by straightforward balance sheet figures, evaluating the success of not-for-profit incubators requires a more nuanced approach. A number of authors suggest there is a need for a framework that takes account of ‘softer factors’ such as entrepreneurial learning to evaluate the success of non-profit and academic incubators (Ebbers 2014). Campbell (1989) sees BIs as change agents and believes that incubators are long-term investments in job creation. He suggests that in order to create the most benefit in terms of job creation and economic development, ‘incubators should offer quality management, professional business assistance, low rents and flexibility’ (Campbell 1989: 58). In a study of US-based business accelerators, Wise and Valliere (2014) found that the start-up experience of the management team had a positive impact on the failure hazard of tenant firms. Perhaps more surprising was the finding that the degree of connectedness (networks) of the management team did not have an effect on the failure rates of tenant firms. Most incubators accept entrepreneurs whose ideas are not fully formed and they provide support in the early stages to help them build companies that will be sustainable in the longer term (Bergek and Norrman 2008). BIs provide a sheltered environment usually including shared office space at below market rates. Many BIs also provide other shared services including IT (information technology), PR (public relations), recruitment, legal and intellectual protection rights advice, accounting and

2.3 Examining Business Incubation

21

pooled buying to reduce costs during the early stages of start-up (Colombo and Delmastro 2002; Phan et al. 2005). Some BIs also provide access to financial resources and support such as training, coaching and mentoring, as well as access to internal and external networks (Bøllingtoft and Ulhøi 2005; Rothschild and Darr 2005) to help establish legitimacy (Battisti and McAdam 2012; Studdard 2006; Westhead and Batstone 1998). Based on a questionnaire survey of BI tenants in the region of Valencia, Albort-Morant and Oghazi (2016) found that those most likely to benefit from support were young, well-qualified and with backgrounds in entrepreneurial families. Soetanto and Jack (2016: 28) provide a useful list of the most significant studies examining the links between BI support and the impact on tenants. Writing in the mid-1980s, Cooper (1985) selected a sample of 161 new, growthoriented firms to examine the relationships of the new companies to their incubators. He recommended that future BI studies needed to assess the effectiveness of university incubators and the relationships between ‘incubators, spinning off students and faculty who start growth-oriented firms’ (Cooper 1985: 85). Later, Voisey et al. (2006: 459) argued that little research has been undertaken on ‘the experience of the incubatees’. Rather than counting the number of existing and graduated firms (Allen and Weinberg 1988), Voisey et al. (2006) advocate including incubatees’ performance as a measure of incubator success. However, the inclusion of subjective, or ‘soft’ measures such as ‘individual performance’ is potentially problematic. The OECD (1999: 11) points out that ‘the lack of systematic evaluation of business incubators is a problem shared all too often with small enterprise support programs generally’. Autio and Klofsten (1998) also argued that incubators are often evaluated by incubator managers or by bodies close to them. Hence, the outcomes of evaluations are partly influenced by the need to enhance the image of the general viability of a particular arrangement: such a motivation is betrayed by, for example, vague or missing definitions of success, by implying that the prosperous economic development of the region is exclusively due to the support arrangement, and by the often-missing consideration of potential alternatives to the arrangement (Autio and Klofsten 1998: 33)

Similarly, Hackett and Dilts (2004) question the transparency of incubator data as politics are involved and decisions about further funding to non-profit and university incubators. Hence, ‘The level, scope and quality of incubation-related data management varies widely among incubators and access to information regarding politically sensitive incubation failures will continue to remain problematic’ (Hackett and Dilts 2004: 73). Schwartz (2009) points out that evaluating BI performance still remains problematic. He believes that BI effectiveness should be based on survival rates after graduation as well as the survival rate of incubatees during their incubation period (see Al-Mubaraki and Busler 2014). After studying 352 graduated firms from five technology-oriented incubators in Germany, he found that BIs have ‘life-prolonging effects [on start-ups] rather than enhancing the firms’ survivability’ (Schwartz 2009: 416). In other words, BIs defer failures of start-ups while they are incubating; however, after ‘graduation’ they are unable to compete in the

22

2 Business Incubation

marketplace. It is recommended that BI managers should develop a process to prepare for firms to graduate by arranging follow-up mentoring. Schwartz (2011) analysed the growth patterns of 324 independent graduate firms from five technology-oriented BIs in Germany after finishing their initial incubation period. The study identified rapid growth in the early stages of incubation but in the longerterm, only a few firms exhibited strong performance. As Schwartz (2011: 509) confirms, ‘the contribution of the five incubators’ graduate firms towards regional employment generation seems to be rather limited in a long-term perspective’. Using samples of science and technology business incubators in China, Zhang and Sonobe (2011: 22) examined the variables associated with incubatees’ success. They found that ‘human resources, infrastructure, and financial resources of the incubator’ are linked to the success of incubatees. It is also pointed out that ‘the location of the incubator, such as the inflow of FDI, proximity to universities, and the diversity and scale of industrial activities in the locality’ are not associated with incubatees’ performance (Zhang and Sonobe 2011: 22). Based on their detailed case study of an incubator at a Swedish medical University, Baraldi and Havenvid (2016) identify six drivers of action for incubation managers; positioning in the value chain, risk-taking/time perspective, revenue model, governance/control, internationalisation and cooperation/competition. M’Chirgui et al. (2018) evaluated the performance of technology-based incubators in France. They also established that those BIs with skilled and resourceful staff, good levels of financial resources and close collaboration with universities had a positive impact on the formation of NSTBF (new science and technology-based firms). A number of authors have examined the crucial role of the incubator manager in the performance of new firms. For example, Kakabadse et al. (2020: 9) state: All incubator managers in this study recognised that their primary role was to support the entrepreneurs and displayed personal motivation towards the positive contribution they brought to the incubatee entrepreneurs.

Bøllingtoft and Ulhøi (2005) argue that most BI research adopts a traditional top-down planning approach and does not examine the role of social interaction. They also point out that existing research ‘underestimates the extent to which such crucial skills [for success] can be acquired by learning’ (Bøllingtoft and Ulhøi 2005: 266). They utilise social capital theory to stress the importance of facilitating relationships to help incubatees build internal networks, which are an important source of learning. These arguments are further supported in a study conducted by McAdam and McAdam (2006), who stress the importance of networking in a university incubator. Hannon (2005) believes that a learner-centred approach is needed to offer effective value-adding learning opportunities. Likewise, a study carried out by Hackett and Dilts (2008) highlights the importance of learning in BIs. They surveyed 53 US business incubators to unravel the inner workings by examining the incubation process. In contrast to their hypothesis, which focused on the availability and quality of resources and resource utilisation, incubatee learning was the only significant resource munificence in BIs. Although the survey was filled

2.4 University-Based Incubation (UBI)

23

in by incubator managers, it stresses the importance of learning in the incubation process and this issue is discussed in greater detail in Chap. 3. In their recent study, Sedita et al. (2019) examine the impact of BIs on the innovative performance of start-up companies. The authors point out that most existing studies of performance focus on the survival rates of start-ups based in BIs (e.g., Schwartz 2013). The research itself drew on a sample of 243 start-up located in Northern Italy; 115 were mechanical engineering firms (MEF) and 128 were based in knowledge-intensive business services (KIBS). The results of the study confirmed that firms with previous experience of BI had higher levels of innovative performance compared to other start-ups. There were two important moderating factors; first, location in a BI enhanced the technical capabilities of start-ups and, secondly, firms benefitted from higher levels of collaboration. As the authors go on to state; ‘the investment in incubation structures oriented towards improving networking and internal capabilities is particularly useful for sustaining successful innovative entrepreneurship’ (Sedita et al. 2019: 448).

2.4

University-Based Incubation (UBI)

University-based incubators provide tenants with two main services: first, office space, business support and training; secondly, services related to the university including access to new technologies and credibility with various stakeholders (Redondo and Camarero 2019a). The authors also distinguish between three elements of the incubation process: pre-incubation (business planning and training), incubation (coaching/mentoring, advanced business planning and commercialisation) and post-incubation (internationalisation support, business development, etc.). According to Nabi and Holden (2008), graduate entrepreneurs are university students who pursue venture creation or self-employment as a career path pre- or post-graduation (see Battisti and McAdam 2012). Therefore, in this section, we concentrate on reviewing studies of university-based incubators, which are primarily focused on assisting students to start new businesses. A number of writers indicate that university technology business incubators (UTBIs) are critical support mechanisms for encouraging the growth and development of early-stage high-technology firms (Fang et al. 2010; Lee and Osteryoung 2004; McAdam and McAdam 2008; Nicholls-Nixon and Valliere 2020; Ng et al. 2019; O’Neal 2005; Rice 2002; Wonglimpiyarat 2016). Although Patton and Marlow (2011: 911) claim that there is no academic consensus on the contribution incubators make to the performance of new ventures (Aernoudt 2004; NESTA 2008). An early research programme based on six technology-based UBIs in the USA established that such organisations create a ‘nurturing environment’ for start-up firms as well as providing access to R&D facilities (Mian 1996a, b, 1997). Ensley and Hmieleski (2005) compared 102 US university-based high-technology start-ups with a matched sample of 154 independent firms and found that the former had significantly lower cash-flow and revenue growth. The authors suggest that the

24

2 Business Incubation

‘policy implications’ of their study are clear: ‘universities would be well advised to focus as much attention on the assessment and development of the top management team of new ventures to which they support as any other aspect these firms’ (Ensley and Hmieleski 2005: 1102). In other words, those responsible for managing US university-based incubators emphasised technology and product development at the expense of team-building. A study of 79 firms based on the Georgia Institute of Technology’s Advanced Technology Development Centre (ATDC) examined the performance of the incubator over a 6-year period (Rothaermel and Thursby 2005a). As most firms were under 3 years old, the authors concluded that revenue was a poor measure of performance while total funding and venture capital funding were ‘more promising performance metrics’ (Rothaermel and Thursby 2005a: 318). In the second paper, based on the same data set, Rothaermel and Thursby (2005b) evaluated the impact of technology licenses from the sponsoring university and links to members of faculty on the likelihood of firm failure. The findings indicated that those firms exploiting a technology licensed from the University had much higher success rates. Although links to faculty members had a negative impact on the probability of firms graduating from the incubator in less than 3 years. Lasrado et al. (2016) carried out an extensive study of 152 US university-based incubation programmes operating between 1999 and 2009. Eventually, the authors were able to contact 653 graduated firms and they then created a matched sample of firms from non-university incubators. In contrast to the earlier study (Ensley and Hmieleski 2005), there was a greater rate of increase in jobs and sales over time for university incubated firms than non-university firms. There was also a greater magnitude in jobs and sales over time for the university incubated firms. As the authors conclude: ‘We propose that incubators vary in the services and resources they offer, and that university incubators typically provide greater connectivity and legitimacy with respect to important contingencies associated with key industry and community stakeholders’ (Lasrado et al. 2016: 217). A sample of 205 Czech firms from UBIs was compared with a matched sample of non-incubated firms based on sales, price–cost-margin, turnover, total assets and personnel costs (Dvouletý et al. 2018). Incubated firms had significantly lower values for all the performance measures. According to the authors, there were two main reasons for the poor performance of incubated Czech firms. First, many incubators contain large numbers of mature, large firms as well as some public institutions. Secondly, owners and managers of Czech incubators are not good at picking winners in the form of those firms likely to ‘become gazelles or unicorns’ (Dvouletý et al. 2018: 556). Voisey et al. (2013) adopted a quite different approach to their study of a ‘preincubator’ located in a Welsh University. Between 2001 and 2011, 360 new firms passed through the pre-incubator. The authors selected nine graduated businesses for in-depth case studies and a further 17 for less intensive research. According to Voisey et al. (2013: 361), the ‘pre-incubator has proved effective in providing would-be entrepreneurs with the opportunity to test their ideas and business skills in a supportive environment’. Furthermore, they stress the importance of such facilities in times of economic recession and high graduate unemployment. In an earlier study of university incubators in Wales, Voisey et al. (2006) concluded that

2.4 University-Based Incubation (UBI)

25

BIs improved incubatees’ business skills, enhanced peer-to-peer networking and other softer factors such as impression management, rhetorical and political skills (see Cooper et al. 2012; Jones et al. 2014: 51–69). For example, Gately and Cunningham (2014) examined an incubation programme for graduate entrepreneurs in Southern Ireland. The authors interviewed 25 graduate entrepreneurs and studied 40 business plans (some participants chose not to be interviewed) to establish the importance of ‘relational capital’ (Nahapiet and Ghoshal 1998) in the start-up process. Gately and Cunningham (2014) identified four types of relational capital activities during new venture formation: development of networks and contacts, relationship building, accessing and leveraging knowledge experts and members of associations. In summary, the authors conclude: ‘New ways need to be explored to facilitate exchange and relationship building between the technology entrepreneur and Higher Education Institute (HEIs) as hothouses of relational capital resources’ (Gately and Cunningham 2014: 531). Battisti and McAdam (2012) also draw on Nahapiet and Ghoshal’s (1998) three dimensions of social capital (structural, relational and cognitive) to study graduate entrepreneurship in a University incubator. The researchers examined four individuals based in an Austrian Science Incubator: two graduate entrepreneurs and two more experienced ‘academic entrepreneurs’. Unsurprisingly, the incubator was more important in giving credibility to the graduate entrepreneurs than it was for the more experienced academics. In addition, the graduate entrepreneurs continued to rely on their strong ties (Granovetter 1973) comprising family and friends throughout the 2 years of the study. In contrast, the academic entrepreneurs were able to mobilise much more heterogeneous networks of relationships and better able to balance the ‘contradictory characteristics’ of academia and business (Battisti and McAdam 2012; 273). Inevitably, a reliance on strong ties meant that younger entrepreneurs were less equipped to mobilise access to a wider range of resources (Lee and Jones 2008). In an earlier, longitudinal study, McAdam and McAdam (2006) focused on the role of entrepreneurial networks in a University science incubator (USI). The study identified the importance of infrastructure and shared facilities as ‘key enablers’ of network roles while issues of confidentiality and IPR were considered barriers to cooperation. McAdam and McAdam (2006: 92) did confirm the importance of university incubators for combatting the isolation of entrepreneurship: A common theme that became apparent from the research was the concept of shared values emerging from the networks at all levels, which happened as a result of the owners facing similar challenges, thus creating a supportive environment based on empathy.

Tensions associated with university-based incubation were explored in greater depth by McAdam and Marlow (2007). While respondents confirmed the benefits provided by university incubators, they also identified clear risks for science and technology-based businesses. Most entrepreneurs suggested that confidentiality was not an issue during the early ‘product development’ stage but close proximity to other, similar businesses became ‘more threatening’ as firms matured (McAdam and Marlow 2007: 374).

26

2 Business Incubation

Patton and Marlow (2011) carried out a comparative study of two university technology incubators in Southampton and Bristol both founded in 2003. At the time of the study, 80% of the 112 companies based in the incubators were external to the universities. The study focused on 27 companies that were still operating in the incubators and the authors draw a number of conclusions about the role of UBIs in overcoming the liabilities of smallness (Aldrich and Auster 1986) and newness (Stinchcombe 1965). First, incubation managers have a key role to play in ensuring that incubatees take advantage of the services offered in the form of seminars, review panels, networking events and mentoring. In particular, Patton and Marlow (2011) stress the importance of encouraging nascent entrepreneurs to move beyond exploitative learning (Hughes et al. 2007) by engaging in explorative learning processes (March 1991a, b). The study revealed two main sources of exploratory learning: first, regular review panels in which incubatees were encouraged to reflect on the progress of their business ideas and, secondly, via engagement with external mentors (Patton and Marlow 2011: 921). There appeared to be few links between either of the two universities and their incubators which was surprising in the context of technologybased businesses. A study of university spin-offs in the UK, The Netherlands and Norway examined the impact of UBI support on the performance of firms involving students, graduates or academics (Soetanto and Jack 2016). The sample of 141 firms with an average age of 4.5 years provided data for establishing the longer-term effect of UBIs on growing firms. The study confirmed that strong network ties (university researchers and professors as well as industry links) had a positive impact on the performance of spin-offs. Companies adopting an ‘ambidextrous strategy’, which combined exploration and exploitation, also performed better than spin-offs focusing on one strategic approach (Soetanto and Jack 2016: 37). Díez-Vial and MontoroSánchez (2016) studied 76 firms based on Madrid Science Park, founded by the Autonomous University of Madrid, to examine the relationship between knowledge exchange and innovation. Those firms obtaining university knowledge through formal agreements and informal interactions increased their innovative capacity. In addition, those more centrally located within their knowledge network inside the science park also had higher levels of innovation (Díez-Vial and Montoro-Sánchez 2016; Ng et al. 2019). McAdam et al. (2016) adopt a ‘stakeholder lens’ to explore the development of university incubator models based on two cases located in the same northwest ‘peripheral region’ of Europe. They draw on the work of Carayannis and Rakhmatullin (2014) who extend the triple helix model (Etzkowitz 1998, 2003) by including users of innovation as well as academia, industry and government. To be effective, university incubators must be embedded in regional ecosystems, which bring together industrial partners, R&D laboratories, banks and investors such as business angels (McAdam et al. 2016). The two universities studied by McAdam et al. (2016) were very different institutions as one was a member of the elite Russell Group (the 24 most research-intensive UK universities) and the other belonged to

2.4 University-Based Incubation (UBI)

27

Universities UK.6 These differences were reflected in their support for start-up businesses as the former adopted a traditional physics-based incubation while the latter utilised a virtual incubator. Despite the different approaches to supporting startups, there were, however, strong similarities in the problems faced by both incubators. Because of their regional location, both were heavily reliant on public funding, which meant they were subject to government ‘saliency’ in the running of their incubators. At the meso level, the differing university cultures did have a direct influence on the nature of their approaches to incubation (McAdam et al. 2016). Huynh et al. (2017) examine the impact of founding conditions including resource endowments, collaborations and networks on the ability of early-stage university spin-offs to grow. Imprinting theory (Mathias et al. 2015) suggests that the formative stage of a university-based company will have a long-standing impact on a venture’s viability. The research sample of 181 firms was accessed by cooperating with the technology transfer offices (TTO) in 35 Spanish universities. There was no evidence that the founder’s original networks influenced the performance of their firms as they matured. Networks established during the creation phase did, however, ‘enhance’ the capabilities (technology/organisational viability and financial acumen) of the founding team, which improved future spin-off performance (Huynh et al. 2017: 17). In an earlier paper based on the same sample, Huynh (2016) confirmed that the founding team could exploit network linkages to improve their capabilities and this impacted the ability of spin-off firms to access early-stage finance. Portuguese universities have a total of 23 TTOs and 8 of these agreed to participate in a study designed to evaluate their role in speeding-up knowledge transfer (Mascarenhas et al. 2019). The study confirmed that the creation of TTOs played an important role in raising the level of patent registrations in Portugal and they also led to an increasing number of spin-off companies from universities. Until the creation of TTOs in the early 2000s, there was very limited exploitation of knowledge and technology from Portuguese universities. Mascarenhas et al. (2019: 3474) claim that TTOs are increasing entrepreneurial spirit within universities and reducing the dependence of public funding. Mavi et al. (2019) examined the factors influencing the strategic management of UBIs in Iran. Based on a number of incubators associated with a major science and technology park, they established that the four most important factors were: human resources, technology resources and financial/organisational resources. A study of six Taiwanese UBIs attempts to establish a benchmarking approach to the evaluation of incubator performance (Wann et al. 2017). Interviews were carried out with all six incubation managers and questionnaires were obtained from 34 incubatees. The questionnaire, adopted from CSES (2002), used eight key performance indicators: KPI 1: average set-up costs, KPI 2: average operating costs, KPI 3: number of incubates, KPI 4: occupancy rate (%), KPI 5: length of tenancy, KPI 6: ratio of UBI’s managers-incubates, KPI 7: average growth of

6 https://www.universitiesuk.ac.uk/Pages/home.aspx (represents 137 UK universities). Accessed 20 August 2020.

28

2 Business Incubation

incubatees’ turnover and KPI 8: job creation (Wann et al. 2017). According to the responses of incubatees, location in a UBI accounted for 37% of their success. In terms of services provided by the incubators, these included ‘marketing and promotion, technological support, pre-incubation programs, and the basic shared office/ meeting rooms’ (Wann et al. 2017: 47).

2.4.1

UBIs and the Management Team

A subset of UBI papers specifically focuses on the incubator manager (IM) or management team. As pointed out by Theodorakopoulos et al. (2014), incubation managers are seen as a key factor in the success of business incubators. While Mian (2014) points out the importance of the IM’s ‘leadership style’ and the creation of trust in successful incubators. Based on their extensive study of incubators based in the Netherlands (16) and Spain (53), Redondo and Camarero (2019a) argue that those with experience of both business and science are best suited to running university incubators. Those incubators offering the widest range of services had the highest occupancy rates and the highest number of firms successfully graduating to the next stage. In an earlier study, Redondo and Camarero (2017) found that incubator managers with scientific backgrounds were less effective in identifying commercial opportunities or providing business-focused training to their incubatees. Based on an ‘institutional logics’ approach, the authors conclude: ‘Business and entrepreneurial experience is key to instil business logic in incubatees and provide them with the training and assistance they need’ (Redondo and Camarero 2017: 291). In a third paper using data from the incubators in Spain and the Netherlands, Redondo and Camarero (2019b) examine the IM’s role in developing social capital within UBIs. Based on 101 questionnaires from incubatees, the results indicated that IMs are key to the creation of relational social capital, based on trust and reciprocity, between incubatees. Managers, who adopted a ‘brokerage role’, were also responsible for establishing bridging social capital, which enables incubatees to establish links with external business networks. Bridging social capital is particularly important because it ‘has a significant influence on the efficiency of incubatees’ business in terms of business planning, implementation and management’ (Redondo and Camarero 2019b: 619). In contrast to the quantitative work of Redondo and Camarero, Ahmad and Ingle (2011) carried out a single case study of a Dublin-based UBI and interviewed 31 incubatees to evaluate their experiences of working in an incubator. They found that the success of the incubation process was reliant on the quality of the incubatees’ relationship with the incubator manager. It was also considered important that the manager was effective in acting as a ‘broker’ to establish external links with potential customers, funders and more experienced business people. Senior managers responsible for eight UBIs in Portugal were interviewed by Carvalho and Galina (2015). Their findings indicated that the management teams’ experience was central to incubator success. In particular, ‘softer services’ including networking and

2.4 University-Based Incubation (UBI)

29

business services were more important to start-up and growth of new firms than harder factors such as the incubator infrastructure (Carvalho and Galina 2015: 264). Ahmad and Thornberry (2018) compared the roles of management teams in two incubators based in Dublin (Ireland); IncWorks, a University-based high-technology incubator and DubInc, a ‘Community Enterprise Centre’. The research was based on interviews with 57 ‘clients’ and 11 members of the two management teams. The IncWorks management team had very specific targets related to the number of spinouts, the number of new clients, the number of feasibility grants and the amount of seed funding/capital obtained by their clients. These targets were subject to annual reviews although it was not clear whether there was any sanction for underperformance. In fact, the authors conclude that the ‘IM’s true role remained largely uncontrolled and unmonitored’ (Ahmad and Thornberry 2018: 1203). Within DubInc there was a clear separation of the formal ‘management-leader’ role with a focus on achieving targets such as monthly revenue to meet the organisation’s financial commitments. The IM’s role as coach and mentor was more informal and ad hoc increasing the difficulty of monitoring and measurement. Maintaining good relationships with the local community with a focus on building a strong enterprise culture was also important in DubInc. In summary, Ahmad and Thornberry (2018: 1207) point out the complexity of the incubation manager’s role: The IM operates in a number of different capacities, at a number of different levels, and as a consequence maintains several different relationships with clients including that of landlord, shareholder, mentor, referee and broker.

Based on a study of the Georgia Institute of Technology’s Advanced Technology Development Center (ATDC), Breznitz et al. (2018) examine the services associated with different levels of membership. Not surprisingly, those with the most comprehensive membership (VentureLab) and the best support from the IM developed the most extensive networks. The two papers, discussed above, by Rothaermel and Thursby (2005a, b) are also based on research carried out at the ATDC. A study of nine incubators associated with the University of Toronto examined the growth of student-based start-ups. Breznitz and Zhang (2019) acknowledge that because of rigorous screening, firms located in the incubators tend to have strong performance in terms of both product and employment growth. Nevertheless, a key finding was that those incubators managed by ‘habitual entrepreneurs’ had a ‘much better chance of experiencing product growth’ (Breznitz and Zhang 2019: 867). A recent ‘in-depth’ study examines the role and performance of incubator managers drawing on 40 interviews in incubation centres across the UK (Kakabadse et al. 2020). The study was informed role theory (Stewart 1982) and social resource theory (Tocher et al. 2015). According to Stewart (1982), it is possible to gain an understanding of managerial performance by examining their role demands– constraints–choices. While Tocher et al. (2015) point out that providing access to social resources is an important element in the opportunity creation process. As discussed above, IMs have a particularly important role in terms of bridging and bonding social capital (Redondo and Camarero 2019b). In terms of their roles, IMs saw their primary function to provide support for incubatees by acting as mentors

30

2 Business Incubation

and catalysts (Kakabadse et al. 2020). Most referred to the need for flexibility in their jobs while at the same time meeting targets related to occupancy and graduation rates as well as focusing on innovation and job creation. Lack of funding, resources, time and too much ‘red-tape’ were seen as the main constraints on their ability to meet targets. The choices IMs had in their day-to-day roles centred around four factors: prioritising, delegating, managing expectations and establishing a ‘balanced’ relationship with incubatees. In summary, generally, IMs felt that too much focus on targets stopped them from achieving their main goal of providing support for incubatees. A key policy recommendation is the need to ‘better align the level of performance indicators and compliance requirements currently imposed on the incubator managers with the incubatees business support needs’ (Kakabadse et al. 2020: 11). Nair and Blomquist (2019) focus on failure prevention as a key function of the incubation manager by providing business support and access to networks (Bergek and Norrman 2008). Their study was based on 56 in-depth interviews with incubator managers/business coaches and entrepreneurs in nine Swedish incubators (three of which were UBIs). The data indicate the importance of IMs focusing on ‘team selection’ rather than the business idea in the early stages of incubation. Encouraging stakeholder involvement is essential as the team seeks validation of their business model. This stage is followed by the development of the business model and a search for funding and professional or technical expertise. As businesses exit the incubator, then the focus of the management team switches to building a scalable business model (DeSantola and Gulati 2017). Nair and Blomquist (2019: 273) summarise the results of their study as follows: Consistent with the non-predictive logic of new venture creation where clear goals and accurate predictions are not required (Dew et al. 2008), perceptions on scalability are accompanied by actions such as the stress on team capabilities, early stakeholder involvement and the provision of collaborative platforms and spaces.

Cooperative networks are the basis of a study by Galvão et al. (2019), which examines three incubators in Portugal. Interviews were carried out with start-up entrepreneurs and the heads of their relevant incubators. In dealing with their lack of resources, the entrepreneurs relied on IMs to supplement their informal networks with more formal links to external institutions. Incubation managers certainly stressed the importance of networks to facilitate access to resources (funds, knowledge and experience) as well as enhancing the firms’ reputations and legitimacy (Galvão et al. 2019: 2830).

2.5

Summary

It is apparent that as a relatively young subject, the business incubation literature lacks theoretical coherence, and work is needed to theorise the incubation process, rather than focus on outputs (Lukeš et al. 2019; Mian et al. 2016; Theodorakopoulos

2.5 Summary

31

et al. 2014). The BI literature moved from defining BIs to developing hard measures of success (Allen and McCluskey 1990; Grimaldi and Grandi 2005; Lumpkin and Ireland 1988). This was followed by a focus on softer measures (McAdam and McAdam 2006; Voisey et al. 2006) and more recently to a concern with using various evaluations according to the BI context (Albort-Morant and Oghazi 2016; Marlow and McAdam 2015; M’Chirgui et al. 2018; Sedita et al. 2019; Todorovic and Moenter 2010; Voisey et al. 2013; Zhang and Sonobe 2011). While these developments provide a better understanding of the role business incubators play in developing entrepreneurship, stimulating local economic development, enhancing knowledge transfer and facilitating employability, two central themes emerge: what are business incubators? How to measure BI performance? The first theme tends to be descriptive in defining and categorising BIs. The second theme in the BI literature tends to be fragmented. As pointed out by Allen and McCluskey (1990), the aims of incubators can be very different (see Gao and Hu 2017). However, it is of paramount importance to understand the role of business incubators because they have become an increasingly crucial tool for universities and governments in the drive for greater knowledge transfer, innovation and entrepreneurship (Torun et al. 2018). Categorising BIs by aims, sectors and how they are funded has contributed to the development of the BI literature. Hard measures are useful in providing a snapshot of how effective funding has been used in a BI and allows performance comparisons across similar types of incubators (Torun et al. 2018; Wann et al. 2017). However, hard measures are insufficient to provide a detailed understanding of what happens inside a BI, the lasting effect a BI has on fledging companies or the interactions that take place between incubatees, the incubator and management team (Redondo and Camarero 2019a). It is evident that literature related to understanding the role of incubators is fragmented and that many early BI studies tended to be descriptive and output centred (Mian et al. 2016). As Hackett and Dilts (2008: 440) point out, ‘few studies have examined the incubation process itself’. This was confirmed by Todorovic and Moenter (2010: 28), who argue that ‘studies on the incubation process are sparse’. A number of studies are beginning to focus on incubatees and their interactions with the incubator and management team (Ahmad 2014; Ahmad and Thornberry 2018; Treanor and Henry 2010). However, existing research points to a gap related to analysing the role of BIs in developing entrepreneurship among incubates (Lasrado et al. 2016). For example, Theodorakopoulos et al.’s (2014: 614) critical literature review reveals that, despite numerous studies, ‘there is still a lack of a comprehensive framework for assessing the effectiveness of business incubation’. The ‘heterogeneity’ of BIs as well as variations in measurement criteria means that it is very difficult to make meaningful comparisons of incubator performance (Theodorakopoulos et al. 2014). There is a distinct body of research focusing on university-based incubation and this material is clearly central to the existing study. For example, a number of authors have begun to focus on the role UBIs play in creating social capital amongst incubatees (Battisti and McAdam 2012; Gately and Cunningham 2014; Soetanto and Jack 2016). As we discuss in Chap. 3, entrepreneurial learning is largely absent

32

2 Business Incubation

from debates about the impact of BIs in developing entrepreneurship. Exploring the role of entrepreneurial learning within the incubation process will help better theorise the business incubation process and encourage more holistic measures of incubator success to be developed (Theodorakopoulos et al. 2014). There is a need to examine how incubators facilitate sustainable entrepreneurship in terms of expanding learning capacity, acquiring knowledge and networking inside the incubators (Ebbers 2014). This will allow a better understanding of the role incubators play in helping incubatees develop their businesses during the incubation period. Prior to joining an incubator, incubatees need to identify a potential business opportunity. Ideally, they will develop that idea and establish a business during their incubation period. Engaging in the incubation process may also help incubatees identify additional opportunities and develop new business ideas (Redondo and Camarero 2019a; Wann et al. 2017). Thus, the process of incubation can be viewed as an enactment of entrepreneurship whereby incubatees identify, develop and exploit opportunities. Indeed, the notion of entrepreneurship and opportunity identification and exploitation are embedded in the incubation process (Aernoudt 2004; Albort-Morant and Oghazi 2016; Breznitz and Zhang 2019; Mian 2014). There is also a small body of literature that examines the role of the incubation manager (IM) or management team (Redondo and Camarero 2019a). A successful IM should be responsible for building relationships with incubatees, identifying their training needs, helping develop their business ideas, acting as a mentor and adopting a brokering role to access external networks (Kakabadse et al. 2020). As this book examines the lived experience, rather than entrepreneurs’ retrospective memory of identifying and developing entrepreneurial opportunities, studying the process of business incubation will help to enrich the theoretical and empirical understanding of entrepreneurship. The different streams of studies in business incubation point to common research directions; namely the study of the entrepreneurial process within the BI environment. Hence, our aim is to analyse the business incubation process by bringing together literature from the fields of BI, opportunity development, entrepreneurial learning and communities of practice to gain insight into that process. The book will provide an in-depth understanding of the links between incubation and learning. In particular, we focus on the incubator as the basis for the emergence of a ‘community of practice’ (Lave and Wenger 1991; Wenger 2000). This is a response to calls for improved theoretical frameworks to conceptualise and produce more convergent literature on understanding the role of BIs in developing entrepreneurship (Eveleens et al. 2017). In contrast to most incubation-centred approaches, we adopt an incubatee-centred approach by focusing on the entrepreneurial process (Gartner 1985; Reynolds 2011). The study will help to advance understanding of how BIs operate and those factors contributing to the development of successful entrepreneurs. The following chapter looks at the concept of opportunity identification and development and examines the possibility and appropriateness of using the concept of entrepreneurial learning to bridge the gap in business incubation research.

References

33

References Aernoudt, R. (2004). Incubators: A tool for entrepreneurship? Small Business Economics, 23, 127–135. Ahmad, A. J. (2014). A mechanisms-driven theory of business incubation. International Journal of Entrepreneurial Behavior and Research, 20(4), 375–405. Ahmad, A. J., & Ingle, S. (2011). Relationships matter: Case study of a university campus incubator. International Journal of Entrepreneurial Behavior and Research, 17(6), 626–644. Ahmad, A. J., & Thornberry, C. (2018). On the structure of business incubators: De-coupling issues and the mis-alignment of managerial incentives. The Journal of Technology Transfer, 43(5), 1190–1212. Albort-Morant, G., & Oghazi, P. (2016). How useful are incubators for new entrepreneurs? Journal of Business Research, 69, 2125–2129. Albort-Morant, G., & Ribeiro-Soriano, D. (2016). A bibliometric analysis of international impact of business incubators. Journal of Business Research, 69(5), 1775–1779. Aldrich, H., & Auster, E. R. (1986). Even dwarfs starred small: Liabilities of age and size and their strategic implications. Research in Organizational Behavior, 8, 165–199. Allen, D. N., & McCluskey, R. (1990). Structure, policy, services, and performance in the business incubator industry. Entrepreneurship: Theory and Practice, 15(2), 61–77. Allen, D. N., & Weinberg, M. L. (1988). State investment in business incubators. Public Administration Quarterly, 12, 196–215. Al-Mubaraki, H., & Busler, M. (2010). Business incubators models of the USA and UK: A SWOT analysis. World Journal of Entrepreneurship, Management and Sustainable Development, 6(4), 335–354. Al-Mubaraki, H. M., & Busler, M. (2014). Incubator successes: Lessons learned from successful incubators towards the twenty-first century. World Journal of Science, Technology and Sustainable Development, 11(1), 44–52. Amezcua, A. S., Grimes, M. G., Bradley, S. W., & Wiklund, J. (2013). Organizational sponsorship and founding environments: A contingency view on the survival of business-incubated firms, 1994–2007. The Academy of Management Journal, 56(6), 1628–1654. Anyadike-Danes, M., Hart, M., & Du, J. (2015). Firm dynamics and job creation in the United Kingdom: 1998–2013. International Small Business Journal, 33(1), 12–27. Arlotto, J., Sahut, J.-M., & Teulon, F. (2011). What is the performance of incubators? The point of view of coached entrepreneurs. International Journal of Business, 16(4), 341–352. Autio, E., & Klofsten, M. (1998). A comparative study of two European business incubators. Journal of Small Business Management, 36, 30–43. Autio, E., & Rannikko, H. (2016). Retaining winners: Can policy boost high-growth entrepreneurship? Research Policy, 45, 42–55. Baraldi, E., & Havenvid, M. I. (2016). Identifying new dimensions of business incubation: A multilevel analysis of Karolinska Institute’s incubation system. Technovation, 50–51, 53–68. Barbero, J. L., Casillas, J. C., Ramos, A., & Guitar, S. (2012). Revisiting incubation performance: How incubator typology affects results. Technological Forecasting and Social Change, 79(5), 888–902. Barbero, J. L., Casillas, J. C., Wright, M., & Garcia, A. R. (2014). Do different types of incubators produce different types of innovations? Journal of Technology Transfer, 39(2), 151–168. Battisti, M., & McAdam, M. (2012). Challenges of social capital development in the university science incubator: The case of the graduate entrepreneur. Entrepreneurship and Innovation, 13 (4), 261–276. Bergek, A., & Norrman, C. (2008). Incubator best practice: A framework. Technovation, 28(1), 20–28. Blok, V., Thijssen, S., & Pascucci, S. (2017). Understanding management practices in business incubators: Empirical evidence of the factors impacting the incubation process. International Journal of Innovation and Technology Management, 14(4), 1750023.

34

2 Business Incubation

Bøllingtoft, A., & Ulhøi, J. P. (2005). The networked business incubator—Leveraging entrepreneurial agency? Journal of Business Venturing, 20, 265–290. Bone, J., Allen, C., & Haley, C. (2017). Business incubators and accelerators: The national picture, BEIS Research Paper No 7 (NESTA). Bone, J., Gonzalez-Uribe, J., Haley, C., & Lahr, H. (2019). The impact of business accelerators and incubators in the UK. BEIS Research Paper Number 2019/009. Bosma, N., & Kelley, D. (2018). Global entrepreneurship monitor: 2018/19 report, GEM. Breznitz, S. M., & Zhang, Q. (2019). Fostering the growth of student start-ups from university accelerators: An entrepreneurial ecosystem perspective. Industrial and Corporate Change, 28 (4), 855–873. Breznitz, S. M., Clayton, P. A., Defazio, D., & Isett, K. R. (2018). Have you been served? The impact of university entrepreneurial support on start-ups network formation. Journal of Technology Transfer, 43(2), 343–367. Brooks, O. (1986). Economic development through entrepreneurship: Incubators and the incubation process. Economic Development Review, 4, 24–29. Bruneel, J., Ratinho, T., Clarysse, B., & Groen, A. (2012). The evolution of business incubators: Comparing demand and supply of business incubation services across different incubator generations. Technovation, 32(2), 110–121. Campbell, C. (1989). Change agents in the new economy: Business incubators and economic development. Economic Development Review, 7, 56–59. Carayannis, E. G., & Rakhmatullin, R. (2014). The quadruple/quintuple innovation helixes and smart specialisation strategies for sustainable and inclusive growth in Europe and beyond. Journal of the Knowledge Economy, 5(2), 212–239. Carvalho, L. M. C., & Galina, S. V. (2015). The role of business incubators for start-ups development in Brazil and Portugal. World Journal of Entrepreneurship, Management and Sustainable Development, 11(4), 256–267. Chandra, A., & Fealey, T. (2009). Business incubation in The United States, China and Brazil: A comparison of role of government, incubator funding and financial services. International Journal of Entrepreneurship, 13, 67–86. Coad, A., Daunfeldt, S. O., Hölzl, W., Johansson, D., & Nightingale, P. (2014). High-growth firms: Introduction to the special section. Industrial and Corporate Change, 23(1), 91–112. Colombo, M. G., & Delmastro, M. (2002). How effective are technology incubators? Evidence from Italy. Research Policy, 31, 1103–1122. Cooper, A. C. (1985). The role of incubator organizations in the founding of growth-oriented firms. Journal of Business Venturing, 1, 75–86. Cooper, C. E., Hamel, S. A., & Connaughton, S. L. (2012). Motivations and obstacles to networking in a university business incubator. Journal of Technology Transfer, 37(4), 433–453. CSES. (2002). Benchmarking of Business Incubators [Online]. Centre For Strategy & Evaluation Services. Retrieved from http://Ec.Europa.Eu/Enterprise/Entrepreneurship/Support_Measures/ incubators/Summary_Benchmarking_Bi_2002.Pdf. Davidsson, P., & Gruenhagen, J. H. (2020). Fulfilling the process promise: A review and agenda for new venture creation process research. Entrepreneurship: Theory and Practice. https://doi.org/ 10.1177/1042258720930991. Dee, N., Gill, D., Livesey, F., & Minshall, T. (2011). Incubation for growth: A review of the impact of business incubation on new ventures with high growth potential. London: Nesta. www.nesta. org.uk/publications/incubation-growth. DeSantola, A., & Gulati, R. (2017). Scaling: Organizing and growth in entrepreneurial ventures. The Academy of Management Annals, 11(2), 640–668. Dew, N., Read, S., Sarasvathy, S., & Wiltbank, R. (2008). Outlines of a behavioral theory of the entrepreneurial firm. Journal of Economic Behavior and Organization, 66(1), 37–59. Díez-Vial, I., & Montoro-Sánchez, Á. (2016). How knowledge links with universities may foster innovation: The case of a science park. Technovation, 50–51, 41–52.

References

35

Dvouletý, O., Longo, M. C., Blažková, I., Lukeš, M., & Andera, M. (2018). Are publicly funded Czech incubators effective? The comparison of performance of supported and non-supported firms. European Journal of Innovation Management, 21(4), 543–563. Ebbers, J. J. (2014). Networking behavior and contracting relationships among entrepreneurs in business incubators. Entrepreneurship: Theory and Practice, 38, 1159–1181. Ensley, M. D., & Hmieleski, K. M. (2005). A comparative study of new venture top management team composition, dynamics and performance between university-based and independent startups. Research Policy, 34(7), 1091–1105. Etzkowitz, H. (1998). The norms of entrepreneurial science: Cognitive effects of the new university–industry linkages. Research Policy, 27, 823–833. Etzkowitz, H. (2003). Research groups as ‘Quasi-firms’: The invention of the entrepreneurial University. Research Policy, 32(1), 109–121. Eveleens, C. P., van Rijnsoever, F. J., & Niesten, E. M. (2017). How network-based incubation helps start-up performance: A systematic review against the background of management theories. Journal of Technology Transfer, 42, 676–713. Fang, S.-C., Tsai, F., & Lin, J. (2010). Leveraging tenant-incubator social capital for organizational learning and performance in incubation programme. International Small Business Journal, 28, 90–113. Freel, M. S. (1998). Policy, prediction and growth: Picking start-up winners? Journal of Small Business and Enterprise Development, 5(1), 19–32. Fry, F. L. (1987). The role of incubators in small business planning. American Journal of Small Business, 12, 51–61. Galvão, A., Marques, C., Franco, M., & Mascarenhas, C. (2019). The role of start-up incubators in cooperation networks from the perspective of resource dependence and interlocking directorates. Management Decision, 57(10), 2816–2836. Gao, Y., & Hu, Y. (2017). The upgrade to hybrid incubators in China: A case study of Tuspark incubator. Journal of Science and Technology Policy Management, 8(3), 331–351. Gartner, W. B. (1985). A conceptual framework for describing the phenomenon of new venture creation. The Academy of Management Review, 5(4), 696–706. Gately, C. G., & Cunningham, J. A. (2014). Building intellectual capital in incubated technology firms. Journal of Intellectual Capital, 15(4), 516–536. Goswami, K., Mitchell, R. J., & Bhagavatula, S. (2018). Accelerator expertise: Understanding the intermediary role of accelerators in the development of the Bangalore entrepreneurial ecosystem. Strategic Entrepreneurship Journal, 12(1), 117–150. Granovetter, M. S. (1973). The strength of weak ties. The American Journal of Sociology, 78(6), 1360–1380. Grimaldi, R., & Grandi, A. (2005). Business incubators and new venture creation: An assessment of incubating models. Technovation, 25(2), 111–121. Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation research. Journal of Technology Transfer, 29, 55–82. Hackett, S., & Dilts, D. (2008). Inside the black box of business incubation: Study b-scale assessment, model refinement, and incubation outcomes. Journal of Technology Transfer, 33 (5), 439–471. Hannon, P. D. (2005). Incubation policy and practice: Building practitioner and professional capability. Journal of Small Business and Enterprise Development, 12, 57–75. Hausberg, J. P., & Korreck, S. (2020). Business incubators and accelerators: A co-citation analysisbased, systematic literature review. The Journal of Technology Transfer, 45(1), 151–176. Hughes, M., Hughes, P., & Morgan, R. E. (2007). Exploitative learning and entrepreneurial orientation alignment in emerging young firms: Implications for market and response performance. British Journal of Management, 18, 359–375. Huynh, T. (2016). Early-stage fundraising of university spin-offs: A study through demand-site perspectives. Venture Capital, 18(4), 345–367.

36

2 Business Incubation

Huynh, T., Patton, D., Arias-Aranda, D., & Molina-Fernández, L. M. (2017). University spin-off’s performance: Capabilities and networks of founding teams at creation phase. Journal of Business Research, 78, 10–22. Jones, O., Macpherson, A., & Jayawarna, D. (2014). Resourcing the start-up business: Creating dynamic entrepreneurial learning capabilities. London: Routledge. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. Kelley, D., Singer, S., & Herrington, M. (2012). The Global Entrepreneurship Monitor 2011 Global Report. London: Global Entrepreneurship Research Association, London Business School. Lalkaka, R., & Abetti, P. A. (1999). Business incubation and enterprise suport systems in restructuring countries. Creativity and Innovation Management, 8, 197–209. Lasrado, V., Sivo, S., Ford, C., O’Neal, T., & Garibay, I. (2016). Do graduated university incubator firms benefit from their relationship with university incubators? Journal of Technology Transfer, 41(2), 205–219. Lave, J., & Wenger, E. (1991). Situated learning: Legitimate peripheral participation. New York: Cambridge University Press. Lee, R., & Jones, O. (2008). Networks, communication and learning during business start-up: The creation of cognitive social capital. International Small Business Journal, 26(5), 559–594. Lee, S. S., & Osteryoung, J. S. (2004). A comparison of critical success factor for effective operations of university business incubators in The United States and Korea. Journal of Small Business Management, 42, 418–426. Lukeš, M., Longo, M. C., & Zouhar, J. (2019). Do business incubators really enhance entrepreneurial growth? Evidence from a large sample of innovative Italian start-ups. Technovation, 82, 25–34. Lumpkin, J. R., & Ireland, R. D. (1988). Screening practices of new business incubators: The evaluation of critical success factors. American Journal of Small Business, 12, 59–81. M’Chirgui, Z., Lamine, W., Mian, S., & Fayolle, A. (2018). University technology commercialization through new venture projects: An assessment of the French regional incubator program. Journal of Technology Transfer, 43, 1142–1160. March, J. G. (1991a). Exploration and exploitation in organizational Learning. Organization Science, 2(1), 71–87. March, J. G. (1991b). Exploration and exploitation in organisational learning. Organization Science, 2, 71–87. Marlow, S., & McAdam, M. (2015). Incubation or induction? Gendered identity work in the context of technology business incubation. Entrepreneurship: Theory and Practice, 39(4), 791–816. Mascarenhas, C., Marques, C. S., Galvão, A. R., Carlucci, D., Falcão, P. F., & Ferreira, F. A. (2019). Analyzing technology transfer offices’ influence for entrepreneurial universities in Portugal. Management Decision, 57(12), 3473–3491. Mathias, B. D., Williams, D. W., & Smith, A. R. (2015). Entrepreneurial inception: The role of imprinting in entrepreneurial action. Journal of Business Venturing, 30(1), 11–28. Mavi, R. K., Gheibdoust, H., Khanfar, A. A., & Mavi, N. K. (2019). Ranking factors influencing strategic management of university business incubators with ANP. Management Decision, 57 (12), 3492–3510. McAdam, M., & Marlow, S. (2007). Building futures or stealing secrets? Entrepreneurial cooperation and conflict within business incubators. International Small Business Journal, 25(4), 361–382. McAdam, M., & McAdam, R. (2006). The networked incubator: The role and operation of entrepreneurial networking with the University Science Park incubator (USI). Entrepreneurship and Innovation, 7(2), 87–97.

References

37

McAdam, M., & McAdam, R. (2008). High-tech start-ups in University Science Park incubators: The relationship between the start-up’s life cycle progression and use of the incubator’s resources. Technovation, 28(5), 277–290. McAdam, M., Miller, K., & McAdam, R. (2016). Situated regional university incubation: A multilevel stake-holder perspective. Technovation, 50–51, 69–78. Merrifield, D. B. (1987). New business incubators. Journal of Business Venturing, 2, 277–284. Mian, S. A. (1996a). Assessing value-added contributions of university technology business incubators to tenant firms. Research Policy, 25(3), 325–335. Mian, S. A. (1996b). The university business incubator: A strategy for developing new research/ technology-based firms. The Journal of High Technology Management Research, 7(2), 191–208. Mian, S. A. (1997). Assessing and managing the university technology business incubator: An integrative framework. Journal of Business Venturing, 12(4), 251–285. Mian, S. (2014). Chapter 15: Business incubation and incubator mechanisms. In A. Fayolle (Ed.), Handbook of research on entrepreneurship: What we know and what we need to know (pp. 335–366). Cheltenham: Edward Elgar. Mian, S., Lamine, W., & Fayolle, A. (2016). Technology business incubation: An overview of the state of knowledge. Technovation, 50–51, 1–12. Miller, P., & Bound, K. (2011). The start-up factories: The rise of accelerator programmes to support new technology ventures. London: Nesta. Nabi, G., & Holden, R. (2008). Graduate entrepreneurship: Intentions, education and training. Education and Training, 50(7), 545–551. Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital and organisational advantage. The Academy of Management Review, 23(2), 242–266. Nair, S., & Blomquist, T. (2019). Failure prevention and management in business incubation: Practices towards a scalable business model. Technology Analysis & Strategic Management, 31 (3), 266–278. NESTA. (2008). Total innovation. London: National Endowment for Science, Technology and the Arts. Ng, B.-K., Chen, S.-H., Wong, C.-Y., & Chandran, V. (2019). University incubation system for research commercialisation: The case of Taiwan and Malaysia. Science, Technology and Society, 24(3), 465–485. Nicholls-Nixon, C., & Valliere, D. (2020). A framework for exploring heterogeneity in university business incubators. Entrepreneurship Research Journal, 10(2), 20–31. O’Neal, T. (2005). Evolving a successful university-based incubator: Lessons learned from the UCF technology incubator. Engineering Management Journal, 17(3), 11–25. OECD. (1999). Business Incubation: International Case Studies [Online]. Oranisation For Economic Co-Operation and Development. Retrieved from http://Cdnet.Stic.Gov.Tw/Ebooks/ Oecd/24.Pdf. Ozgen, E., & Baron, R. A. (2007). Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums. Journal of Business Venturing, 22, 174–192. Patton, D., & Marlow, S. (2011). University technology business incubators: Helping new entrepreneurial firms to learn to grow. Environment and Planning. C, Government & Policy, 29(5), 911–926. Pauwels, C., Clarysse, B., Wright, M., & Van Hove, J. (2016). Understanding a new generation incubation model: The accelerator. Technovation, 50(51), 13–24. Peters, L., Rice, M., & Sundararajan, M. (2004). The role of incubators in the entrepreneurial process. Journal of Technology Transfer, 29, 83–91. Phan, P. H., Siegel, D. S., & Wright, M. (2005). Science parks and incubators: Observations, synthesis and future research. Journal of Business Venturing, 20(2), 165–182. Politis, D., Gabrielsson, J., Galan, N., & Abebe, S. A. (2019). Entrepreneurial Learning in venture acceleration programs. The Learning Organization, 26(6), 588–603.

38

2 Business Incubation

Ratinho, T., Amezcua, A., Honig, B., & Zeng, Z. (2020). Supporting entrepreneurs: A systematic review of literature and an agenda for research. Technological Forecasting and Social Change, 154, 119956. Redondo, M., & Camarero, C. (2017). Dominant logics and the manager’s role in university business incubators. The Journal of Business and Industrial Marketing, 32(2), 282–294. Redondo, M., & Camarero, C. (2019a). University business incubators: Mechanisms to transform ideas into businesses. In A. Fayolle, D. Kariv, & H. Matlay (Eds.), The role and impact of entrepreneurship education: Methods, teachers and innovative programmes. Cheltenham: Edward Elgar. Redondo, M., & Camarero, C. (2019b). Social Capital in University Business Incubators: Dimensions, antecedents and outcomes. The International Entrepreneurship and Management Journal, 15(2), 599–624. Reynolds, P. D. (2011). Informal and early formal financial support in the business creation process: Exploration with PSED II data set. Journal of Small Business Management, 49(1), 27–54. Rice, M. (2002). Co-production of business assistance in business incubators: An exploratory study. Journal of Business Venturing, 17(2), 163–187. Rothaermel, F. T., & Thursby, M. (2005a). Incubator firm failure or graduation? The role of University linkages. Research Policy, 34(3), 1076–1090. Rothaermel, F. T., & Thursby, M. (2005b). University–incubator firm knowledge flows: Assessing their impact on incubator firm performance. Research Policy, 34(3), 305–320. Rothschild, L., & Darr, A. (2005). Technological incubators and the social construction of innovation networks: An Israeli case study. Technovation, 25(1), 59–67. Schwartz, M. (2009). Beyond incubation: An analysis of firm survival and exit dynamics in the post-graduation period. Journal of Technology Transfer, 34(4), 403–421. Schwartz, M. (2011). Incubating an illusion? Long-term incubator firm performance after graduation. Growth Change, 42(4), 491–516. Schwartz, M. (2013). A control group study of incubators’ impact to promote firm survival. Journal of Technology Transfer, 38, 302–331. Sedita, S. R., Apa, R., Bassetti, T., & Grandinetti, R. (2019). Incubation matters: Measuring the effect of business incubators on the innovation performance of start-ups. R&D Management, 49 (4), 439–454. Seet, P.-S., Jones, J., Oppelaar, L., & de Zubielqui, G. C. (2018). Beyond ‘know-what’ and ‘knowhow’ to ‘know-who’: Enhancing human capital with social capital in an Australian start-up accelerator. Asia Pacific Business Review, 24(2), 233–260. Soetanto, D., & Jack, S. (2016). The impact of university-based incubation support on the innovation strategy of academic spin-offs. Technovation, 50–51, 25–40. Stewart, R. (1982). A model for understanding jobs and behaviour. The Academy of Management Review, 7, 7–13. Stinchcombe, A. L. (1965). Organizations as social structures. In J. March (Ed.), Handbook of organizations. Chicago: Rand-McNally. Studdard, N. L. (2006). The effectiveness of entrepreneurial firm’s knowledge acquisition from a business incubator. International Entrepreneurship and Management Journal, 2(2), 211–225. Tavoletti, E. (2013). Business incubators: Effective infrastructures or waste of public money? Looking for a theoretical framework, guidelines and criteria. Journal of the Knowledge Economy, 4, 423–443. Temali, M., & Campbell, C. (1984). Business incubator profiles: A national survey. Minneapolis: University of Minnesota, Hubert H. Humphrey Institute of Public Affairs. Theodorakopoulos, N. K., Kakabadse, N., & McGowan, C. (2014). What matters in business incubation? A literature review and a suggestion for situated theorising. Journal of Small Business and Enterprise Development, 21(4), 602–622. Thierstein, A., & Wilhelm, B. (2001). Incubator, technology, and innovation centres in Switzerland: Features and policy implications. Entrepreneurship and Regional Development, 13, 315–331.

References

39

Tocher, N., Oswald, S. L., & Hall, D. J. (2015). Proposing social resources as the fundamental catalyst toward opportunity creation. Strategic Entrepreneurship Journal, 9, 119–135. Todorovic, Z., & Moenter, K. (2010). Tenant firm progression within an incubator: Progression toward an optimal point of resource utilization. Academy of Entrepreneurship Journal, 16(1), 40. Torun, M., Peconick, L., Sobreiro, V., Kimura, H., & Pique, J. (2018). Assessing business incubation: A review on benchmarking. International Journal of Innovation Studies, 2, 91–100. Treanor, L., & Henry, C. (2010). Gender in campus incubation: Evidence from Ireland. International Journal of Gender and Entrepreneurship, 2(2), 130–149. Vanderstraeten, J., & Matthyssens, P. (2012). Service-based differentiation strategies for business incubators: Exploring external and internal alignment. Technovation, 32(12), 656–670. Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The measurment of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. Voisey, P., Jones, P., & Thomas, B. (2013). The pre-incubator: A longitudinal study of 10 years of university pre-incubation in Wales. Industry and Higher Education, 27(5), 349–363. Wann, J.-W., Lu, T.-J., Lozada, I., & Cangahuala, G. (2017). University-based incubators’ performance evaluation: A benchmarking approach. Benchmarking: An International Journal, 24(1), 34–49. Wenger, E. (2000). Communities of practice and social learning systems. Organization, 7, 225–246. Westhead, P., & Batstone, S. (1998). Independent technology-based firms: The perceived benefits of a Science Park location. Urban Studies, 35(12), 2197–2219. Wise, S., & Valliere, D. (2014). The impact on management experience on the performance of startups within accelerators. Journal of Private Equity, 18(1), 9–19. Wonglimpiyarat, J. (2016). The innovation incubator, university business incubator and technology transfer strategy: The case of Thailand. Technology in Society, 46, 18–27. Zhang, H., & Sonobe, T. (2011). Business incubators in China: An inquiry into the variables associated with incubatee success. Economic Design, 5(7), 1–27.

Chapter 3

Entrepreneurship, Opportunities and Entrepreneurial Learning

3.1

Introduction

The review of literature covering business incubation, with a focus on universitybased incubators (UBI) presented in Chap. 2 points to an important knowledge gap; namely, how the incubation process works in practice from the perspective of incubatees. Improving understanding of the entrepreneurial process within BIs is fundamental to advancing theoretical and practical knowledge. Therefore, as a first step in exploring the interaction between the incubation process and entrepreneurs, this chapter presents an overview of the literature in the field of entrepreneurship and opportunity identification. We pay particular attention to the important issue of how an individual’s prior knowledge shapes their approach to new opportunities, whether discovered or created. Renewed interest in the interaction of entrepreneur and opportunity identification was stimulated by a number of key publications early in the twenty-first century (Shane 2000; Shane and Venkataraman 2000). Others suggest that rather than ‘identifying’ new opportunities, entrepreneurs create opportunities based on their existing knowledge and experience (Gartner et al. 1992; SanzVelasco 2006; Sarasvathy 2001). In recent years, the topic of entrepreneurial learning has grown in importance and significantly improved our understanding of the entrepreneurial process. Therefore, we then examine the literature related to experiential entrepreneurial learning during the start-up process. Being based in a business incubator means that individuals have access to a wide range of resources including other nascent entrepreneurs as well as the incubator management team. Consequently, we also examine the literature related to learning as a member of a community of practice. This, we suggest, is fundamental to the effective functioning of any university-based incubator (UBI), where there is concern to ensure inexperienced would-be entrepreneurs have the best possible support in establishing their businesses. The chapter examines recent entrepreneurship literature with a strong focus on entrepreneurial learning in a social context. One of the most significant changes has © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_3

41

42

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

been the shift from the search for individual entrepreneurial ‘traits’ (McClelland 1961) to a focus on the ambiguous and complex nature of the entrepreneurial process (see Jones et al. 2014: 13–29). Greater interest in the social processes associated with entrepreneurship includes a rapid growth in the literature examining the nature of entrepreneurial learning. Therefore, in Sect. 3.5, we bring together the various strands of literature discussed in Chaps. 2 and 3 to develop a learning model in the context of business incubation.

3.2

Defining Entrepreneurship

There are several key figures in the field of entrepreneurship that defined the intellectual basis for future generations of academic researchers (Landström et al. 2012). It is widely acknowledged that Richard Cantillon (1732/1931) first used the term entrepreneur in his Essai Sur la Nature du Commerce en Général where he outlined the importance of individual property rights, economic interdependency and the concept of arbitrage. Jean-Baptiste Say owned a cotton-spinning mill as well as being Europe’s first professor of economics and the concept of entrepreneurship was central to his explanation of how economic systems functioned. Say’s (1880) ideas were also important because he recognised that the human industry (knowledge) was the third factor of production in addition to land and capital (Pittaway 2012). Schumpeter (1934) remains the most important influence on the contemporary understanding of the role played by entrepreneurs in capitalist economies. Anyone familiar with Schumpeter’s work will be aware that he regarded ‘creative destruction’ as the engine of economic change. The Theory of Economic Development (Schumpeter 1934) is still the most important publication in the entrepreneurship literature (Landström et al. 2012). Other significant contributors to entrepreneurship during the course of the twentieth century include: Ludwig von Mises (1949), Fredrich von Hayek (1990), Frank Knight (1921), Israel Kirzner (1973) and David McClelland (1961), whose ideas about entrepreneurial traits, such as the need for achievement, risk-taking and a tolerance of ambiguity remain popular concepts (Kolvereid and Isaksen 2012; Krueger and Brazeal 1994; Legge and Hindle 2004). Research on traits has been inconclusive and, in contrast, many recent scholars have focused on the ambiguity and complexity associated with firm emergence (Baker and Nelson 2005; Sarasvathy 2008; Steyaert 2007). Entrepreneurship involves the entrepreneur, the opportunity and interaction between the two (Rae 2015). When looking at entrepreneurship research, Grégoire et al. (2006) argue that while the field has some low levels of convergence it remains fragmented. Definitions of entrepreneurship and indeed the domain of entrepreneurship are, therefore, divergent and Matlay (2005: 670) points out, ‘as a generic term, entrepreneurship has been used in a variety of contexts and it covers a broad range of interchangeable meanings and situations’. Sarason et al. (2006) claim that a major problem in the entrepreneurship domain is that much research is either

3.2 Defining Entrepreneurship

43

entrepreneur-focused or opportunity-centred. Early literature in entrepreneurship is skewed towards the entrepreneur. Indeed, neoclassical economists such as Kihlstrom and Laffont (1979) believed that opportunities were equally distributed in the market and they could, potentially, be recognised by anyone. The only characteristic that distinguished entrepreneurs was their ability to cope with uncertainty and risk and, therefore, act on the opportunities they identified. Similarly, studies focusing on entrepreneurs’ psychological characteristics argue that they have personality traits that predispose them to strive for high achievements (McClelland 1961; Riedo et al. 2019), or that they possess superior abilities in processing information that is relevant to opportunities (Shaver and Scott 1991). This approach was questioned by those associated with the Austrian School; Kirzner (1997) argues that differences in the distribution of information stocks mean that some are better able to spot opportunities. Inspired by Austrian theory, Shane and Venkataraman (2000) take a disequilibrium view of entrepreneurship (Mole and Mole 2010). They question research that focuses only on the entrepreneurs and stress the importance of linking the concepts of entrepreneur and opportunity. In addition, Shane and Venkataraman (2000: 218) stress the importance of entrepreneurship as a process: [the] sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them.

This definition advances the understanding of entrepreneurship by providing a dynamic, holistic view of entrepreneurs and the processes associated with identifying and developing opportunities. Adopting this definition means that entrepreneurship can be viewed as a process within which the interplay between the entrepreneur and the opportunity is highlighted. Interestingly, Davidsson (2016: 220) is critical of the focus on ‘opportunity’ in entrepreneurship research, which he likens to the concept of ‘phlogiston’, once believed to be a key element in combustion (Hricko 2017). He goes on to provide an extensive list of what opportunities ‘are’ or ‘can be’ according to the literature (Davidsson 2016: 224). Notwithstanding Davidsson’s (2016) critique, we believe the focus on opportunity identification/creation is fully justified. There are a variety of ways in which business opportunities can be surfaced: new uses for existing resources; new products from existing resources; new resources for existing products, openings created through regulatory or demographic changes (Shane and Venkataraman 2000: 220); emergence of new information; and exploitation of market asymmetries (differences in information about potential opportunities) across space and time. Variations in the ability of individuals to exploit new opportunities are attributed to ‘entrepreneurial alertness’ (Chavoushi et al. 2020; Kirzner 2009, Shane and Venkataraman 2000). Individual alertness depends on intuition and heuristics, as well as access to appropriate information and these factors determine who will become an entrepreneur (Shane 2000). According to such writers, opportunities are ‘concrete and real’ spaces in the market and, therefore, are ripe for exploitation. Those focusing on the nature of opportunity reject the earlier emphasis on entrepreneurial traits such as the need for achievement and risk-taking (McClelland 1961). The focus shifts to other individual

44

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

characteristics, such as alertness and foresight; while the entrepreneurial ability to discover, evaluate and exploit new opportunities, is retained (Monsson and Jörgensen 2016; Shane 2000; Shane and Venkataraman 2000). It is generally acknowledged that business ideas are based on entrepreneurs’ subjective interpretations of the resources required to pursue a particular opportunity (Shane 2012: 15). Nevertheless, Shane’s model (2003) is a deliberate attempt to reconcile the focus on either individuals or the environment. Hence, the model combines individual psychological attributes and demographic factors (age, education, experience) with environmental factors (sector and the macro environment). The underpinning ethos of the model is that entrepreneurs are driven by the profitmotive to identify and exploit opportunities. This illustrates the so-called causal approach in which opportunities are identified and entrepreneurs then acquire the resources necessary to exploit those opportunities. Sarasvathy (2001: 250) set out an alternative to the conventional causal perspective; all nascent entrepreneurs begin with three categories of ‘means’; their own traits, tastes and abilities; their particular set of knowledge; and their social networks. Hence, ‘effectuation’ is ‘a tool for problem solving when the future is unpredictable, our goals unspecified or simply unknown, and when the environment is not independent of our decisions’ (Sarasvathy 2004: 525). The key point in effectuation theory is that entrepreneurs begin with the means in their possession rather than beginning by establishing a specific end-goal (amount of funding required). Effectual entrepreneurs engage in activities associated with starting their business and allow longer-term goals to emerge as they exploit the means under their control. The basic premise is that opportunities are actively created rather than being identified before the business is started as per Shane’s model. Goals evolve over time as the business develops rather than being established at the outset. The factors which underpin effectuation theory are as follows (Fisher 2012: 1024; Sarasvathy 2012): 1. Start with means rather than end goals (bird-in-hand principle). 2. Apply affordable loss rather than expected returns (risk little, fail cheap). 3. Leverage relationships rather than carrying competitive analysis (crazy quilt principle). 4. Entrepreneurs exploit rather than avoid contingencies (lemonade principle). Effectuation theory is based on Simon’s (1959) decision theory, which indicates that rather than trying to predict future trends in an uncertain environment it is more effective to acquire information through experiential and iterative learning. Sarasvathy (2001) argues that one of the main benefits of an effectuation approach is that entrepreneurs who fail will fail very early and with much lower levels of investment than if they had pursued an opportunity based on the causal approach (Read et al. 2016; Read and Sarasvathy 2005). Jones and Li (2017) utilise effectuation theory to examine the microprocesses associated with a successful business established by two young brothers. The data are drawn from a longitudinal study of a family business created by the brothers while still at school. Opportunities were created, rather than discovered, by optimising limited familial resources during the early stages of start-up. Effectuation theory is linked to Weick’s (1995) concept of

3.2 Defining Entrepreneurship

45

sensemaking (enactment, selection and retention), familial influences on dispositions (habits, heuristics and routines) and experiential learning to examine the early years of a start-up business (Jones and Li 2017). A recent study by Haneberg (2019) also drew on effectuation theory to examine the process of entrepreneurial learning during the early phases of new venture creation. Based on a study of five studentbased ventures in a Norwegian University, the author examines the sequence of learning events over a 1-year period. Haneberg (2019: 643) concludes: ‘Understanding EL as an effectual process has provided insight into how entrepreneurs approach process events through collective actions, social and networked interactions as well as with dynamic and adaptive action depending on the context’.

3.2.1

Defining Opportunity Identification

Entrepreneurship can be contextualised as the process of opportunity identification and exploitation. It is, therefore, important to clarify what the term opportunity means in this context. Shane (2000: 451) suggests that ‘entrepreneurial opportunities are opportunities to bring into existence new goods, services, raw materials and organizing methods that allow outputs to be sold at more than their cost of production’. Drawing on earlier work (Bhave 1994; Kirzner 1973; Schumpeter 1934), Ardichvili et al. (2003: 108) define an opportunity as ‘the chance to meet a market need (or interest or want) through a creative combination of resources to deliver superior value’. While Vaghely and Julien (2010: 75) define opportunities as ‘situations in which new goods, services, raw materials, markets and organizing methods can be introduced through the formation of new means, ends or endsmeans relationships’. It should be noted that in the context of entrepreneurship, the terms ‘entrepreneurial opportunity’ and ‘opportunity’ are interchangeable. An important paper by Grégoire and Shepherd (2012) establishes that prior knowledge and entrepreneurial intent moderate the relationship between various technologymarket combinations and opportunity identification. In contrast, based on their recent meta-analysis, Shepherd et al. (2019: 166) make the following point about the need for additional research: A more in-depth understanding of opportunity emergence increases the chance for us to teach entrepreneurs how to engage in this process more successfully, proceed through the process more quickly, and engage others in facilitating the process (how and when).

Shane and Venkataraman (2000: 219) point out that ‘entrepreneurship does not require, but can include, the creation of new organizations’. This suggests that the idea of providing new products and services, organising new methods to serve the market and to meet new means-ends relationships is at the core of the process, rather than the physical entity of a new organisation. In a similar vein, Dimov (2007a: 718) argues that ‘opportunities are nested within the realm of ideas’. He goes on to argue that regardless of where and how an opportunity ends, it is pragmatic to define an idea as an opportunity. As such, Dimov (2007a: 720) describes an opportunity as ‘a

46

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

creative product in entrepreneurship, [that] is the progress (idea + action) along a continuum ranging from an initial insight to a fully shaped idea about starting and operating a business’. As discussed above, the work of Shane/Venkataraman is the most important in bringing this view into mainstream entrepreneurship research (Shane 2000, 2012; Shane and Venkataraman 2000; Venkataraman et al. 2012). The Austrian view of markets is that they are in a constant state of disequilibrium and characterised by dynamic competition. Entrepreneurial opportunities are an outcome of these constant disturbances to the market. The nature of those opportunities is that they have an objective reality, which is distinct from entrepreneurs who identify them as new business opportunities. The alternative view, expressed by Edelman and Yli-Renko (2010: 850), is that opportunities are created through the efforts of entrepreneurs to reduce subjective uncertainty. Sanz-Velasco (2006) suggests that the difference between ‘opportunity discovery’ and ‘opportunity creation’ is reflected in differences between what Sarasvathy (2001) describes as ‘causation’ and ‘effectuation’. In contrast to the opportunity identification view (Shane 2000) is the idea that potential entrepreneurs use their knowledge and experience to create opportunities (Gartner et al. 1992; Macpherson and Holt 2007; Smith et al. 2019). Linking experience to the creation of new opportunities can be traced to the work of Edith Penrose (1959) who laid the foundations for the resource-based view of the firm (Barney 1991). The legacy of Penrose can be found in a range of approaches to understanding the entrepreneur-opportunity interface: entrepreneurial embeddedness (Anderson and Jack 2002; Anderson and Miller 2003), entrepreneurial learning (Cope 2005; Rae 2004, 2005) and entrepreneurial practice (Katz and Gartner 1988; Sarason et al. 2006). Penrose (1959) rejects the idea that entrepreneurs are ‘rational economic actors’ in favour of the view that opportunities are created (rather than discovered) during the day-to-day practices of being in business. Foss et al. (2008) draw heavily on the work of Penrose (1959) to set out the importance of subjectivity as a basis for understanding entrepreneurship. That individuals have different preferences, knowledge and expectations is strongly linked to the ‘Austrian tradition’ in entrepreneurship (Chiles et al. 2010). According to Foss et al. (2008: 78), ‘Penrose (1959) was primarily concerned with developing a theory of firm-level growth emphasizing Austrian themes of cognition, learning and adaption’. Subjectivity has two key elements in the work of Penrose (1959): heterogeneity of resources and heterogeneity of entrepreneurial/managerial mental models. Consequently, growth potential is based on the entrepreneur’s tacit knowledge of the firm’s resource-base (Foss et al. 2008). According to Dimov (2007b: 561), ‘entrepreneurial opportunities do not simply “jump out” in a final, readymade form but emerge in an iterative process of shaping and development’ (see Dimov 2011). Likewise, adopting a development perspective of entrepreneurship, Gabrielsson and Politis (2012) point out that identifying an opportunity starts with one or more ideas, which are generally linked to customer needs. They argue that opportunity development is an emerging process where ‘the idea can be elaborated and subsequently refined during its path of development’ (Gabrielsson and Politis 2012: 51). Sanz-Velasco (2006: 252) emphasises the creation and elaboration of an

3.2 Defining Entrepreneurship

47

opportunity: ‘the term “opportunity development” incorporates the identification, the development, and the evaluation of an opportunity’. Based on an extensive literature review of 180 articles related to opportunity identification, George et al. (2016) established that there were six influential factors: prior knowledge, social capital, cognition/personality traits, environmental conditions, alertness and systematic search. Schmitt et al. (2018) examine the role of selfefficacy (Bandura 1997) in the relationship between uncertainty perception and business opportunity identification. Self-efficacy influences how individuals perceive situations and how they respond to those situations by taking action (Gielnik et al. 2014) The authors focus on two environmental factors, technological innovation and product or service demand, that are key sources of entrepreneurial uncertainty (McKelvie et al. 2011). The study is based on 121 early-stage start-ups participating in a Chilean business accelerator programme. Schmitt et al. (2018) established that individual differences in entrepreneurial self-efficacy influenced the relationship between variations in perceived uncertainty and opportunity identification. The authors conclude: ‘the findings indicate that entrepreneurial self-efficacy is especially important for exploration in times when uncertainty is perceived to be higher than usual’ (Schmitt et al. 2018: 850).

3.2.2

Prior Knowledge

According to Ardichvili et al. (2003), rudimentary opportunities are not sufficient to form viable businesses. Prior knowledge of markets, the ways to serve those markets, customer problems and elaboration of developing opportunities are also important elements to the formation of business ventures (Dabrowski 2019; SanzVelasco 2006; Shane 2000). Early studies emphasise knowledge asymmetry and its impact on start-up businesses (Basu and Goswami 1999; Brüderl et al. 1992; Cooper et al. 1994; Davidsson and Honig 2003; Dahlqvist et al. 2000; Deakins 1999; Ucbasaran et al. 2006, 2008, 2009). Much of this work focuses on human capital and its relationship to business survival and growth. There is a general consensus that the higher stocks of human capital (education, skills and general and specific business experience) possessed by an entrepreneur, the more likely he/she will start up and sustain their business (Aldrich and Yang 2012; Jayawarna et al. 2014). Therefore, prior knowledge exists before an opportunity is identified. Shane (2000) explicitly links prior knowledge to opportunity identification. He explains that prior knowledge, ‘whether developed from work experience, education, or other means, influences the entrepreneur’s ability to comprehend, extrapolate, interpret, and apply new information in ways that those lacking that prior information cannot replicate’ (Shane 2000: 452). He further claims that prior knowledge is not only important at the identification stage but also moderates the processes of development and exploitation as information is combined with prior knowledge to create new knowledge. Hence, prior knowledge is central to opportunity identification. Shane (2000: 452) suggests that prior knowledge of markets ‘might include information

48

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

about supplier relationships, sales techniques, or capital equipment requirements that differ across markets’. In the context of technology-based firms, prior knowledge of ways to serve markets is ‘how the new technology could be used to create a product or service’. Finally, prior knowledge of customer problems means ‘information about customer needs’ (Shane 2000: 452). Similarly, writing in the context of prior knowledge, opportunity development and innovation, Sanz-Velasco (2006: 255–256) draws on Shane (2000) to offer a more detailed explanation of the three types of prior knowledge: markets, ways to serve markets and customer problems. However, these definitions of prior knowledge are focused on high-tech and innovative firms rather than start-ups in general. To meet the research aims of this book requires a more general definition that is appropriate for all types of start-ups. Drawing on the work of Shane (2000) and Sanz-Velasco (2006) the following definitions are used for prior knowledge discussed in this study: • Markets: including information about supplier relationships, sales techniques, or capital equipment requirements that differ across markets. • Ways to serve markets: such as a new idea that might change a production process, allow the creation of a new product, provide a new method of distribution, permit a new material to be used, generate new sources of supply or make possible new ways of organising. • Customer problems: knowledge about customer needs, which enables those customers to gain optimal benefits from the new idea. In their model, Ardichvili et al. (2003: 118) suggest that entrepreneurial alertness is also linked to two specific forms of knowledge: special interests and experience gained about a specific product or customer market. The first factor refers to an area of knowledge that is of ‘fascination’ to an entrepreneur stimulating ‘autodidactic learning’ that deepens their knowledge base. The second factor refers to knowledge that is accumulated by potential entrepreneurs while acquiring work experience. In an earlier paper, Ardichvili and Cordozo (2000: 107) argue that each individual’s prior knowledge (special interests and industry knowledge) creates a ‘knowledge corridor’ enabling them to identify opportunities that are not obvious to other people. Although, as pointed out by Gruber et al. (2013), knowledge corridors can also act as constraints on the ability of entrepreneurs to identify new opportunities (see Grégoire and Shepherd 2012; Gruber et al. 2012; Shane 2000). According to the resource-based view (RBV), a firm’s growth and competitive advantage arise from managerial knowledge (Esteve-Perez and Manez-Castillejo 2008). In addition to knowledge relevant to the business, the knowledge to identify and evaluate those resources in which to invest, and how to utilise them is a key entrepreneurial attribute. Knowledge acquired by entrepreneurs through their idiosyncratic information-gathering behaviours are particularly useful for identifying and deploying resources in combinations that are difficult to copy. Tacit knowledge is more important than explicit knowledge for entrepreneurs who want to build longterm competitive advantage (Rae and Carswell 2001). Initially, internal knowledge largely resides with the individual entrepreneur and is central to opportunity creation. As the business develops, externally sourced knowledge in the form of

3.2 Defining Entrepreneurship

49

partnerships with key stakeholders is important for enhancing the firm’s resource capabilities (Jenssen and Koenig 2002). To be successful, entrepreneurs must know how to integrate product specific knowledge, facts and management techniques with contextual experience (Alvarez and Busenitz 2001). The knowledge resources necessary for entrepreneurs include an understanding of the processes involved in business creation, people management, business growth, new technologies and new product development (Brush et al. 2001). Successful pursuit of these activities depends on an entrepreneur’s understanding of the type and configuration of resources necessary to develop a particular opportunity. Wiklund and Shepherd (2003) identified three types of procedural knowledge important to new venture founders: knowledge about the industry, knowledge about the type of business and knowledge about starting up new ventures. A wealth of experience-based knowledge, developed over time, exerts a central and often pivotal influence on the entrepreneur’s ability to engage effectively in opportunity recognition and the exploitation of new ideas (Hansen et al. 2011). Personal interests influence an entrepreneur’s understanding of opportunities and are likely to be related to the knowledge they have acquired through occupations, job routines, social relationships and daily life (Venkataraman 1997). For example, high-tech entrepreneurs need specialised knowledge to understand and develop unique business opportunities within highly specialised industries. Entrepreneurs need to draw in new members with new knowledge when seeking growth opportunities (Jones and Macpherson 2006). However, for new entrepreneurs, the accumulation of human capital in the form of recruiting skilled and competent staff is difficult due to limited financial capabilities. Therefore, ‘an entrepreneur’s expanding knowledge base and absorptive capacity becomes an entrepreneurial firm’s competitive advantage’ (Alvarez and Busenitz 2001: 766). Here pre-existing networks and the capability to bridge into new networks are both important. The first is a structural issue dependent on the number and depth of existing network ties (Elfring and Hulsink 2003, 2008). The second is a capability issue that requires the skills to understand resource opportunities available in more diverse network ties (Lee and Jones 2008). For example, the ability of entrepreneurs to actively engage suppliers and customers as well as other business and social contacts can help support emerging firms (Baker et al. 2003). According to Jones et al. (2014), there is an extensive body of research aimed at identifying the most appropriate skill sets required to exploit opportunities as the basis for new business creation. The authors suggest that the ‘inconclusive results’ are linked to the wide range of measures of ‘success’ (profit, turnover, number of employees, longevity, growth) and variations in context (sector, region, economic climate, institutional regulations, gender, age). Based on the work of leading authors (Penrose 1959; Shane 2000; Venkataraman 2004), Jones et al. (2014: 53) suggest that there are three key factors associated with opportunity recognition: knowledge and experience of the market, desire to use that knowledge and entrepreneurial alertness. In terms of the more generic skills required by nascent entrepreneurs to set up new businesses, Jones et al. (2014) bring together a number of key studies. Early research focused on entrepreneurial ‘know-how’ required to establish a

50

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Table 3.1 Generic entrepreneurial competencies Competency Entrepreneurial Relational

Conceptual Functional

Technical Resourcefulness

Entrepreneurial behaviours The ability to keep abreast of potential changes in the market in order to recognise and exploit market opportunities The ability to motivate others, to engage with them to build trust, establish networks and to persuade others to join in the venture. Effective communication, symbolic management and rhetorical abilities The ability to absorb and make sense of complex information and to interpret its meaning, or be innovative in reformulating ideas based on such information The ability to develop and operate management systems necessary to run the business. This involves controlling and allocating all its resources, human, technological and financial These are specific competences that depend on technical product or service knowledge in order to deliver the primary revenue stream for the business The motivation, commitment and resilience to problem solve and to apply creative solutions given limited resources and capacity

growing business (Curran 1986; Stanworth and Curran 1991). Based on a review of the literature, Man et al. (2002) identify a list of competencies possessed or acquired by successful entrepreneurs. Drawing on Spender’s (1989) concept of industry ‘recipes’, Sharifi and Zhang (2009) suggest that it is possible to identify the generic recipes associated with setting up and growing a new business. A wide range of other authors have examined the skills and knowledge required to manage entrepreneurial firms from a variety of perspectives (Mangham 1985; Martin and Staines 1994; Matlay and Hyland 1997; Mitchelmore and Rowley 2010; Sadler-Smith et al. 2003; Stokes and Wilson 2010). Based on this earlier material, Jones et al. (2014: 58) generate a list of ‘generic entrepreneurial competencies’ (Table 3.1). At an early stage, entrepreneurs lack the necessary resources to build an internal knowledge base. Essentially, knowledge resources and capabilities need to be identified, borrowed, appropriated and integrated from outside the firm’s boundaries. This is particularly important for technological entrepreneurs as the range of knowledge resources necessary to create a successful business is unlikely to be readily available or possessed by entrepreneurs themselves. For their ventures, high performance is more likely to be achieved if a range of skills are available within a start-up team or embedded in the firm’s employees. If appropriate skills are absent, it is suggested that talented expertise may be recruited (Kaulio 2003), developed within a wider managerial team (Littunen and Tohmo 2003), obtained via external consultants or through alliance partners and other local firms (Fernhaber et al. 2009). When entrepreneurship is team-based, it is important that knowledge and skills are complementary rather than dependent on a single individual with an absolute set of skills/ knowledge (Jones et al. 2010). Brush et al. (2001) conclude that one of the biggest challenges facing new ventures is transforming the founding entrepreneur’s personal knowledge of the industry, market and product into organisational resources, especially when the entrepreneur is working with a team.

3.3 Perspectives on Entrepreneurial Learning

51

George et al. (2016: 332) point out that literature related to prior knowledge is ‘heterogeneous’ and summarise their findings in the following manner: ‘research is oriented mostly toward finding appropriate contingencies in which prior knowledge can be an influencing factor for recognizing opportunities’. Early work applied human capital theory to discuss the impact of prior knowledge on opportunity recognition (Ardichvili et al. 2003). That work was followed by studies concerned with specific dimensions of prior knowledge based on the knowledge-based perspective (Hill and Birkinshaw 2010; Marvel and Droege 2010). Others have applied learning theories to examine how teaching curricula enhance opportunity recognition (Kourilsky and Esfandiari 1997) and how learning asymmetries influence opportunity recognition (Corbett 2007). Smith et al. (2019) examine the issue of prior knowledge and entrepreneurship from two alternative perspectives: first, the Austrian economics view in which prior knowledge based on an entrepreneur’s idiosyncratic information obtained from previous work and industry experience leads to opportunity discovery (Shane 2000, 2003). Those operating from a social constructionist perspective suggest that actors’ shared interpretation of reality is central to the creation of opportunities (Alvarez et al. 2015; Jennings et al. 2015). Based on ‘25 start-up stories’ collected by the Kauffmann Foundation, the authors carried out qualitative comparative analysis (QCA) to identify the links between prior knowledge and opportunity discovery/ creation (Smith et al. 2019). Nine entrepreneurs used a creation approach, and all benefited from a very committed circle of friends and family to provide knowledge and information related to the opportunity. Social capital (Jack 2005) was also important to the 16 entrepreneurs who adopted a discovery approach to the identification of new opportunities. However, the key difference was that ‘discovery’ entrepreneurs made much greater use of ‘social bridges’ to access a wider range of knowledge and information. As the author summarises: ‘Specifically, results suggest that entrepreneurs may rely on social capital and prior knowledge and experiences in different ways, depending on the type of opportunity associated with their venture’ (Smith et al. 2019: 90). For an examination of the links between prior knowledge and the entrepreneurs’ social networks, see Shu et al.’s (2018) study of 212 Chinese entrepreneurs.

3.3

Perspectives on Entrepreneurial Learning

To tackle divergence in the entrepreneurship literature (Grégoire et al. 2006), Schildt et al. (2006: 411) call for entrepreneurship researchers to ‘connect their ideas and findings to mainstream disciplines. Opening this dialogue can enrich future entrepreneurship research and increase its acceptance and academic legitimacy’. This points the way for researchers in the entrepreneurship field to borrow more established conceptual frameworks and theories to explain the entrepreneurial process. Over the last 20 years, ‘learning’ has become a central feature of entrepreneurship research (Toutain et al. 2017) despite a small number of scholars who question

52

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

the idea that entrepreneurs do actually ‘learn’ (Frankish et al. 2013; Storey 2004, 2011). The first paper that explicitly refers to entrepreneurial learning was published in the Journal of Small Business Management (Lamont 1972). As recently pointed out by Jones (2019), the entrepreneurial learning literature grew exponentially from just three papers in 1990 to 677 refereed publications in 2018.

3.3.1

Entrepreneurial Learning

Several scholars advocate the need for more research in the field of entrepreneurial learning. For example, Minniti and Bygave (2001: 7) stress the importance of linking learning theories with studies in entrepreneurship because, ‘entrepreneurship is a process of learning, and a theory of entrepreneurship requires a theory of learning’. Based on their recent review of the literature, Toutain et al. (2017: 884) make the following claim: Future exploration of the research field centred on learning as a localised social construct offers the opportunity to strengthen these two dimensions, i.e. multi-disciplinarity on the one hand, and on the other hand, construction of individual and collective meaning given to entrepreneurship learning realised by the individual and his or her community of practice.

Earlier, authors (Cope 2005; Minniti and Bygrave 2001; Ozgen and Baron 2007; Ucbasaran et al. 2008) point out that there is a lack of understanding about why and how some entrepreneurs identify and pursue more opportunities than others. To respond to this knowledge gap, there were some early attempts to use learning theories to explain the development of business opportunities. Donohoe and Wyer (2005), for instance, utilise personal construct theory to model growth in entrepreneurial small businesses. They found that entrepreneurial learning plays an important role in entrepreneurs’ growth from the start-up stage to maturity. Similarly, focusing on the individual, Ucbasaran et al. (2008) utilise human capital theory to illustrate those factors that have an impact on an entrepreneur’s ability to identify and pursue opportunities. Both the entrepreneur’s prior knowledge and current information were examined in relation to opportunities. It was found that entrepreneurship-specific human capital, such as ownership experience, managerial capability and entrepreneurial capability significantly relate to a higher probability of identifying and pursuing opportunities (Neill et al. 2017). A study by Jayawarna et al. (2014) found that human capital in childhood, adolescence and early adulthood made significant contributions to the prediction of engaging in entrepreneurship. In particular, analytical ability, cognitive/creative ability and knowledge in social science disciplines were strongly associated with individuals starting their own businesses. A supportive family background and a solid start in education provides a strong initial pathway to entrepreneurship (Jayawarna et al. 2014). Ozgen and Baron (2007) study the opportunity recognition process in a social setting. Benefits from the information entrepreneurs acquire from their social networks were examined. It was found that informal industry networks, mentors and

3.3 Perspectives on Entrepreneurial Learning

53

participation in professional forums have a positive impact on an entrepreneur’s alertness to new opportunities. The findings also suggest that entrepreneurs who have the ability to perceive the dynamics and connections between technology, markets, demographics and government policies are more likely to recognise opportunities. These are consistent with the elements Ardichvili et al. (2003) argue are vital for the development of opportunities. Nevertheless, previous studies often focus on one aspect of opportunity development and fail to offer a comprehensive understanding of the entire process (Ardichvili et al. 2003). Adopting a creative perspective on entrepreneurship and relating it to learning, Dimov (2007a: 714) suggests: rather than being the deed of a single person, entrepreneurial opportunities encompass a social, learning process whereby new knowledge continuously emerges to resolve the uncertainty inherent to each stage of opportunity development . . . opportunities can be represented as a stream of continuously developed ideas, driven and shaped by one’s social interaction, creative insights, and action at each stage.

Hence, in Dimov’s (2007a) view, learning is embedded in the entrepreneurial process of opportunity development. Similarly, drawing on Kolb’s (1984) influential experiential learning theory, Corbett (2005: 482) claims that, in order to achieve success, entrepreneurs ‘must learn through their experiences and seek out new opportunities’. Moreover, Pittaway and Cope (2007: 212) maintain that entrepreneurial learning occurs through experience and discovery and through doing and reflection (see Chang and Rieple 2018). In their recent study, Baltrunaite and Sekliuckiene (2020) suggest a range of different learning approaches associated with three stages of development: pre-start-up, start-up and growth. At the prestart-up stage, the main focus is opportunity recognition, intuition and double-loop learning; start-up moves to opportunity exploitation, behavioural learning and absorptive capacity; growth combines cognitive, behavioural and action learning as well as institutionalised organisational learning (Baltrunaite and Sekliuckiene 2020: 78).

3.3.2

Experiential Learning Theory

Experiential learning theory (hereafter ELT) is based on the cognitive and situational concepts of thinking, feeling, doing and watching. ELT is a cyclical model of learning, where ‘knowledge is created through the transformation of experience’ (Kolb 1984: 38). Kolb (1984) stresses the importance of the process of learning, he further points out that a learning process should be viewed from the perspective of experience transformation, rather than just the outcomes of learning (Fig. 3.1). He distinguishes between learning and knowledge and the interplay between the two: ‘to understand learning, we must understand the nature of knowledge, and vice versa’ (Kolb 1984: 38). In developing the learning cycle, Kolb drew extensively on the work of Dewey (1938), Lewin (1951) and Piaget (1951). The experiential learning cycle is based on the principle that knowledge is created by a combination

54

3 Entrepreneurship, Opportunities and Entrepreneurial Learning Accommodative Knowledge

Experience

Divergent Knowledge

Grasp

Experiment

Transform Experience

Reflect

Experience

Convergent Knowledge

Conceptualise

Assimilative Knowledge

Fig. 3.1 The experiential learning cycle

of two dialectical processes: making sense of experience (prehension) and applying that experience (transformation). The prehension dimension varies from abstract conceptualisation (comprehension) to concrete experience (apprehension). The transformative dimension varies from active experimentation (extension) to reflective observation (intention). These four basic learning modes can be summarised as follows: Abstract Conceptualisation (Conceptualise): the individual’s ability to use reasoning, ideas and concepts as a way of understanding physical or social phenomena Concrete Experience (Experience): focuses on an artistic and creative approach to dealing with real situations intuitively Active Experimentation (Experiment): focuses on a process of doing-in-practice rather than simple observation Reflective Observation (Reflect): central to ELT as it focuses on making sense of previous practical experiences and observations Figure 3.1 illustrates four distinct and elementary forms of knowledge that result from combing the prehension and transformation dimensions (Kolb 1984): convergent knowledge (conceptualise + experiment); accommodative knowledge (experience + experiment); divergent knowledge (experience + reflection); and assimilative knowledge (conceptualise + reflection). Although, Holman et al. (1997: 139) claim that Kolb’s learner is an ‘intellectual Robinson Crusoe’. Drawing on activity theory (Vygotsky 1978), the authors posit that learning should be understood in the context of the learner’s social relations. Learning is a process of ‘argumentation’ in which activities associated with thinking, reflecting, experiencing and taking action are mediated by the social, cultural and historical context in which the learner is situated (Holman et al. 1997). Kayes (2002) suggests that critics of ELT have not paid enough attention to the influence of Vygotsky’s social constructivist learning theory.

3.3 Perspectives on Entrepreneurial Learning

55

Tomkins and Ulus (2016: 172) argue that it is important to move away from the heuristic appeal of the Kolb cycle and ‘its stage-like simplifications which encourage splitting between thinking and action, detachment and engagement, mind and body. Instead, we should emphasise the fluid, multifaceted and often unexpected ways in which things happen when we ask both teachers and students to draw on experience’. Kolb and colleagues did explicitly extend ELT to account for social processes as well as cognitive processes (Baker et al. 2005; Kolb and Kolb 2005). The authors propose that conversational learning helps learners construct new meaning and transform their collective experiences into knowledge and knowing (Baker et al. 2005: 412). The core dialectic of apprehension and comprehension means that knowledge is based on a combination of concrete and abstract knowing (Kolb 1984). In other words, there is tension between individuals subjective and emotional understanding compared to understanding based on objective and rational knowledge. In terms of entrepreneurial learning, this dialectic can be explored by encouraging incubatees to compare their own understanding of entrepreneurship with the experiences of family and friends who own their own businesses. Alternatively, incubatees could be presented with data related to the number of start-ups that survive beyond the first year and encouraged to consider the potential of their own businesses surviving in the longer-term. The second dialectic of extension and intention indicates the tension between applying new knowledge (action) and sensemaking (reflection). In terms of entrepreneurial learning, resolving this dialectic means encouraging incubatees to engage in active experimentation by generating ideas for potential new businesses. Such activities should be combined with group reflections on their experiences of idea generation and encouraged to converse about the implications for their own understanding of what it means to be a nascent entrepreneur. Taylor and Pandza (2003) draw on this broader understanding of ELT (theorising, action, experience and reflection) to suggest that all learning takes place within a social context. Therefore, it is essential that UBIs provide ample opportunities for incubatees to share their knowledge and understanding. Conventional activities such as preparing a business plan or discussing how to engage with customers should be organised to accommodate social learning activities. Consequently, as illustrated in Fig. 3.2, the focus shifts from a concentration on cognitive learning (as described in the traditional Kolb cycle) to social learning as group activities encourage discussion and reflection as students move through the four stages of the model (Baker et al. 2005). As pointed out by Jones and Macpherson (2014), the literature has gradually evolved from a focus on the individual entrepreneur to learning within communities of practice. As a consequence, conversations have relational and communal qualities which are important for increasing entrepreneurs’ mutual understandings (Baker et al. 2005; Holman et al. 1997). Corbett (2005: 482) proposes that opportunity development should be studied as a learning process: ‘ELT focuses on the process. By transforming experience into new knowledge, ELT allows individuals to discover new outcomes from their learning, which is just what entrepreneurs do when they are attempting to uncover

56

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Isolated Monad

Experience

Reflect

S o c i a l

Social Character

Experience

Reflect

S o c i a l

Theorise

Action

R e l a t i o n s

Theorise

Action

R e l a t i o n s

Fig. 3.2 Extending Kolb’s experiential learning cycle

new means-ends relationships’. From this perspective, experiential learning theory provides a useful heuristic to study entrepreneurship in the context of an incubator. The reasons are threefold. First, opportunity identification and development can be viewed as a process where, based on prior knowledge, new knowledge is created through the experience of participating in a development process (Smith et al. 2019). Secondly, it takes into account both prior knowledge and newly acquired information, where knowledge (or business ideas) can be created and re-created. In this sense, it highlights the dynamic iterative process between an individual’s knowledge and newly acquired information, which can lead to the identification and development of opportunities (Schmitt et al. 2018). In such a process, the framework connects the person with the opportunity (knowledge, information and experience of transformation) and emphasises the interplay between the two concepts. Thirdly, ELT stresses the importance of the process of transformation rather than the content or the outcomes (Pittaway and Cope 2007). However, due to different types of learning during the complex and iterative process of opportunity identification and development, ELT modes may not be sequential. As pointed out by Politis (2005: 407), experiential learning can be ‘messy’ and the process of entrepreneurial learning: does not necessarily follow a predetermined sequence of steps according to Kolb’s (1984) four-stage learning cycle, but rather can be conceived as a complex process where entrepreneurs transform experience into knowledge in disparate ways. Here, alternative modes of transforming entrepreneurs’ experiences into knowledge become an essential part of the process of entrepreneurial learning.

A recent study of a family-based start-up suggests that while experiential learning is crucial in the early stages of start-up cognitive and team-based learning gradually

3.3 Perspectives on Entrepreneurial Learning

57

become more important as the business matures (Jones and Giordano 2020). A key issue associated with entrepreneurial learning is the debate between those who favour cognitive approaches (Gavetti and Levinthal 2000) and those who argue that learning is based on actions and activities (Billinger et al. 2014). Berends et al. (2016) propose that learning is based on ‘forward-looking processes’ in which entrepreneurs choose actions based on cognitive representations (see MacKay and Burt 2015). In contrast, experiential learning is ‘backward-looking’ as previous experiences are encoded in the entrepreneur’s activities and routines (Berends et al. 2016; Breslin 2019; Hernes and Irgens 2013; Jones and Li 2017; Chang and Rieple 2018). In cognitive learning, understanding precedes action whereas in experiential learning action precedes cognition. As Berends et al. (2016: 184) posit: ‘thus, both cognitive search and experiential learning involve action and cognition, but in opposite sequences’. Jones and Giordano (2020) propose that the two forms of learning are mutually reinforcing; experiential learning ‘feeds-forward’ into cognitive learning and the latter ‘feeds-backward’ into experiential learning. Hence, experiential learning and cognitive learning ‘are part of a learning cycle in which each element enhances and enriches the other form of learning’ (Jones and Giordano 2020: 15). This distinction has similarities to the feedforward and feedback learning flows identified in the 4i (Crossan et al. 1999) and 5i (Jones and Macpherson 2006) learning frameworks. In both the 4i and 5i models, learning begins at the individual, cognitive level but is then shared with group members to gradually become institutionalised at the organisational level. Social learning theorists see human development as something which occurs as a result of observation of those who are ‘credible and knowledgeable’ (Bandura 1967, 1997). For example, Zozimo et al. (2017) utilise social learning theory (Bandura 1997; Cope 2005) to examine the importance of role models to entrepreneurs engaged in starting and growing their businesses. The study was based on interviews with 16 entrepreneurs attending a programme at a ‘leading’ UK Management School. Four distinct groups of role models were identified: parents, teachers, fellow students and work colleagues (fellow entrepreneurs included). According to the authors, the study underlines the importance of various social contexts in which entrepreneurs have opportunities to observe a range of role models. They conclude: ‘We show that role modelling is equally important for entrepreneurial learning pre- and post-start-up. Indeed, we show that entrepreneurial learning continues to be associated with observing role models although through distinct learning processes and learning tasks’ (Zozimo et al. 2017: 906).

58

3.4

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Entrepreneurial Learning in the Context of an Incubator

It is evident that understanding how individuals learn to develop opportunities during the incubation process is crucial for improving the role played by UBIs in enhancing entrepreneurial skills. Minniti and Bygrave (2001: 5) describe entrepreneurial learning as a ‘calibrated algorithm of an iterated choice problem’. This suggests a person-centred approach based on a belief that learning-by-doing enhances entrepreneurial knowledge (Minniti and Bygrave 2001). Entrepreneurs, in this context, are isolated from their environment and make decisions according to their accumulated experience of past successes and failures. In contrast, situated learning theory indicates that learning takes place in communities of practice amongst groups of people engaged in a common enterprise (Theodorakopoulos et al. 2014). Earlier, Thorpe et al. (2008) also suggested that the trend in learning research was to focus on learning communities. In the context of this book, business incubators can be conceptualised as learning communities. Thorpe et al.’s (2008) claim supports Fry’s (1987) view that incubators provide shared administrative services and management assistance as well as opportunities to network among tenants. Likewise, Seidel (2002) believes that business incubators represent a social network and exhibit characteristics of a community of practice for the development of incubatees. Both cultural-historical theory (Vygotsky 1978) and communities of practice (Lave and Wenger 1991) are based on social learning theory and are a reaction against the earlier cognitive and behavioural approaches. Engeström’s (1987) cultural-historical activity theory (CHAT) is concerned with the way in which ‘artefacts’ represent and mediate the socially situated nature of learning. The ‘community of practice’ approach is based on three key elements: a domain of knowledge, a community and their shared practices (Wenger 2000). Situated learning, which can occur both formally and informally, is associated with the idea of legitimate peripheral participation (Lave and Wenger 1991). That is, the processes by which newcomers are able to join and engage in an established learning community such as a BI. Thus, the primary sensemaking distinction concerns whether research is focused on developing individual knowledge and skills or a recognition that learning is influenced by the context of experiences, problem-solving and networks in which nascent entrepreneurs are embedded (see Berends et al. 2016). Developed from situated learning theory (Lave and Wenger 1991), Wenger (1998) sees learning as social participation and identifies four elements of learning: identity (learning as becoming), meaning (learning as experience), practice (learning as doing) and community (learning as belonging). These elements suggest that individuals not only learn from self-critical reflection but also by interacting with their environment through relationships in the community (Lans et al. 2008). McAdam and McAdam (2006: 92) conducted exploratory multiple case studies over a 3-year period in a university incubator in Ireland and concluded that ‘the role of the incubator in the development of customer networks and relationships

3.4 Entrepreneurial Learning in the Context of an Incubator

59

appeared significant’. These earlier studies attempt to explore the impact of social interaction on the development of incubatees. Although predominately looking at the networking effects of the BI, McAdam and McAdam (2006) established a link between incubatees’ development and the BI’s social context. Similarly, Cope (2003) argues that entrepreneurs learn from discontinuous (non-routine) events and inward critical self-reflection. Looking at the individual as well as the social level, Rae (2005: 324) suggests that ‘learning is a fundamental and integral part of the entrepreneurial process, in which the human, social and behavioural activities are of as much concern as the economic aspects’. When reviewing ELT (Kolb 1984), Kolb and Kolb (2005) add the concept of learning space and highlight its importance in enhancing experiential learning. They draw the social concept of learning from the ecology of human development (Bronfrenbrenner 1977, 1979), situated learning theory (Lave and Wenger 1991) and the theory of knowledge creation (Nonaka and Konno 1998). It is emphasised that ‘learning is not one universal process but a map of learning territories, a frame of reference within which many different ways of learning can flourish and interrelate’ (Kolb and Kolb 2005: 200). This suggests that individuals can change their styles of learning in order to adapt to different circumstances. In the context of nascent entrepreneurship, individuals must adapt to a dynamic environment as they transform their business ideas into viable ventures. Rennemo and Åsvoll (2019: 3) draw on the concept of Ba (Nonaka and Konno 1998; Nonaka and Toyama 2015) to stress the importance of an ‘enabling context’ in which ‘knowledge is shared, created and utilized’ through dialogue between entrepreneurs. Based on their study of four entrepreneurs, the authors stress the importance of trust to promote meaningful dialogue as well as ‘professional facilitation’ to encourage reflective learning. A number of commentators maintain that entrepreneurship and learning do not take place in isolation, rather they are part of a social process and all knowledge is socially constructed (Cope 2005; Cope and Watts 2000; Pittaway and Cope 2007; Jones and Giordano 2020; Rae and Carswell 2001; Rae 2005, 2015; Theodorakopoulos et al. 2014; Wenger 1998). Using a narrative approach, Rae (2005) develops a conceptual model of entrepreneurial learning, which consists of three main components and 11 sub-components. Personal and social emergence, negotiated enterprise and contextual learning are the three main components. This model suggests that entrepreneurs can learn at an individual level and through social interactions. Likewise, Pittaway and Cope (2007: 213) agree that entrepreneurs are ‘practitioners who operate in social communities of practice’. In the context of opportunity development, this proposition acknowledges the active role entrepreneurs take in the process associated with identifying, evaluating, developing and exploiting opportunities through self-reflection as well as social interactions.

60

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

3.4.1

Learning in Communities of Practice

As discussed in the introduction, the intention from the outset was that INNOSPACE would the base for a genuine community of practice (CoP) amongst those trying to set up new businesses. It was also anticipated that the CoP would include the incubator management team, members of the CfE, academic staff in MMUBS as well as representatives of the wider business and business support communities within Manchester. This links to the concept of legitimate peripheral participation (LPP), which Lave and Wenger (1991: 29) describe in the following manner: A person’s intentions to learn are engaged and the meaning of learning is configured through the process of becoming a full participant in a sociocultural practice. This social process includes, indeed it subsumes, the learning of knowledgeable skills.

The idea of legitimate peripheral participation (LPP) stemmed from Lave and Wenger’s interest in recapturing the term ‘apprenticeship’, which they suggest is a synonym for situated learning. However, Lave and Wenger (1991) regard situated learning as a bridge between the cognitive processes of learning and the broader social practices associated with the ‘lived-in world’. Therefore, learning through LPP does not necessarily mean that some form of instruction takes place, rather, the focus is on the situated practices in which CoPs operate. According to Lave and Wenger (1991), individuals develop their identities and practices through participation in situated learning activities (Handley et al. 2006; McDonald and Cater-Steel 2018; Mercieca 2017). Although the initial research focus was on situated learning amongst small groups of learners (tailors, midwives, etc.), there was then a change to larger, more distributed groups of learners (Soekijad et al. 2011). According to Agterberg et al. (2010: 86), these networks of practice (NoPs) were associated with intra-organisational learning in large companies such as Shell (Wenger et al. 2002), BP Amoco (Collison and Parcell 2001; Prokesch 1997), Siemens (Nielsen and Ciabuschi 2003), Unilever (Rumyantseva et al. 2006), and Buckman Laboratories (Pan and Leidner 2003). Our view of developing learning communities in a UBI is commensurate with Lave and Wenger’s (1991) original conceptualisation of CoPs based on relatively small groups of learners. Wenger (1998) argues that CoPs are defined by three key elements (see Van Weele et al. 2018: 175): 1. A joint enterprise arises from the shared understanding of what the community is about (Zhang and Watts 2008). It reflects the common or shared goals and interests. It is never prescribed and unlikely to be formally defined. Instead, it is the result of collective negotiations (Wenger 1998), which creates accountability among members to contribute to the joint enterprise. 2. Mutual engagement refers to how members in the community interact with each other (Zhang and Watts 2008). It describes the community’s social fabric: the social relationships through which members interact, the shared norms and values that they establish, and the shared identity that reflects these interactions and values (Akkerman et al. 2008). This shared identity also contributes to members’ feeling of a sense of belonging to a particular community.

3.4 Entrepreneurial Learning in the Context of an Incubator

61

3. A shared repertoire encompasses the resources and capabilities that the community members produce and adopt by jointly contributing to an enterprise (Wenger 1998; Garavan et al. 2007). This repertoire includes ‘routines, words, tools, ways of doing things, stories, gestures, symbols, genres, actions, or concepts’ (Wenger 1998: 83) that have become part of the community’s practice. As discussed in Chap. 2, a well-run UBI should certainly be capable of creating the conditions for a community of practice to emerge (Patton and Marlow 2011; Wenger-Trayner et al. 2014). According to Theodorakopoulos et al. (2014: 611), successfully creating a community of growth-oriented businesses is predicated on three factors: (a) community strength, (b) the quality of boundaries (opportunities to interface with other CoPs), (c) a community identity, which is focused on learning and development. For example, Gartner et al. (1992) stress the importance of nascent entrepreneurs ‘acting as if’ equivocal events were non-equivocal. Adopting a critical realist perspective, Kasperova et al. (2018: 245) agree that entrepreneurial identities are influenced by social relations but argue that ‘constructionist approaches’ undertheorise the importance of cultural artefacts in shaping agential motivation while pursuing venture creation (see Downing 2005). CoPs are based on the view that much knowledge is tacit in nature and, therefore, must be acquired directly through social interaction (Nonaka and Takeuchi 1995). Regular interaction should mean that high levels of mutual trust are established within a CoP that enables participants to share problems, knowledge, information and practices (Brown and Duguid 1991, 2001). However, one of the main barriers to creating CoPs within UBIs is the issue of confidentiality particularly associated with science or technology-based businesses. McAdam and Marlow (2007) certainly found that confidentiality was an issue for many entrepreneurs located in university-based incubators. In contrast, a study of Australian start-up businesses (Van Weele et al. 2018) did find strong evidence that entrepreneurs regarded themselves as belonging to a community of practice. Mutual engagement and shared practices were particularly apparent for those entrepreneurs operating within shared workspaces but even those belonging to regionally distributed ecosystems were functioning as networks of practice (Van Weele et al. 2018; Nicholls-Nixon et al. 2020). Hughes et al. (2007) use the concept of ‘strategic networks’ to explain why new firms based in incubators have higher survival rates. Such networks comprise enduring inter-firm links that include other start-ups based in the incubator, in-house services as well as external firms. The benefits of such network arrangements are as follows (Hughes et al. 2007: 156): Collaboration increases exposure for firms such that, through partnerships in which they draw on one another’s resources or share knowledge, they can achieve more together than they could alone. By collaborating, firms can create value and increase performance, which represents the logic underpinning networked incubators.

Based on a survey of all 143 high-technology incubators based in the UK, the authors obtained 211 (from 1000 questionnaires) responses from the MDs of start-up firms. The firms were then categorised according to a two-by-two value matrix

62

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

(strategic network involvement vs. resource pooling). The results indicated that firms were categorised as follows: 70 firms—enclosed incubation (low resource pooling and low strategic networks) 47 firms—specialist incubation (extensive resource pooling and low strategic networks) 48 firms—community incubation (low resource pooling and extensive strategic networks) 37 firms—dynamic incubation (high resource pooling and extensive strategic networks) Dynamic incubation involves high resource pooling with extensive strategic networking and ‘should be aspired to by all incubating firms’ (Hughes et al. 2007: 164). In other words, firms are active in drawing in knowledge from external sources while, at the same time, sharing that knowledge with other start-ups in the incubator. The authors do not use the term CoP but do suggest that firms participating in dynamic incubation are adhering to the same principles. According to Seet et al. (2018: 235), start-up accelerators (and incubators) ‘attempt to combine the three components of entrepreneurial learning’ labelled “know-what”, “know-how” and “know-who” (Gibb 1997). “Know-what” and “know-how” can be understood in terms of developing knowledge and experience, important aspects of human capital’. The study was based on 20 semi-structured interviews with equal numbers of students and non-students located in an Australian start-up accelerator. As the authors point out, many of the responses focused on the ‘know-who’ of the programme; ‘the people aspect of their learning experience’ (Seet et al. 2018: 246). Respondents expressed a sense of isolation before joining the accelerator, which provided a range of contacts. Mentors delivered the most valuable learning based on their own ‘real-world’ experiences; experts in law, marketing, production and search engine optimisation were also useful; peers provided the opportunity for collaborative learning (Lévesque et al. 2009), which encouraged motivation and selfconfidence improving the chances of success; customers/stakeholders provided practical knowledge related to the nascent entrepreneurs’ specific business problems (Seet et al. 2018: 247–248). The issue of entrepreneurial learning in venture accelerators was also addressed by Politis et al. (2019). Twenty-one entrepreneurs participating in a 1-week education programme funded by the Swedish government were interviewed about their learning experiences. The study revealed that learning was ‘triggered’ by three catalysts: affective motivation, constructive feedback and peer atmosphere. As the authors go on to state, peer atmosphere was influenced by social aspirations (benchmarking) and collaborations, which involved joint problemsolving (Politis et al. 2019: 598). There is an associated literature examining ‘co-working spaces’ that comprises shared working environments in which independent knowledge workers are located to create, utilise and share knowledge; ‘working alone, together’ (Spinuzzi 2012: 299). According to Spinuzzi (2019: 115), the concept of co-working began in San Francisco, where Brad Neuberg ‘decided to offer the spatial and social infrastructure for a community of practice relevant to people like himself—freelancers,

3.4 Entrepreneurial Learning in the Context of an Incubator

63

entrepreneurs, and other individual knowledge workers’. Spinuzzi et al. (2019) go on to say that the academic co-working literature tends to focus on the importance of ‘community’. Capdevila (2015: 3) argues that ‘the focus on the community and its knowledge sharing dynamics’ differentiates co-working spaces from shared offices. The importance of ‘community’ and collaboration in co-working spaces are also confirmed by other writers (Fuzi 2015; Parrino 2015). According to Kubatova (2014: 571), co-working ‘gives rise to a professionally heterogeneous community which enables development of informal relations, sharing knowledge, and increasingly also standards and values similarly to what happens at a normal workplace within an organization’. To establish the significance of community and collaboration, Spinuzzi et al. (2019) studied 10 co-working spaces in three countries: the USA, Italy (early adopter) and Serbia (late adopter). Surprisingly, the ten co-working sites were driven by ‘the logic of the market’ rather than the logic of collaboration. It is generally accepted that CoPs cannot be created by management fiat although managers can provide the supporting infrastructure and control who joins the community (Wenger et al. 2002). Managers themselves, or those they delegate to act as brokers, provide links between incubatees who need advice or information and individuals or organisations that can provide the necessary support (Wenger 2000; Garavan et al. 2007). Brokers may also establish links between various CoPs by introducing members or practices from one community into another (Wenger et al. 2002). The study carried out by Van Weele et al. (2018) confirms the importance of managers adopting roles as facilitators to introduce newcomers to the incubator (CoP) and as brokers to build links with external knowledge and resource providers.

3.4.2

A Learning Model

From the review above, it is apparent that a key research issue is the need to develop a better understanding of how incubatees participate in social learning communities during the incubation period. In the context of incubators, more research is needed to gain a better understanding of how UBIs facilitate learning through social interactions. Drawing on theories of entrepreneurship, experiential learning and learning in a social context provide the basis for a holistic approach to the business incubation process. Therefore, in the study, we examine how individuals develop their ideas within a UBI and, at the same time, how they interact with other community members. Hence, we will provide a more comprehensive understanding of business incubation by taking into account the development of opportunities, the development of individuals, the interactions between individuals and opportunities, and interactions between individuals and the UBI community. Figure 3.3 illustrates how the research brings together theories of experiential and social learning to address a research gap in business incubation. As discussed above, there is a lack of knowledge related to the incubation process from the perspective of incubatees. In doing so, we acknowledge the important role of UBIs as social spaces that not only facilitate but also shape learning. The study also takes account of prior

64

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Fig. 3.3 Entrepreneurial learning in a University-based Incubator (UBI)

knowledge possessed by incubatees, the new information acquired as a result of belonging to the UBI and the knowledge transformation process that takes place within the UBI. This transformation process can lead to new opportunities as well as the development of existing opportunities. Figure 3.3 places a boundary around the study, which focuses on learning as part of a UBI community. Drawing on ELT, the model demonstrates how individual learning in the form of experience transformation takes place within the UBI community. The arrows around the frame illustrate how individuals and opportunities evolve during the experience transformation process in an iterative manner. Dotted lines rather than solid lines are used to acknowledge that learning takes place inside as well as outside the UBI, although we focus on the activities within the UBI. Blue represents entrepreneurs, yellow represents opportunities and green represents where learning takes place. Thus, the

3.5 Summary

65

four blue building blocks (left-hand side) focus on the development of the individual entrepreneurs. The yellow building blocks (right-hand side) illustrate the opportunity identification and development process. The solid rectangles where the blue and yellow blocks meet and become green (centre) is where individual and opportunity identities ‘blend’ into each other. When entrepreneurs are at a very early stage, their identity and that of the business are shared (Churchill and Lewis 1983). This highlights the importance of learning where both the entrepreneur and the opportunity go through a transformational process. Using the community of practice concept (Lave and Wenger 1991), the four circles on the left side (identity, meaning, practice and community) correspond to the four rectangles (learning) in the centre of the model. This demonstrates how using learning theories can help to draw out the interaction between entrepreneur and opportunity.

3.5

Summary

When reviewing literature related to business incubation in Chap. 2, it became apparent that it is crucial to explore learning during the incubation period to advance understanding of the process. As discussed in the earlier sections of this chapter, adopting a learning perspective can enrich our understanding of the opportunity identification and development process. Therefore, both the business incubation and entrepreneurship research domains can be enhanced by a study adopting a processorientated approach incubation in combination with a learning perspective. Despite recent work that aims to build a better understanding of the entrepreneurial process, there is surprisingly little empirical work devoted specifically to the relationship between opportunity identification and learning, especially in the context of business incubation. Entrepreneurs learn through experience and events as they identify and develop business ideas (Cope 2003; Jones and Macpherson 2014). As a knowledge, information and network hub, UBIs offer individual learning experiences as well as the opportunity to learn through social interactions with other incubatees. We suggest that the impact of a UBI on individuals’ opportunity identification and development can be studied by incorporating the experiential and social elements of learning. Kolb’s (1984) model provides insight into the business incubation process as prior knowledge, newly acquired information and experience are transformed into new knowledge. Examining the entrepreneurial process will help explain how an individual’s prior knowledge influences the identification of new opportunities, the information acquired through a UBI and the process by which new knowledge (business ideas or opportunities) is generated. At a social level, the study will examine how a community of practice emerges in the context of a new business incubator. The book will enrich the UBI literature by exploring the entrepreneurial process that takes place in an incubator. This process is embedded in the opportunity identification and development process, or in other words, how prospective

66

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

entrepreneurs turn business ideas into business opportunities and eventually into new business ventures. Using learning theories, the study also furthers our understanding of entrepreneurship by exploring the interplay between the individual entrepreneur and the opportunity. Using the ELT as a heuristic tool, the study looks at how individuals and opportunities develop in a UBI setting, which in turn, highlights the impact of business incubation on entrepreneurship. Chapters 5, 6 and 7 present the data from INNOSPACE and are organised to reflect the conceptual framework. In other words, the entrepreneurs and the opportunities in INNOSPACE, and the interactions between the three. Using Fig. 3.3 to guide the data collection, analysis and reporting, Chap. 5 focuses on the left-hand side of the diagram: the individual entrepreneur’s UBI experience. It presents the pathways through a business incubation journey. Using six case studies, the study exemplifies the experience and process that takes place in a UBI. It also looks at the impact of a UBI on the development of the entrepreneurs. Chapter 6 focuses on the entrepreneurs’ prior knowledge. This is mainly reflected on the right-hand side of the conceptual framework. It is where the interplay between entrepreneurs and opportunity begins. Chapter 7 shifts focus onto the process of opportunity development and entrepreneurial learning. The chapter brings together the different elements of the conceptual framework. Using the same six case studies from Chap. 6, this chapter continues to tell the stories of how entrepreneurs develop the opportunities they identified. The outcomes of the opportunity development process reflect each individual’s learning journey within the UBI. That is, the process of transforming prior knowledge and new information into business ideas and opportunities. For individuals, it is also a process of becoming, experiencing, practising as an entrepreneur and as part of a community. For the UBI, it is a place where individuals, knowledge, information, skills, experience and opportunities interact. Through the lens of learning, the empirical data examines the transformation experience that takes place in a university-based incubator. This, in turn, brings out the role of a UBI in developing entrepreneurship, which is embedded at an individual level as well as within the associated community.

References Agterberg, M., van den Hooff, B., Huysman, M., & Soekijad, M. (2010). Keeping the wheels turning: The dynamics of managing networks of practice. Journal of Management Studies, 47 (1), 85–108. Akkerman, S., Petter, C., & De Laat, M. (2008). Organising communities-of-practice: Facilitating emergence. Journal of Workplace Learning, 20(6), 383–399. Aldrich, H. E., & Yang, T. (2012). Lost in translation: Cultural codes are not blueprints. Strategic Entrepreneurship Journal, 6(1), 1–17. Alvarez, S., & Busenitz, L. (2001). The entrepreneurship of resource-based theory. Journal of Management, 27, 755–775.

References

67

Alvarez, S. A., Young, S. L., & Woolley, J. L. (2015). Opportunities and institutions: A co-creation story of the king crab industry. Journal of Business Venturing, 30(1), 95–112. Anderson, A. R., & Jack, S. L. (2002). The articulation of social capital in entrepreneurial networks: A glue or a lubricant? Entrepreneurship and Regional Development, 14(3), 193–210. Anderson, A. R., & Miller, C. J. (2003). “Class matters”: Human and social capital in the entrepreneurial process. The Journal of Socio-Economics, 32, 17–36. Ardichvili, A., & Cardozo, R. N. (2000). A model of the opportunity recognition process. Journal of Enterprising Culture, 8(2), 103–119. Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18, 105–123. Baker, T., & Nelson, R. E. (2005). Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative Science Quarterly, 50, 329–366. Baker, T., Miner, A. S., & Eesley, D. T. (2003). Improvising firms: Bricolage, account giving and improvisational competencies in the founding process. Research Policy, 32(2), 255–276. Baker, A. C., Jensen, P. J., & Kolb, D. A. (2005). Conversation as experiential learning. Management Learning, 36(4), 411–427. Baltrunaite, V., & Sekliuckiene, J. (2020). The use of organisational learning practices in start-ups growth. Entrepreneurial Business and Economic Review, 8(1), 72–89. Bandura, A. (1967). Social learning theory. Prentice-Hall: Engleword Cliffs, NJ. Bandura, A. (1997). Self-efficacy: The exercise of control. New York: WH Freeman. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17 (1), 99–121. Basu, A., & Goswami, A. (1999). Determinants of South Asian entrepreneurial growth in Britain: A multivariate analysis. Small Business Economics, 13, 57–70. Berends, H., Smits, A., Reymen, I., & Podoynitsyna, K. (2016). Learning while (re)configuring: Business model innovation processes in established firms. Strategic Organization, 14(3), 181–219. Bhave, M. (1994). A process model of entrepreneurial venture creation. Journal of Business Venturing, 9, 223–242. Billinger, S., Stieglitz, N., & Schumacher, T. R. (2014). Search on rugged landscapes: An experimental study. Organization Science, 25(1), 93–108. Breslin, D. (2019). Entrepreneurial learning; intuiting, scanning, internalizing and routinizing. The Learning Organization, 26(6), 604–616. Bronfrenbrenner, U. (1977). Toward an experimental ecology of human development. The American Psychologist, 7, 513–530. Bronfrenbrenner, U. (1979). The ecology of human development. Cambridge, MA: Harvard University Press. Brown, J. S., & Duguid, P. (1991). Organizational learning and communities-of-practice: Toward a unified view of working, learning and innovation. Organization Science, 2(1), 40–57. Brown, J. S., & Duguid, P. (2001). Knowledge and organization: A social-practice perspective. Organization Science, 12(2), 198–213. Brüderl, J., Preisendörfer, P., & Ziegler, R. (1992). Survival chances of newly founded business organizations. American Sociological Review, 57, 227–242. Brush, C. G., Greene, P. G., & Hart, M. M. (2001). From initial idea to unique advantage: The entrepreneurial challenge of constructing a resource base. The Academy of Management Executive, 15(1), 64–78. Cantillon, R. (1732/1931). Essai sur la nature du commerce general. London: Macmillan. Capdevila, I. (2015). Co-working spaces and the localised dynamics of innovation in Barcelona. International Journal of Innovation Management, 19, 1–28. Chang, J., & Rieple, A. (2018). Entrepreneurial decision-making in a microcosm. Management Learning, 49(4), 471–497.

68

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Chavoushi, Z. H., Zali, M. R., Valliere, D., Faghih, N., Hejazi, R., & Dehkordi, A. M. (2020). Entrepreneurial alertness: A systematic literature review. Journal of Small Business and Entrepreneurship. https://doi.org/10.1080/08276331.2020.1764736. Chiles, T. H., Toggle, C. S., McMullen, J. S., Bierman, L., & Greening, D. W. (2010). Dynamic creation: Extending the radical Austrian approach to entrepreneurship. Organization Studies, 31 (7), 7–46. Churchill, N. C., & Lewis, V. L. (1983). The five stages of small business growth. Harvard Business Review, 61, 30–39. Collison, C., & Parcell, G. (2001). Learning to fly–practical knowledge management from leading and learning organizations. New York: Capstone Press. Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. (1994). Initial human and financial capital as predictors of new venture performance. Journal of Business Venturing, 9, 371–395. Cope, J. (2003). Entrepreneurial learning and critical reflection. Management Learning, 34(4), 429–450. Cope, J. (2005). Toward a dynamic learning perspective of entrepreneurship. Entrepreneurship: Theory and Practice, 29, 373–397. Cope, J., & Watts, G. (2000). Learning by doing: An exploration of experience, critical incidents and reflection in entrepreneurial learning. International Journal of Entrepreneurial Behavior and Research, 6, 104–124. Corbett, A. C. (2005). Experiential learning within the process of opportunity identification and exploitation. Entrepreneurship: Theory and Practice, 29, 473–491. Corbett, A. C. (2007). Learning asymmetries and the discovery of entrepreneuiral opportunities. Journal of Business Venturing, 22(1), 97–118. Crossan, M., Lane, H., & White, R. (1999). An organizational learning framework: From intuition to institution. The Academy of Management Review, 24(3), 522–537. Curran, J. (1986). Bolton 15 years on: A review and analysis of small business research in Britain 1971–1986. London: Small Business Research Trust. Dabrowski, D. (2019). Market knowledge and new product performance: The mediating effects of new product creativity. Journal of Business Economics and Management, 20(6), 1168–1188. Dahlqvist, J., Davidsson, P., & Wiklund, J. (2000). Initial conditions as predictors of new venture performance: A replication and extenstion of the Cooper et al. study. Enterprise and Innovation Management Studies, 1, 1–17. Davidsson, P. (2016). Researching entrepreneurship: Conceptualisation and design (2nd ed.). New York, NY: Springer. Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18, 301–331. Deakins, D. (1999). Entrepreneurship and small firms. Maidenhead: Mcgraw-Hill Publishing Company. Dewey, J. (1938). Education and experience. New York: Simon and Schuster. Dimov, D. (2007a). Beyond the single-person, single-insight atribution in understanding entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 31(5), 713–731. Dimov, D. (2007b). From opportunity insight to opportunity intention: The importance of personsituation learning match. Entrepreneurship: Theory and Practice, 31(4), 561–583. Dimov, D. (2011). Grappling with the unbearable elusiveness of entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 35(1), 57–81. Donohoe, S., & Wyer, P. (2005). Towards a model examining and explaining growth in entrepreneurial small business. Blackpool: Illuminating entrepreneurship: Institute for small businesses & entrepreneurship 28th national conference. Downing, S. (2005). The social construction of entrepreneurship: Narrative and dramatic processes in the coproduction of organizations and identities. Entrepreneurship: Theory and Practice, 29, 185–204.

References

69

Edelman, L., & Yli-Renko, H. (2010). The impact of environment and entrepreneurial perceptions on venture-creation efforts: Bridging the discovery and creation views of entrepreneurship. Entrepreneurship: Theory and Practice, 34(5), 833–856. Elfring, T., & Hulsink, W. (2003). Networks in entrepreneurship: The case of high-technology firms. Small Business Economics, 21(4), 409–422. Elfring, T., & Hulsink, W. (2008). Networking by entrepreneurs: Patterns of tie-formation in emerging organizations. Organization Studies, 28(12), 1849–1872. Engeström, Y. (1987). Learning by expanding: An activity–theoretical approach to developmental research. Helsinki: University of Helsinki. Esteve-Perez, S., & Manez-Castillejo, J. A. (2008). The resource-based theory of the firm and firm survival. Small Business Economics, 30(3), 231–249. Fernhaber, S. A., McDougall-Covin, P. P., & Shepherd, D. A. (2009). International entrepreneurship: Leveraging internal and external knowledge sources. Strategic Entrepreneurship Journal, 3(4), 297–320. Fisher, G. (2012). Effectuation, causation, and bricolage: A behavioural comparison of emerging theories in entrepreneurship research. Entrepreneurship: Theory and Practice, 36(5), 1019–1051. Foss, N. J., Klein, P. G., Kor, Y., & Mahoney, J. T. (2008). Entrepreneurship, subjectivism, and the resource-based view: Toward a new synthesis. Strategic Entrepreneurship Journal, 2(1), 73–94. Frankish, J. S., Roberts, R. G., Coad, A., Spears, T. C., & Storey, D. J. (2013). Do entrepreneurs really learn? Or do they just tell us that they do? Industrial and Corporate Change, 22(1), 73–106. Fry, F. L. (1987). The role of incubators in small business planning. American Journal of Small Business, 12, 51–61. Fuzi, A. (2015). Co-working spaces for promoting entrepreneurship in sparse regions: The case of South Wales. Regional Studies, Regional Science, 2, 462–469. Gabrielsson, J., & Politis, D. (2012). Work experience and the generation of new business ideas among entrepreneurs: An integrated learning framework. International Journal of Entrepreneurial Behavior and Research, 18(1), 48–74. Garavan, T. N., Carbery, R., & Murphy, E. (2007). Managing intentionally created communities of practice for knowledge sourcing across organisational boundaries: Insights on the role of the CoP manager. The Learning Organization, 14, 34–49. Gartner, W. B., Bird, B. J., & Starr, J. A. (1992). Acting as if: Differentiating entrepreneurial from organizational behavior. Entrepreneurship: Theory and Practice, 16(3), 13–31. Gavetti, G., & Levinthal, D. (2000). Looking forward and looking backward: Cognitive and experiential search. Administrative Science Quarterly, 45(1), 113–137. George, N. M., Parida, V., Lahti, T., & Wincent, J. (2016). A systematic literature review of entrepreneurial opportunity recognition: Insights on influencing factors. The International Entrepreneurship and Management Journal, 12(2), 309–350. Gibb, A. (1997). Small firms’ training and competitiveness: Building upon the small firm as a learning organization. International Small Business Journal, 15(3), 13–29. Gielnik, M. M., Krämer, A.-C., Kappel, B., & Frese, M. (2014). Antecedents of business opportunity identification and innovation: Investigating the interplay of information processing and information acquisition. Applied Psychology. An International Review, 63, 344–381. Grégoire, D. A., & Shepherd, D. A. (2012). Technology-market combinations and the identification of entrepreneurial opportunities: An investigation of the opportunity-individual nexus. The Academy of Management Journal, 55(4), 753–785. Grégoire, D. A., Noël, M. X., Déry, R., & Béchard, J.-P. (2006). Is there conceptual convergence in entrepreneurship research? A co-citation analysis of frontiers of entrepreneurship research, 1981–2004. Entrepreneurship: Theory and Practice, 30, 333–373.

70

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Gruber, M., MacMillan, I. C., & Thompson, J. D. (2012). From minds to markets: How human capital endowments shape market opportunity identification of technology start-ups. Journal of Management, 38(5), 1421–1449. Gruber, M., MacMillan, I. C., & Thompson, J. D. (2013). Escaping the prior knowledge corridor: What shapes the number and variety of market opportunities identified before market entry of technology start-ups? Organization Science, 24(1), 280–300. Handley, K., Sturdy, A., Fincham, R., & Clark, T. (2006). Within and beyond communities of practice: Making sense of learning through participation, identity and practice. Journal of Management Studies, 43(3), 641–653. Haneberg, D. (2019). Entrepreneurial learning as an effectual process. The Learning Organization, 26(6), 634–647. Hansen, D. J., Lumpkin, G. T., & Hills, G. E. (2011). A multidimensional examination of a creativity-based opportunity recognition model. International Journal of Entrepreneurial Behavior and Research, 17(5), 515–533. Hayek, F. V. (1990). Economics and knowledge. In M. Casson (Ed.), Entrepreneurship (pp. 33–80). Aldershot: Edward Elgar. Hernes, T., & Irgens, E. J. (2013). Keeping things mindfully on track: Organizational learning under continuity. Management Learning, 44(3), 253–266. Hill, S. A., & Birkinshaw, J. M. (2010). Idea sets: Conceptualizing and measuring a new unit of analysis in entrepreneurship research. Organizational Research Methods, 13(1), 85–113. Holman, D., Pavlica, K., & Thorpe, R. (1997). Rethinking Kolbs theory of experiential learning in management education—The contribution of social constructionism and activity theory. Management Learning, 28(2), 135–148. Hricko, J. (2017). Scientific rationality: Phlogiston as a case study. In T.-W. Hung & T. J. Lane (Eds.), Rationality. Amsterdam: Elsevier. Hughes, M., Hughes, P., & Morgan, R. E. (2007). Exploitative learning and entrepreneurial orientation alignment in emerging young firms: Implications for market and response performance. British Journal of Management, 18, 359–375. Jack, S. L. (2005). The role, use and activation of strong and weak network ties: A qualitative analysis. Journal of Management Studies, 42(6), 1233–1259. Jayawarna, D., Jones, O., & Macpherson, A. (2014). Entrepreneurial potential: The role of human and cultural capitals. International Small Business Journal, 32(8), 918–943. Jennings, J. E., Edwards, T., Jennings, P. D., & Delbridge, R. (2015). Emotional arousal and entrepreneurial outcomes: Combining qualitative methods to elaborate theory. Journal of Business Venturing, 30(1), 113–130. Jenssen, J. I., & Koenig, H. F. (2002). The effect of social networks on resource access and business start-ups. European Planning Studies, 10(8), 1039–1046. Jones, O. (2019). UK small business and entrepreneurship research: A subjective account, Institute of Small Business and Entrepreneurship Annual Conference, Newcastle. Jones, O., & Giordano, B. (2020). Family entrepreneurial teams: The role of learning in business model evolution. Management Learning. https://doi.org/10.1177/1350507620934092. Jones, O., & Li, H. (2017). Entrepreneurial becoming: Sensemaking in a family-based start-up. Entrepreneurship and Regional Development, 29(5-6), 467–499. Jones, O., & Macpherson, A. (2006). Inter-organizational learning and strategic renewal in SMEs: Extending the 4i framework. Long Range Planning, 39(2), 155–175. Jones, O., & Macpherson, A. (2014). Research on learning in small firms. In E. Chell & M. Katratas-Ozkan (Eds.), Handbook of research in entrepreneurship and small business. Cheltenham: Edward Elgar. Jones, O., Macpherson, A., & Thorpe, R. (2010). Promoting learning in owner-managed small firms: Mediating artefacts and strategic space. Entrepreneurship and Regional Development, 22 (7/8), 649–673. Jones, O., Macpherson, A., & Jayawarna, D. (2014). Resourcing the start-up business: Creating dynamic entrepreneurial learning capabilities. London: Routledge.

References

71

Kasperova, E., Kitching, J., & Blackburn, R. (2018). Identity as a causal power: Contextualizing Entrepreneurs’ concerns. The International Journal of Entrepreneurship and Innovation, 19(4), 237–249. Katz, J., & Gartner, W. B. (1988). Properties of emerging organizations. The Academy of Management Review, 13(3), 429–441. Kaulio, M. A. (2003). Initial conditions or process of development? Critical incidents in the early stages of new ventures. R&D Management, 33(2), 165–176. Kayes, D. C. (2002). Experiential learning and its critics: Preserving the role of experience in management learning and education. The Academy of Management Learning and Education, 1 (2), 137–149. Kihlstrom, R. E., & Laffont, J. (1979). A general equilibrium entrepreneurial theory of firm formation based on risk aversion. Journal of Political Economy, 87(4), 719–748. Kirzner, I. M. (1973). Competition and entrepreneurship. Chicago, IL: University of Chicago Press. Kirzner, I. M. (1997). Entrepreneurial discovery and the competitive market process: An austrian approach. Journal of Economic Literature, 55(1), 60–85. Kirzner, I. M. (2009). The alert and creative entrepreneur: A clarification. Small Business Economics, 32(2), 145–152. Knight, F. (1921). Risk, uncertainty and profit. New York: Houghton Mifflin. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. Englewood Cliffs, NJ: Prentice-Hall, Inc.. Kolb, A. Y., & Kolb, D. A. (2005). Learning styles and learning spaces: Enhancing experiential learning in higher education. Adademy of Management Learning & Education, 4, 193–212. Kolvereid, L., & Isaksen, E. J. (2012). The psychology of the entrepreneur. In K. Mole & M. Ram (Eds.), Perspectives in entrepreneurship: A critical approach. Basingstoke: Palgrave Macmillian. Kourilsky, M. L., & Esfandiari, M. (1997). Entrepreneurship education and lower socioeconomic black youth: An empirical investigation. The Urban Review, 29(3), 205–215. Krueger, N., & Brazeal, D. (1994). Entrepreneurial potential and potential entrepreneurs. Entrepreneurship: Theory and Practice, 18, 91–105. Kubatova, J. (2014). The cause and impact of the development of coworking in the current knowledge economy. In C. Vivas & P. Sequeiro (Eds.), Proceedings of the European Conference on Knowledge Management (Vol. 2, pp. 571–577). London: ECKM. Lamont, L. M. (1972). What entrepreneurs learn from experience. Journal of Small Business Management, 10(3), 36–41. Landström, H., Harirchi, G., & Åström, F. (2012). Entrepreneurship: Exploring the knowledge base. Research Policy, 41, 1154–1181. Lans, T., Biemans, H., Verstegen, J., & Mulder, M. (2008). The influence of the work environment on entrepreneurial learning of small business owners. Management Learning, 39(5), 597–614. Lave, J., & Wenger, E. (1991). Situated learning: Legitimate peripheral participation. New York: Cambridge University Press. Lee, R., & Jones, O. (2008). Networks, communication and learning during business start-up: The creation of cognitive social capital. International Small Business Journal, 26(5), 559–594. Legge, J., & Hindle, K. (2004). Entrepreneurship: Context, vision and planning. Basingstoke: Palgrave Macmillan. Lévesque, M., Minniti, M., & Shepherd, D. (2009). Entrepreneurs’ decisions on timing of entry: Learning from participation and from the experiences of others. Entrepreneurship: Theory and Practice, 33(2), 547–570. Lewin, K. (1951). Field theory in social science. London: Harper Row. Littunen, H., & Tohmo, T. (2003). The high growth in new metal-based manufacturing and business service firms in Finland. Small Business Economics, 2, 187–200. Mackay, D., & Burt, G. (2015). Strategic learning, foresight and hyperopia. Management Learning, 46(5), 546–564.

72

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Macpherson, A., & Holt, R. (2007). Knowledge, learning and small firm growth: A systematic review of the evidence. Research Policy, 36(2), 172–192. Man, T. W. Y., Lau, T., & Chan, K. F. (2002). The competitiveness of small and medium enterprises a conceptualization with focus on entrepreneurial competencies. Journal of Business Venturing, 17(2), 123–142. Mangham, I. (1985). In search of competence. Journal of General Management, 12(2), 5–12. Martin, G., & Staines, H. (1994). Managerial competences in small firms. Journal of Management Development, 13(7), 23–34. Marvel, M. R., & Droege, S. (2010). Prior tacit knowledge and first-year sales: Learning from technology entrepreneurs. Journal of Small Business and Enterprise Development, 17(1), 32–44. Matlay, H. (2005). Researching entrepreneurship and education: Part 1: What is entrepreneurship and does it matter? Education and Training, 47(8/9), 665–677. Matlay, H., & Hyland, T. (1997). NVQs in the small business sector: A critical overview. Education and Training, 39(9), 325–332. McAdam, M., & Marlow, S. (2007). Building futures or stealing secrets? Entrepreneurial cooperation and conflict within business incubators. International Small Business Journal, 25(4), 361–382. McAdam, M., & McAdam, R. (2006). The networked incubator: The role and operation of entrepreneurial networking with the University Science Park incubator (USI). Entrepreneurship and Innovation, 7(2), 87–97. McClelland, D. (1961). The achieving society. New York: A Free Press Paperback, The Macmillan Company. McDonald, J., & Cater-Steel, A. (Eds.). (2018). Communities of practice: Facilitating social learning in higher education. Singapore: Springer. McKelvie, A., Haynie, J. M., & Gustavsson, V. (2011). Unpacking the uncertainty construct: Implications for entrepreneurial action. Journal of Business Venturing, 26, 273–292. Mercieca, B. (2017). What is a community of practice? In J. McDonald & A. Cater-Steel (Eds.), Communities of practice: Facilitating social learning in higher education. Singapore: Springer. Minniti, M., & Bygrave, W. (2001). A dynamic model of entrepreneurial learning. Entrepreneurship: Theory and Practice, 25, 5–16. Mitchelmore, S., & Rowley, J. (2010). Entrepreneurial competencies: A literature review and development agenda. International Journal of Entrepreneurial Behavior and Research, 16(2), 92–111. Mole, K. F., & Mole, M. (2010). Entrepreneurship as the structuration of individual and opportunity: A response using a critical realist perspective: Comment on sarason, Dean and Dillard. Journal of Business Venturing, 25, 230–237. Monsson, C. K., & Jörgensen, S. B. (2016). How do entrepreneurs’ characteristics influence the benefits from the various elements of a business incubator? Journal of Small Business and Enterprise Development, 23, 224–239. Neill, S., Metcalf, L. E., & York, J. L. (2017). Distinguishing entrepreneurial approaches to opportunity perception. International Journal of Entrepreneurial Behavior and Research, 23 (2), 296–316. Nicholls-Nixon, C. L., Vallier, D., Gedeon, S. A., & Wise, S. (2020). Entrepreneurial ecosystems and the lifecycle of university business incubators: An integrative case study. The International Entrepreneurship and Management Journal. https://doi.org/10.1007/s11365-019-00622-4. Nielsen, B. B., & Ciabuschi, F. (2003). Siemens ShareNet: Knowledge management in practice. Business Strategy Review, 14(2), 33–40. Nonaka, I., & Konno, N. (1998). The concept of “Ba”: Building a foundation for knowledge creation. California Management Review, 40, 40–54. Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company. How Japanese companies create the dynamics of innovation. New York: Oxford University Press.

References

73

Nonaka, I., & Toyama, R. (2015). The knowledge-creating theory revisited: Knowledge creation as a synthesizing process. In J. Edwards (Ed.), The essentials of knowledge management. New York: Palgrave. Ozgen, E., & Baron, R. A. (2007). Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums. Journal of Business Venturing, 22, 174–192. Pan, S. L., & Leidner, D. E. (2003). Bridging communities of practice with information technology in pursuit of global knowledge sharing. The Journal of Strategic Information Systems, 12, 71–88. Parrino, L. (2015). Coworking: Assessing the role of proximity in knowledge exchange. Knowledge Management Research and Practice, 13, 261–271. Patton, D., & Marlow, S. (2011). University technology business incubators: Helping new entrepreneurial firms to learn to grow. Environment and Planning. C, Government & Policy, 29(5), 911–926. Penrose, E. T. (1959). The theory of the growth of the firm. Oxford: Basil Blackwell. Piaget, J. (1951). Play, dreams and imitation in childhood. London: Routledge. Pittaway, L. (2012). The evolution of entrepreneurship theory. In S. Carter & D. Jones-Evans (Eds.), Entrepreneurship and small business: Principles, practice and policy (pp. 9–26). Harlow: Pearson. Pittaway, L., & Cope, J. (2007). Simulating Entrepreneurial Learning: Integrating experiential and collaborative approaches to learning. Management Learning, 38, 211–233. Politis, D. (2005). The process of entrepreneurial learning: A conceptual framework. Entrepreneurship: Theory and Practice, 29(4), 399–424. Politis, D., Gabrielsson, J., Galan, N., & Abebe, S. A. (2019). Entrepreneurial Learning in venture acceleration programs. The Learning Organization, 26(6), 588–603. Prokesch, S. E. (1997). Unleashing the power of learning—An interview with BP’s John Browne. HBR OnPoint–The Harvard Business Review, 75, 146–168. Rae, D. (2004). Practical theories from entrepreneurs’ stories: Discursive approaches to entrepreneurial learning. Journal of Small Business and Enterprise Development, 11, 195–202. Rae, D. (2005). Entrepreneurial learning: A narrative-based conceptual model. Journal of Small Business and Enterprise Development, 12, 323–335. Rae, D. (2015). Opportunity-centred entrepreneurship. London: Palgrave. Rae, D., & Carswell, M. (2001). Towards a conceptual understanding of entrepreneurial learning. Journal of Business and Enterprise Development, 8, 150–158. Read, S., & Sarasvathy, S. (2005). Knowing what to do and doing what you know: Effectuation as a form of entrepreneurial expertise. Journal of Private Equity, 9(1), 45–62. Read, S., Sarasvathy, S., Dew, N., Wiltbank, R., & Ohisson, A.-V. (2016). Effectual entrepreneurship (2nd ed.). London and New York: Routledge, Taylor and Francis. Rennemo, Ø., & Åsvoll, H. (2019). Existential learning: Dialogues and places to be(come) in entrepreneurial Ba practice. Journal of Innovation and Entrepreneurship, 8(1), 1–29. Riedo, V., Kraiczy, N. D., & Hack, A. (2019). Applying person-environment fit theory to identify personality differences between prospective social and commercial entrepreneurs: An explorative study. Journal of Small Business Management, 57(3), 989–1007. Rumyantseva, M., Enkel, E., & Pos, A. (2006). Supporting growth through innovation networks in Unilever. In A. Back, E. Enkel, & G. von Krogh (Eds.), Knowledge networks for business growth (pp. 77–97). Berlin-Heidelberg: Springer. Sadler-Smith, E., Hampson, Y., Chaston, I., & Badger, B. (2003). Managerial behaviour, entrepreneurial style and small firm performance. Journal of Small Business Management, 41(1), 47–67. Sanz-Velasco, S. A. (2006). Opportunity development as a learning process for entrepreneurs. International Journal of Entrepreneurial Behavior and Research, 12, 251–271. Sarason, Y., Dean, T., & Dillard, J. F. (2006). Entrepreneurship as the nexus of individual and opportunity: A structuration view. Journal of Business Venturing, 21, 286–305.

74

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. The Academy of Management Review, 2, 243–263. Sarasvathy, S. D. (2004). Making it happen: Beyond theories of the firm to theories of firm design. Entrepreneurship: Theory and Practice, 28(6), 519–531. Sarasvathy, S. D. (2008). Effectuation: Elements of entrepreneurial expertise. Cheltenham: Edward Elgar. Sarasvathy, S. D. (2012). Effectuation and entrepreneurship. In S. Carter & D. Jones-Evans (Eds.), Enterprise and small business: Principles, practice and policy, 3rd ed. (pp. 135–151). Harlow: Pearson. Say, J.-B. (1880). A treatise on political economy. Philadelphia, PA: Claxton, Remsen and Haffelfinger. Schildt, H. A., Zahra, S. A., & Sillanpa, A. (2006). Scholarly communities in entrepreneurship research: A co-citation analysis. Entrepreneurship: Theory and Practice, 30(3), 399–415. Schmitt, A., Rosing, K., Zhang, S. X., & Leatherbee, M. (2018). A dynamic model of entrepreneurial uncertainty and business opportunity identification: Exploration as a mediator and entrepreneurial self-efficacy as a moderator. Entrepreneurship: Theory and Practice, 42(6), 835–859. Schumpeter, J. (1934). The theory of economic development. Cambridge, MA: Harvard University Press. Seet, P.-S., Jones, J., Oppelaar, L., & de Zubielqui, G. C. (2018). Beyond ‘know-what’ and ‘knowhow’ to ‘know-who’: Enhancing human capital with social capital in an Australian start-up accelerator. Asia Pacific Business Review, 24(2), 233–260. Seidel, V. (2002). The dynamics within high-technology incubators: The impact of incubator management practices on resident start-ups [Online]. Babson College. Retrieved from http:// Www.Babson.Edu/Entrep/Fer/Babson2001/Xix/Xixc/Xixc.Htm. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Shane, S. (2003). A general theory of entrepreneurship: The individual-opportunity nexus. Cheltenham: Edward Elgar Publishing Limited. Shane, S. (2012). Reflections on the 2010 AMR decade award: Delivering on the promise of entrepreneurship as field of research. The Academy of Management Review, 37(1), 10–20. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. The Academy of Management Review, 25, 217–226. Sharifi, S., & Zhang, M. (2009). Sense-making and recipes: Examples from selected small firms. International Journal of Entrepreneurial Behavior and Research, 15(6), 555–571. Shaver, K., & Scott, L. (1991). Person, process, and choice: The psychology of new ventrue creation (pp. 23–42). Winter: Entrepreneurship Theory and Practice. Shepherd, D. A., Wennberg, K., Suddaby, R., & Wiklund, J. (2019). What are we explaining? A review and Agenda on initiating, engaging, performing, and contextualizing entrepreneurship. Journal of Management, 45(1), 159–196. Shu, R., Ren, S., & Zheng, Y. (2018). Building networks into discovery: The link between entrepreneur network capability and entrepreneurial opportunity discovery. Journal of Business Research, 85, 197–208. Simon, H. A. (1959). Theories of decision making in economics and behavioural science. The American Economic Review, 49, 253–283. Smith, A. W., Moghaddam, K., & Lanivich, S. E. (2019). A set-theoretic investigation into the origins of creation and discovery opportunities. Strategic Entrepreneurship Journal, 13, 75–92. Soekijad, M., van den Hooff, B., Agterberg, M., & Huysman, M. (2011). Leading to learn in networks of practice: Two leadership strategies. Organization Studies, 32(8), 1005–1027. Spender, J. C. (1989). Industry recipes: The nature and source of management judgement. Oxford: Basil Blackwell. Spinuzzi, C. (2012). Working alone together: Coworking as emergent collaborative activity. Journal of Business and Technical Communication, 26, 399–441.

References

75

Spinuzzi, C., Bodroz, Z., Scaratti, G., & Ivaldi, S. (2019). Coworking is about community: But what is ‘Community’ in coworking? Journal of Business and Technical Communication, 33(2), 112–140. Stanworth, J., & Curran, G. (1991). Bolton 20 years on: The small firm in the 1990s. London: Paul Chapman. Steyaert, C. (2007). ‘Entrepreneuring’ as a conceptual attractor? A review of process theories in 20 years of entrepreneurship studies. Entrepreneurship and Regional Development, 19(6), 453–477. Stokes, D., & Wilson, N. (2010). Small business management and entrepreneurship. Andover: Cengage Learning EMEA. Storey, D. J. (2004). Exploring the link, among small firms, between management training and firm performance: A comparison between the UK and other OECD countries. International Journal of Human Resource Management, 15(1), 112–130. Taylor, D. W., & Pandza, K. (2003). Networking capability: The competitive advantage of small firms. In O. Jones & F. Tilley (Eds.), Competitive advantage in SMEs. Organising for innovation and change (pp. 156–173). Chichester: John Wiley & Sons. Theodorakopoulos, N. K., Kakabadse, N., & McGowan, C. (2014). What matters in business incubation? A literature review and a suggestion for situated theorising. Journal of Small Business and Enterprise Development, 21(4), 602–622. Thorpe, R., Jones, O., Macpherson, A., & Holt, R. (2008). The evolution of business knowledge in smaller firms. In H. Scarbrough (Ed.), The evolution of business knowledge. Oxford: Oxford University Press. Tomkins, L., & Ulus, E. (2016). Oh, was that “experiential learning”?! Spaces, synergies and surprises with Kolb’s learning cycle. Management Learning, 47(2), 158–178. Toutain, O., Fayolle, A., Pittaway, L., & Politis, D. (2017). Role and impact of the environment on entrepreneurial learning. Entrepreneurship and Regional Development, 29(9–10), 869–888. Ucbasaran, D., Westhead, P., & Wright, M. (2006). Habitual entrepreneurs. Cheltenham: Edward Elgar Publishing Limited. Ucbasaran, D., Westhead, P., & Wright, M. (2008). Opportunity identification and pursuit: Does an entrepreneur’s human capital matter? Small Business Economics, 30, 153–173. Ucbasaran, D., Westhead, P., & Wright, M. (2009). The extent and nature of opportunity identification by experienced entrepreneurs. Journal of Business Venturing, 24, 99–115. Vaghely, I. P., & Julien, P. (2010). Are opportunities recognized or constructed? An information perspective on entrepreneurial opportunity identification. Journal of Business Venturing, 25(1), 73–86. Van Weele, M. A., Steinz, H. J., & Van Rijnsoever, F. J. (2018). Start-up communities as communities of practice: Shining a light on geographical scale and membership. Journal of Economic and Social Geography, 109(2), 173–188. Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor’s perspective. Advances in Entrepreneurship, Firm Emergence, and Growth, 3, 119–138. Venkataraman, S. (2004). Entrepreneurial opportunity. In Encyclop Dictionary Entrepreneurs (pp. 100–103). New York: Springer. Venkataraman, S., Sarasvathy, S., Dew, N., & Forster, W. R. (2012). Reflections on the 2010 AMR decade award: Whither the promise? Moving forward with entrepreneurship as a science of the artificial. The Academy of Management Review, 37(1), 21–33. von Mises, L. (1949). Human action: A treatise on economics. London: Hodge. Vygotsky, L. S. (1978). In M. Cole, V. John-Steiner, S. Scribner, & E. Souberman (Eds.), Mind in society: The development of higher psychological processes. Cambridge, MA: Harvard University Press. Weick, K. E. (1995). Sensemaking in organizations. Thousand Oaks: Sage Publications. Wenger, E. (1998). Communities of practice: Learning, meaning, and identity. Cambridge: Cambridge University Press.

76

3 Entrepreneurship, Opportunities and Entrepreneurial Learning

Wenger, E. (2000). Communities of practice and social learning systems. Organization, 7, 225–246. Wenger, E., McDermott, R., & Snyder, W. (2002). Cultivating communities of practice. Boston, MA: Harvard Business School Press. Wenger-Trayner, E., Fenton-O’Creevy, M., Hutchinson, S., Kubiak, C., & Wenger-Trayner, B. (2014). Learning in landscapes of practice: Boundaries, identity, and knowledgeability in practice-based learning. New York: Routledge. Wiklund, J., & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strategic Management Journal, 24(13), 1307–1314. Zhang, W., & Watts, S. (2008). Online communities as communities of practice: A case study. Journal of Knowledge Management, 12(4), 55–71. Zozimo, R., Jack, S., & Hamilton, E. (2017). Entrepreneurial learning from observing role models. Entrepreneurship and Regional Development, 29(9–10), 889–911.

Chapter 4

Research Methods

4.1

Introduction

The overall aim of the study is to explore the role of university-based incubators (UBIs) in developing entrepreneurship using a framework drawing on entrepreneurial learning and opportunity identification and development (Fig. 3.3). This aim can be broken down into two principal areas of research: the creation of an entrepreneurial learning community of practice and opportunity development. Prospective entrepreneurs may have pre-existing business ideas that they bring to the UBI. The study will investigate the entrepreneurial learning process by focusing on how entrepreneurs acquire knowledge to start and nurture their businesses during the incubation period. We build on this understanding to explore how an individual’s entrepreneurial learning interacts with opportunity development during the incubation process. By bringing these two strands of research together, the study provides new insights into the role of UBIs in developing entrepreneurship. The conceptual framework developed in Chap. 3 (Fig. 3.3) illustrates the key elements of this study: the development from individuals with business ideas to entrepreneurs; the development from existing knowledge into business opportunities; the interplay between individuals and opportunities; the impact of a UBI on the development of these individuals and opportunities. These developments are viewed through the lens of learning to highlight the importance of a UBI community in nurturing business opportunities and entrepreneurs. The study is informed by the following research question: how are learning communities of practice created and sustained in the context of a university-based incubator (UBI)? We attempt to answer this question by examining various activities undertaken by incubatees during the early stages of business incubation. To begin, we explore the incubation process in a UBI from the perspective of individual entrepreneurs. We then focus on the process of entrepreneurial learning from the perspective of individual incubatees. This will provide insight into the processes of business development during the early stages of incubation. The outcomes of entrepreneurial © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_4

77

78

4 Research Methods

learning influence the success of start-up firms (Deakins and Freel 1998; Jones and Giordano 2020), which contribute to UBI performance. Hence, it is crucial to examine how incubators stimulate a learning environment by facilitating communication, cooperation and trust between incubatees belonging to the community. To explore this issue, participants’ prior knowledge associated with their business opportunities will be examined at the second stage of the research. Building on this material, the process of transforming information into new knowledge will be explored at the third research stage. We also examine how incubatees’ learning interacts with the process of opportunity recognition during the incubation process to provide a deeper understanding of opportunity development. Rae and Carswell (2001: 150) believe that ‘entrepreneurial learning is concerned with how people construct new meaning in the process of recognising and acting on opportunities, and of organising and managing ventures’. Examining opportunity development through the lens of entrepreneurial learning will offer new insights into how UBIs sustain entrepreneurial activity. Finally, we will provide a holistic view of the UBI’s role in the process of opportunity development by exploring the attitudes and experiences of incubatees and the incubation management team. This will provide an overall view of the UBI process in which entrepreneurship is conceptualised as a ‘co-participation, where learning is dependent on social, historical and cultural factors’ (Taylor and Thorpe 2004: 204). The research is based on a single case study, which examines a unique UBI known as INNOSPACE, which was established in 2007 (see Chap. 10). A recent literature review identified 88 case studies in the related literature on family businesses published between 2000 and 2017 (Leppäaho et al. 2016, 2020). Most studies (75) adopted an approach defined as ‘qualitative positivism’, 12 were based on interpretivism and 1 study adopted a critical realist perspective. The most widely cited authors (Eisenhardt 1989; Yin 2009, 2012) argue for a ‘replication logic’ approach based on the comparison of multiple cases for theory-building. Longitudinal cases are essential for developing a better understanding of ‘the processes of continuity and change’ associated with organisations operating in dynamic environments (Malhotra and Hinings 2015). Stake (1995) is a leading advocate for the constructionist approach to case study research. He is critical of those who try to ‘decontextualise’ case studies, arguing that researchers adopting an interpretative approach must embrace context, narratives and personal engagement with their subjects (Stake 2005: 449). Longitudinal cases, such as this study of INNOSPACE, are crucial for understanding the problems facing incubatees and managers associated with UBIs (Kakabadse et al. 2020; Redondo and Camarero 2017). As we discuss below, this research is based on an in-depth case study of a single incubator using a qualitative research approach based on the principles of social constructionism (Lindgren and Packendorff 2009).

4.2 Researching Entrepreneurship

4.2

79

Researching Entrepreneurship

Kuhn’s (1962) seminal work on the structure of scientific revolutions was extended by Burrell and Morgan (1979) who suggested management research could be located within four paradigms defined by two dimensions. The horizontal axis, based on assumptions about the nature of science (epistemology and ontology), is labelled the subjective-objective dimension. Ontological concerns relate to the extent to which the world has an objective reality beyond an individual’s subjective perceptions. Epistemology concerns are related to assumptions about the extent to which it is possible to obtain objective data by which to ‘measure’ or quantify social phenomena. The vertical axis is grounded on assumptions about the nature of society in terms of a regulation-radical change dimension (Lee and Jones 2015). Burrell and Morgan (1979) used these two dimensions to identify four distinct paradigms: functionalist, interpretive, radical humanist and radical structuralist (see Denzin and Lincoln 2000; Hassard and Cox 2013; Shepherd and Challenger 2013). The idea of paradigms was applied to small business and entrepreneurship research by Grant and Perren (2002). The authors carried out a ‘systematic metatheoretical analysis’ of 36 papers published in six leading journals1 during 2000. In total, 32 articles were classified as being located within the dominant ‘functionalist’ paradigm and the remaining four papers were classified as ‘interpretivist’ (Grant and Perren 2002: 202). Lee and Jones (2015) identify a number of dualisms in entrepreneurship research including the key distinction between qualitative and quantitative approaches to data collection. They also suggest these two approaches are linked to another well-known dualism; the different research traditions associated with Europe and the USA (Down 2013). Although Davidsson (2013) argues that the two traditions are more heterogeneous than classifying US entrepreneurship research as largely quantitative while the European tradition is regarded as largely qualitative. However, the majority of papers published in the top entrepreneurship journals (Entrepreneurship: Theory & Practice, Journal of Business Venturing, Strategic Entrepreneurship Journal) certainly follow a broadly positivist tradition and are located within the functionalist paradigm. For example, a recent review of literature related to new venture survival identified 205 studies of which 75% (153) were quantitative, only 10% qualitative and less than 2% (4) used mixed methods. As the authors go on to state: ‘suggesting that this field has been dominated by positivistic research approaches’ (Soto-Simeone et al. 2020: 7). In total, 97 of the studies were published in the entrepreneurship journals and the majority (96%) were in 3 or 4 rated journals (Soto-Simeone et al. 2020). According to Al-Amoudi and Willmott (2011), these deep-seated philosophical differences can be summarised as variations between constructionism and positivism with a mid-point occupied by critical realism. 1

Entrepreneurship: Theory and Practice, Journal of Business Venturing, Journal of Small Business Management, Small Business Economics, International Small Business Journal and Entrepreneurship & Regional Development.

80

4 Research Methods

Studies based on the critical realist perspective are starting to emerge in the entrepreneurship arena (Kitching and Rouse 2020; Ramoglou 2013; Ramoglou and Tsang 2016). Although these publications are primarily critiques of existing research approaches without offering empirical studies based on critical realist methods. According to Cunliffe (2008), the origins of ‘social constructionism’ can be traced to a number of different scholars including Schütz (1960) and Garfinkel (1967). The work of Berger and Luckmann (1966) has been ‘foundational’ for understanding constructionism amongst the management and organisation studies communities (Grandy 2018: 5). In fact, Berger and Luckmann were both students of Alfred Schutz in the early 1960s (Knoblauch and Wilke 2016) prior to the publication of their seminal text: The Social Construction of Reality. Society exists as both an objective and a subjective reality resulting from the dialectical processes associated with externalisation, objectivation and internalisation (Berger and Luckmann 1966: 61). As Cunliffe (2008: 125) goes on to explain: ‘They argue that the social world is humanly produced in ongoing activity and routines (externalization), yet experienced as being objective in that it affects our lives on an ongoing basis, and we have to go out and learn about it (objectivation). We are socialized in the world as we interpret meanings of events and/or others’ subjectivities, and in doing so we take on the world, the identity of others and therefore our own place and identity (internalization)’. In summary, Berger and Luckmann (1966: 137) propose that knowledge itself is socially constructed and all ‘facts’ are social products (see Alvesson and Sköldberg (2018: 30–37). Social constructionism does not focus upon ‘the meaning-making activity of the individual mind but on the collective generation of meaning as shaped by the conventions of language and other social processes’ (Crotty 1998: 58). Lindgren and Packendorff (2009: 30) compare constructionism and constructivism arguing that the latter ‘is still rooted in positivism in several ways’. In particular, constructivism is based on a dualistic ontology, which separates the subjective and objective with the implication that there are ‘objective truths about social phenomena beyond individuals’ subjective interpretations of reality’. In contrast, social constructionism ‘is explicitly based in a hermeneutic tradition where there is no knowledge beyond individuals’ subjective and inter-subjective interpretations of reality’ (Lindgren and Packendorff 2009: 30). Hence, social constructionists reject the ontological position that objective facts can be established about human behaviour (Berger and Luckmann 1966). Rather, researchers can only examine various societal processes as a basis for interpreting how people construct and understand their reality and actions (Cunliffe 2008). A focus on language led some researchers to label social constructionism ‘linguistic reductionism’ (Fletcher 2006). Talja et al. (2004: 90) also point out that ‘the strong focus of constructionism on language use and discursive practices entails an assumption that real world problems are to a large extent defined, produced and solved in institutionalised discourses’. Fletcher (2006) proposes that that social constructionist work should not only examine linguistic representations but should also focus on the meaning-making and sense-making processes at the individual and interpersonal levels. It is argued by Cunliffe (2008) that researchers adopting a social

4.3 Research Approach

81

constructionist approach must choose between examining a subjective reality or an intersubjective reality. In the former, the reality is negotiated by individuals in particular social settings and researchers focus on the language those individuals use to make sense of their experiences. Researchers concerned with intersubjective realities acknowledge that social interaction occurs within a context that has some element of objectivity. In other words, organisations are ‘discursively produced’ as they have ‘a degree of continuity through artefacts, routines, stories, discursive practices, language systems’ (Cunliffe 2008: 127). We suggest that adopting such a social constructionist approach to entrepreneurial learning during the incubation process is complementary to the research related to communities of practice. According to Wenger-Trayner in response to a question about social learning theory (Farnsworth et al. 2016: 141): Social theory is not true or false. It is not a ‘proposition’ or a statement of truth, as in the natural sciences. It is validated through its usefulness for telling meaningful stories about the human condition. It guides inquiries by focusing on certain aspects of this condition, suggesting questions to pursue and ways of framing the answers.

A number of scholars agree that entrepreneurial learning is a subjective process through which knowledge is socially constructed (Cope 2003; Cope and Watts 2000; Jones and Giordano 2020; Jones and Macpherson 2014; Pittaway 2005; Rae 2005; Rae 2004; Rae and Carswell 2001). Wenger (1998) sees learning as a form of social participation. Social constructionism offers a novel and appropriate approach to developing a better understanding of the interactions between individual entrepreneurial learning and the creation of a business incubator community of practice. In this study, we examine the incubation process primarily through the eyes of the incubatees. As pointed out by Berends and Deken (2019: 2), process research demands that data and process theory must be ‘closely and systematically tied together in the write-up’.

4.3

Research Approach

Davidsson (2016: 86) acknowledges: ‘the process character of entrepreneurship’ requires more use of qualitative studies or what he describes as ‘close-up’ approaches (McMullen and Dimov 2013). He also accepts that a focus on longitudinal approaches ‘has been short in supply in entrepreneurship research’ (Davidsson 2016: 91). A qualitative, interpretist approach was chosen for this research because we believe that is the best way to gain a real understanding of links between individual learning and communities of practice. As explained above, a social constructionist approach also helps provide a more holistic and contextual view of various social phenomena. In this case, explaining the interactions between incubatees and opportunities and between incubatees and the incubator community. Bell et al. (2019) distinguish between deductive and inductive research approaches. The former is most widely associated with quantitative studies and the

82

4 Research Methods

latter with qualitative research approaches such as ‘grounded theory’ (Glaser and Strauss 1967). A third research approach, a hybrid of deduction and induction, is known as abduction. Mantere and Ketoviki (2013: 72) propose that these ‘three forms of reasoning constitute our primary tools of inference’ (deduction, induction and abduction). Applying abductive reasoning, also described as ‘systematic combining’, provides an interpretist approach to the analysis of a single case study (Dubois and Gadde 2002, 2014). Researchers using systematic combining iterate between their empirical data and theory developed from the literature. Hence, abductive methods span the divide between ‘theory testing’ approaches to case study research (Eisenhardt 1989; Yin 2009) and research based on grounded theory (Glaser and Strauss 1967). An abductive approach involves researchers adopting a ‘dialogical process’ (back and forth) engagement with social phenomena and concepts from the literature (Alvesson and Sköldberg 2018: 4). As Bell et al. (2019: 24) point out, abduction is based on the pragmatic philosophy of Charles Peirce (1965). Mantere and Ketoviki (2013: 81) also draw on the work of Peirce (1878) to suggest that ‘interpretive scholars’ acknowledge that their work is always influenced by existing theory, and, ‘thus, abduction is a process driven by an interplay of doubt and belief, which, in tum, fuels the imaginative act of creating new knowledge’. Simpson (2018: 7) certainly regards abduction as a key element of Peirce’s approach to pragmatism; researchers not only observe the details of a situation but also engage in ‘formulating plausible explanations for these details’. A pragmatic philosophy, based on an ‘empirical engagement’ with the real world is non-reductive and antifoundationalist. As Simpson (2018: 8) goes on to explain, in rejecting a rationalist perspective, based on ‘immutable facts’, pragmatists accept that ‘outcomes and actions are co-evolving aspects of a world-in-process’. Simpson (2018) outlines a number of studies that are based on pragmatist thinking including routines (Cohen 2007; Winter 2013), organisational learning (Elkjaer and Simpson 2011) and entrepreneuring (Steyaert 2007). Simpson (2018: 15) goes on to state: Pragmatism’s value to business and management studies is its particular resonance with questions relating to practice and process, where the field is still wide open to new inquiries and fresh insights.

In summary, we propose that social constructionism (Berger and Luckmann 1966; Cunliffe 2008; Grandy 2018), located within a pragmatic philosophical framework (Simpson 2018), provides a sound basis for the collection, analysis and reporting of case study data. Returning to the issue of research paradigms, Hassard and Cox (2013) revisit Burrell and Morgan’s (1979) work in an attempt to accommodate the emergence of postmodernist ideas in organisation theory (Clegg and Kornberger 2003). Based on the ‘four principles of social science’, ontology, epistemology, human nature and methodology, Hassard and Cox (2013: 1709) suggest three revised paradigms: structural, anti-structural and post-structural. Each paradigm is then expanded by categorising research approaches as either

4.3 Research Approach

83

normative or critical. Hence, the normative2 anti-structural paradigm adheres to the same basic principles of Burrell and Morgan’s interpretive paradigm and incorporates social constructionism (Hassard and Cox 2013: 1714). We suggest that our approach also fits with the principles of a ‘reflexive methodology’ as described by Alvesson and Sköldberg (2018). The authors point out that qualitative researchers must exercise vigilance and self-questioning if they are to establish the trustworthiness of their work. A researcher’s own ethics, experiences and motivations are fundamental to the process of collecting qualitative data. For example, when carrying out interviews or observations, researchers must establish a rapport and engage emotionally with their subjects, which results in an intersubjective account of some social phenomena (Gabriel 2018). In Chap. 10, we explain the background of the case study organisation from its inception in 2007. All three contributors to the book have been associated with INNOSPACE in various capacities during the 13 years the incubator has been operating. Therefore, we certainly do not claim that this research provides a ‘value-free’ account of the creation of Manchester Metropolitan University’s Business Incubator.

4.3.1

The Case Study Organisation

INNOSPACE was initially supported by the European Regional Development Fund, MMUBS and the Centre for Enterprise (CfE). To qualify, prospective incubatees had to apply for a place and selection interviews were conducted by a panel of Steering Group members (see Chap. 10). Prospective incubatees were required to present their businesses (if they were already trading) or their business ideas (if they were not trading). The posters or presentation files submitted at the entry interviews were retained by the INNOSPACE office. These provided a useful source of information about the age of the business where it already existed, or the age of the opportunities where a business idea was presented to the panel. There was considerable variation in the stage of business ideas suggested by the incubatees. Some had only a rough idea for their business, while others had been in business for several years and had spotted new opportunities, which they intended to develop in INNOSPACE. Successful applicants then signed a contract and became tenants (later they were known as licensees). They agreed to a starting date with the management when they came to pay the rent, collect their keys and asked to complete an INNOSPACE Company Support Monitoring Form. After 6 months of incubation, incubatees met the manager for a review meeting, where an INNOSPACE Company Support Output Monitoring Form and an INNOSPACE Review Form were completed. After 12 months, incubatees could apply for a second-year of incubation. An interview then took place with a panel of Steering Group members. Most

2 The critical anti-structural approach is based on the work of Herbert Marcuse and Jurgen Habermas.

84

4 Research Methods

Table 4.1 Sources of information on participants

Case no. 1 2 3 4 5

Entry interview form/ notes ✓

✓ ✓

16 17 18 19 20

Company support output monitoring form ✓

✓ ✓

✓

✓ ✓ ✓

INNOSPACE review form ✓ ✓

Secondyear interview form/notes

Other information submitted by participants Business plan

✓

✓ ✓

✓

✓

✓

✓ ✓

✓ ✓

✓ ✓

✓

✓ ✓ ✓ ✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓ ✓

✓ ✓

6 7 8 9 10 11 12 13 14 15

Company support monitoring form ✓ ✓

Business plan Business plan Background

Business plan

second-year interviewees submitted PowerPoint slides to illustrate their business ideas and some submitted paperwork based on their business plan or background to their business ideas. To complement the documentary data and provide an in-depth understanding of the context of the business incubation process, the second author (PPM) undertook participant observation by acting as a member of the INNOSPACE Steering Group (Meckel 2014). PPM participated as a panel member in 32 first- and second-year interviews. Some of these applicants subsequently became participants in the study because of their regular use of INNOSPACE. Participant observation helped to validate PPM’s ‘insider’ identity and so further helped gain information about important developments at INNOSPACE and access to potential participants (Table 4.1). Due to the nature of the forms, not all data was available for each case. First, not all participants decided to stay in INNOSPACE for a second year. As a result, we were unable to collect data from these participants for the second-year reviews. Secondly, some entrepreneurs had left or were leaving INNOSPACE when the

4.4 Interviews with Incubatees and the Management Team

85

interviews were conducted and INNOSPACE did not keep their records. There were no files on case numbers 3 and 9 and there were some files missing related to participant numbers 10 and 13. One case (number 16) did not give her consent to access her files stored in the INNOSPACE office. Participant observation data and documents from the INNOSPACE office provided a rich source of information about the background of individual incubatees. At the end of each interview, participants were asked for their verbal consent to access information and forms retained by INNOSPACE management. In the majority of cases, consent was given and PPM was able to collect additional contextual data for these incubatees using documents from the INNOSPACE office. This documentary evidence enabled PPM to design a demographic data collection template, to consolidate details of the participants’ backgrounds. Table 4.2 summarises the demographic data collection template and data from INNOSPACE’s records. On average participants had been in INNOSPACE for 13 months when they were interviewed. There are three participants (No. 6, 17 and 18) who participated in the NES (New Entrepreneur Scholarships) programme and went on to apply to INNOSPACE as a result.

4.4

Interviews with Incubatees and the Management Team

Table 4.3 presents a short description of the 20 participants together with information about the interviews, which were conducted at a place that was convenient and comfortable for the participants. Most took place in the INNOSPACE meeting rooms, some in the CfE meeting room and one was conducted in the participant’s own office because he had moved out of INNOSPACE. Interview duration ranged from 35 to 84 min with an average of 58 min. Each interview was recorded and transcribed. Where further information or clarification was required, several interviewees (Andy, Tony and James) were contacted again. The interviews were organised around the key questions outlined in the interview schedule (see Appendix A). Questions were designed to explore the biography of incubatees’ business ideas over time, starting with questions about where the ideas originated and ending with future plans. The aim was to capture, as directly as possible, the experience of incubatees during a critical learning period by exploring, through the lens of business idea development, how being in the incubator helped them to learn both individually and socially via the community of practice. The latter involved fellow incubatees, academics, business advisors and more experienced entrepreneurs. During the interviews, incubatees frequently raised issues related to support from the management team, as well as other stakeholders, in relation to their learning process during the first 12 months of the incubation period. Therefore, it was decided to include interviews with a number of key INNOSPACE ‘stakeholders’, including members of the management team. Eventually, five agreed to participate in face-toface individual interviews (Appendix B):

86

4 Research Methods

Table 4.2 Profiles of participants Case no. 1

Name Helen

Gender F

Age (yrs) 35

2

Tim

M

30

3

Andy

M

27

4

Jane

F

32

5

Ian

M

27

6

Tony

M

32

7

Nick

M

28

8

Neil

M

48

9

Phil

M

29

10 11

Jeff Paul

M M

24 25

12 13

Peter Emma

M F

24 40

14

James

M

33

15

Kath

F

45

16

Laura

F

35

17

Alex

M

37

Nonminority Nonminority Nonminority Minority Nonminority Minority Nonminority Nonminority Nonminority Nonminority Minority

18

Kelly

F

40

Minority

19

Mark

M

32

20

Karen

F

33

Nonminority Nonminority

Ethnicity Nonminority Nonminority Nonminority Nonminority Nonminority Minority

Education Postgraduate

Incubation length when interviewed (months) 6

Postgraduate

9

Undergraduate

8

Undergraduate

15

Undergraduate

16

Undergraduate & NES Undergraduate

17

Postgraduate

18

Undergraduate

12

Postgraduate Postgraduate

17 15

Postgraduate Undergraduate

13 20

Postgraduate

12

Postgraduate

14

No higher education Undergraduate & NES Postgraduate & NES No higher education Postgraduate

18

15

13 8 9 11

1. The management team (consisting of a manager who had recently left INNOSPACE and the administrator) 2. The former and acting CfE directors 3. A member of the INNOSPACE steering group who was also an academic staff

4.5 Data Analysis

87

Table 4.3 List of interviews Case no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Name Helen Tim Andy Jane Ian Tony Nick Neil Phil Jeff Paul Peter Emma James Kath Laura Alex Kelly Mark Karen

Place GBS meeting room GBS meeting room The Bayliss, INNOSPACE One-to-one room, INNOSPACE One-to-one room, INNOSPACE One-to-one room, INNOSPACE One-to-one room, INNOSPACE One-to-one room, INNOSPACE Phil’s office, city centre Corner meeting room, ERC One-to-one room, INNOSPACE One-to-one room, INNOSPACE One-to-one room, INNOSPACE Corner meeting room, ERC Corner meeting room, ERC Corner meeting room, ERC Corner meeting room, ERC Corner meeting room, ERC Corner meeting room, ERC One-to-one room, INNOSPACE

Duration (min) 52 43 53 52 52 + 32 55 69 70 54 48 72 63 50 58 67 47 73 48 62 35

member teaching entrepreneurship in MMU Business School On average, each stakeholder interview lasted 87 min and was designed to establish the roles played by participants in setting up and developing INNOSPACE as a means of enhancing entrepreneurship. All five interviews were recorded and transcribed. These interviews are a central element of Chap. 10 in which we examine the evolution of INNOSPACE within Manchester Metropolitan University. The interviews also add context to the main study, which helps explain why some incubatees felt they lacked support from the management team. For example, all those who were involved with setting up and managing INNOSPACE were doing so in addition to their existing duties. In other words, particularly in the early stages of the incubator, dedicated resources were extremely limited. In addition, none of the team members who established and managed INNOSPACE had previous incubator experience and this meant it was a steep learning curve for all those concerned.

4.5

Data Analysis

Qualitative data are difficult to deal with because even a small number of interviews can generate large amounts of complex data. For example, Miles (1979: 500) refers to qualitative data as ‘an attractive nuisance’ because collecting such data is labour

88

4 Research Methods

intensive and, moreover, ‘the most serious and central difficulty in the use of qualitative data is that methods of analysis are not well formulated’. Four decades later, Bell et al. (2019: 517) also point out that ‘unlike quantitative data analysis, there are no clear-cut rules about how qualitative data analysis should be carried out’. It is the responsibility of qualitative researchers, therefore, to choose carefully which data analysis techniques best reflect their philosophical approaches and allows them to address their research questions. Our data analysis is based on template analysis as well as Alvesson and Sköldberg’s (2018) ‘reflexive methodology’. Adhering to a reflexive approach means that the creation of knowledge cannot be separated from the researcher’s subjective interpretation of the data. Template analysis is a ‘particular style’ of thematic analysis, which ‘is one of the most common approaches to qualitative data’ (Bell et al. 2019: 519). According to King et al. (2018), template analysis can be inductive, based on specific empirical observations, or deductive using a ‘theory-led’ approach. As discussed below, we adopted a combination of deductive, using concepts from Fig. 3.3 and inductive, based on concepts that emerged from the data. It is stressed by King et al. (2018: 186) that template analysis is not based on coding each line of text, rather, the focus is on ‘segments of text’ in the context of the ‘participant’s full account’. Consequently, researchers should be fully familiar with their data before starting to code. Various bodies of literature were reviewed and, in Chap. 3, a conceptual framework was proposed to study the impact of business incubation. Also, as discussed in this chapter, a semi-structured schedule was used to interview the participants. When discussing the suitability and advantages of adopting template analysis, King (2004: 268) points out that it ‘works very well in studies which seek to examine the perspectives of different groups within an organizational context’. This study investigates learning, not only at an individual level but also at the group and community levels. In other words, we research how learning took place in INNOSPACE through interactions between different actors in the incubation centre. When discussing epistemological issues, King (2004: 256) states that when using thematic analysis to organise and analyse data, the researcher ‘assumes that there are always multiple interpretations to be made of any phenomenon, which depend upon the position of the researcher and the context of the research’. Template analysis is appropriate for this study because it is consistent with our social constructionist philosophical position (Cunliffe 2008; Grandy 2018; Lindgren and Packendorff 2009). For example, King et al. (2018: 184–185) offer a four-way classification of philosophies underpinning template analysis: Qualitative neo-positivism: researchers share the assumption underpinning quantitative research that reality is independent of any observer (positivist) Limited realism: ontological assumptions based on an independent external reality but knowledge is not independent of the researcher’s perspective (critical realist) Contextualism: no reality independent of human perceptions nor can knowledge of any phenomenon be separate from the researcher’s personal engagement (social constructionist)

4.5 Data Analysis

89

Radical constructionism: ‘language’ is the basis of human understandings of reality and the associated knowledge claims of social researchers (poststructuralist) All 20 interviews were transcribed, stored in Word format and exported to NVivo. Transcribing and coding were carried out soon after each interview was conducted. This meant that thoughts generated from the interview could be captured and embodied in codes while still fresh in the memory. Transcribing the interviews allowed PPM (second author) to fully familiarise herself with the data. Using NVivo helped to improve the data analysis by enabling PPM to code accurately and, subsequently, easily access the relevant information when necessary (see Bell et al. 2019: 542–554). Some suggest that the use of software tools such as NVivo help qualitative researchers address issues of reliability and validity (Richards 1999). However, we subscribe to the view that adopting such positivist criteria are inappropriate in qualitative research. Guba and Lincoln (1998) point out that reliability and validity should be replaced the criteria of ‘trustworthiness and authenticity’. As Bell et al. (2019: 363) explain, such a view rejects the idea that there is ‘a single absolute account of social reality’ that can be revealed by social scientists. The initial template was created using a priori codes developed from the research question and based on concepts from the literature review (Fig. 3.3). Following guidance (King 2004), we also used themes from the interviews as an initial template (Appendix C). These codes (impact of INNOSPACE, prior knowledge and ways of developing business ideas) are used as higher-order codes, with subsidiary lowerorder codes. Under the heading ‘impact of INNOSPACE’, for example, there were second-level codes. They are: ‘experience of INNOSPACE’, ‘reasons of entering INNOSPACE’, ‘skills obtained in INNOSPACE’ and ‘experience of support from INNOSPACE’. There were then third-level codes under these, except ‘experience of support from INNOSPACE’. As King et al. (2018: 190) explain, creating an initial template is only the starting point as data coding is an iterative process. Therefore, modifying or extending the template should be repeated as often as necessary to produce a final version. When changes were made in the coding process, for example, different codes or structure, an older version of the coding structure was stored in a separate file. This helped reflections on the process of coding as well as documenting progress in the data analysis process. After coding five interviews, the first-level code ‘ways of developing business ideas’ had codes that derived from different concepts, including learning, opportunity development and impact of INNOSPACE. This did not come as a surprise as these concepts are intertwined in the context of INNOSPACE. The concept of entrepreneurship is contextualised in the process of opportunity development, which is studied through the lens of learning. All of the learning activities had a relationship to INNOSPACE and this was how these second-level codes developed under the first-level code ‘ways of developing business ideas’. Therefore, a revision of the initial template was needed and some first- and secondlevel codes were re-defined (see Appendix D).

90

4.6

4 Research Methods

Summary

In this chapter, we began by clearly establishing the principles underlying our research approach. Social constructionism can be located within Burrell and Morgan’s (1979) interpretive paradigm or what Hassard and Cox (2013) describe as ‘the normative anti-structuralist paradigm’. This approach, based on the four principles of social science, can be summarised as follows (Hassard and Cox 2013: 1709; Burrell and Morgan 1979: 5–6): Ontology ¼ Nominalist (social structures do not exist independently of individual cognition and the various institutions [class, gender, etc.] are all social constructions) Epistemology ¼ Constructionist (the social world is relativistic in nature and all knowledge is subjective) Human Nature ¼ Voluntarist (social actors have individual agency and can exercise ‘free will’ rather than being subject to environmental determinism) Method ¼ Interpretive (reject methods based on natural sciences, instead, emphasises the analysis of accounts associated with the ‘flow of everyday life’) In carrying out the research we adopt an abductive approach in which concepts developed from the literature are supplemented by our engagement with the empirical data. As outlined above, abduction represents a hybrid of deductive and inductive research approaches (Bell et al. 2019). Abduction is associated with the work of Peirce who was a founder of the pragmatic school of philosophy. Pragmatists reject rationalist ideas related to immutable facts especially related to social phenomena. Our view is that this research approach provides the best way of developing a fuller understanding of the links between individual learning and the creation of communities of practice. Particularly as the research is based on a single case study in which we interview 20 tenants and five members of the management team. This chapter also describes how the data for the study were collected and the method of data analysis (template analysis). The principal method of data collection was in-depth semi-structured interviews with the INNOSPACE incubatees, supplemented with data collected through interviews with stakeholders, participant observation as a member of the INNOSPACE steering group and documents from the INNOSPACE management team. Data from semi-structured interviews provide insight into the processes and procedures within INNOSPACE from the perspective of incubatees. Documents from the incubatee selection interviews and records from the INNOSPACE management team provide a contextualised understanding of the 20 nascent entrepreneurs. Participant observation allowed PPM (second author) to build relationships with the respondents and to observe their interactions with the management team. The study, therefore, captures data about relationships, procedures and processes within INNOSPACE from a range of perspectives and preserved the ‘wholeness’ of the stories. The following Chapters 5, 6 and 7 present the data for this study.

References

91

References Al-Amoudi, A., & Willmott, H. (2011). Where constructionism and critical realism converge: Interrogating the domain of epistemological relativism. Organization Studies, 32(1), 27–46. Alvesson, M., & Sköldberg, K. (2018). Reflexive methodology: New vistas for qualitative research (3rd edition). Newbury Park, CA: Sage. Bell, E., Bryman, A., & Harley, B. (2019). Business research methods (5th edition). Oxford: Oxford University Press. Berends, H., & Deken, F. (2019). Composing qualitative research process. Strategic Organization. https://doi.org/10.1177/1476127018824838. Berger, P., & Luckmann, T. (1966). The social construction of reality: A treatise in the sociology of knowledge. London: The Penguin Press. Burrell, G., & Morgan, G. (1979). Sociological paradigms and organisational analysis. Hants: Ashgate Publishing Limited. Clegg, S., & Kornberger, M. (2003). Modernism, postmodernism, management and organization theory. Research in the Sociology of Organizations, 21, 57–88. Cohen, M. D. (2007). Reading Dewey: Reflections on the study of routine. Organization Studies, 28(5), 773–786. Cope, J. (2003). Entrepreneurial learning and critical reflection. Management Learning, 34(4), 429–450. Cope, J., & Watts, G. (2000). Learning by doing: An exploration of experience, critical incidents and reflection in entrepreneurial learning. International Journal of Entrepreneurial Behavior and Research, 6, 104–124. Crotty, M. (1998). The foundations of social research: Meaning and perspective in the research process. London: Sage Publications Ltd. Cunliffe, A. (2008). Orientations to social constructionism: Relationally responsive social constructionism and its implications for knowledge and learning. Management Learning, 39 (2), 123–139. Davidsson, P. (2013). Some reflection on research ‘schools’ and geographies. Entrepreneurship and Regional Development, 25(1/2), 100–110. Davidsson, P. (2016). Researching entrepreneurship: Conceptualisation and design (2nd ed.). New York, NY: Springer. Deakins, D., & Freel, M. (1998). Entrepreneurial learning and the growth process in SMEs. The Learning Organization, 5, 144–145. Denzin, N. K., & Lincoln, Y. S. (2000). Introdution: The discipline and practice of qualitative research. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research (2nd ed.). California: Sage Publications. Down, S. (2013). The distinctiveness of the European tradition in entrepreneurship research. Entrepreneurship and Regional Development, 25(1–2), 1–4. Dubois, A., & Gadde, L. E. (2002). Systematic combining: An abductive approach to case research. Journal of Business Research, 55, 553–560. Dubois, A., & Gadde, L. E. (2014). Systematic combining: A decade later. Journal of Business Research, 67(6), 1277–1284. Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532–550. Elkjaer, B., & Simpson, B. (2011). Pragmatism: A lived and living philosophy. what can it offer to contemporary organization theory? Research in the Sociology of Organizations, 32, 55–84. Farnsworth, V., Kleanthous, I., & Wenger-Trayner, E. (2016). Communities of practice as a social theory of learning: A conversation with Etienne Wenger. British Journal of Educational Studies, 64(2), 139–160. Fletcher, D. E. (2006). Entrepreneurial processes and the social construction of opportunity. Entrepreneurship and Regional Development, 18, 421–440.

92

4 Research Methods

Gabriel, Y. (2018). Interpretation, reflexivity and imagination in qualitative research. In M. Ciesielska & D. Jemielniak (Eds.), Qualitative methodologies in organization studies: Volume 1 Theories and new approaches (pp. 137–157). London: Palgrave Macmillan. Garfinkel, H. (1967). Studies in ethnomethodology. Englewood Cliffs, NJ: Prentice-Hall. Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory. Chicago, IL: Aldine. Grandy, G. (2018). Chapter 11: An introduction to constructionism for qualitative researchers in business and management. In C. Cassells, A. Cunliffe, & G. Grandy (Eds.), The SAGE handbook of qualitative business and management research methods: History and traditions. London: Sage. Grant, P., & Perren, L. (2002). Small business and entrepreneurial research: Meta-theories paradigms and prejudices. International Small Business Journal, 20(2), 185–211. Guba, E. G., & Lincoln, Y. S. (1998). Competing paradigms in qualitative research. In N. K. Denzin & Y. S. Lincoln (Eds.), The landscape of qualitative research: Theories and issues. Thousand Oaks: Sage Publications, inc.. Hassard, J., & Cox, J. W. (2013). Can sociological paradigms still inform organizational analysis? A paradigm model for post-paradigm times. Organization Studies, 34(11), 1701–1728. Jones, O., & Giordano, B. (2020). Family entrepreneurial teams: The role of learning in business model evolution. Management Learning. https://doi.org/10.1177/1350507620934092. Jones, O., & Macpherson, A. (2014). Research on learning in small firms. In E. Chell & M. Katratas-Ozkan (Eds.), Handbook of research in entrepreneurship and small business. Cheltenham: Edward Elgar. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. King, N. (2004). Using templates in the thematic analysis of text. In C. Cassell & G. Symon (Eds.), Essential guide to qualitative methods in organizational research. London: Sage Publications Ltd. King, N., Brooks, J., & Tabari, S. (2018). Template analysis in business and management research. In M. Ciesielska & D. Jemielniak (Eds.), Qualitative methodologies in organization studies Volume II: Methods and possibilities. Basingstoke: Palgrave Macmillan. Kitching, J., & Rouse, J. (2020). Contesting effectuation theory: Why it does not explain new venture creation. International Small Business Journal, 38, 515–535. Knoblauch, H., & Wilke, R. (2016). The common denominator: The reception and impact of Berger and Luckmann’s the social construction of reality. Human Studies, 39(1), 51–69. Kuhn, T. S. (1962). The structure of scientific revolutions. Chicago: The University of Chicago Press. Lee, R., & Jones, O. (2015). Entrepreneurial social capital research: Resolving the structure and agency dualism. International Journal of Entrepreneurial Behavior and Research, 21(3), 338–363. Leppäaho, T., Plakoyiannaki, E., & Dimitratos, P. (2016). The case study in family business: An analysis of current research practices and recommendations. Family Business Review, 29(2), 159–173. Leppäaho, T., Plakoyiannaki, E., & Dimitratos, P. (2020). The case study in family business: Current perspectives and suggestions for the future. In A. De Massis & N. Kammerlander (Eds.), Handbook of qualitative research methods for family business (pp. 161–190). Cheltenham: Edward Elgar Publishing. Lindgren, M., & Packendorff, J. (2009). Social constructionism and entrepreneurship—Basic assumptions and consequences for theory and research. International Journal of Entrepreneurial Behavior and Research, 15(1), 25–47. Malhotra, N., & Hinings, C. R. (2015). Unpacking continuity and change as a process of organizational transformation. Long Range Planning, 47, 173–185. Mantere, S., & Ketoviki, M. (2013). Reasoning in organisational science. The Academy of Management Review, 38(1), 70–89.

References

93

McMullen, J. S., & Dimov, D. (2013). Time and the entrepreneurial journey: The problems and promise of studying entrepreneurship as a process. Journal of Management Studies, 50(8), 1481–1512. Meckel, P-P. (2014). The role of business incubators in developing entrepreneurship. Unpublished PhD, Manchester Metropolitan University. Miles, M. B. (1979). Qualitative data as an attractive nuisance: The problem of analysis. Administrative Science Quarterly, 24, 590–601. Peirce, C. S. (1878). Deduction, induction, and hypothesis. Popular Science Monthly, 13, 470–482. Peirce, C. S. (1965). Collected papers of Charles Sanders Peirce. Cambridge, MA: Belknap Press of Harvard University Press. Pittaway, L. (2005). Philosophies in entrepreneurship: A focus on economic theories. International Journal of Entrepreneurial Behavior and Research, 11, 201–221. Rae, D. (2004). Practical theories from entrepreneurs’ stories: Discursive approaches to entrepreneurial learning. Journal of Small Business and Enterprise Development, 11, 195–202. Rae, D. (2005). Entrepreneurial learning: A narrative-based conceptual model. Journal of Small Business and Enterprise Development, 12, 323–335. Rae, D., & Carswell, M. (2001). Towards a conceptual understanding of entrepreneurial learning. Journal of Business and Enterprise Development, 8, 150–158. Ramoglou, S. (2013). On the misuse of realism in the study of entrepreneurship. The Academy of Management Review, 38(3), 463–465. Ramoglou, S., & Tsang, E. W. (2016). A realist perspective of entrepreneurship: Opportunities as propensities. The Academy of Management Review, 41(3), 410–434. Redondo, M., & Camarero, C. (2017). Dominant logics and the manager’s role in university business incubators. The Journal of Business and Industrial Marketing, 32(2), 282–294. Richards, L. (1999). Using nvivo in qualitative research. London: Sage Publications Ltd. Schütz, A. (1960). Der Sinnhafte Aufbau der Sozialen Welt. Vienna: Springer. Shepherd, C., & Challenger, R. (2013). Revisiting paradigm(s) in management research: A rhetorical analysis of the paradigm wars. International Journal of Management Reviews, 15(2), 225–244. Simpson, B. (2018). Chapter 4: Pragmatism: A philosophy of practice. In C. Cassell, A. Cunliffe, & G. Grandy (Eds.), The SAGE handbook of qualitative business and management research methods: History and traditions. London: Sage. Soto-Simeone, A., Sirén, C., & Antretter, T. (2020). New venture survival: A review and extension. International Journal of Management Reviews, 22, 378–407. Stake, R. E. (1995). The art of case study research. Thousand Oaks, CA: Sage. Stake, R. E. (2005). Qualitative case studies. In N. K. Denzin & Y. S. Lincoln (Eds.), The sage handbook of qualitative research (3rd ed., pp. 443–466). Thousand Oaks, CA: Sage. Steyaert, C. (2007). ‘Entrepreneuring’ as a conceptual attractor? A review of process theories in 20 years of entrepreneurship studies. Entrepreneurship and Regional Development, 19(6), 453–477. Talja, S., Tuominen, K., & Savolainen, R. (2004). “Isms” in information science: Constructivism, collectivism and constructionism. Journal of Documentation, 61, 79–101. Taylor, D. W., & Thorpe, R. (2004). Entrepreneurial learning: A process of co-participation. Journal of Small Business and Enterprise Development, 11, 203–211. Wenger, E. (1998). Communities of practice: Learning, meaning, and identity. Cambridge: Cambridge University Press. Winter, S. (2013). Habit, deliberation, and action: Strengthening the microfoundations of routines and capabilities. Academy of Management Perspectives, 27(2), 120–137. Yin, R. (2009). Case study research design and methods (1st–4th Editions). Thousand Oaks: Sage Publications. Yin, R. (2012). Applications of case study research. Thousand Oaks: Sage Publications.

Chapter 5

The INNOSPACE Experience

5.1

Introduction

This chapter explores the incubation experience and process from the perspective of incubatees by presenting a series of narratives. This is our response to calls for in-depth, qualitative studies in the incubation process (Todorovic and Moenter 2010; Hackett and Dilts 2004, 2008; McAdam and McAdam 2006; Voisey et al. 2006) and provides a contextual understanding of pathways through INNOSPACE. The 20 interviews with frequent users capture rich data about the incubation process. To bring these narratives to life and explore the incubation experience in detail, a two-step analysis was carried out. The aim of the first step was to identify key stages and activities during the incubation period. Key activities at the pre-, during and post-INNOSPACE stages are summarised in Appendix E, using the individual incubatee as the unit of analysis. The second stage of the analysis uses ‘activities’ as the unit of analysis. Figure 5.7 draws on data from all 20 incubatee interviews to identify individual pathways through INNOSPACE by comparing activities and patterns between cases. Flowcharts are used to illustrate key activities and stages during the INNOSPACE process. To keep the INNOSPACE story to a manageable level, we selected six respondents to illustrate the incubation pathways. Although what happened during the incubatees’ time in INNOSPACE is the focus of this study, the pre- and postINNOSPACE stages provide an understanding of the context of participants and their reasons for staying or leaving INNOSPACE.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_5

95

96

5 The INNOSPACE Experience

5.2

Six Individual Pathways

Appendix E provides a detailed account of the relevant activities that took place prior, during and post-INNOSPACE for individual incubatees. At the pre-INNOSPACE stage, attention is paid to the maturity of the ideas, how participants first heard about INNOSPACE and their previous experiences. At the INNOSPACE stage, the focus is on activities carried out in the incubator; who they spoke to about their ideas, their views on facilities, the incubator management team and MMU (Manchester Metropolitan University) as well as how they evaluated the development of their business ideas. The post-INNOSPACE stage mainly looks at whether the participants decided to stay on for another year of incubation. Six distinct pathways through the INNOSPACE process emerged from the data. These six participants (Andy, Jane, Tony, Ian, Paul and Kath) are used to illustrate the ways in which tenants progressed through the incubation process. We discuss how the remaining 14 tenants fit with these six pathways at the end of the chapter.

5.2.1

Andy’s Experience: INNOSPACE as a Transitional Phase

Andy’s business idea was Web Development (WD), he heard about INNOSPACE from an existing tenant and decided he would apply to join the incubator. His original business idea was to use skills from his previous employment as a web developer to work for an incubatee he already knew. He also thought that the rent was affordable and he liked the office environment where he could meet more potential clients than working from home. When applying for a place in INNOSPACE, Andy presented his idea of developing websites for other incubatees. Shortly after entering INNOSPACE, he began working with another tenant, Frank, who designed websites and whose skills were complementary. Two months after starting to work together, they created a new company, which then subcontracted projects to Andy’s original company. They also teamed up with a third incubatee who was running a marketing and PR (public relations) business. Andy and his partners employed two university students to work part-time on some projects. They then moved to another incubator that had longer opening hours with more professional office space and meeting rooms. Andy’s experience is summarised in Fig. 5.4. During Andy’s time in INNOSPACE, two activities (discussed ideas with others and needed an office environment/facility) happened continuously: If I hadn’t met Frank, I wouldn’t be doing what I’m doing now, networking, meeting other people to bounce ideas off. An example of that is Nick who runs WDD, we have lots of discussions, just general talking about our ideas and there’s kind of a trust there that if you talk about what you’re doing that it won’t go any further than that person. As long as what you’re doing isn’t similar to them they’re not gonna steal your idea. . . . Various other people here who if I needed advice on something, I would ask them, because there are lots of people who are specialists in what they do in here. Also, the INNOSPACE [management] team

5.2 Six Individual Pathways Fig. 5.1 Andy’s INNOSPACE experience

97

Pre-INNOSPACE Had mature business idea Got to know about INNOSPACE from former tenant

INNOSPACE Activities Discussed idea with other tenants Needed an office environment Worked for other tenants Collaborated with other tenants Set-up new company with another tenant Employed University students on various projects

Stage of business outside INNOSPACE Developing business outside of INNOSPACE with other tenants

Post-INNOSPACE Left with other tenants to develop business in a more professional environment

generally, the INNOSPACE manager and the administrator are the people I’ve spoken to and if you ever need any advice then those two are very helpful.

The sequential activities that distinguish Andy’s transitional pathway were ‘getting to know other tenants in INNOSPACE’ and ‘setting up a new company’. Andy worked together with Frank while they considered a number of different projects. Then, 2 months after Andy entered INNOSPACE, he started the new company with Frank: He’s got a brand managing background, he’s done branding, he’s done naming, he’s done customer service, we both worked in education. . . . He’s done web design, whereas I’m

98

5 The INNOSPACE Experience completely the other side of that, I’ve done production and management. I’ve done web development, databases, networking, and in some places we cross over a little bit, but mostly we’re two halves of a very complete circle, which works very well. . . . So, we developed a kind of a package, which is still in development, but we then decided because we are gonna be doing this, we then started a third company, which is a partnership, called NV, which has been going since early December.

The new company Andy and Frank established employed university students working on projects on a part-time basis. Eight months after his incubation period, Andy moved out with two other tenants, Frank and Angela, to a new location in the City. Both Andy and Frank felt that as the business began to grow that they needed to have more professional premises: Frank does a lot of brand management and it’s important to have a business front and Angela obviously it’s the same. Doing PR, she needs to appear very professional and one of the few downsides of INNOSPACE is that it’s basically that it’s a giant computer room, where you come in, you network. What Angela and Frank actually needed was a sound-proof office which looks very professional.

In summary, although Andy’s tenure in the incubator was, at 8 months, fairly brief, it did enable him to engage in many networking activities, identify other partners and establish a joint business, which had the potential for rapid growth. Therefore, INNOSPACE served a useful space for Andy and Frank to develop their business ideas and then move on to a more professional incubator (Fig. 5.1).

5.2.2

Jane’s Experience: INNOSPACE Separating Work and Home

Jane’s business idea was Sports Management (SM) and she set up her business when studying for a university degree. She organised netball leagues for women in Greater Manchester. After the company was established it grew organically from 7 to 18 teams playing 1 night/week to 48 teams in total. Growth occurred without additional resources spent on marketing or promotional campaigns. During her first-year INNOSPACE review, Jane mentioned that although there was a decrease in the number of casual employees (from 10 to 8), SM’s turnover had increased by 30% to £36,000, after 1 year in the incubator. Jane joined INNOSPACE 2 years after her business had been founded. Previously, she worked as a sports development officer for 5 years and learned that there was a market niche in services she could provide. She moved to Manchester to undertake an undergraduate course and worked part-time in a sports company. Parttime work provided her with the resources needed to start the business with minimal risk. Her degree was not directly related to the business but provided time to test her idea during the summer holidays. Knowledge gained from her degree was helpful as there were health and safety issues relating to her business. Before Jane joined INNOSPACE, she had recently completed her undergraduate degree and her business was growing.

5.2 Six Individual Pathways

99

At the time, she was employed full-time and worked on her company during evenings and weekends. Prior to her INNOSPACE entry interview, she negotiated with her employer to work on her sports business 1 day/week. Jane used her time in INNOSPACE to do administrative work for her company as she felt that was a more efficient way to operate. She preferred to work in an office environment rather than working from home as she had access to a better printer and professional meeting spaces, which was important to her clients: Because the space is brilliant and I work a lot better when I’m here . . . I’ve been a lot more productive because when I’m here it’s just me and a computer and I have to get on with it. It’s useful as a meeting space, so I have met people here before and it’s just invaluable for me to get away from home, to actually have a space I can work and have access to a printer. You know, the actually office space itself is really good for me. So that’s the main thing really.

With support from academics in MMUBS and the INNOSPACE management team, Jane met a student who was willing to work for her on a part-time basis to help with press releases. While in INNOSPACE she also had a business mentor who clarified ideas about the direction of her business: I did have a business mentor, for a little bit, she was quite helpful at the beginning because I was at a point where I didn’t really know whether to really go for expansion or whether to make sure that what I had was OK. She was good just to have a chat with her, you know just to sort of right, you need to do this this and this. Because I was thinking that I need to get a logo, I need to do this, I need to market it better, and she was going, ‘do you really? Because you know, it’s working OK as it is’, so that was quite useful.

While in INNOSPACE, Jane also observed her fellow entrepreneurs and learned new business skills from them: It’s made me a lot more aware of . . . sounds silly, but a lot more aware of the bits that I’m not very good at. So, I watch other people networking and see how useful that is and how beneficial is for them. And I think that I should do that more. I see how other people market themselves, again, think I should do that a lot more and a lot better. I think being here has made me a lot more aware of how to market my business.

Jane was stayed-on in INNOSPACE for a second year to develop her business further. She was really keen on remaining part of the supportive community: Because I don’t feel like I’ve got the full potential out of the business yet, so I feel like if I was to expand it any more, if I was to do things differently, so trying to market it differently, and things like that. I want to tap into the resources that are here. I don’t feel like I could necessarily do it alone, so even if I chose not to use the facility as I do now, I cannot really ever see a time when I wouldn’t want to be part of the community. I know we were given different options for our second year, and I think if it comes to next year, and you know, if I feel I can set up an office at home where I’m more productive etc. I think I still want to be part of this place as a community and to get those emails and things like that.

Jane gained valuable insights from other entrepreneurs and became much more aware of the importance of the marketing and PR (public relations) side of the business. She also liked to observe and learn from other fellow entrepreneurs, particularly the ways they presented themselves and how they marketed their companies. The entrepreneurial atmosphere also attracted Jane to INNOSPACE

100

5 The INNOSPACE Experience

and gave her the courage to grow by offering different insights into the potential of her business. Moreover, being with fellow nascent entrepreneurs provided moral support and exposed her to different kinds of information, opportunities and events. Jane viewed INNOSPACE as a learning resource for her marketing and networking skills. There were also entrepreneurs with different skill sets, who could help her if she decided to expand her business further. Although the INNOSPACE management team did not have a fundamental influence on the development of Jane’s business idea, they were very supportive and yet not pushy. Jane’s incubation experience is demonstrated in Fig. 5.2.

Fig. 5.2 Jane’s INNOSPACE experience

Pre-INNOSPACE Had a mature business idea

INNOSPACE Activities Needed/liked office environment/facilities Spoke to business mentor Employed other tenants + students Working + starting a business at same time Observed and learnt new skills from other tenants

Stage of business after first incubation period Running the business + developing the idea further

Post-INNOSPACE Staying in INNOSPACE for second year

5.2 Six Individual Pathways

5.2.3

101

Ian’s Experience: INNOSPACE as a Physical and Social Space

Ian came to INNOSPACE with a business idea related to Social Networking Events (SNE/Ian1) and he also developed a hypnotherapy and well-being business (HW/Ian2). His very first business was promoting bands and club nights. He had to purchase printed products to promote the business but was unhappy with the quality and service he received. Ian started his own printing company 3 years before entering INNOSPACE. He was working on a part-time basis at first until his employer forced him to resign. He then worked full-time in the printing business. At the same time, he started a business services company and a music equipment hiring service. Ian recruited a business partner for the printing business before he joined INNOSPACE. When Ian saw the facilities in INNOSPACE he thought that it was an ideal venue for holding networking events for entrepreneurs. Therefore, based on their experiences of networking, Ian and his business partner decided they would use INNOSPACE to host their own events. While these events were well-received, they were also free of charge. Nevertheless, Ian viewed these networking sessions as providing opportunities to meet new people and sell products from his printing business. These events were also effective in attracting other local entrepreneurs to INNOSPACE and eventually, ten joined as tenants. Ian explained that although the management team could not contribute to the development of his business ideas, they were very helpful in organising the networking events for him. While Ian had gained experience in running his own business the idea he brought to INNOSPACE was unrelated to his previous activities. Ian liked the INNOSPACE facilities and they were instrumental in developing his business idea of social networking events (SNE): Being at INNOSPACE allowed me to have a better presence, I can do more things because I use the meeting rooms quite a lot and put on quite a lot of talks and events. When we came here, we realised how much potential it had for people to do networking and there wasn’t anything going on so we started running these events successfully. That was something that completely evolved from being here, it was something that we wouldn’t have done [without INNOSPACE] so that was really good.

Ian was also extremely interested in alternative therapies and while in INNOSPACE he gained a diploma in hypnotherapy. He used the University library during his studies and spoke to Tony, a fellow entrepreneur and business mentor who was associated with Blue Orchid,1 about marketing strategy for the business. He began to build strategic alliances with fellow tenants and people outside of INNOSPACE to provide well-being services. Consequently, Ian decided to stay in INNOSPACE for another year and stressed his debt to Tony:

1 See Sect. 10.1, Blue Orchid provides business advice and support programmes to small firms in the UK.

102

5 The INNOSPACE Experience

Fig. 5.3 Ian’s INNOSPACE experience

Pre-INNOSPACE Has a mature business idea

INNOSPACE Activities Discussed idea with other tenants Needed/liked office environment/facilities Used library + other MMU facilities Spoke to business advisor Collaborated with other tenants on various projects

Stage of business after first incubation period Not ready to leave – still developing 1st business Developing new business idea with other tenants

Post-INNOSPACE Staying in INNOSPACE for second year

He helped me through Blue Orchid . . . he helped me with the hypnotherapy because he made me look at it as a real-world example. And he showed me how it would work and did all the costings and that was really really helpful. So, he took my original business idea and actually laid it out in figures and numbers and actual plans.

In addition to Tony’s input Ian was also building an alliance with Mark, a fellow tenant and a nutritionist who was not based in INNOSPACE: I’m developing sort of ‘strategic alliances’ . . . so I’m teaming up with the nutritionist and also a personal trainer—Mark from INNOSPACE and we are going to do some work together. . . . Mark came to one of our events here and signed up to come and work here which is good. So hopefully I am going to do some work with him. The whole package that’s

5.2 Six Individual Pathways

103

what I am working towards at the moment and that’s what I am going to be doing for the rest of the month. I’m going to be using this place much more to do talks for New Year’s Resolutions because they are to do with fitness, wealth and health.

Having introduced new tenants to INNOSPACE via his networking events, the INNOSPACE management team were committed to helping Ian organise future activities to promote the incubator. Ian was very active in engaging with other tenants and business advisors as well as making use of MMU facilities including the library. While Ian certainly benefitted from having INNOSPACE as a base for his business activities he was also important in terms of helping develop a strong community in the incubator. Ian’s entrepreneurial process in INNOSPACE is demonstrated in Fig. 5.3.

5.2.4

Tony’s Experience: INNOSPACE as a Talent Pool

When Tony joined INNOSPACE his business idea was Life Coaching and Business Advice (LCBA). At the age of 14, Tony had started a car-wash business and later sold it for £50. He then started a marketing company with friends when he went to university. The company sold environmental-friendly products. However, it was not a popular idea at that time and was difficult to attract new customers and he sold that company after 4 years. Tony then started another company with two friends. The new company provided services in events management and marketing and this was also sold 3 years later. Tony spotted a business opportunity when he was one of the first scholars on the NES (New Entrepreneurship Scholarship) programme run by MMUBS’s Centre for Enterprise. He found that the NES marketing section was designed for larger organisations and he designed a series of workshops designed specifically for the NES scholars who were in the process of starting their businesses. Inspired by an article in Time Magazine, Tony travelled to America and trained as a life coach. When Tony entered INNOSPACE he started LCBA (Life Coaching & Business Advice), which he planned to re-name Marketing Advice (MA) within a month of becoming a tenant. Tony also developed relationships with four business partners, three of whom were fellow entrepreneurs in INNOSPACE. One business partner dealt with web issues, one was in charge of sales and the third was project manager. Tony’s fiancé was the fourth partner and she dealt with legal and financial issues. Tony had set business targets at the beginning of his incubation period and planned to help 100 small businesses and engage three private clients. The targets were exceeded as he helped 187 businesses and provided services to six private clients 1 year after joining INNOSPACE. Despite this success, Tony planned to sell one of his subsidiary companies which provided date training. Furthermore, Tony indicated that MA would develop new products by advertising his workshops online with a subscription charge. He believed that this e-strategy would help him reach more potential clients. Tony came into INNOSPACE with a mature business idea

104

5 The INNOSPACE Experience

and he enjoyed the opportunities to interact with other tenants and discussed ideas for a range of new businesses with them: Well, because it’s a quite open space, and because people, you know, bump into people and talk to people, that’s how I managed to meet David so much and that’s how I get to manage to get to know most people I’m working with, it’s just by bumping into people.

As a result of his previous experience working as a consultant for Blue Orchid, a service provider that delivered business support to small firms, Tony provided business mentoring services to fellow tenants, both formally and informally: Ian: He helped me with my website and explained why it wasn’t working and not generating cash-flow. How many sales I would need to get per month from what advertising. . . . Yeah basically this is how many clients you would have to see per week to make this amount of money per year. So he did it all out on a big blackboard and showed me you can do this advertising and it will cost this much, this is how many clients you should get. . . . He took what my idea in business was and actually laid it down into figures and numbers and actual plans. Alex: Tony made me think more about how I could use the facilities and resources at MMUBS to help me build the business and other things that might be going on such as developments in Media City (Salford) and so on and it was good advice.

Tony modified his original business idea and was about to start a new venture with other tenants: Through Life Coaching & Business Advice (LCBA), I got a contract with Blue Orchid and I’ve learnt lots of more about the tendering process and about how to get government money. I know where the opportunities are, really. And that’s why I’m at a very very strong position now with MA, which I wasn’t before. I realised if I could get a group of talented people together, the right people with the right motivation, we could really revolutionise the way that business is taught.

At the time of the interview Tony was in his second year of incubation and explained why he decided to stay in INNOSPACE for another year: I don’t think my business partners wanna move, and I don’t wanna move them. At the end of the day, these guys [INNOSPACE tenants] gave me my first clients and there are good people in MMU. . . . I’ve got lots lots of contacts here, so I wouldn’t want to leave before I manage to utilise the strength and power of MMU, because as I say, as a university brand couldn’t really be better one for what I’m trying to do. I know I can take my business to places like China but I don’t think I can export that under the MA brand, but I could export that under MMU because it’s well known.

Tony was an experienced entrepreneur who had experimented with a range of different businesses before he joined INNOSPACE. Because of his knowledge about the problems associated with starting a new business and his marketing skills he was an extremely important member of the community. Tony was always willing to offer advice to those less experienced than him while at the same time honing his own business-related skills. At the same time, being based in the incubator provided Tony with opportunities to identify like-minded individuals to develop new business ideas. It also provided him with the opportunity to build links within MMU with a

5.2 Six Individual Pathways

105

Fig. 5.4 Tony’s INNOSPACE experience

Pre-INNOSPACE Had a mature business idea

INNOSPACE Activities Discussed business idea with other tenants Liked the office environment/facilities Worked for other tenants Employed other tenants on own projects

Stage of business after first incubation period Original business temporarily on hold Starting new business with other tenants

Post-INNOSPACE Staying on for second year – planning to use MMU brand to build business

view of using the University brand to sell his business idea overseas. Figure 5.4 demonstrates Tony’s incubation process.

5.2.5

Paul’s Experience: INNOSPACE as a Resource Repository

When Paul joined INNOSPACE his business idea was Online Food Specialist (OFS) and he then developed a second business based on Digital Publishing (DP) with Jeff.

106

5 The INNOSPACE Experience

Paul decided that he wanted to become an entrepreneur when he was studying for an undergraduate degree in geography. He then studied for a Masters of Enterprise in Environmental Innovation. He combined his personal interests, knowledge and skills together and developed his first business idea which was to sell environmentally friendly products online. This idea was based on research he conducted and his personal experience in buying green products online. Initially, Paul planned to grow his original business, Online Food Specialist (OFS). Nine months after becoming a tenant he launched Digital Publishing (DP) with Jeff and another tenant. Paul and his business colleagues had the idea of writing easy-to-use computer manuals and thought that publishing them online could be the basis of a good business. Despite his personal experience as a digital green food shopper, Paul was aware that OFS was a high-risk business because he was unfamiliar with the industry. He found that his skills complemented Jeff’s and they enjoyed working together. Eventually, Paul became a director and shareholder in Jeff’s Information Technology Services (ITS) company. Paul viewed ITS as a low-risk business that generated some income and he valued working with Jeff who was skilled and resourceful. Paul claimed that being an INNOSPACE tenant gave extra value to his business because he could discuss his ideas with other like-minded and supportive entrepreneurs. By building networks with his colleagues, he was able to obtain useful information and extent his range of contacts: If I explained my idea to people outside of INNOSPACE then they would say “why do you want to do that when you can just get a graduate job and be earning lots of money?” Whereas if I have the same conversation with people in INNOSPACE then immediately they can see the opportunity straight away. Say you are doing an online business they will understand where I am coming from and then start to add to the idea or say have you thought about this? Or this would be a good business model to use or these are really good contacts and you should go and speak to these people. That’s the kind of thing, they add extra value to your business idea by giving you extra input which people outside of INNOSPACE are less likely to do because they think in different ways.

He liked the INNOSPACE office facilities for a number of reasons; not being isolated, low-cost access to office equipment and building credibility with clients. Similar to the other respondents, Paul stated that some business advisors were useful in helping with generic business knowledge and referring tenants to more specialist advisors. Other advisors were less helpful because they lacked the necessary experience: Some of the advisors really do know what they are talking about and they are really useful to speak to, others . . . well I think this applies right across the board to all business advisors, some aren’t really qualified to speak authoritatively about what they’re advising on. It’s the same when I’ve sought advice from external business advisors; sometimes they are not very knowledgeable and they can give you general business advice which is useful when you are at the very early stage of setting-up. As soon as you develop some experience yourself, they have less to offer because they can only really advise you generically and can’t give you specific information. Some advisors have been able to introduce us to their network of contacts so if they weren’t able to answer the question then they referred us to say

5.2 Six Individual Pathways

107

Fig. 5.5 Paul’s INNOSPACE experience

Pre-INNOSPACE Had an under-developed business idea

INNOSPACE Activities Discussed idea with other tenants Liked office environment/facilities Used library, students union, career service etc Learned skills from other tenants Spoke to business advisor Collaborated with other tenants Developing two new business ideas

Stage of business after first incubation period Developing first idea further Developing 2 new business ideas with other tenants

Post-INNOSPACE Staying on for second year to develop businesses

accountants and solicitors and that type of thing who have been able to offer us free advice as well so that’s been useful.

Paul used his links to academics in MMUBS to attend lectures on a number of Postgraduate Master’s programmes including the MBA (Masters in Business Administration). He also made useful contacts in Careers Services and the Students Union who were particularly helpful in marketing his businesses. As a result of the value of being based in INNOSPACE, Paul decided to remain a tenant for a second year: First, it’s purely practical in that it can take longer than 12 months to set-up a business to the point which it is successful enough to move somewhere else. That’s both in terms of financial success and also for the company to grow significantly enough so you don’t need

108

5 The INNOSPACE Experience

access to the resources and the people and things that you have here. We’re looking to expand each of these businesses within the next 12 months and will mean that at some point we are going to have to move out. We are much more likely to succeed in business if we stay here and not incur the extra financial costs and complications. I think that the most valuable thing INNOSPACE has to offer is the community on the human capital side, even if we have to move out I would still like to have access to the community here because I wouldn’t want to lose the value that it creates for my businesses.

Paul was aware that he lacked the knowledge and skills to become successful as an entrepreneur. As a tenant of INNOSPACE, he contacted MMUBS and was able to participate in postgraduate modules without charge. He believed that attending those classes were useful in developing his businesses. Paul found the incubatees very supportive of each other and he learned a lot from his peer group. He mentioned that being able to have the access to the human capital in INNOSPACE was very important for his businesses. He also believed that staying in INNOSPACE would save money compared to moving out and decided to stay on for another year. Figure 5.5 illustrates Paul’s incubation process.

5.2.6

Kath’s Experience: INNOSPACE as a Driver of Entrepreneurial Spirit

Kath’s business idea was based on a government scheme related to Childcare Voucher Management (CVM). With a self-employed father and sister, Kath believed that it was natural she would also work for herself. Kath was originally a school teacher and then ran a portfolio of businesses, including nurseries, out-of-school clubs and holiday clubs. She was invited to an event held in INNOSPACE and the buzzing, entrepreneurial atmosphere made Kath think of starting another business. She then picked up a childcare voucher idea, which she had put on hold 4 years earlier. Kath became a tenant and spent time studying the childcare voucher system while running her nurseries and clubs. The core of the business idea was to set up an online system, which would be easy to use for various vouchers. She needed a specialist to design a website for her business and eventually subcontracted the project to a former incubatee. As a busy entrepreneur, Kath was happy to have a space in INNOSPACE, though she had a home office. She emphasised that being in INNOSPACE enabled her to delegate work to her manager and concentrate on developing the Childcare Voucher Management (CVM) business 1 day a week. Kath felt that the tenants in INNOSPACE gave fresh perspectives that she could not get elsewhere although she was an experienced businesswoman compared to most tenants. She was happy to engage with other incubatees who gave honest comments about her business ideas. She also found that there was a great deal of trust amongst the incubatees and she was able to share confidential ideas without fear of being copied. Being entrepreneurial Kath was thinking of another business idea, which involved writing e-books

5.2 Six Individual Pathways

109

Fig. 5.6 Kath’s INNOSPACE experience

Pre-INNOSPACE Had an under-developed business idea

INNOSPACE Activities Running a portfolio of businesses Discusses idea with other tenants Liked office environment/facilities Employed former tenant Spoke to two business advisor Learned new skills from other tenants

Stage of business after first incubation period Developing first idea further Developing another business idea

Post-INNOSPACE Staying on for second year to develop businesses + explore other opportunities

for nascent female entrepreneurs. After a year of incubation, Kath had decided to stay on for a second year in INNOSPACE, because she benefited from the networks and business support. Kath made good use of the free business advisers provided by INNOSPACE. She obtained help with her marketing strategy from Chris as well as Tony, an INNOSPACE tenant and an associate of Blue Orchid. She also took advice about how to develop the information system that was the core of her CVM business. Fellow tenants offered a number of suggestions and Kath eventually employed an ex-tenant to carry out the work for her. Despite experience as a successful entrepreneur, Kath was still keen to learn new skills from other tenants:

110

5 The INNOSPACE Experience

You can take what someone has showed you to do in a practical sense but also people talk about, ‘oh I went to this meeting and somebody said such and such a thing’ and you might actually question that and take that idea and think, ‘I could do that,’ or ‘that relates to me in this particular way, ‘and you might sort of use it. For example, I went to a talk and the person who was speaking I just sat there and thought, ‘I could do this’ and that sort of led me to thinking, ‘What would I need to be able to do that’, . . . and that has led me to the route of I haven’t done this yet but I have got a list of things to do and find out if I can get funding, so sometimes it isn’t what you expect. . . . Then you might talk to that person at INNOSPACE and say, ‘Do you know I was speaking to somebody the other day and I thought it might be a little side-line for your business’ and that’s what happens in there, people do think about each other and sort of help each other.

Because she enjoyed the supportive atmosphere and the ‘family feel’ of INNOSPACE, Kath decided to stay on for another year as she continued to work on her businesses: For the benefits I get out of it and the contacts that I have made, I was going to go downstairs into one of the separate rooms but I have made a decision not to do that because I’ve decided because of the family-feel and the way I want the business to move forward and because of the support I get. . . . I still want to be at INNOSPACE and have contact with everybody and be part of it so that’s why I am carrying on.

Although Kath originally became a school teacher she always had a strong interest in working for herself because close family members were self-employed. When she joined INNOSPACE she was already running a nursery and various outof-school clubs. She felt that being with other nascent entrepreneurs would provide a stimulating atmosphere in which to develop her businesses. However, because of her experience as a teacher and her business experience, she was also extremely important in helping build a strong community spirit within INNOSPACE. Kath’s business incubation process is demonstrated in Fig. 5.6.

5.3

Analysis: The Incubation Process

This chapter presents an initial exploration of what takes place in the ‘black box’ of a business incubator (Hackett and Dilts 2008). In particular, the chapter offers insight into each participant’s incubation process and identifies six distinct pathways through INNOSPACE. Drawing on rich data, we highlight the lived experience of individual entrepreneurs as they start up and develop their businesses. This links to the ‘development of individuals’ and ‘development of opportunities’ sections in our conceptual framework (see Fig. 3.3). It also shows how each individual’s learning took place in the incubator. We present the background of each of the six entrepreneurs and their motivations for joining INNOSPACE. The chapter also clarifies the incubation process by exploring the various pathways taken by the incubatees. By focusing on individuals as well as the interactions that took place in INNOSPACE, we summarise the processes associated with starting up a business in an incubator.

5.3 Analysis: The Incubation Process

111

We also try to explain the impact being a tenant in INNOSPACE had on the development of incubatees and their ideas. This is particularly articulated through the different ways incubatees used INNOSPACE to develop their businesses. It is noted that INNOSPACE, as well as supporting entrepreneurs as individuals, also provided social spaces where tenants exchanged knowledge, information and formed working relationships. It is also interesting to point out that some business ideas only developed because of entrepreneurs’ engagement with INNOSPACE. Key to the resources provided by INNOSPACE were the social spaces for informal meetings as well as information from the management team and support from a business mentor. Incubatees were also able to draw on resources from a wider range of services associated with INNOSPACE, such as MMU’s library, postgraduate classes and the students’ union.

5.3.1

Pathways Through INNOSPACE

When looking at the pathways (summarised in Table 5.1), Jane was the most distinctive of the six. She had some entrepreneurial experience and a reasonably well-developed idea before joining INNOSPACE. Jane only spent 1 day a week working in INNOSPACE as she concentrated on growing the business. Similarly, Kath was already a successful businesswoman, owning several nurseries and afterschool clubs. She started the childcare vouchers system alongside her other businesses. The difference was that once the system was developed and operating, Kath was already thinking of the next business idea for her portfolio, which was to write a guidebook for new female entrepreneurs. Unlike the other four entrepreneurs (discussed below), neither Jane nor Kath added other tenants to their businesses. However, they both mentioned during the interviews that they used INNOSPACE to divide their roles from their other work/business activities. They also learned by observing other tenants and being part of the INNOSPACE community. This is Table 5.1 Idea development in INNOSPACE Case Andy

Idea before INNOSPACE Web development

Jane Ian

Sports management Networking events

Tony

Life-coaching and business advice Green food online

Paul Kath

Childcare vouchers system

Idea development in INNOSPACE Same idea, keeping the original company and formed a new one with two other INNOSPACE tenants Keeping the same idea, successful, and thinking of expanding Keeping the same idea, and establishing an alliance with other INNOSPACE tenants to develop a new business Thinking of selling the coaching business and was forming a new marketing company with four other tenants Developing original idea further and getting involved with two other businesses with two tenants Developing the idea further and thinking of writing a ‘guidebook’ as a new business opportunity

112

5 The INNOSPACE Experience

discussed further in Chap. 7. Although Jane and Kath did not form formal strategic alliances or partnerships with other INNOSPACE tenants, they employed an MMU student (Jane) and former a INNOSPACE tenant (Kath). The other four entrepreneurs were in the process of forming new businesses (Ian and Tony) or had already started businesses with other tenants (Andy and Paul). Unlike most tenants who chose to stay in INNOSPACE for another 12 months after their initial incubation period, Andy collaborated with two other tenants on a new project. The positive experience encouraged them to jointly form a new company. Andy, Frank and Angela moved out and rented office space in the city centre, which provided 24-h access. The new company then subcontracted projects to Andy’s original business and he worked on the technical side of the business with web development. Frank and Angela worked on web design and provided marketing consulting to clients. Under the umbrella of this new company, they diversified and offered a package of services to clients. Although Andy had left INNOSPACE when the interview was conducted, he still wanted to be associated with the incubator and received regular newsletters. This shows that even for a fledgling business, INNOSPACE was still useful in providing information and social resources. Although Ian’s free networking events worked well, he did not feel they would be viable if he charged a fee. Therefore, passionate about hypnotherapy, Ian obtained a practitioner certificate and established an alliance with Mark, a fellow tenant, to offer a package of well-being services to clients. Tony was intending to sell part of his life coaching business to form a new marketing company with four other tenants. He said that the new company would not exist without INNOSPACE where he met all the ‘right’ people for the new business. Paul’s initial business idea took a long time to take off. During his time in INNOSPACE, he worked with Jeff, another tenant. After a few months, he became a partner in Jeff’s business. At the same he, Jeff and a third tenant were setting up a third business, writing an e-book for students. INNOSPACE acted as a resource harbour for these entrepreneurs, whose first ideas may not have worked very well and needed time to develop. At the same time, the entrepreneurs looked for additional resources (including other tenants), so that other people’s knowledge and skills could be utilised to form new ideas. In a sense, these entrepreneurs were very good at re-organising resources and identifying new opportunities. Without INNOSPACE, they might have given up on their initial ideas, which took longer to develop than they expected. Forming partnerships with other tenants, which could potentially bring some income, gave them the leeway to further develop their initial ideas. Although some participants had only one business idea they indicated, without INNOSPACE, they would have almost certainly given up. This was mainly due to the ‘entrepreneurial community’ effect, which is discussed in Chap. 7. From this perspective, INNOSPACE increased entrepreneurial activities, sustained and enhanced entrepreneurship.

5.3 Analysis: The Incubation Process

5.3.2

113

Business Support

There were regular master classes in accounting, finance and legal issues and tenants could also apply for more personalised business support in the format of business advisors and mentors. Like the majority of the other participants (14 out of 20), four out of six core cases (Jane, Ian, Paul and Kath) spoke to a business adviser or mentor during their incubation time. For most participants, such support services were useful at a very early stage when they needed general information about starting their businesses. However, as their businesses grew, such advice was less useful as most advisers did not have specific business or industry knowledge. One exception was Tony, an associate of Blue Orchid, who advised some fellow tenants on marketing and planning, which was generally regarded as very useful. This can be seen as a paradox of providing business support in an incubator. On one hand, tenants need a wide range of generic business support programmes but on the other hand, as businesses develop, specialised, targeted support is required. It is, perhaps, a question of how to manage expectation or to develop a better understanding tenant needs to provide more focused services. The tenants were also entitled to access to the University library although the majority did not take advantage of this opportunity. Amongst the participants who did use the library, it was quite common to disseminate promotional flyers for their businesses. Officially, having access to the library was the only University resource offered to tenants although some more entrepreneurial tenants used their association with incubator to obtain support from various University departments. Mark, for example got support from the HR (Human Resources) department who agreed to add well-being tips to staff payslips while Ian rented IT equipment from University technicians for his events. Paul negotiated with the Business School so that he was able to attend relevant classes on the MBA programme and he built a social network with local managers who were the students on the course. After he became a business partner with a fellow tenant Jeff, he spoke to the Students Union, who helped to promote their business, which was to provide IT support for students. Paul even went to the Career Services, to see how he could enhance his skills and what career path he could have if he decided to look for a job. This in a way provided a safety net, if the businesses did not do well or if he and his associates wanted to sell the businesses. Perhaps surprisingly, most participants did not think of contacting academic staff within the University in order to collaborate, nor were most academic staff (except one) keen on working with INNOSPACE. There were, however, some links between the tenants and students from MMUBS (Manchester Metropolitan University Business School). A few tenants had students working on projects such as web development and press packs. From the University point of view, students were able to gain experience working in real businesses, which enhanced their skills and employability prospects. From the tenants’ point of view, they minimised costs by having students as a resource to work on projects. However, the narratives suggest that if

114

5 The INNOSPACE Experience

universities want more integration and collaboration between incubators and academic faculty then further support is needed for academic staff in terms of time allocation and workload.

5.3.3

The Social Aspects of Business Incubation

Most participating tenants liked the office environment and facilities in the incubator as illustrated by the six cases discussed above. Tenants also benefitted from the cheap rent, the city centre address (rather than a home address or a Post Office box), and felt that belonging to INNOSPACE enhanced their credibility and professionalism. However, it was not the cheap rent the participants emphasised but the office environment, which separated work and life. This could be seen as the enactment of being an ‘entrepreneur’ or a ‘business person’, so they felt as if they were real entrepreneurs rather than simply working from home. Participants were happy that they had professional office space to meet business associates and to hold events. Booking meeting rooms and using additional space without extra charges also encouraged the tenants to arrange events and meetings in INNOSPACE, which in turn made the working space alive with entrepreneurial activities. This shifts the ‘physical’ meaning of business incubation to a more personal and social level mirroring the findings of Bøllingtoft and Ulhøi (2005) who suggest the social aspects being based in an incubator was important to tenants. Most participants discussed their ideas with other tenants. This is also consistent with five of the above cases (except Jane). This could be a result of Jane being the only participant (amongst the 20 participants) who possessed all three types of prior knowledge (markets, customer problems and means to serve markets). Having had these types of prior knowledge was a powerful mix, which formed a mature business idea for Jane before coming to INNOSPACE. The impact of prior knowledge on opportunity identification is further discussed in Chap. 7. Although Jane did not discuss the actual business idea with her fellow tenants, she felt it was important for her to start her business as a member of the entrepreneurial and business community. This was also the case for Helen, Paul, Kath and Kelly.

5.3.4

Collaboration Between Tenants

Some incubatees worked with other tenants, collaborating on projects and, on occasions, forming partnerships, or starting up new businesses together. This contrasts with the findings of McAdam and McAdam (2006) from a university science incubator in Ireland. They found a number of negative aspects of networking such as lack of co-operation, hostility and competition. There are two possible reasons for differences between the studies. First, INNOSPACE’s tenants came from a broad mix of backgrounds, across various business sectors, whereas McAdam and

5.4 Summary

115

McAdam studied (2006) a high-technology incubator, which may have created a more competitive atmosphere. Secondly, it is possible that the expectations and values of INNOSPACE incubatees were shaped by the founding team’s original vision of a learning community of practice. A vision that was encouraged by the Steering Group and staff responsible for the day-to-day management of INNOSPACE (see Chap. 10), which created an environment very different from the incubator described by McAdam and McAdam (2006). For example, Bøllingtoft and Ulhøi’s (2005) ethnographic study in Denmark looks at the networking activity in a BI and they point out the importance of creating the value of social networking amongst the tenant community. Participants in this study often mention the word ‘trust’ when speaking about the incubator. This adds support to the notion of trust as the ‘glue’ of networking activities among microbusinesses (Chell and Baines 2000). Most recognised the importance of being a member of INNOSPACE. In fact, when tenants had their selection interviews one of the questions was ‘what can you bring to INNOSPACE’ and many applicants indicated that they could bring a wide range of knowledge and skills. This can be seen as a way of ‘pre-installing’ the importance of community in tenants’ minds. The selection panel often pointed out tenants of INNOSPACE who had similar or complementary skills to the interviewees. Some participants mentioned that the importance of networking was reinforced by the incubation manager on their first day in INNOSPACE. The importance of the incubator community is discussed in greater detail in Chap. 7.

5.4

Summary

As discussed above, six of the interviewees were chosen to illustrate various pathways through the incubator. The overall process of incubation for all 20 tenants is shown in Fig. 5.7. There were two distinct groupings before incubatees entered INNOSPACE; 11 who all had reasonably mature business ideas and the remaining 9 who had much less well-developed business ideas. With regard to their activities in the Incubator, almost all of the interviewees (18) discussed their ideas with other tenants. A similar number chose to work in INNOSPACE because they liked the office environment and the facilities provided such as telephones and internet access. Fourteen of the interviewees made use of a business advisor or a mentor during the early stages of the incubation process. The only other two activities that were used by a good number of the tenants were engaging other tenants or students to work on projects (8) and making use of University facilities including the library, lectures and the student union (7). Six of the incubatees were working together on new projects and four were developing another business idea. With regard to the stage of business, four incubatees were developing business outside of INNOSPACE having left during their first 12 months. Three (Tim, Emma and Phil) left to work on their own businesses and Andy left to work with other tenants on the founding of a new

Used INNOSPACE for storage: Tim

Business development delayed due to problems with supplier + working and studying: Peter, Kelly

Starting new business with other tenants: Andy, Ian, Tony, Jeff, Paul

Recruited supplier/clients/partners through INNOSPACE: Tim, Neil, Laura, Kelly

Observed and/or learned skills from other tenants: Helen, Jane, Paul, Kath, Kelly

Developing another idea: Ian, Jeff, Paul, Kath, Alex

Worked for other tenants: Andy, Tony, Neil, Phil, Jeff, Kelly

Used library/Students’ Union/lectures or other MMU facilities: Ian, Nick, Neil, Jeff, Paul, Kelly, Mark

Collaborated with other tenants: Helen, Andy, Ian, Neil, Jeff, Paul

Working/studying/running other business when joined INNOSPACE: Helen, Jane, Neil, Phil, Peter, Emma, Kath, Kelly

Other tenants/university students worked on projects: Tim, Andy, Jane, Tony, Emma, James, Kath, Alex

Spoke to a business advisor and/or mentor: Helen, Tim, Jane, Ian, Nick, Neil, Phil, Jeff, Paul, Kath, Laura, Alex, Kelly, Mark

Needed an ofice environment/facility: Helen, Tim, Andy, Jane, Ian, Tony, Nick, Jeff, Paul, Peter, Emma, James, Kath, Laura, Alex, Kelly, Mark, Karen

Discussed idea with other tenants: Helen, Tim, Andy, Ian, Tony, Nick, Neil, Phil, Jeff, Paul, Emma, James, Kath, Laura, Alex, Kelly, Mark, Karen

Fig. 5.7 Business incubation pathways

Had a mature business idea: Tim, Andy, Jane, Ian, Tony, Jeff, Peter, Emma, James, Laura, Karen

PreINNOSPACE

Had a less developed business idea: Helen, Nick, Neil, Phil, Paul, Kath, Alex, Kelly, Mark

PreINNOSPACE

INNOSPACE Activities

Business on hold but planning t re-starting: Peter, Kelly

Developing new business with other tenants: Ian, Tony, Jeff, Paul

Still reining and developing ideas: Helen, Neil, Paul, Alex, Kelly

Developing business further/original idea on hold but developing another business: Jane, Ian, Tony, Nick, Jeff, Paul, James, Kath, Laura, Alex, Mark, Karen

Stage of business in INNOSPACE

Developing business further/original idea on hold but developing another business: Andy, Phil, Tim, Emma

Stage of business outside INNOSPACE

Staying on for another year/ planning to stay for another year: Helen, Jane, Ian, Tony, Nick, Neil, Jeff, Paul, Peter, James, Kath, Laura, Alex, Kelly, Mark, Karen

Post-INNOSPACE

Left with other tenants for a new company: Andy

Post-INNOSPACE

Left/leaving INNOSPACE for own business: Tim, Phil, Emma

Post-INNOSPACE

116 5 The INNOSPACE Experience

References

117

business. The remaining 16 tenants had chosen to stay in the incubator for another 12 months and were at various stages of business development. This study has two unique aspects: first, we examine the incubation process from the incubatees’ point of view rather than management (Hackett and Dilts 2004, 2008; Grimaldi and Grandi 2005; Hannon 2005; O’Neal 2005; Lee and Osteryoung 2004; Hannon 2003; Brooks 1986). Secondly, unlike many other studies seeking a causal relationship between the incubator services and resources and incubatee performance (Albort-Morant and Ribeiro-Soriano 2016; Dvouletý et al. 2018; Hackett and Dilts 2008; Kakabadse et al. 2020; Lee and Osteryoung 2004; M’Chirgui et al. 2018; Sedita et al. 2019; Todorovic and Moenter 2010; Zhang and Sonobe 2011), our data provide a detailed exploration of the interactions between the incubatees themselves as well as incubatees and the incubator. This helps to build a more robust understanding of the business incubation process. What is clear from the data presented above is that the tenants enjoyed the facilities such as printing, telephone and internet access as well as benefitting from business mentoring. The low costs were also appreciated as well as the location close to the centre of Manchester and the opportunity to meet clients and customers in a professional office environment, which gave them and their businesses much greater legitimacy. However, the ‘social space’ within INNOSPACE was certainly at least as important as the more tangible benefits of being based in an incubator. The opportunities to share experience and information was a central element of the incubation process. Participants certainly valued the sense of trust they gained from being in the incubator, which promoted openness in sharing experiences and building a community spirit.

References Albort-Morant, G., & Ribeiro-Soriano, D. (2016). A bibliometric analysis of international impact of business incubators. Journal of Business Research, 69(5), 1775–1779. Bøllingtoft, A., & Ulhøi, J. P. (2005). The networked business incubator—Leveraging entrepreneurial agency? Journal of Business Venturing, 20, 265–290. Brooks, O. (1986). Economic development through entrepreneurship: Incubators and the incubation process. Economic Development Review, 4, 24–29. Chell, E., & Baines, S. (2000). Networking, entrepreneurship and microbusiness behaviour. Entrepreneurship and Regional Development, 12(3), 195–216. Dvouletý, O., Longo, M. C., Blažková, I., Lukeš, M., & Andera, M. (2018). Are publicly funded Czech incubators effective? The comparison of performance of supported and non-supported firms. European Journal of Innovation Management, 21(4), 543–563. Grimaldi, R., & Grandi, A. (2005). Business incubators and new venture creation: An assessment of incubating models. Technovation, 25(2), 111–121. Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation research. Journal of Technology Transfer, 29, 55–82. Hackett, S., & Dilts, D. (2008). Inside the black box of business incubation: Study b-scale assessment, model refinement, and incubation outcomes. Journal of Technology Transfer, 33 (5), 439–471.

118

5 The INNOSPACE Experience

Hannon, P. D. (2003). A conceptual development framework for management and leadership learning in the UK incubator sector. Education and Training, 45(8/9), 449–460. Hannon, P. D. (2005). Incubation policy and practice: Building practitioner and professional capability. Journal of Small Business and Enterprise Development, 12, 57–75. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. Lee, S. S., & Osteryoung, J. S. (2004). A comparison of critical success factor for effective operations of university business incubators in The United States and Korea. Journal of Small Business Management, 42, 418–426. M’Chirgui, Z., Lamine, W., Mian, S., & Fayolle, A. (2018). University technology commercialization through new venture projects: An assessment of the French regional incubator program. Journal of Technology Transfer, 43, 1142–1160. McAdam, M., & McAdam, R. (2006). The networked incubator: The role and operation of entrepreneurial networking with the University Science Park incubator (USI). Entrepreneurship and Innovation, 7(2), 87–97. O’Neal, T. (2005). Evolving a successful university-based incubator: Lessons learned from the UCF technology incubator. Engineering Management Journal, 17(3), 11–25. Sedita, S. R., Apa, R., Bassetti, T., & Grandinetti, R. (2019). Incubation matters: Measuring the effect of business incubators on the innovation performance of start-ups. R&D Management, 49 (4), 439–454. Todorovic, Z., & Moenter, K. (2010). Tenant firm progression within an incubator: Progression toward an optimal point of resource utilization. Academy of Entrepreneurship Journal, 16(1), 40. Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The measurment of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. Zhang, H., & Sonobe, T. (2011). Business incubators in China: An inquiry into the variables associated with incubatee success. Economic Design, 5(7), 1–27.

Chapter 6

The Role of Prior Knowledge in Opportunity Identification

6.1

Introduction

The six pathways presented in Chap. 5 highlight a number of different ways that ideas evolved during the incubation process (Fig. 5.7). In this chapter, we explore the development of ideas using the concepts of prior knowledge and opportunity identification. The ability to discover and develop business opportunities is considered to be among the most important abilities of successful entrepreneurs (Politis 2005). A number of scholars have pointed out that experienced entrepreneurs have valuable prior knowledge about contacts, markets, products and resources that improve their ability to identify and develop entrepreneurial opportunities (Shepherd et al. 2000; Ronstadt 1988). Politis (2005) expands on this to suggest that it is the total stock of prior information and knowledge that influences an individual’s ability to recognise opportunities. This could be prior knowledge of business start-up, industry-specific knowledge gained as an employee or customer, or management experience where leadership, communication or problem-solving skills have been acquired (Shane 2003). The interaction between different types of prior knowledge and opportunity identification has the potential to provide greater insight into the way businesses developed during incubatees’ time in INNOSPACE. Moreover, it represents an important point of departure for investigating knowledge that is newly acquired during the incubation process. In total, the 20 respondents mentioned 23 business opportunities, which they were pursuing. Three respondents, Ian, Paul and Alex were each developing two business opportunities. Because Ian and Alex had more than one business when entering INNOSPACE, subscripted numbers are used in this chapter next to Ian’s and Alex’s names, to distinguish the different opportunities and to signify the order in which the respondents identified them. This has the benefit of showing the sequence of opportunities, which in turn presents a contextual story of the respondents. One opportunity uses two respondents’ names (Jeff–Paul) because the opportunity was identified and developed jointly. Using the same name for the respondents © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_6

119

120

6 The Role of Prior Knowledge in Opportunity Identification

and their opportunities is also in line with Churchill and Lewis’s (1983) model of the five stages of small business growth, which proposes that at the existence stage of a business (in this study some are at the pre-existence stage), the entrepreneur and the business share one identity. In Churchill and Lewis’s (1983: 33) words: ‘the owner is the business’. Some respondents developed opportunities before joining INNOSPACE; for example, Phil invested in a tailoring business established by a friend. He played the role of an investor with little involvement in the decisionmaking process. Because this business was not directly created by Phil and the business had little connection to INNOSPACE, it is excluded from the study. However, it is part of Phil’s narrative and provides an insight into his experience and interests. Shane and Venkataraman (2000: 219) suggest that ‘entrepreneurship does not require, but can include, the creation of new organizations.’ As discussed in Sect. 3. 2.2, adopting a learning view of entrepreneurship suggests that idea development is the crucial stage rather than the creation of a new business. It is worth noting that this study focuses on the process of how ideas are developed into businesses rather than the outcomes of those opportunities. We explore the process of how prior knowledge and learning in a business incubator influences opportunity development. Hence, whether or not a business was established when the interviews took place was not a decisive factor for including or excluding the opportunity. Ten opportunities were in the development process although the businesses had not begun trading when the interviews were conducted. Drawing on the cases presented in Chap. 5 and Appendix F, several distinct types of prior knowledge are identified. The interactions between prior knowledge and opportunity identification are then explored. The analysis is anchored in the literature related to both prior knowledge and opportunity identification (Sects. 3. 2.1 and 3.2.2). The chapter concludes with three emerging themes, which are achieved by linking the analysis with the empirical data and the literature.

6.2

Prior Knowledge

According to Kolb’s (1984) ELT (experiential learning theory), the learning process begins with existing knowledge, which is then combined with newly acquired information and transformed into new knowledge, in this context, a new business idea. The concepts of perception, existing knowledge and prior knowledge suggest that entrepreneurs are heterogeneous individuals (Alvarez and Busenitz 2001) who have different experiences and values and possess different knowledges at the early stages of opportunity development. Differences in prior knowledge therefore have a varying impact on the opportunity identification and exploitation processes (Shane 2000). This section focuses on the role played by prior knowledge in identifying entrepreneurial opportunities (Suddaby et al. 2015). Since the mid-1990s, the way in which an owner-manager’s human capital influences a small firm’s survival and growth has attracted the attention of scholars (Basu and Goswami 1999; Brüderl et al. 1992; Cooper et al. 1994; Dahlqvist et al. 2000;

6.2 Prior Knowledge

121

Davidsson and Honig 2003; Jayawarna et al. 2015; Ucbasaran et al. 2008, 2009). Prior knowledge, which is linked to asymmetries of information, is derived from the Austrian School and human capital literatures. It emphasises the term knowledge and, more specifically, the three dimensions of prior knowledge proposed by Shane (2000); prior knowledge of markets, prior knowledge of means to serve markets, and prior knowledge of problems. Ardichvili et al. (2003) added a fourth dimension of prior knowledge, which they describe ‘special interests’, which refers to those topics that are fascinating and fun for entrepreneurs. These four dimensions of prior knowledge provide a heuristic to guide the data analysis. Personal interests played an important role for seven entrepreneurs (Ian2, Tony, Neil, Paul, Alex1, Alex2, and Kelly) and helped explain why and how some opportunities were identified. The second stage of data analysis explores the impact of each form of prior knowledge on opportunity identification. In some cases (Helen, Andy, Ian1, Ian2, Nick, Phil, Peter, James, Laura, Alex1, Alex2, Mark and Karen) only one form of prior knowledge was present when opportunities were identified. The third stage of data analysis investigated how the various combinations of prior knowledge influenced opportunity identification. At this stage, nine different combinations of prior knowledge were identified and presented. By linking the interview data with literature, this stage helped to draw out three emerging themes, which demonstrate the impact of prior knowledge on opportunity identification. To illustrate this rich and complex data, quotations and information demonstrating the existence of prior knowledge in the opportunity identification process are presented in Appendix F, together with details of personal interests. The following sections describe each of the forms of prior knowledge and their links to opportunity identification.

6.2.1

Prior Knowledge of Markets

This section examines how prior knowledge of markets influenced opportunity identification amongst tenants (see Appendix F). As discussed in Sect. 3.2.2, prior knowledge of markets can be based on information about supplier relationship, sales techniques, or capital equipment requirements that differ across markets (Fig. 6.1). Knowledge can be gained through work experience or as a customer in a particular market. Education and personal events are also sources of prior knowledge of markets (Shane 2000). Eight respondents identified opportunities when only prior knowledge of the markets was present: Helen, Andy, Nick, Phil, Peter, Laura, Mark and Karen. Analysing the interview data and INNOSPACE records identified two themes related to the impact of prior knowledge of markets: education and business experience. Five of the eight opportunity identification events were linked to education (Helen, Andy, Nick, Phil and Karen). From a human capital and information asymmetry point of view, the likelihood of success is increased when entrepreneurs choose an area that is familiar to them (Cooper et al. 1994; Dahlqvist et al. 2000; Peña 2004; Shane 2000, 2003; Ucbasaran et al. 2008). Starting a business in an area that an entrepreneur understands gives them confidence and, sometimes, the intuitive

122 Fig. 6.1 Prior knowledge of markets

6 The Role of Prior Knowledge in Opportunity Identification

Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

insight to identify opportunities. Specialist knowledge acquired from education helped the entrepreneurs recognise values in new information that others did not identify. Taking Helen as an example, she only processed prior knowledge of markets when identifying an opportunity to provide environmental sustainability consultancy. Helen’s business idea was very much based on the degree she studied, which led her to believe that were many opportunities in the environmental management consultancy sector: I did a Masters last year in Environmental Management and Sustainable Development and it kind of came out of that really that there’s a lot of work to be done in that area. My business idea is about providing consultancy in environment management sustainability and people development linking the two together very much with that.

Asymmetry in prior knowledge not only helped to build a stronger knowledge base but also enabled Helen to be more sensitive to new ideas. This in turn further influenced the process of transforming information and helped her to identify opportunities others might not recognise. The significance of prior knowledge supports Shane’s (2000) finding that entrepreneurs may identify an area that is familiar to them as Helen demonstrates in her narrative: If you look at all the networking clubs and stuff, that that are out there, they are all very generic and when you go and attend them, you know and you talk to people about environmental sustainability, nobody ever thinks it really applies to them . . .

Business experience includes both experience as an employee as well as experience in running an entrepreneurial business. Such previous experience was present in all the opportunity identification events associated with prior knowledge of markets. The interview data indicates that having had business experience helped entrepreneurs identify opportunities in the same sectors. This is consistent with the study carried out by Davidsson and Honig (2003) who found that tacit knowledge enhances the ability of nascent entrepreneurs to identify opportunities. More importantly, specific business knowledge gave them insight into how organisations operated. Having such experience helped entrepreneurs cope with uncertainties. From the perspective of information asymmetry (Shane 2003), these insights gave them the prior knowledge others did not possess and enabled them to be more alert to new information.

6.2 Prior Knowledge

123

Having previous experience of setting up a business helps entrepreneurs cope with the uncertainty of new venture creation (Politis 2008; Ucbasaran et al. 2008; Ucbasaran et al. 2009). Such experience is an important source of learning and it enhances understanding of new opportunities. Taking Phil as an example, he had experience of setting up his own businesses. He was setting up a similar business (online job-search and management) during his time in INNOSPACE: I used to sell those [hats] on eBay and I built it up and had an on-line store but I sold that while I was at uni and that did really well so that’s what spurred me on while I was at university. Then I set up WD, which is a web design company that offers web design solutions and things like that to various clients. . . When I finished uni I never thought I would work for myself straight away, I thought I would get a job and then work for myself in the future. I always knew I would work for myself at some stage but not straight away, so I looked for jobs and that’s where the idea of Online Job Search and Management came in.

Although Phil explained the differences between WD (Web Design) and OJSM (Online Job Search and Management), it is apparent that his knowledge of online services was transferred from the previous businesses: WD is a web design company which offers bespoke web design to various clients, erm small to large. Online Job Search and Management is completely separate and is an on-line service . . . and whilst I was doing that [running WD] I gained experience in the kind of market and knew what was going on, different technologies and had the idea of Online Job Search and Management (OJSM).

Unlike other respondents in the group, Peter, Laura and Mark did not have education linked to their business ideas. Instead, business experience alone played a fundamental role in helping them identify opportunities. All three individuals had extensive experience in the industry they choose to start their businesses. High stocks of business experience help moderate their lack of formal education. Moreover, extensive experience itself could be converted into knowledge to fill the educational gap: Laura: It was very much like my original [job] . . . so it’s the same sort of model . . . I have worked in the recruitment industry for over 20 years and I was developing training and development programmes for recruitment consultants and managers in specialist recruitment businesses and when I was made redundant, which was just before I came into INNOSPACE. I was basically approached by a lot of my previous people who I had trained myself . . . ask[ing] me if I would do consultancy with them with regards to helping them develop their businesses and their consultants . . . I thought about that and I started to do some sales training for people generally in the North West and I actually met up with . . . one of the business advisors [in INNOSPACE], and I thought to myself, ‘Should I start to look at this as a business idea?’ as opposed to doing some market testing with people who I knew, so I came to INNOSPACE.

6.2.2

Prior Knowledge of Customer Problems

Two participants (Ian1 and James) identified opportunities when only prior knowledge of customer problems existed (Fig. 6.2). A shared pattern is that both

124

6 The Role of Prior Knowledge in Opportunity Identification

Fig. 6.2 Prior knowledge of customer problems

Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

respondents were customers for a particular business (Ian1 as a networking event user and James as a landlord). Both were unhappy with the services they received and thought that they could do something better based on their negative experiences. Both Ian1 and James tried to improve the current system as the basis of their business ideas: Ian1: because myself and Tom (business partner) have been to a lot of networking events and we were coming home one night and a lot of them are really bad and we just sort of said we should run our own and that was all the planning that went into it to be honest. James: Typically I had lots of problems, I had letting agents that stopped paying me rent, taking money from tenants with me, went bust, I had letting agents who put tenants in and when I found the paperwork I wouldn’t have put them into my own property . . . so I have seen because the market has been booming and the way they work hasn’t been particularly customer focused and hasn’t been particularly competitive in terms of cost so I was already aware of that as a background and I saw this idea . . .

6.2.3

Personal Interests

Three opportunities (Ian2, Alex1 and Alex2) were identified when only personal interests were present (Fig. 6.3). In all three cases, the respondents were fascinated by an idea associated with a hobby. The three participants enjoyed pursuing the opportunities without having clear market knowledge or knowing how to serve customers. Their strong passion gave the three incubatees the confidence to turn their hobbies into businesses. These nascent entrepreneurs tended to look at the business logic at a later stage of opportunity development compared to the other tenants. This is illustrated both in the case of Ian2 and Alex2: Ian2: I met somebody who was a hypnotist and he offered to hypnotise me so I went along, got hypnotised and really enjoyed it, did a few sessions with him, thought it was really interesting and decided . . . he said, ‘You should train, you’d be really good’, and I didn’t need any more convincing than that to be honest . . . the thing is . . . before I get into a business I don’t really sit there and do a business plan and everything like that, I generally just do what I enjoy and then try to make money out of it which I know is the wrong way around to be perfectly honest (laughs) but I start doing something and if I enjoy it then I’ll make a business out of it. . .

6.2 Prior Knowledge

125

Fig. 6.3 Personal interests Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

Alex2: I became obsessed with a camera, (laughs) it was an antique camera . . . it’s completely beautiful and I saw it on eBay and lusted after it and I knew I shouldn’t get this camera because it would become an obsession for me . . . there’s film but it’s expensive and I cannot afford it and I had actually had this obsession for a while, about two or three years ago and I put it down because of this reason and when I saw this camera I knew I had to get it so I did and it was sitting there and I bought some film and I said to myself if I am going to justify taking pictures with this camera I have to make this thing pay for itself and I thought the best way to do this was to look at places which were a novelty situation where I could be paid and I thought ‘nightclubs’, I could take pictures of people in nightclubs and they could pay me!

In the case of Alex1, his interest in online social maps was so overwhelming he questioned the necessity of having any market knowledge: I’m not interested in market need, this is the wrong way to look at the internet, I need to look at technology and this never goes towards the market need . . . the market need isn’t there for a lot of things which then become critical to the web, for instance Twitter. . .Twitter is now exploding, what is the market need? I don’t know. If anyone can tell me what the market need for Twitter is I will buy them a beer tonight because I can see no market need whatsoever for Twitter, however it is exploding . . . what I can see within what I am doing, within my maps idea . . .I can see tremendous personal utility and I think that utility extends beyond myself, the market need I don’t know but I think there is tremendous utility in it and I think around that a market may cohere, I couldn’t guarantee it but I think there is something in it . . .

Alex1’s scenario reflects literature in entrepreneurs’ personality, which suggests that those who have confidence and strong beliefs, are opportunistic and willing to live with uncertainty and risk (Kolvereid and Isaksen 2012; Krueger and Brazeal 1994; Legge and Hindle 2004). It also indicates a strong need for achievement and an internal locus of control.

6.2.4

Prior Knowledge of Markets and Customer Problems

Emma and Kath identified opportunities when they had prior knowledge of markets and customer problems (Fig. 6.4). In both cases, the entrepreneurs were users of the

126

6 The Role of Prior Knowledge in Opportunity Identification

Fig. 6.4 Prior knowledge of markets and customer problems

Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

services. Emma was a buyer for aviation parts and Kath provided services to parents who used childcare vouchers. Both respondents’ business ideas were in the markets where they had gained knowledge of customer problems. Substantial previous market experience gave the respondents practical insight into customer problems. It is worth noting that both participants’ knowledge of markets came from their business experience as opposed to education. This indicates that business experience offers insights and practical knowledge that may not be obtained from education. At a later stage of the opportunity process, when they began to solve the problems they had identified, this knowledge inspired them to develop better products and services. This combination of having market knowledge and knowing what problems customers faced led to problem-solving opportunity identification, as Emma’s experience demonstrates: Emma: I worked with a buyer for airlines for the last 17 years and because of that I picked up on a need for a website that showed approved suppliers, well the approvals that suppliers have because we weren’t allowed to buy from any suppliers who didn’t meet our ‘approval criteria’ but it was very annoying when I could find 20 suppliers on part-searched databases that had spare parts that I required but I couldn’t go ahead and buy from, until they’d gone through the approval process . . .

6.2.5

Prior Knowledge of Markets and Means to Serve Markets

Tim and Jeff identified an opportunity based on their prior knowledge of markets as well as the means to serve markets (Fig. 6.5). Tim gained knowledge in retailing through 7 year’s work experience as a buyer. He combined this knowledge with what he learned from his friend’s art gallery business. Jeff’s knowledge of the markets came both from education and work experience. He studied computer

6.2 Prior Knowledge Fig. 6.5 Prior knowledge of markets and means to serve markets

127

Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

science and enterprise while working part-time in a computer store. He also provided IT support to family and friends during his free time. Having gained market knowledge and some experience of how to serve markets it felt like a natural progression to start a business in a field familiar to both entrepreneurs: Jeff: It was well, I was just doing it for like a part time job really so I was just doing it as a steady income, so I decided in my masters to try and do it on a larger scale with more people and that’s basically the business idea.

6.2.6

Prior Knowledge of Markets and Personal Interests

Paul and Kelly had gained market knowledge that was combined with their personal interests when they spotted an opportunity (Fig. 6.6). Personal interests seem to be dominant when this knowledge combination forms the basis of opportunity identification. Both respondents indicated their passion in the chosen markets: online environmentally friendly food for Paul and marketing for Kelly. Without knowing about customer problems or investigating the means to serve markets, they were both positive about their ideas at the opportunity identification stage. Paul’s comment is typical of their approach: Paul: when I was looking into what career that I wanted to follow I both looked at what my interests were and what kind of things I was passionate about and also the type of person I was . . . so I wanted something exciting to help me actually create new things, which is what I wanted to do. Then I also thought about the things I am passionate about, the other thing is the environment and protecting the environment because my under-graduate degree was in geography so I looked at kind of climate change and that type of thing, so I got to the end of my degree and kind of thought because I had done three years of studying and research into climate change and whatever I was fairly sure that there was a big problem and people had to do something about climate change so I wanted to follow a career that was something to do with that, also creating things and being entrepreneurial which I thought I would be and that’s what kind of made me embark on sort of thinking about the environmental idea.

128

6 The Role of Prior Knowledge in Opportunity Identification

Fig. 6.6 Prior knowledge of markets and personal interests

Prior Knowledge of markets

Personal Interests

6.2.7

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

Prior Knowledge of Customer Problems and Means to Serve Markets

One opportunity was identified via a combination of prior knowledge of customer problems and the means to serve markets (Fig. 6.7). The opportunity (Jeff–Paul, digital publishing) was identified by two INNOSPACE tenants working with a former classmate. As former university students, Jeff and Paul had experience of using computer manuals. Although they did not have any knowledge of the digital publishing business, the negative experience they had as customers encouraged them to think of solutions for this problem. This led to the identification of an opportunity based on the knowledge they developed to solve problems they had as customers, which moderated their lack of market knowledge: Jeff: when you are at university the text books that you are given specifically on things like how to use software programmes on your computer. They are not written in the way that students would like . . . they’ll be thick with loads and loads of writing. The way it is written is almost like they want to teach you everything there is to know about it. The only reason that the student is using the computer programme is because they have got something to do and that is all they care about, getting their work done. Paul: three of us who were working on it were all students at the time when we started doing it and it was out of our direct experiences because we were working on projects together whilst students and learning how to use these computer programmes and by the end of our course the three of us knew so much more about what the computer programmes did than we did at the start that we kind of said if only there had been a book that was really quick to go through and had we read it at the start it would be much more useful . . .

6.2 Prior Knowledge Fig. 6.7 Prior knowledge of customer problems and means to serve markets

129

Prior Knowledge of markets

Personal Interests

6.2.8

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

Prior Knowledge of Markets, Customer Problems and Means to Serve Markets

When Jane identified an opportunity in sports management, she had prior knowledge of markets, customer problems and means to serve markets (Fig. 6.8). Jane worked as a sports development officer, where she gained experience in organising sports events as a social activity. When travelling abroad she learned cultural and gender differences in sports and realised that there were not enough sports activities available for women to play as social and fitness events rather than as competitions. When working in London, she witnessed how another entrepreneur became successful by providing services in organising sports for large companies’ employees. These different types of prior knowledge acted as pieces of a jigsaw, which provided the core of an opportunity for Jane. I’m trying to tap into the fact that there’s very few team sports available for women whereas compared to men, who can gladly play football or cricket and etc. ... Because in this country you need to be good at sports whereas you know place like Australia or New Zealand, it’s seeing more as a social thing and you just go and have fun and play. And you can participate whereas over here women just sort of competing in that sport whereas a lot of people just wanna do it for fitness and fun and don’t want it take it that seriously. So, I feel like it’s hit a bit of a niche in in that respect. I used to work for a football club in London. Working for their community programme . . . that was basically where my understanding came from about how sport works in this country. I was working with the community in East London and I was to target women and girls who in a certain area. . . . An Australian girl set up in London, and she sort of again found this niche where she was targeting companies that worked around Canary Wharf. A lot of these large companies have lots of money for social activities for their employees. She was targeting those to try and get teams to play in her leagues, and I just realised how successful it was but also, how much she was making from it.

130

6 The Role of Prior Knowledge in Opportunity Identification

Fig. 6.8 Prior knowledge of markets, customer problems and means to serve markets

Prior Knowledge of markets

Personal Interests

6.2.9

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

Prior Knowledge of Markets, Customer Problems and Personal Interests

Tony and Neil both gained knowledge in the relevant industry from their education and obtained market experience, although in different ways (Fig. 6.9). Tony started a series of businesses, which were related to marketing and coaching. Neil on the other hand worked in the training and consultancy industry over many years. Both of had strong personal interests that were related to their business ideas. Their personal interests acted as a strong driver for them to pursue businesses in the industries they were passionate about. This powerful knowledge combination of markets, customer problems and personal interest moderated a lack of knowledge in ways to serve markets. Furthermore, there was a shared pattern between Tony and Neil as they both spotted problems the customers had when they were service providers. This was driven by their strong personal interests in the field and their intentions to create something better in the market. Taking Neil as an example:

Fig. 6.9 Prior knowledge of markets, customer problems and personal interests

Prior Knowledge of markets

Personal Interests

Prior Knowledge of customer problems

Prior knowledge of means to serve markets

6.3 Analysis: Prior Knowledge and Opportunity Identification

131

For many years I have seen leadership and training programmes and I have delivered many of them in many kinds of organisations and they seem to operate in a language that people don’t understand. They operate in the made-up language of academic organisational development and they talk about synergies and leverage and teamwork, they speak in analogies of sport to people who don’t play sport. . . I have always been interested in sociology and psychology, those have always been my primary interests.

6.3

Analysis: Prior Knowledge and Opportunity Identification

Bhave (1994) argued that there are two types of opportunity identification. When externally stimulated, entrepreneurs filter the opportunities by aligning prior knowledge with market needs. When an opportunity identification process is internally stimulated, entrepreneurs experience a market need that cannot be fulfilled by existing products or service providers. Entrepreneurs then try to create their own solutions to customer problems by introducing new means to serve the market. Indeed, such identification is a process of learning by transforming knowledge and/or by creating new ideas (Hansen et al. 2011). Venkataraman (1997) believes that specific experience gained from personal life can offer access to information others might not have. This in turn helps to identify new opportunities. Shane (2003) mentions that high stocks of prior knowledge not only help entrepreneurs interpret new information in a meaningful way but also enhances their ability to find solutions. Ardichvili et al. (2003) explain that together with prior knowledge, creativity also plays a role in identifying opportunities. Therefore, opportunities can be identified not only by expanding or transferring existing knowledge to a business sector but it can also create innovative solutions to problems (Burns 2011; Deakins and Freel 2012; Stokes and Wilson 2010). Examining all twenty cases, it became apparent there were three different approaches related to opportunity identification: change and innovation, knowledge transfer and knowledge replication (Fig. 6.10). Prior knowledge and personal interests combined to form a basis for entrepreneurs to change and innovate as a means of solving problems. Prior knowledge and personal interests also acted as a testing ground, where the entrepreneurs could try out knowledge gained from education and/or work experience as a basis for establishing a new business. The second stream relates to knowledge transfer in which tenants transferred prior knowledge of one sector to a different business idea. Using a creativity-based model of opportunity recognition (Lumpkin et al. 2004), Lumpkin and Lichtenstein (2005: 243) state that whilst ‘entrepreneurial processes are emergent and iterative’ opportunity recognition takes place in five stages. They

132

6 The Role of Prior Knowledge in Opportunity Identification

Impact of Prior Knowledge On Opportunity Identification

Sources of Prior Knowledge

Markets Customer Problems Means to serve markets Personal Interests

Change and Innovation Prior Knowledge

Knowledge Transfer Knowledge Replication

Fig. 6.10 The role of prior knowledge in opportunity identification

are: preparation, incubation, insight, evaluation and elaboration. During the incubation stage of opportunity recognition, the entrepreneur contemplates an idea or a specific problem. However, it is not a conscious problem-solving or systematic analysis of the idea’s potential. Hansen et al. (2011) found that creativity plays an important role in the incubation stage of opportunity recognition. In line with what Lumpkin et al. (2004) call the incubation stage of opportunity identification, tenants’ testing did not have to be explicit during the time they worked in business. At a later stage in the opportunity recognition process, with the catalyst of new information, entrepreneurs re-examine their past experiences (prior knowledge) as a serious business opportunity (Shane 2000). In this opportunity identification process, prior knowledge helped some participants’ knowledge replication process. Prior knowledge gained from previous employment remained stable with minimal changes added to new businesses. Following Schumpeter’s (1942) definition of entrepreneurship, which highlights the importance of disruptive creation and innovation, scholars have emphasised the importance of creative thinking (Hansen et al. 2011; Sanz-Velasco 2006; Corbett 2005; Lumpkin et al. 2004; Ardichvili et al. 2003; Long and McMullan 1984). However, the literature calls for a more in-depth understanding of how knowledge interacts in such a process. The three streams identified in this chapter shed new light on such questions. On a spectrum, these streams are organised from the most (change and innovation) to the least creative (knowledge replication).

6.3 Analysis: Prior Knowledge and Opportunity Identification

6.3.1

133

Stream 1: Change and Innovation

There are seven opportunities in this stream: Ian1, Tony, Neil, Paul, Emma, James and Kath. Taking Neil as an example, he worked as a consultant in various areas, such as marketing, public relations, sales and operations management. These business experiences helped him to gain prior knowledge in specialised fields, which related to his business idea of providing consultancy services to organisations using unconventional approaches to consultancy. As he described, his insights into other consultancy services gained from business experience were helpful: If you look at the CIPD website, 95% of it is about dealing with, and I quote, “problem staff”. It’s not about developing organisations, it’s become a disciplinary procedure as opposed to an empowerment and development procedure. Its whole purpose seems to have become inverted and corrupt. People admire certain traits in others, they admire integrity, they admire shrewdness and by using words like integrity and shrewdness you will never actually find those in old organisational development literature. You won’t find terms like, ‘good personal relationships’, the stuff that matters doesn’t actually reach the pages of the training manual.

Neil accumulated his knowledge during employment and he gradually developed the idea of establishing his own company to offer a different approach to consultancy. His prior knowledge of markets, customer problems and personal interests had a direct link to the opportunity he identified at a later stage. This stock of knowledge became more apparent when used as a basis for adding new information to exploit the opportunity. He had gained an understanding of the consultancy business, how services were delivered, the industry norms as well as various pitfalls he perceived from the relationship between client and service provider. These insights enabled him to critically scrutinise the industry and gave him the confidence to try out his ideas when he obtained new information that was blended with his experience.

6.3.2

Stream 2: Knowledge Transfer

Tim, Jane, Phil, Peter and Mark all had some work experience in the industries where they spotted opportunities. Tim, Jane and Peter transferred their prior knowledge from working for other businesses, whereas Phil and Mark transferred knowledge from their own businesses. Peter, for example, identified an opportunity while selling mobile phones to corporate clients. He also mentioned buying and selling mobile phones when he was 13 years old. He later worked in sales and administration in a large mobile phone retailing chain where he gained more professional experience in selling to end-users. This work experience gave Peter a good understanding of how the mobile telecommunication industry worked from the perspectives of sales as well as administration. Peter then worked for his friend’s company where he gained experience selling mobile phones to corporate clients, which motivated him to set up his own company. Peter believed that the knowledge he had in the mobile industry gave him sufficient knowledge and he saw it as an opportunity for himself:

134

6 The Role of Prior Knowledge in Opportunity Identification

What I was going to do is do the same thing, as I was working for somebody else I was going to do it for myself so and it was just a stage of waiting to get a VAT number because you need a special VAT number to get into telecommunications and you have to pass extensive credit checks and money laundering checks and they have to come and see you check all your bank statements, passport, they see all your ID—both business and personal identification and bank accounts to make sure you are not involved in anything illegal, so I passed all these like very hard security checks . . .

In contrast, Phil had some experience of setting up his own businesses. Similar to his third business both earlier businesses used online technology. Although there were differences in the web design business and the online job services, it is apparent that his knowledge in online service business was transferred from previous businesses: Web Design Co. is a web design company which offers bespoke web design to various clients, erm small to large. Online Job Search and Management is completely separate and is an on-line service. And whilst I was doing that (running Web Design Co.) I gained experience in the kind of market and knew what was going on, different technologies and had the idea of Online Job Search and Management (OJSM).

His knowledge in the digital industry was transferred and used to help him to set up a different business in the same industry. The business experience he had enabled him to gain insights of the industry in terms of technology and trends of customer needs.

6.3.3

Stream 3: Knowledge Replication

Knowledge replication is different from knowledge transfer. There are 11 opportunities where prior knowledge and personal interests played a role in knowledge replication at the identification stage (Helen, Andy, Ian2, Nick, Jeff, Jeff–Paul, Laura, Alex1, Alex2, Kelly and Karen). Experience in a specific industry provided entrepreneurs with the knowledge and confidence to set up their own businesses in the same area. Jeff and Karen had been working part-time and recognised that they could carry out the businesses formally in full-time self-employment. Andy and Laura worked full-time for other companies as employees and in the case of Laura, when she was made redundant, she decided to set up her own business in the same industry. She considered herself to be a very experienced trainer in her sector and that she had accumulated a lot of business contacts through her career which would be beneficial when starting her own company. Laura’s comments are typical of this group: I’ve worked for a large recruitment business where I developed training and development programmes for recruitment consultants and managers in specialist recruitment businesses until I was made redundant, I was basically approached by a lot of people who had moved on from my old company and set-up their own recruitment businesses. They asked me if I would do consultancy with them where they didn’t necessarily want the cost of a training manager full-time but where they could use me on an ad-hoc basis. Basically, I thought about that and I started to do some sales training for people generally in the Northwest and I actually met up one of the business advisors [from INNOSPACE} and I thought to myself, ‘Should I start to look at this as a business idea?’

6.4 Summary

135

As we discuss below, knowledge replication was the most common form of opportunity identification amongst the twenty INNOSPACE tenants. This appears to be entirely logical as most individuals used their existing knowledge and experience to identify a potential business opportunity.

6.4

Summary

Figure 6.11 illustrates the different combinations of knowledge used to identify the 23 opportunities incubatees in this study were endeavouring to exploit. Altogether there were nine different combinations of prior knowledge and personal interests. Of the 23 opportunities, 17 were based on the tenants’ prior knowledge of markets. Eight of these (Helen, Andy, Nick, Phil, Peter, Laura, Mark and Karen) used their prior knowledge of markets in isolation from other types of knowledge. Prior knowledge of customer problems was the basis of eight opportunities (Tony, Neil, Emma, Kath, Ian1, James, Jane and Jeff–Paul) making it the second most important Personal interests

Alex1

Alex2

Paul Ian2 Kelly Prior knowledge of markets

Tony Prior knowledge of customer problems

Helen Neil

Andy

Emma

Nick Peter

Phil Laura

Mark

James

Jane Tim

karen

Ian1

Kath

Jeff-Paul

Jeff Prior knowledge of means to serve markets

Fig. 6.11 Distribution of prior knowledge and personal interests

136

6 The Role of Prior Knowledge in Opportunity Identification

factor for opportunity identification. Five of the tenants (Tony, Neil, Emma, Kath and Jane) combined their understanding of customer problems with market knowledge. Two (Tim and Jeff) combined market knowledge with their prior knowledge of means to serve markets and another two (Paul and Kelly) linked market knowledge with personal interests. The third most important factor, personal interests was present in seven opportunities (Alex1, Alex2, Ian2, Paul, Kelly, Tony and Neil) and it can act alone or in combination with other types of prior knowledge as a mechanism for identifying opportunities. Three opportunities were entirely reliant on the entrepreneurs’ personal interests (Alex1, Alex2 and Ian2). Prior knowledge of customer problems formed the basis of three opportunities (Ian1, James and Jeff–Paul); the latter combined knowledge of customer problems with prior knowledge of the means to serve markets. Personal interests also play an important role in opportunity identification. It corresponds to what Ardichvili et al. (2003) call the second domain of prior knowledge or special interests. In three opportunities, it is the only reason the entrepreneurs were able to identify opportunities. Linking this finding with literature in entrepreneur’s personal traits, the participants in this category exhibited typical characteristics of being entrepreneurial in terms of their risk-taking, opportunistic behaviour and self-confidence (Burns 2007). Therefore, when an entrepreneur has a low stock of prior knowledge but strong interests in the opportunity they identify, the business is likely to be risky and/or lifestyle based. Prior knowledge of means to serve markets is not sufficient to identify an opportunity. To be effective in identifying an opportunity it is necessary to combine prior knowledge of means to serve markets with prior knowledge of customer problems, and/or prior knowledge of markets, and/or personal interests. Without these additional forms of prior knowledge, knowledge of means to serve markets would not exist. In this sense, compared to other types of prior knowledge, prior knowledge of means to serve markets plays a distinctive role as a catalyst for opportunity identification. It is worth noting that opportunity identification is complex and isolating each type of prior knowledge cannot offer the whole picture related to the dynamic interaction between knowledge and opportunity. The chapter examines each type of prior knowledge and, more importantly, the varying combinations of prior knowledge and their impact on opportunity identification. Consequently, this chapter represents an important step in addressing the question of how incubatees use existing knowledge and acquire new knowledge to develop their businesses. More specifically, the chapter explores how different types of prior knowledge and varying combinations of prior knowledge impact on opportunity identification. We also examine how the opportunity development process takes place under the influence of starting up a business in a UBI environment. As illustrated in Fig. 3.3 (Sect. 3.6), this chapter mainly focuses on the right half of the conceptual framework, in other words, the development of opportunities. That is, the process of transformation of business ideas, from existing knowledge to business opportunities. In addition, a cross-case analysis was carried out to compare the varying combination of prior knowledge and their role in opportunity identification. Consequently, three different impacts were identified, and they are listed from most to least creative:

References

137

• Change and innovation: in this scenario, the opportunity was often externally stimulated. The entrepreneurs discovered problems in the products or services they have received. They then created solutions to the problems, which were perceived as an opportunity. • Knowledge transfer: this is the least common stream. For this stream, the entrepreneurs have accumulated knowledge through studying and work experience. They then transferred the knowledge to a related but different business, which formed the opportunity identification stage. • Knowledge replication: the most common stream, with 11 out of 23 opportunities. In this scenario, the entrepreneurs applied their knowledge and interests in an area where they had worked and/or studied and where they felt confident. Finally, for the majority of cases, a combination of different types of prior knowledge helped to identify various opportunities. This suggests that studying the dynamic interactions between prior knowledge and opportunity identification is an important step in understanding how entrepreneurs create new businesses. The emphasis of studies exploring opportunity development should therefore focus on interactions and processes, as opposed to content or isolating factors. The next chapter continues to explore the opportunity development process, specifically where new information was acquired through INNOSPACE, and transformed into experience and new knowledge. Also, as a continuation of Chap. 5 (The INNOSPACE Experience), Chap. 7 explores in greater depth the role played by INNOSPACE in creating an entrepreneurial community of practice.

References Alvarez, S., & Busenitz, L. (2001). The entrepreneurship of resource-based theory. Journal of Management, 27, 755–775. Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18, 105–123. Basu, A., & Goswami, A. (1999). Determinants of South Asian entrepreneurial growth in Britain: A multivariate analysis. Small Business Economics, 13, 57–70. Bhave, M. (1994). A process model of entrepreneurial venture creation. Journal of Business Venturing, 9, 223–242. Brüderl, J., Preisendörfer, P., & Ziegler, R. (1992). Survival chances of newly founded business organizations. American Sociological Review, 57, 227–242. Burns, P. (2007). Entrepreneurship and small business (2nd ed.). Basingstoke: Palgrave. Burns, P. (2011). Entrepreneurship and small business: Start-up, growth and maturity (3rd ed.). Basingstoke: Palgrave Macmillan. Churchill, N. C., & Lewis, V. L. (1983). The five stages of small business growth. Harvard Business Review, 61, 30–39. Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. (1994). Initial human and financial capital as predictors of new venture performance. Journal of Business Venturing, 9, 371–395. Corbett, A. C. (2005). Experiential learning within the process of opportunity identification and exploitation. Entrepreneurship: Theory and Practice, 29, 473–491. Dahlqvist, J., Davidsson, P., & Wiklund, J. (2000). Initial conditions as predictors of new venture performance: A replication and extenstion of the Cooper et al. study. Enterprise and Innovation Management Studies, 1, 1–17.

138

6 The Role of Prior Knowledge in Opportunity Identification

Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18, 301–331. Deakins, D., & Freel, M. (2012). Entrepreneurship and small firms. Maidenhead: Mcgraw-Hill Education. Hansen, D. J., Lumpkin, G. T., & Hills, G. E. (2011). A multidimensional examination of a creativity-based opportunity recognition model. International Journal of Entrepreneurial Behavior and Research, 17(5), 515–533. Jayawarna, D., Jones, O., & Macpherson, A. (2015). Becoming an entrepreneur: The unexplored role of childhood and adolescent human capital. In D. Rae & C. Wang (Eds.), Entrepreneurial learning: New perspectives in research, education and practice. London: Routledge. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. Englewood Cliffs, NJ: Prentice-Hall, Inc.. Kolvereid, L., & Isaksen, E. J. (2012). The psychology of the entrepreneur. In K. Mole & M. Ram (Eds.), Perspectives in entrepreneurship: A critical approach. Basingstoke: Palgrave Macmillian. Krueger, N., & Brazeal, D. (1994). Entrepreneurial potential and potential entrepreneurs. Entrepreneurship: Theory and Practice, 18, 91–105. Legge, J., & Hindle, K. (2004). Entrepreneurship: Context, vision and planning. Basingstoke: Palgrave Macmillan. Long, W., & McMullan, W. (1984). Mapping the new venture opportunity identification process, frontiers of entrepreneurship research. Wellesley: Babson College. Lumpkin, G. T., & Lichtenstein, B. B. (2005). The role of organizational learning in the opportunity-recognition process. Entrepreneurship: Theory and Practice, 29(4), 451–472. Lumpkin, G. T., Hills, G. E., & Shrader, R. C. (2004). Opportunity recognition. In H. P. Welsch (Ed.), Entrepreneurship: The way ahead. London: Routledge. Peña, I. (2004). Business incubation Centers and new firm growth in the Basque Country. Small Business Economics, 22(3/4), 223–236. Politis, D. (2005). The process of entrepreneurial learning: A conceptual framework. Entrepreneurship: Theory and Practice, 29(4), 399–424. Politis, D. (2008). Does prior start-up experience matter for entrepreneurs’ learning? A comparison between novice and habitual entrepreneurs. Journal of Small Business and Enterprise Development, 15, 472–489. Ronstadt, R. (1988). The corridor principle. Journal of Business Venturing, 3(1), 31–40. Sanz-Velasco, S. A. (2006). Opportunity development as a learning process for entrepreneurs. International Journal of Entrepreneurial Behavior and Research, 12, 251–271. Schumpeter, J. A. (1942). Capitalism, socialism and democracy. Oxford: Taylor & Frances Books. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Shane, S. (2003). A general theory of entrepreneurship: The individual-opportunity nexus. Cheltenham: Edward Elgar Publishing Limited. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. The Academy of Management Review, 25, 217–226. Shepherd, D. A., Douglas, E., & Shanley, M. (2000). New venture survival: Ignorance, external shocks, and risk reduction strategies. Journal of Business Venturing, 15(5/6), 393–410. Stokes, D., & Wilson, N. (2010). Small business management and entrepreneurship. Andover: Cengage Learning EMEA. Suddaby, R., Bruton, G. D., & Si, S. X. (2015). Entrepreneurship through a qualitative lens: Insights on the construction and/or discovery of entrepreneurial opportunity. Journal of Business Venturing, 30, 1–10. Ucbasaran, D., Westhead, P., & Wright, M. (2008). Opportunity identification and pursuit: Does an entrepreneur’s human capital matter? Small Business Economics, 30, 153–173. Ucbasaran, D., Westhead, P., & Wright, M. (2009). The extent and nature of opportunity identification by experienced entrepreneurs. Journal of Business Venturing, 24, 99–115. Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor’s perspective. Advances in Entrepreneurship, Firm Emergence, and Growth, 3, 119–138.

Chapter 7

Learning and Opportunity Development in INNOSPACE

7.1

Introduction

In Chap. 5, we explored the process of business incubation that took place in INNOSPACE. After examining the pathways of all 20 participants, 6 individuals were selected to demonstrate their incubation experience and to examine the associated activities. To gain a more in-depth understanding of the entrepreneurial process we focused on the core of this process; opportunity identification and development. In Chap. 6, we specifically examined the relationship between prior knowledge and opportunity identification. In this chapter, we extend that analysis by exploring the opportunity development process through a learning lens. Outcomes from the two previous chapters suggest that INNOSPACE played a key role in developing entrepreneurship by providing a physical facility, mentoring and business advice as well as creating social spaces to nurture those intangible resources crucial to the entrepreneurial process. We take the experiential learning framework (Chap. 3) to explore opportunity development within INNOSPACE. Both opportunity identification/development and entrepreneurial learning are complex, recursive processes, where individuals may reverse or repeat stages. From a learning point of view, business concepts or ideas can be derived and constantly moderated or transformed by experience (Man 2006). Viewed from this perspective, it is possible to investigate opportunity development as a process by first exploring prior knowledge (Chap. 5), and then establishing what information was acquired and how it was transformed by entrepreneurs during the opportunity development process. We begin by presenting our analysis of the opportunity transformation process. In order to do this, it is important to understand the context in which learning and opportunity development interact. Therefore, we draw on the six case studies used in Chap. 5, as their pathways have already been presented in detail. In Sect. 7.3, we build on analyses presented in Chaps. 5 and 6 by combining them with the analysis of the transformation process presented in Sect. 7.2 of this chapter. This helps © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_7

139

140

7 Learning and Opportunity Development in INNOSPACE

provide a holistic view of the learning process within INNOSPACE taking account of the prior knowledge possessed by the six participants when identifying opportunities (Chap. 5) and the transformation process that took place (Chap. 6) during the participants’ incubation period. To illuminate the impact of belonging to the INNOSPACE community of practice, we draw on the six generic entrepreneurial competencies (Jones et al. 2014) discussed in Sect. 3.2.3. The chapter concludes by discussing the role of INNOSPACE in developing entrepreneurship.

7.2

Opportunity Development and Entrepreneurial Learning

As discussed in Chap. 3, the identification and development of opportunities is based on three fundamental elements: prior knowledge (previous experience and education), the process of acquiring new information and the process of combining prior knowledge with new information. Effective entrepreneurs are able to utilise their new knowledge to identify, develop and exploit new opportunities. This interplay between knowledge creation and opportunity identification is stimulated by entrepreneurial learning. It is widely acknowledged in the literature that Kolb’s experiential learning is an essential element in the entrepreneurial process (Chang and Rieple 2018; Cope 2005; Jones and Giordano 2020; Politis 2005; Tomkins and Ulus 2016). At the same time, our basic argument is that incubators should promote social learning amongst incubatees to create a community of practice. Wang and Chugh (2014: 33) argue that in the field of entrepreneurship, integrating individual and collective learning remains a key challenge. In an earlier publication, Pittaway and Cope (2007: 213) did point out that entrepreneurial learning is a relational process of co-participation (Taylor and Thorpe 2004) based on argument, debate, and collaboration with others (Holman et al. 1997). Recently, El-Awad et al. (2017) draw on Crossan et al.’s (1999) 4i framework to link individual cognitive learning to team-based learning and, ultimately, organisational learning (Jones and Macpherson 2006; Lans et al. 2008). A study of 76 entrepreneurs in a venture accelerator programme emphasises the links between experiential learning and collective learning (Politis et al. 2019). Experiential learning theory was also extended by Kolb and colleagues who proposed that conversation helps groups of learners construct new meaning and transform their collective experiences into knowledge and knowing (Baker et al. 2005: 412). In the following sections, the empirical data are used to demonstrate how the incubatees identified their business opportunities and the role of learning in that process.

7.2 Opportunity Development and Entrepreneurial Learning

7.2.1

141

Andy: Learning About Customer Problems

While in INNOSPACE, Andy developed knowledge of customer problems. He believed that the key to a viable business idea was easy-to-use websites rather than providing customers with too much technical jargon. He understood that the problem for many customers was being confronted with too many confusing details, as he explains: Well, a lot of people don’t know. They know the internet exists, and they know how to use it, but they don’t understand what makes it work or makes it tick, and as far as we are concerned, they don’t need to, they shouldn’t have to and they don’t want to. So our idea has always been to make everything do as simple as possible, including the support . . . especially with the internet, there’s a lot stuff that people, would go straight over people’s heads, in one ear and out the other, and that’s the way it should be, because they are concentrating on their businesses . . . they don’t need to worry about how or why their website is working, just the content about the website, really.

After teaming up with Frank, Andy and his partner reflected on the process of website production and developed new ways of serving the market. Not only did they become more effective, but it also made cost-saving possible and therefore increased customer numbers and satisfaction: The first three of our websites we just gave to the client and then said right, there you go. I think three of the four came back and they just asked just to do changes on the website. So straightaway, there’s things we got to do that we’re not being paid for because that’s included in the original quote. We realised that if all the websites were easy for us to update then it would save us time, make us more money, customers will be happier. So, it was pointless producing one off website again and again and again, when actually what we needed was this system for doing it. We were spending, say a week, creating almost exactly the same website, as we did the week before, except the way it looked. We decided to come up a system for re-using what we’d already done in the past. We are currently developing a content management system.

Being in INNOSPACE enabled Andy to meet other entrepreneurs and find those with complementary skills and knowledge. Eventually, he formed a new company with Frank and other tenants: Becoming a freelancer was always gonna be something to do until I have a business idea that would bring me regular income. I don’t wanna be a freelancer for the rest of my life and going from freelancer to what I am doing now is has taught me massive amounts of all sorts of different businesses as well, so I’ve learnt a lot from Frank, I’ve learnt a lot from Angela, I’ve learnt a lot from Tom, and I continue to do so. It’s been a good eight months! Felt just started, it’s going really well.

Andy’s generic competencies (skills) clearly have a strong technical element associated with improvement in his ability to develop websites as well as the functional skills associated with running the business more efficiently. Perhaps most significantly, being in the incubator also enhanced his resourcefulness and helped him to apply creative solutions to a range of difficult problems.

142

7.2.2

7 Learning and Opportunity Development in INNOSPACE

Jane: Learning New Business Skills

For Jane, INNOSPACE was not only a physical space which she used as an office and to meet other tenants. Importantly, she viewed INNOSPACE as a resource for learning, where she could acquire new business skills: I need things like the marketing and networking skills. I’m considering getting a new website, and I know a lot of people like graphic designs, website design in here. It’s nice to be able to go to them and say ‘could you please do this for me’ but also know that you are generating a bit of income for them as well. I think that’s quite important, I come from a public sector background, you know, voluntary background, not a private, commercial company, and I don’t feel like I’ve learnt some of the skills needed when you are in business.

A key element of the support provided by the INNOSPACE management team was to act as brokers between the different resources and tenants. They helped Jane to acquire the information and resources to further develop her business: I feel like if I had a problem, even if they couldn’t help me, they would know who to put me in touch with and I’ve gone to the INNOSPACE manager and said I need I need some help with administration, I’ve got a load of fixtures to do, I need to sort the website out, you know I cannot take any time off work, I need some help. He said: ‘right well, you know there are a number of people in here you know, they could help you’. They put me in touch with Anne and she was great. It’s nice just to have those emails coming around so, if you feel you can, then great go for it, and there’s no pressure if you cannot, if you don’t have the time to do it.

Jane was inspired by the entrepreneurial atmosphere in INNOSPACE, which was a direct contrast to her previous public sector experience. She also found that the INNOSPACE management team were important in creating an inspiring environment without being too pushy: I feel they are quite encouraging of you to think of the bigger picture and to have a bit of plan about where you want to go and things like that. I feel quite supported here as well. You get a number of emails about different opportunities coming up and different things you can attend and you do feel you are part of this little community. It has changed the way I think about my business because I think well, if I can achieve this, with doing minimum really, just to keep it going. If I was to actually concentrate on it and put a lot more time into it, then it could actually achieve, you know, so it’s made me think about it slightly differently.

In summary, Jane’s skills were enhanced in a number of areas. As discussed in Chap. 5, being based in INNOSPACE certainly enhanced Jane’s relational skills as she learned to engage with other tenants building trust and establish effective networks. Jane improved her conceptual skills as she began to see the ‘bigger picture’ by being able to make better sense of complex information. Although she had experience of running her own businesses, Jane was also able to develop her entrepreneurial skills by helping identify other business opportunities.

7.2 Opportunity Development and Entrepreneurial Learning

7.2.3

143

Ian: Learning About Networking

As discussed in Chap. 5, Ian organised free networking events and the INNOSPACE management team agreed to help him to attract more clients to his events by introducing a wider range of social contacts. Despite this support, the idea did not work out as planned although at one event he met someone in the hypnotherapy business. Ian had been to some hypnotherapy sessions and had been interested in it as a hobby: I became really friendly with a girl who comes to my networking events actually who runs a hypnotherapy training company and so she helped me with a lot of things, so I’ve done three diplomas. Standard hypnotherapy, another standard hypnotherapy and an advanced hypnotherapy/psychotherapy diploma.

Therefore, as SNE (Social Networking Events) was not generating income, he shifted focus to a new business idea based on hypnotherapy. Ian decided to keep offering his network events which could generate business leads when he met other business people. The low rent charged by INNOSPACE helped Ian to sustain the business and try out his ideas for longer: The on-line printing [business] is making money, it’s making residual income at the moment so I can’t knock it. SNE is making nothing but that’s fine and I don’t want to make money out of it really. The hypnotherapy is potentially very large so that’s where I am going to be putting most of my time and efforts because that’s where I am going to make the most money. It’s the most interesting area of the three so that’s where I’m gonna to be putting a lot of time over the New Year.

From knowledge gained in the industry regarding the means to serve markets, Ian planned to set up his hypnotherapy business as a joint venture. He successfully recruited one of his fellow INNOSPACE tenants: Basically, because I wanted to do joint ventures before but have never bothered doing them and then I’ve read a lot of marketing materials and also by speaking to my external influences which are the other people who do hypnotherapy around the country. They say they do joint ventures with other people and its very successful so that’s given me the motivation because I’ve been building up contacts for quite some time and now I’m going to start using them.

While Ian was fully aware of the importance of networking for start-up businesses, entering the incubator opened up his network to a wider range of contacts. His various associates helped improve his functional skills so that he was better equipped to manage the printing business and potentially develop SNE into a profitable venture. Being part of the INNOSPACE community also developed his resourcefulness by helping him identify creative solutions in balancing his ability to exploit opportunities with his own limited resources.

144

7.2.4

7 Learning and Opportunity Development in INNOSPACE

Tony: Learning How to Serve Customers

Tony came to INNOSPACE with the idea of running his Life Coaching and Business Advice (LCBA) business. Initially, it did not work as planned and he got to know David and changed the delivery methods for the business: I thought INNOSPACE would be a better area to do workshops than it is, even though it has got the facilities. The location isn’t very good because no-one can find it and no-one can park. Instead of people coming here for the workshops, I’m going to do it as a web-cast. Hopefully, we’ve got our first 10 customers now and we launch in January. INNOSPACE has given me the opportunity to meet David, and without David, we wouldn’t have that product.

Because of the other four tenants, Tony met in INNOSPACE, his business idea gradually evolved into something rather different. Instead of running workshops on marketing and date training, he shifted his focus entirely to giving marketing advice online. This process helped him to develop knowledge in means to serve markets: Refinement of the idea comes from more market researching. With LCBA I thought I did enough market research, but I hadn’t and I just launched it on gut-feeling. Half the business works but the date training side of it didn’t. Now for [the new business], Marketing Advice (MA), I’m actually doing the opposite, I’m going to bring in four business partners. We’ve got David who’s our web guy, we’ve got a sales guy, we’ve got a project manager, and then we’ve got Tania as well who is finance . . . and that’s really through INNOSPACE.

Teaming up with other INNOSPACE tenants was a way for Tony to cope with the newness of the business. Tony was also inspired by the books he read about entrepreneurs. After he identified the ‘right people’ in INNOSPACE with the right skills, he recruited them as his business associates for Marketing Advice. His plan was to act like an entrepreneur in terms of his role in the new company and with regard to his future business career. I started to read a lot more autobiographies, so things like Peter Jones, Richard Branson, which is pretty good. Bare Entrepreneur, fantastic! So, I re-read it. And the E-myth, another brilliant book, because they are all good. I mean that’s what I realised, I’ve got to a certain level, which is great, but I need to get another level, which can only happen through meeting better people. In fact, INNOSPACE made a huge difference, well, otherwise I wouldn’t have met any of these people.

Tony felt that being part of INNOSPACE not only enhanced his motivation but also enabled him to access the right people, with the right skills to develop his business idea further. Benefitting from the community effect, Tony was also building up his own community and integrating it with INNOSPACE by staying on for another year and not renting a separate room for the new company: Without the energy levels that you get from working around other people, I don’t think, I think a lot of these businesses survive, because they can come to INNOSPACE and have a bad day but still be around people that are smiling, I think it’s, you know, if you have a bad day, you by yourself at home, and ultimately if you are at home, half time you spend it watching telly.

7.2 Opportunity Development and Entrepreneurial Learning

145

The INNOSPACE community was hugely important for Tony and he benefitted from working in close proximity to other people who were starting their own businesses. His entrepreneurial skills were also enhanced by exposure to other incubatees with a range of different ideas and competencies. Working with partners helped Tony develop his functional skills and he gained a much deeper understanding of the systems required to operate an efficient business.

7.2.5

Paul: Learning About Markets

When Paul came to INNOSPACE, his original idea was about setting up a specialist online food business (OFS), selling environmentally-friendly food via the Internet. However, it took much longer than Paul planned, and, in the meantime, he looked at other options in INNOSPACE. Eventually, he teamed up with Jeff and another tenant, working on a Digital Publishing (DP) business and he became Jeff’s business partner in a company trading as IT Support (ITS): I guess the kind of personality I analyse the environment a lot and I find it quite easy to pick out trends and spot opportunities. Things I could do with Jeff’s ITS idea because I could see there was need for it and I was also attracted to it because it’s a relatively low risk business and investment is quite low. He was already trading so there’s hardly any sort of barriers to entry for us because we’ve got the links with the University which the competitors don’t have and so it just seemed like a sensible venture to get involved in and I think additionally it was attractive because my first idea was quite a high risk business because it requires quite a lot of financial investment to grow it to the scale I want to grow it to.

Teaming up with other tenants with complementary skills gave him a better chance of developing a successful new business. Paul was still passionate about OFS (Online Food Business) but needed investment to operationalise the idea. By joining other tenants’ ventures, he was trying to offset the risks of OFS while continuing to develop his own business idea: ITS has potential to make money and the digital publishing business is likely to make more money but it’s slightly more risky. OFS is likely to make an awful lot more money but the likelihood of success for that is less again. I think while we’ve been at INNOSPACE working on the business and accessing the resources the probability of success has definitely been increasing as we’ve developed. With OFS, the first strategy was to get a small amount of finance so that I could develop a concept, or proof of concept so that should be finished soon . . . We can then start trading for perhaps maybe six months proof that it is working and then we can start looking to put proposals in to various people to get funding.

Paul liked the supportive and entrepreneurial community of INNOSPACE. It not only enabled him access to useful information for the business but also provided an environment where like-minded entrepreneurs motivated and supported each other: I think the human capital side of INNOSPACE and being in an entrepreneurial community is by far the best thing that INNOSPACE has to offer and it’s almost the only reason why I came into INNOSPACE to be with other people. It’s nice to be working in an environment with other people from a motivational point of view. Having other people around you and it doesn’t even matter if they are not doing the same thing, just having other people around you

146

7 Learning and Opportunity Development in INNOSPACE

is much more enjoyable than say sitting at home in your home office just by yourself. In Britain generally if you say you want to do something people usually find reasons to advise you not to do it; ‘it’s risky, it would be easier to get a job’. So, to get a community who all think the same way and they can see the reasons why you should be doing something. They can see the opportunities and therefore they can sort of see why you want to be doing it, I think that’s really useful.

When Paul joined INNOSPACE he was motivated to start his own business and being with other highly motivated people certainly enhanced his entrepreneurial skills and competencies. He was much better equipped to analyse changes in the market and identify potential business opportunities. In part, this was a result of enhancing his conceptual skills as he was better able to make sense of complex market information. He was also very effective in developing his relational skills to identify and establish associations with other tenants who had complementary skills and knowledge.

7.2.6

Kath: Learning from Others

In INNOSPACE, Kath spent 12 months developing her business idea by working on the business concept, target market and business name. After witnessing a major competitor in the same region selling their childcare business, Kath decided that her competitor had grown too fast and the owners were struggling to manage a complex business. To avoid this potential problem, Kath developed a system suitable for a two-person team with a manageable number of clients. She also thought of franchising her business: We’ve refined it so the process is dead simple; the strategy is that it won’t be time consuming. When I first did my business model, I thought that for 2000 clients you would need about five people and I have got it down to two [employees]. I’ve developed that strategy because what I’m now thinking is I can franchise it to husband and wife teams.

Kath used INNOSPACE’s tenants to get more information and feedback on her ideas to improve the system she was developing for the business. She knew it needed to be ‘fool-proof’ if she was going to sell the business concept as a franchise and was helped by guidance from the management team: One of the main ways they have helped things is by continually sending us information on courses, conferences, meetings, seminars, We all get a lot of information and obviously I don’t go to everything but I do look at everything they send and I do things that benefit me.

Kath mentioned that although she was creative and entrepreneurial being based in the incubator made her feel more like a real entrepreneur. She also felt that other entrepreneurs were able to offer her ‘refreshing’ and ‘different’ points of view about setting up a business: The main thing I have found with INNOSPACE is that the other people who are around are able to offer you advice and encouragement and a different perspective on what you think is

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

147

clear-cut. Someone then comes in and turns it completely on its head by just asking a simple question or making a comment and you think, “oh right I hadn’t thought about it like that”. I think that’s the strength of INNOSPACE as far as I am concerned, the contacts that you make. A lot of the people look at me and think “oh well she’s already got a business, she’s a successful business woman”. In my other business I’m boss . . . whereas here I am just Kath, so nobody has to be careful what they say to me. Here it’s really really positive, I think, that you can get some honest opinions and honest feedback.

As a result of being an INNOSPACE tenant, Kath believed all incubatees shared the same objectives, which helped build trust with her fellow tenants and the management team. This trust enabled her to share ideas freely with other entrepreneurs and get feedback to improve her plans: I think INNOSPACE has affected it [the business idea] 100%. When I come here everybody is excited about business and everyone is going for the same goals, although in completely different businesses and I find that very very refreshing. When I come into INNOSPACE there is always somebody to talk to for a start-off, there is always somebody to say something to and there is the sort of family atmosphere that it’s almost like an unwritten rule that you can trust people in INNOSPACE, so like I have just said to you about the franchise and that’s a secret and loads of people know that secret in there but I know nobody is going to nick the idea off me because the trust is there as well.

Although Kath was an experienced business woman and entrepreneur before joining INNOSPACE, being based in the incubator certainly enhanced her entrepreneurial skills. She became much more aware of the need to utilise her resources effectively if she was going to successfully exploit opportunities in the marketplace. Also, as seen above, her functional skills developed in-line with running a start-up business. Her entrepreneurial skills and her functional skills benefitted to a great extent by Kath’s interaction with other tenants within the incubator (relational skills).

7.3

Analysis: Entrepreneurial Learning and Opportunity Development

Building on Kolb’s (1984) experiential learning framework, Corbett (2007: 100) believes that the process of learning consists of three elements: ‘existing knowledge, the process through which individuals acquire new information and experiences, and the manner in which individuals transform new information and experiences into new knowledge’. In the context of opportunity identification and development, existing knowledge (Corbett 2007) can be described as prior knowledge (Shane 2000). In Chap. 5, we discussed the impact of prior knowledge on opportunity identification and mapped-out the type of prior knowledge possessed by each participant when identifying an opportunity. Following on from Chaps. 5 and 6, this chapter focuses on the relationship between opportunity development and the learning process. Relating it to the conceptual framework developed in Fig. 3.3, Sect. 3.6, this chapter brings together

148

7 Learning and Opportunity Development in INNOSPACE

the left-hand and right-hand sides of the diagram to examine the development of incubatees and their business opportunities. We also explore how learning takes place as a process of experience transformation. Through the lens of learning, we demonstrate the interaction between entrepreneurs and their business ideas. The outcomes of the learning process, or in other words, the transformation of knowledge and information helps to draw out the role played by INNOSPACE on individual incubatees, their businesses and their community. Exploring the role of business incubation through the process of opportunity development and entrepreneurial learning suggests that some key concepts overlap. This is reflected in the learning model (Fig. 3.3), where the blue and yellow blocks blend into each other and become green. This is because when nascent INNOSPACE businesses are at the start-up stage or, in many cases, the preexistence stage, individuals share the same identity as their business; in other words, the entrepreneur is the business (Churchill and Lewis 1983). In some instances, the narratives presented in Tables 7.2 and 7.3 overlap, while the same narratives demonstrate different transformational processes; one being individual identity and the other being the opportunity. This illustrates the interplay between entrepreneurs and opportunity at the early stages of a new business. Hence, learning is the focal point, where both the entrepreneur and the opportunity undergo a transformational process. In some cases, where entrepreneurs already have mature businesses or ideas when entering INNOSPACE, they still developed new identities and businesses while in the incubator (see Sect. 7.2.6, Kath). and this process led to more than one business idea when the tenants were reaching the end of their 12-month incubation period (Sects. 7.2.1, 7.2.3 and 7.2.4; Andy, Ian and Tony). In Sect. 7.3.1, we discuss the links between information, knowledge and opportunity development, with a focus on the development of prior knowledge in the context of business idea development. Section 7.3.2 discusses the transformation of identity and opportunity as the respondents became part of the entrepreneurial community. Finally, Sect. 7.3.3 examines the specific skills and competencies acquired by all 20 respondents. Before proceeding, it is worth noting that learning is conceptualised as a continuous and evolving process. Tenants developed their ideas formally and informally, inside and outside of INNOSPACE, and therefore the idea development process itself was not physically restricted to the incubator. However, as the principal objective of this study is to explore the role of a business incubator in developing entrepreneurship, it is essential to draw a boundary around the internal learning processes. Therefore, the discussion is limited to information and skills acquired during the time incubatees spent in INNOSPACE.

7.3.1

The Exploitation of Prior Knowledge

As we discuss below, Andy was focused on enhancing his technical and functional skills and he developed close working relationships with those incubatees who had higher-level technical skills. Most of Jane’s information about which tenants could

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

149

build a website and help with her administrative work came from the INNOSPACE management team. Similarly, in developing his Social Networking Events (SNE) business Ian relied on the INNOSPACE management team’s external contacts to introduce speakers and advertisers. Hence, his future business strategy was based on contacts and information obtained within INNOSPACE. Tony’s life coaching business (LCBA) was developed into a solid business idea because of the information and knowledge he acquired from other tenants. While he did do some market research, he also joined forces with those he identified as having complementary skills to his own. Paul’s work on developing his Digital Publishing business was helped by information about the publishing industry from the INNOSPACE manager who had previously worked in publishing. Similar to Ian’s case, this information was then integrated into his learning processes and transformed into new knowledge, which shaped his marketing strategy for Digital Publishing. Similar to Andy, Kath acquired useful information directly from her fellow tenants with the appropriate technical skills. For example, she used specific knowledge of systems design from colleagues to experiment with her own ideas while reflecting on their feedback from her suggestions. In addition to existing knowledge and newly acquired information, the process of transforming information and experience is an important element of experiential learning (Kolb 1984). In a social context, Wenger (1998) argues that the experience of participation and engaging in a community of practice helps to construct new meanings of identity. In Chap. 6, prior knowledge in the form of markets, customer problems, the means to serve markets and personal interests were explored in relation to opportunity identification. Building on that analysis, this section looks at opportunity development, focusing in particular on the type of knowledge that is being or has been transformed into a more mature business opportunity. Table 7.1 summarises the types of knowledge the six participants were developing. The table is divided into three sections. The ‘Pre-INNOSPACE’ section lists the mix of knowledge the participants had before entering the incubator. The ‘During INNOSPACE’ section outlines the types of knowledge the participants developed while they were tenants. An asterisk is used to highlight new knowledge that was developed in INNOSPACE. The last section ‘Maturity of Opportunity’ presents the stage of development for each business opportunity. In the table below, the unit of analysis is opportunity. This is because each opportunity was specifically linked to its own knowledge. Ian and Paul identified two opportunities each, and thus there are eight opportunities amongst six participants. Apart from Jane, seven out of eight opportunities were based on knowledge developed during incubation. This is because Jane joined INNOSPACE with high levels of prior knowledge and her business idea was mature when entering the incubator (see Chap. 5). Jane mainly used INNOSPACE’s physical space for administration, while she observed how other tenants marketed their businesses and she also recruited students to work for her. Although INNOSPACE had less impact on Jane’s initial business idea development, it helped her acquire the skills needed to grow her business and reduce costs as the rent was very competitive. She

✓

Paul1 (OFS) Paul2 (DP/JeffPaul) Kath

✓

✓

Tony

Andy Jane Ian1 (SNE) Ian2 (HW)

Markets ✓ ✓

✓

✓

✓

✓ ✓

Customer problems

Pre-INNOSPACE

✓

✓

Means to serve markets

Table 7.1 Knowledge development in INNOSPACE

✓

✓

✓

Personal interests

✓

*

✓

✓

Markets ✓ ✓ * *

✓

✓

*

✓

Customer problems * ✓ ✓ *

During INNOSPACE

*

✓

*

*

Means to serve markets * ✓ * *

✓

✓

✓

Personal interests

Trading in 1 month

Maturity of Opportunity Trading Trading Trading Trading; forming alliance with another tenant Trading; business is evolving; formed alliance with tenants Not trading yet; developing a website to test idea Trading

150 7 Learning and Opportunity Development in INNOSPACE

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

151

was also important as a role model and inspiration for a number of the younger entrepreneurs who had limited experience in the business world. The development of personal interests was static and quite different to the other three types of knowledge. There were three opportunities (Ian2, Tony and Paul2) based on personal interests prior to joining INNOSPACE, and these remained the same after the initial 12-month incubation period. Amongst the three opportunities, Ian2 only developed his interest in a hypnotherapy business about 4 months after entering INNOSPACE. When he recognised it as a business idea, he did not have any other forms of prior knowledge. With the help of fellow incubatees and especially Tony, he developed knowledge of markets and the means to serve markets. Tony introduced Ian to another incubatee, Mark, who entered INNOSPACE to develop a business of his own. Ian forged an alliance with Mark and an external contact to form a business as a well-being service provider. This indicates that personal interests play an important role at an early stage of opportunity development. Consistent with the analysis presented in Chap. 6, personal interests are a strong driver for some entrepreneurs to start their own businesses. Looking at the knowledge developed after the 12-month initial incubation period, apart from personal interests, all eight opportunities were based on comprehensive sets of knowledge: markets, ways to serve markets and customer problems. Andy, Tony, Paul1 and Paul2 gained new types of knowledge through building alliances and formed new companies with other tenants. Ian1 used INNOSPACE to run his free networking events although he soon realised that business owners and entrepreneurs were only interested in attending free networking sessions. Therefore, the INNOSPACE meeting space became his way of serving the markets. Ian2’s business idea was through his contacts with another tenant and an external entrepreneur. Together, they formed a business providing well-being services to clients. As for Kath, she came to INNOSPACE for the entrepreneurial atmosphere, as well as finding ways to serve a new market, which she identified as an important opportunity through her other businesses in childcare. While creating new relationships in INNOSPACE, Kath found a solution to serve her customers and contracted a web developer to build a website for her business. The type of knowledge participants most lacked in the opportunity development process was ‘the means to serve markets’. As entrepreneurial opportunities develop to a more mature stage, knowledge of means to serve markets is needed to provide solutions to business problems. This might also mean that possessing knowledge of means to serve markets can be used as an indication of the readiness of a business opportunity. A study conducted by Hajizadeh and Zali (2015) confirms that higher stocks of prior knowledge indicates more likelihood of recognising opportunities. This study advances our understanding of the links between prior knowledge and opportunity development by uncovering the relationship between stocks of knowledge and the readiness of an opportunity. The study also begins the process of clarifying the differing roles prior knowledge plays in the development of opportunities. In other words, personal interests are important for some entrepreneurs at the early stage of opportunity development; whereas the means to serve markets are more important in the actualisation of an opportunity (Hajizadeh and Zali 2015).

152

7.3.2

7 Learning and Opportunity Development in INNOSPACE

Transformation of Identity and Opportunities

Wenger (1998: 146) argues that ‘talking about identity in social terms is not denying individuality but viewing the very definition of individuality as something that is part of the practices of specific communities’. Evidence that the transformation of identities took place in INNOSPACE supports this argument. In a sense, this transformation was not an individual activity as found in professions such as lawyers, accountants, marketeers and so on. Rather, the development of entrepreneurial identities is very much based on the social practices associated with the INNOSPACE community of practice. This is also consistent with Toutain et al.’s (2017) claim that entrepreneurial learning takes place at a community level as well as an individual level. Although the emphasis of Table 7.2 is the transformation of individual identities, the data suggest that this is strongly associated with their business opportunities. Hence, Table 7.2 distinguishes between Ian1 and Ian2 as well as Paul1 and Paul2. This is because sometimes tenants perceived themselves as entrepreneurs in general and other times viewed themselves as business people with a specific role. Taking Ian as an example, he was a networking event organiser for his SNE business (Ian1) and, at the same time, he was a hypnotherapist for his HW (Hypnotherapy and Well-being) business (Ian2). In other words, Ian had different identities for the two distinct business opportunities he was associated with developing. This transformation process is embedded in the way tenants perceived themselves, as well as how they adopted behaviours which they viewed as typical for an entrepreneur. Using the learning model as a guide (Fig. 3.3), Table 7.2 illustrates how the tenants in INNOSPACE became experienced and ‘acted as if’ they were real entrepreneurs. We illustrate this process by means of four distinct but interrelated processes: learning as becoming, learning as experience, learning as doing and learning as belonging. Using the narratives from the six cases presented in Chap. 6, Table 7.2 also demonstrates how individuals interacted as part of a community of practice. Taking Jane as an example, the entrepreneurial environment in INNOSPACE made her aware of differences in people’s behaviour compared to her earlier public sector experience. Tenants in INNOSPACE made her think about her own identity as an entrepreneur and how she would do things differently compared to her other workplace. This supports the entrepreneurial learning model developed by Rae (2007: 42), which suggests that learning is a transformation of identity, in other words, ‘becoming an entrepreneur’. When speaking about her experience in INNOSPACE, Jane often contrasted it to her time working in the healthcare sector. Using the professional space in INNOSPACE helped her to consolidate her identity as an entrepreneur and business owner. Ian, Tony, Paul and Kath mentioned how they were practising as entrepreneurs. For example, Tony felt that being in INNOSPACE encouraged him to read a number of autobiographies written by well-known entrepreneurs. INNOSPACE provided Tony with the opportunity to practice what it really means to be an entrepreneur. He formed a new

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

153

Table 7.2 Transformation of entrepreneurial identities Transformation of entrepreneurial Identities

Andy

Jane

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs I wasn’t working with Jonathan fulltime, and I knew he would give me regular income, but I knew it would go on forever, and I wanted to grow into, rather, I didn’t want to just have one client, one big client, and nobody else, so I straightaway looking for other proper work [projects].

I went into physio, thinking that I would like to work for myself one day and I didn’t feel like I could that in sports development, and it sort of turned full circle, so I ended up with a business that is like sports development, and I work for the NHS. I think this place in itself has a good energy about it . . . and people are much more sort of lateral thinking and you know, have that autonomy to go out and do what they want to do.

Meaning— Learning as experience Experience of being an entrepreneur It’s very difficult to work on your own, it’s very hard to be a sole-trader, with no body to lean on. The benefits I got from working with Frank, although we work in the same industry, we’ve got complete opposite sides of knowledge, without his side of knowledge, I would either not be able to sell products, or I have to employ somebody else to do that. I think being here has made me a lot more aware of how to market, well knowing that there’s none marketing that I do, compared to everyone else . . . and how innovative, you know, or the importance of networking, things like that.

Practice— Learning as doing Acting as an entrepreneur It is the difference between going to somewhere and meeting a client and having them come to us, so that we can, I guess impress them. We’re not turning up on their doorstep with just a laptop and a pad of paper, it shows that we actually do have a professional office work space going on, and it’s not just a two-bed company who’s working from home. I’ve learnt a huge amount in terms of managing the accounts as well, because I’ve got quite a lot money going through the account, so always trying to make sure I’m not short of money, you know, for the netball account, and I feel like I’ve picked up bits of pieces but I still I think I’ve still got quite a lot to learn.

Community— Learning as belonging Social interaction as part of the incubator community If I hadn’t met Frank I wouldn’t be doing what I’m doing now, networking, meeting other people to bounce ideas off. An example is Nick. We have lots of discussions, just general talking about our ideas and there’s kind of a trust there that if you talk about what you’re doing that it won’t go any further than that person. You can feel the people are very driven and really want to succeed and they’ve got these great ideas, and I feel quite supported here as well. So you get a number of emails about different opportunities coming up and different things you can attend and you do feel like you are part of this little community.

(continued)

154

7 Learning and Opportunity Development in INNOSPACE

Table 7.2 (continued) Transformation of entrepreneurial Identities

Ian1 (SNE)

Ian2 (HW)

Meaning— Learning as experience Experience of being an entrepreneur We came here we saw what a good state it was and we realised how much potential it had for people to do networking and there wasn’t anything going on so we started running these events, and successfully as well and so that was something that completely evolved from being here.

Identity—Learning as becoming Practice— Individuals with Learning as doing ideas of becoming Acting as an entrepreneurs entrepreneur It was very well We sometimes received, we got have speakers as about 20 or well and it’s gone 30 video testimoreally well and nials, it showed we we’ve had six or can run events, and seven events now. basically we were They’ve all been looking for more received well, sales and that we’ve got another hasn’t happened one booked up and but you know it it looks like we are just proved we can going to continue run events and we doing them from are good at it and February next year. we are good at networking and that was our point really. Transformation of entrepreneurial identities Identity—Learning Meaning—LearnPractice—Learnas becoming ing as experience ing as doing Individuals with Experience of Acting as an ideas becoming being an entrepreneur entrepreneurs entrepreneur

I then started researching on-line courses and I then became really friendly with a girl who comes to my networking events who runs a hypnotherapy training company and so she helped me with a lot of things, so I’ve done three diplomas I think, standard hypnotherapy, another

We went through Google Ad Words, we went through search engine optimization, we went through my website and why it wasn’t working and how many sales I would need to get per month . . . so he [Tony] did it all out on a big blackboard . . . so he took what my idea in business

I really get good results for people and because I know how to market, that’s my kind of strong point because I do a lot of talks and public speaking about hypnosis and stuff like that and I’m just more interested in it and getting people real results. When he said you should learn to be a

Community— Learning as belonging Social interaction as part of the incubator community I like the community element of it and I like to work with people and I like coming in and talking to people.

Community— Learning as belonging Social interaction as part of the incubator community I like the community element of it and I like to work with people and I like coming in and talking to people.

(continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

155

Table 7.2 (continued) Transformation of entrepreneurial Identities

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs

Tony

Meaning— Learning as experience Experience of being an entrepreneur

standard hypnotherapy and an advanced hypnotherapy diploma.

was and actually laid it down into figures and numbers and actual plans. A lot of the people on the course were training hypnotherapists in different areas of the country and we talk on the phone about how they get clients and . . . so we would get to share knowledge and tactics which has been good.

Because I already work for a couple of the non-government organisations, these we’re going for the contract, obviously I’m going to work that bit as well, so that’s the plan. And then my plan is to sell in three years and I leave after three years, and that’s good . . . Because that’s what happens if you’re an entrepreneur. I didn’t realise there’s actually a bigger opportunity,

Basically this idea came about asking them [clients] what they want, so instead of me, saying this is it, I’m your marketer, I basically said to them for a year “what do you want?” and I’m gonna to give them that. So I would say it being a success, mainly drawing the fact that they actually want the product, rather than a need . . . Because that’s what happens if

Practice— Learning as doing Acting as an entrepreneur hypnotherapist, I just did it without really thinking about it. I don’t really sit there and do a business plan and everything like that, I generally just do what I enjoy and then try to make money out of it which I know is the wrong way around to be perfectly honest (laughs) but I start doing something and if I enjoy it then I’ll make a business out of it. . . . I was just basically working, I had a job really, I had 3 or 4 clients, that was really a job. Whereas this is a company, another plan of this, is as they said in Entrepreneur, you know, it’s not a business unless you can walk away from it or unless you can be ill and you know, things still work.

Community— Learning as belonging Social interaction as part of the incubator community

INNOSPACE made a huge difference, otherwise I won’t have met any of these people. I think a lot of these businesses survive, because they can come to INNOSPACE and have a bad day but still be around people that are smiling. It was when I listen to Neil’s speech, I’ve realised actually it’s not just the social side of it, it’s the motivation side of it, but also it’s meeting the (continued)

156

7 Learning and Opportunity Development in INNOSPACE

Table 7.2 (continued) Transformation of entrepreneurial Identities

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs

Meaning— Learning as experience Experience of being an entrepreneur

Practice— Learning as doing Acting as an entrepreneur

until couple of a you’re an month ago, I supentrepreneur. pose, when the internet changed a bit, when I met Abul, and when I read a bit about Entrepreneur again, and these are the books I’d read years ago, and I just hadn’t been in the situation that I’m now, and I’ve had the life experience and it’s suddenly all made more sense to me. Transformation of entrepreneurial Identities Identity—Learning Meaning—LearnPractice—Learnas becoming ing as experience ing as doing Individuals with Experience of Acting as an ideas becoming being an entrepreneur entrepreneurs entrepreneur

Paul1 (OFS)

They [tenants] will understand where I am coming from and then start to add to the idea or say have you thought about this or this would be a good business model to use or these are really good contacts and you should go and speak to these people or they might say they have experience in this

If I explained my idea to people outside of INNOSPACE then they would say why do you want to do that when you can just get a graduate job and be earning lots of money or why would you want to do that, it might not work and that type of thing, because they can’t see what I can see and they

If you are going to be a successful entrepreneur who is a university graduate you have to be quite honest with yourself in admitting that because you don’t have experience there are very large gaps in your knowledge which have to be filled somewhere and have to be filled as quickly as

Community— Learning as belonging Social interaction as part of the incubator community right people. And as soon as I opened my mind, the possibility that we can meet, you know, the right people, so I then met all the right people [for this new business].

Community— Learning as belonging Social interaction as part of the incubator community In the last six months I started working with Jeff on another project as well which is offering IT support to students, so kind of I came here with just the one idea of working by myself and after just over a year I am now working on three things with other INNOSPACE tenants. (continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

157

Table 7.2 (continued) Transformation of entrepreneurial Identities

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs

Paul2 (DP/JeffPaul)

and that might not be the best way to go about doing it but a different way worked for them, and that’s the kind of thing, they add extra value to your business idea by giving you extra input which people outside of INNOSPACE are less likely to give you because they think in a different way. We had about a six month period where we were testing out working together and then in the last couple of months we have been negotiating so I will be becoming a director and a shareholder [for DP] in the next couple of weeks.

Meaning— Learning as experience Experience of being an entrepreneur can’t see the opportunity that is there to be exploited.

The other alternative would be to work from home and I tried that for a couple of months to begin with and I don’t think it’s anywhere near as productive as having a place to come and work, I think in terms of your mindset it is much better to come away from where you sort of socialise and spend your spare time and go somewhere different which you associate with working hard and doing business – especially if that place has the kind of facilities that

Practice— Learning as doing Acting as an entrepreneur

Community— Learning as belonging Social interaction as part of the incubator community

possible, so I think having access to academics at the university who can help you fill those gaps is really important, both in terms of developing yourself as an entrepreneur and also developing your business ideas so that they perhaps are more realistic and more likely to be effective. I have found that by being an INNOSPACE tenant from within the Business School it opens the gate to speak to lots of university staff who probably wouldn’t speak to you . . . so for example like us being able to talk to directors and deans of the university just by writing them an e-mail and explaining who I am and what I would like to speak to them about so that is the kind of thing where I don’t think we would have got that kind level of support or

Being around other people who have a sort of entrepreneurial way of thinking is incredibly valuable . . . everyone has an area of expertise that is different so the amount of information you can pick up from people which you wouldn’t usually pick up is massive because there are web designers, web developers, on-line retailers in here, recruitment agencies, legal consultants, book keepers, you know there is somebody in here (continued)

158

7 Learning and Opportunity Development in INNOSPACE

Table 7.2 (continued) Transformation of entrepreneurial Identities

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs

Meaning— Learning as experience Experience of being an entrepreneur you have got here so having access to the meeting rooms and the kind of networking areas,

Practice— Learning as doing Acting as an entrepreneur even the time to speak to them unless we had been somehow affiliated within the university like we are within INNOSPACE.

Transformation of entrepreneurial Identities Identity—Learning Meaning—LearnPractice—Learnas becoming ing as experience ing as doing Individuals with Experience of Acting as an ideas becoming being an entrepreneur entrepreneurs entrepreneur

Kath

A lot of the people already in there look at me and think, ‘oh well she’s already got a business, she’s a successful business woman, she’s done X, Y and Z,’ and I have and I know a lot of

‘Oh I wish I could say to Kath she is doing that wrong but she’s the boss and she might not like it’, and you might get some of that in a normal situation whereas here it’s really really positive, I

Family Vouchers won’t be perfect either, I shall start running that and think, ‘Oh I should have thought of that’ or whatever it is but I am definitely putting in, at the moment to the best of my business

Community— Learning as belonging Social interaction as part of the incubator community who has some kind of experience into almost all aspects of the business and marketing and all that kind of stuff so I think when you add those kind of three factors’ being around other people, having them add to your ideas and being able to access their knowledge, skills and experience then that makes INNOSPACE a really really valuable tool to help you develop your business. Community— Learning as belonging Social interaction as part of the incubator community I suppose it’s a bit like teachers we are the same, if somebody says to me, ‘oh I’m a teacher’, I immediately have the impression that I can trust them, because I was a teacher, I know (continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

159

Table 7.2 (continued) Transformation of entrepreneurial Identities

Identity—Learning as becoming Individuals with ideas of becoming entrepreneurs things that they perhaps don’t know but I also get so much back from those people who possibly because they haven’t had the experiences that I have had don’t see what I can see and so they put a completely different view point forward and it’s really refreshing and as well with INNOSPACE people. In my other business, I’m the boss, I’m not a sort of autocratic boss or anything but bottom line I am the boss whereas here I am just Kath so nobody has to be careful what they say to me.

Meaning— Learning as experience Experience of being an entrepreneur

Practice— Learning as doing Acting as an entrepreneur

think, that, you can get some honest opinions and honest feedback.

knowledge, what I think will work into the next business.

Community— Learning as belonging Social interaction as part of the incubator community what you’ve been through, I know your 4-year course, I did that. I suppose it’s because we have all been endorsed by +Martin {INNOSPACE manager} or somebody like him, anybody else who is on that little team and if you trust that team you trust the people, like they have said, “oh you’re okay to come into INNOSPACE”.

company, where he could adopt the role of an experienced entrepreneur by running online workshops for other entrepreneurs and small business owners. The transformation of opportunities is summarised in Table 7.3. Again, we draw on our conceptualisation of entrepreneurship (Fig. 3.3) to illustrate the four learning activities. In this section, data are used to demonstrate how the incubatees developed their opportunities (rather than their identities). As illustrated in ‘learning as becoming’, during the early stages opportunities were, in most cases, opaque with little clear focus. Of the eight opportunities presented in Table 7.3, only Kath’s childcare voucher plan was targeted at a specific ‘gap’ in the market. Learning as experience demonstrates that interaction with other actors including potential customers and the

160

7 Learning and Opportunity Development in INNOSPACE

Table 7.3 Transformation of opportunities

Andy

Jane

Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities The company has I catered my [intergot branding, sloview] presentation gans, tag lines, it’s towards smallgot it’s suite of scale, cheap web business cards and developments, letter headed paper, which I realised we’ve got graphics would be attractive up on the glass to current tenants. walls in the office. The people here have just started new businesses and they don’t want a huge website. So, I knew a lot of them would be looking to get websites to increase their presence on the internet.

I want to appear professional. I don’t necessarily want them to know that I just do it a bit part-time. I want them to think it’s more than that. It definitely helps having somewhere that you can use, a city centre address, trying make myself a bit more professional.

It’s a lot easier in the summer because a lot more courses are available and it doesn’t matter if you have to cancel it because the cost isn’t quite as high, so I feel like it’s little bit less risky if I’m doing it in the summer . . . I feel like I’m a lot more aware of what I need to do and I

Practice— Learning as doing Elaboration on opportunities: from identification to development We document everything . . . we have a weekly meeting agenda . . . It’s literally it’s a chart about issues we might have, things we need to talk about, it could be really small . . . or it could be as big as how we gonna to implement this new system, how does this piece of technology work.

Each time I knew that I had enough plays to add to the venue or to expand it, then I will try to do that. It was more as a response to, it developed so as its response to people emailing me wanting to play and me having to them finding extra venues to fit them in.

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development To begin with I didn’t see that benefit, but as soon as we moved into the office, it became clear that there was going to be lots of work flowing in different directions .. [It] has taught me massive amounts of all sorts of different businesses as well, so I’ve learnt a lot from Frank, Jenny, Jonathan and I continue to do so. It’s been good . . . well, eight months, is it? Felt just started, it’s going really well. I don’t feel like I could necessarily do it alone, so even if I chose not to use the facility as I do now, I cannot really ever see a time when I wouldn’t want to be part of that community. I feel like I’ve still got a lot to learn, and I feel like that the resources that are here and the (continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

161

Table 7.3 (continued) Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities

Practice— Learning as doing Elaboration on opportunities: from identification to development

can take it forwards from here.

Ian1 (SNE)

We had no intenI will ask the peotion of setting up a ple who come to it networking event what they want . . . when we came because it’s not to here we saw really my business what a good state it it’s the people who was and we come to it and if no realised how much people came then potential it had for there wouldn’t be people to network anything so we will and there wasn’t continue asking anything going them what they on. We started would like to see at running these the event and we events and that was will probably try something that all these. completely evolved from being here. It was something that we wouldn’t have done otherwise so that was really good. Transformation of opportunities Identity—Learning Meaning—Learnas becoming ing as experience Ideas becoming Making new business meaning from opportunities experience and new info. Prior

We knew what we had to get, we had to get testimonials, referrals, we made some little extras, and the day before the event we sent out all the details of the people who were coming, we allowed people to advertise to each other . . . we just kept what we actually liked and we just went from there and every session we do we learn a little bit more and tweak it a little further.

Practice—Learning as doing Elaboration on opportunities: from identification to development

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development people here could help me achieve what I would want to achieve, you know, to learn, I think having that as your first port of call, I think it’s quite comforting. Being at INNOSPACE has allowed me to have a better presence, I can do more things because I use the meeting rooms quite a lot and I put on quite a lot of talks and events and with the networking we had no intention of setting up a networking event, that was just something which we thought we might as well do to be perfectly honest.

Community— Learning as belonging Exchange ideas and information in a BI, leading to (continued)

162

7 Learning and Opportunity Development in INNOSPACE

Table 7.3 (continued) Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities

Ian2 (HW)

I went along, got hypnotised and really enjoyed it, did a few sessions with him, thought it was really interesting and decided . . . he said, “You should train, you’d be really good”, and I didn’t need any more convincing than that

Tony

The whole point of the second company LCBA, and in fact all my companies, the whole point of them has always been to try and to help people often less fortunate than myself.

knowledge transformed to opportunities I’ve always been interested in hypnosis and NRP which is a form of hypnosis and I was reading about it and I was learning about it and I then went to a networking event and I met somebody who was a hypnotist and he offered to hypnotise me so I went along, Basically the idea is developed because I’m work with Blue Orchid . . . now by getting that contract with Blue Orchid, I’ve learnt lots of more about the tendering process and I know where the opportunities are really. And that’s why I’m at a very very strong position now with LCBA, which wasn’t before.

Practice— Learning as doing Elaboration on opportunities: from identification to development

I then started researching on-line courses and I then became really friendly with a girl who comes to my networking events actually who runs a hypnotherapy training company and so she helped me with a lot of things, so I’ve done three diplomas. LCBA was an idea, it wasn’t called LCBA it was called something else, years ago, and that came out from MA. After doing MA, I realised if I could get a group of talented people together, and the right people and right motivation, we can then really revolutionise the way that business is taught and that was only because the business advice I got, right start from MA was so bad, especially

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development new opportunity identification and development He helped me through Blue Orchid and helped me with the hypnotherapy he made me look at it as a real world example and he showed me how it would work and did all the costings and showed me how it would be so that was really really helpful. This LCBA idea wouldn’t happen without INNOSPACE. LCBA would happen without INNOSPACE, full stop, really . . . because of the people I met [here]; because of the atmosphere; the design of this room . . . this room is really helpful, so we draw the stuff, and because it’s hot-desking, you can basically meet a lot more people. You know, (continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

163

Table 7.3 (continued) Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities

Practice— Learning as doing Elaboration on opportunities: from identification to development marketing, and that I just wanna to help people make sure it’s better.

Paul1 (OFS)

I have been going through the business planning process and specifically looking at how we commercialise the ideas and capitalise on the opportunities it’s become apparent that as graduates, because we do like this experience, that we’ve got a lot to learn as quickly as possible in order to succeed.

Most of my research was deskbased. . . market reports saying what consumers were looking for and . . . how environmental consumers behaved and how on-line consumers behaved and ways of motivating them to sort of buy more or to buy in the first place. I also spoke to experts in the industry and leading figures who perhaps would be able to lend a more up-to-date version of, well extra information that you perhaps wouldn’t read in a market report which has taken sort of two years to compile or something like that.

I identified the need fairly easily but it was more the things like when I started to speak to more and more people within the university and outside the university it made me much more aware of what processes I would have to go through in order to exploit the opportunity and kind of that’s where the sort of commercial or which processes during the commercial development I would have to go through and what kind of team I would have to assemble in order to do it and how much it would cost and all that type of thing.

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development INNOSPACE itself will become too small for this business, and hopefully relatively soon, but without it, it wouldn’t really exist. It was going to be an on-line retailer of environmentally friendly products so that’s why I initially came here to do that but then after being here for just over a year I am actually now involved in three businesses so I am still working on the initial idea that I had but then I have also started a digital publishing company so with two other of the tenants here at INNOSPACE.

(continued)

164

7 Learning and Opportunity Development in INNOSPACE

Table 7.3 (continued)

Paul2 (DP/JeffPaul)

Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities Transformation of opportunities Identity—Learning Meaning—Learnas becoming ing as experience Ideas becoming Making new business meaning from opportunities experience and new info. Prior knowledge transformed to opportunities [Having an adviI could see there sor] increases the was a market need credentials of the because through company and an my own experiadvisor with a lot ences and the of experience who experience of can help us address being in the target the issues of us market I could see being graduates there was need for with not very much it and I was also experience. attracted to it because it’s a relatively low risk business and the investment required is quite low and he was already trading so there’s hardly any sort of barriers to entry for us because we’ve got the links with the university which the competitors don’t have and so it just seemed like a sensible venture to get involved in.

Practice— Learning as doing Elaboration on opportunities: from identification to development Practice—Learning as doing Elaboration on opportunities: from identification to development

We did a questionnaire to collect information, we also used Facebook because you can do questionnaires and polls on Facebook and then we also had a small group of about 15 students and graduates who reviewed the books for us and they sort of filled out questionnaires for us as well. Having an advisor . . . open up his network and contacts for us . . . so I am meeting the CEO of an international publishing company plus five of his advisors to get advice.

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development Community— Learning as belonging Exchange ideas and information in a BI, leading to new opportunity identification and development In the last six months I started working with Jeff on another project as well which is offering IT support to students, so kind of I came here with just the one idea of working by myself and after just over a year I am now working on three things with other INNOSPACE tenants.

(continued)

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

165

Table 7.3 (continued)

Kath

Transformation of opportunities Meaning— Learning as experience Making new meaning from Identity—Learning experience and as becoming new info. Prior Ideas becoming knowledge business transformed to opportunities opportunities When I had heard I’ve been able to about start gathering the INNOSPACE for information and the first time I had start getting to had the idea about where I want to be childcare vouchers and during all that for about three or time before I am four years but not looking at their been able to do it [competitors’] sysbut it was coming tem and I am to INNOSPACE thinking, ‘That’s that made me do it. not very good, that’s not easy to use. So I have been refining my system through looking at what they are doing and we have come up with something that we are hoping is going to knock socks off everybody else because it’s so much further forward.

Practice— Learning as doing Elaboration on opportunities: from identification to development I cannot design things but I am creative and I know what I want and that is exactly what happened, by the Summer of last year I did a lot of research and working out the system that I wanted, so I took the system then and went, well I actually went to INNOSPACE and I said does anybody know who could design a system, not even the web design, I was more interested in the system.

Community— Learning as belonging Exchange ideas and information in the incubator leading to new opportunity identification and development The main thing I’ve found with INNOSPACE is that the other people who are around are able to offer you advice and encouragement and a different perspective on what you think is clear-cut . . . You might develop an idea as you are speaking and if somebody is saying something you might follow it through and say, “actually yes”. It’s a bit like coaching, you come out with the idea yourself. Perhaps wouldn’t have done that if somebody hadn’t have talked about it over lunch.

collection of market ‘data’ enabled incubatees to give their business ideas greater focus. Engaging with partners or actively attempting to launch the business feature prominently in learning as doing. In other words, at this stage incubatees were thinking seriously about accessing the resources necessary to exploit their business opportunities. Data related to ‘learning as belonging’ demonstrate the centrality of INNOSPACE to the development of all eight opportunities. In three cases (Ian1, Tony and Paul2), the specific opportunities were only identified because the tenants

166

7 Learning and Opportunity Development in INNOSPACE

were actually working together in INNOSPACE. Even Kath’s childcare voucher idea benefitted greatly from her interaction with other incubatees. In all six cases presented in this chapter (see Tables 7.2 and 7.3), it is evident that tenants perceived their entrepreneurial identities through a process of ‘argumentation’ (Holman et al. 1997) or ‘negotiation’ (Rae 2007; Wenger 1998). In line with Dimov’s (2007a) work, incubatees understood that ‘being an entrepreneur’ meant taking risks other people would not be prepared to take. Paul mentioned that tenants in INNOSPACE understood him and were supportive when he took risks while family and friends urged him to take a graduate job as a better option. Also, being with other tenants gave him insight from more experienced business people on the advisory boards of his start-ups to help to offset liabilities of newness. This, in his words, gave him more credibility and ‘fast-tracked’ the transformation process from a university graduate with a business idea into an entrepreneur running one business with an INNOSPACE colleague while, at the same time, developing two more business ideas. Similar to Jane’s example of having a more professional presence for the business, Paul and the other cases explored in this study, INNOSPACE incubatees learned the importance of being perceived as professional and experienced from their peers. This supports ideas underpinning the 4i (Crossan et al. 1999) and the 5i (Jones and Macpherson 2006) learning frameworks, which explain how learning shifts from the cognitive level via teams and groups to the organisational level. There was a strong sense among the participants of being part of or belonging to the INNOSPACE community (Wenger 1998; Wenger et al. 2002; Wenger-Trayner et al. 2014). While there were some similar businesses, each individual had a unique business idea/angle. Nevertheless, all participants shared a common identity in perceiving themselves as being or becoming entrepreneurs. The meaning of starting up a business and being an entrepreneur was negotiated through conversations (discourse), their understanding of starting up and running a business (concepts), and events taking place inside and outside of INNOSPACE. Data from interviews and documents suggest that this community did not only consist of the tenants but also included the management team, the Steering Group (see Chap. 10), business advisers/mentors and guest speakers at INNOSPACE events. The concept of a community was explicitly articulated by tenants and management, while the other actors implicitly acknowledged the idea. There was a strong sense of identity and membership of INNOSPACE, suggesting the type of mutual engagement identified by Wenger (1998). Participants’ developed common stories and ideas, creating what Wenger (1998) refers to as a ‘shared repertoire’. In this context, INNOSPACE can be seen as a joint enterprise (Wenger 1998) that participants were building by sharing ideas and goals and maintaining through their negotiated meaning and learning (see Table 7.2 and case studies in Sect. 10.6). For example, Paul mentioned that the INNOSPACE management team supported the entrepreneurial community by sharing understanding and encouraging engagement in various activities such as masterclasses and social events. When explaining the concept of negotiated enterprise in the entrepreneurial learning model, Rae (2007: 44) suggests that negotiated enterprise includes ‘negotiating meaning,

7.3 Analysis: Entrepreneurial Learning and Opportunity Development

167

structures and practices—developing shared beliefs about the venture’. In Paul’s case, these shared beliefs were about being an entrepreneur and setting up business ventures. Similarly, Kath explained that the INNOSPACE community influenced the way she developed her business idea. She noted that although everyone in INNOSPACE was running different businesses they shared the same goal of becoming successful entrepreneurs. Because of the joint enterprise they built together, Kath and other tenants had explicit trust in each other. This is demonstrated through their mutual engagement. They readily exchanged ideas without fear of being copied and they helped each other to improve their business ideas (Table 7.3).

7.3.3

Acquisition of Skills and Competencies

To better understand the role INNOSPACE played in linking learning to opportunity development, this section looks at the skills and competencies that were acquired by respondents while based in the incubator. One of the key benefits of an incubator is that inexperienced entrepreneurs are provided with a supportive environment in which to develop their skills. INNOSPACE certainly helped tenants cope with the liabilities of smallness and newness. As demonstrated in the sections above, respondents in this study were heavily reliant on their fellow tenants and the management team for obtaining new information and knowledge. Our study also supports the literature, which suggests that experiential learning is crucial for novice entrepreneurs (Kolb 1984). Seeing themselves as part of an ‘entrepreneurial community’ encouraged incubatees to enhance the skills necessary to succeed in their entrepreneurial ventures. The study establishes that in the entrepreneurial learning process information, knowledge, skills and competencies supported opportunity development. Table 7.4 summarises the most important skills and competencies developed by each of the tenants during their time in INNOSPACE (see Jones et al. 2014). Unsurprisingly, most of the 20 respondents enhanced their entrepreneurial skills while in INNOSPACE. Even those who had previous experience of running their own businesses (Ian, Tony, Nick, Neill, Phil, Jeff, Paul, Peter, Alex and Mark) or working as employees (Helen, Tim, Andy, Jane, Emma, James, Kath, Laura, Kelly and Karen), certainly benefitted from an environment in which entrepreneurship was the focus of everyone’s attention. For example, it was rare for any discussion between incubatees not to include some mention of the potential for developing a successful production/service that would exploit or create a market opportunity. Given the importance attached to the need for tenants to buy in to the concept of an INNOSPACE community of practice, it is also not surprising that 16 of the 20 respondents indicated that their relational competencies were enhanced. Most respondents mentioned the importance of ‘trust’ between incubatees as a key factor in why they enjoyed being in INNOSPACE. Exposure to other stakeholders including the management team, various external speakers, members of the steering group and those belonging to the various support organisations (Blue Orchid), also helped

Skills Andy Jane Ian Tony Paul Kath Helen Tim Nick Neil Phil Jeff Peter Emma James Laura Alex Kelly Mark Karen ✓

✓ ✓

✓ ✓ ✓

✓

✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

✓

Relational ✓ ✓

Entrepreneurial

Table 7.4 Acquisition of skills and competencies

✓

✓ ✓

✓ ✓

✓

✓

Conceptual

✓

✓ ✓

✓ ✓ ✓

✓ ✓

✓

Functional ✓ ✓ ✓ ✓

✓

✓

Technical ✓

✓

✓

✓ ✓

✓

✓

✓

Resourcefulness ✓

168 7 Learning and Opportunity Development in INNOSPACE

7.4 Summary: The INNOSPACE Learning Community

169

tenants develop specific relational competencies such as their conversational and rhetorical skills. Although some incubatees (7) did develop their conceptual skills while in INNOSPACE they were in the minority. Perhaps this reflects the fact that there was more emphasis on informal, experiential learning than formal classroom-based teaching. It is possible for inexperienced entrepreneurs to develop the ability to make sense of complex and messy information during business start-up (see Jones and Giordano 2020). Some of those who enhanced their conceptual skills did have previous business experience (Jane and Tim) but there were no obvious patterns in the data. In contrast, the majority (15) indicated that their functional skills had improved while in INNOSPACE. Again, this appears a logical outcome as there are clear links between gaining experience of attempting to start a business and a better appreciation of the individual’s ability to allocate and manage their resources (their own time for example). Only 3 of the 20 respondents suggested that they had improved their technical skills. This is certainly a reflection of the type of businesses being started by the INNOSPACE tenants. As discussed above, the majority were trading companies and required little technical input other than the ability to use the Internet. Perhaps the most surprising outcome was that a minority of incubatees (8) felt that being in INNOSPACE improved their resourcefulness. There was some evidence of incubatees applying creative solutions to difficult problems this was less evident than we would have anticipated. Once again, perhaps this reflected a lack of formal input, which could have helped tenants develop resourcefulness by improving their problem-solving skills. For example, by applying a range of ‘bootstrapping’ techniques, it is possible for nascent entrepreneurs to access valuable resources without incurring major expenditure (Jones and Jayawarna 2010; Jayawarna et al. 2020).

7.4

Summary: The INNOSPACE Learning Community

In this chapter, we have presented data on the links between opportunity development and learning amongst the core group of nascent entrepreneurs. We began by presenting our analysis of the opportunity transformation process. To do this, we continue to draw on the six case studies used in Chaps. 5 and 6, as their pathways have already been presented in detail. In Sect. 7.3, we combine the analyses presented in the earlier chapters with the transformation processes presented in Sect. 7.2. This provides a holistic view of the learning process within INNOSPACE that takes account of context, the type of prior knowledge the six participants possessed when identifying opportunities (Chap. 6) and the transformation process that took place (Chap. 7) during the incubation period. We show the way in which incubatees access information and knowledge to develop their business ideas. The data clearly illustrate the importance of the INNOSPACE community in this process. Other tenants and the management team were central to the acquisition of information and knowledge. We also identified two transformational processes: the

170

7 Learning and Opportunity Development in INNOSPACE

transformation of knowledge and the transformation of identity. The latter concept is particularly relevant to this study as being a member of the INNOSPACE CoP helped the tenants develop their identities as entrepreneurs. Furthermore, to illuminate the impact of belonging to the INNOSPACE community of practice, we draw on the six generic entrepreneurial competencies (Jones et al. 2014) discussed in Sect. 3.2.3. As discussed in Chap. 2, incubators are important because they provide earlystage support for entrepreneurs whose ideas are not fully formed and help them build sustainable companies (Lukeš et al. 2019; Bergek and Norrman 2008). INNOSPACE certainly provided a sheltered environment with shared office space at a cost well-below below market rates. Although, in order to minimise costs (see Chap. 10) the services offered by INNOSPACE were less extensive than some more formal incubators, which offer support for IT (information technology), PR (public relations), recruitment, legal and intellectual protection rights, accounting, or pooled buying (Colombo and Delmastro 2002; Phan et al. 2005). At the same time, the objective was to help incubatees develop better business awareness, a clearer understanding of how to satisfy customer needs as well more effective networking skills (Bone et al. 2017; Voisey et al. 2006). There is little doubt that all participants in this study benefitted from being members of the INNOSPACE community. The majority were able to improve their business ideas by drawing on the support of their peer group and the management team. In the next chapter, we explore the role of INNOSPACE in developing a community of practice in greater detail (Sect. 10.6).

References Baker, A. C., Jensen, P. J., & Kolb, D. A. (2005). Conversation as experiential learning. Management Learning, 36(4), 411–427. Bergek, A., & Norrman, C. (2008). Incubator best practice: A framework. Technovation, 28(1), 20–28. Bone, J., Allen, C., & Haley, C. (2017). Business incubators and accelerators: The national picture, BEIS Research Paper No 7 (NESTA). Chang, J., & Rieple, A. (2018). Entrepreneurial decision-making in a microcosm. Management Learning, 49(4), 471–497. Churchill, N. C., & Lewis, V. L. (1983). The five stages of small business growth. Harvard Business Review, 61, 30–39. Colombo, M. G., & Delmastro, M. (2002). How effective are technology incubators? Evidence from Italy. Research Policy, 31, 1103–1122. Cope, J. (2005). Toward a dynamic learning perspective of entrepreneurship. Entrepreneurship: Theory and Practice, 29, 373–397. Corbett, A. C. (2007). Learning asymmetries and the discovery of entrepreneuiral opportunities. Journal of Business Venturing, 22(1), 97–118. Crossan, M., Lane, H., & White, R. (1999). An organizational learning framework: From intuition to institution. The Academy of Management Review, 24(3), 522–537. Dimov, D. (2007a). Beyond the single-person, single-insight atribution in understanding entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 31(5), 713–731. El-Awad, Z., Gabrielsson, J., & Politis, D. (2017). Entrepreneurial learning and innovation: The critical role of team-level learning for the evolution of innovation capabilities in technology-

References

171

based ventures. International Journal of Entrepreneurial Behavior and Research, 23(3), 381–405. Hajizadeh, A., & Zali, M. (2015). Prior knowledge, cognitive characteristics and opportunity recognition. International Journal of Entrepreneurial Behavior and Research, 22(1), 63–83. Holman, D., Pavlica, K., & Thorpe, R. (1997). Rethinking Kolbs theory of experiential learning in management education—The contribution of social constructionism and activity theory. Management Learning, 28(2), 135–148. Jayawarna, D., Jones, O., & Macpherson, A. (2020). Managing social enterprises: The role of socially oriented bootstrapping practices. British Journal of Management, 31(1), 56–79. Jones, O., & Giordano, B. (2020). Family entrepreneurial teams: The role of learning in business model evolution. Management Learning. https://doi.org/10.1177/1350507620934092. Jones, O., & Jayawarna, D. (2010). Resourcing start-up businesses: Social networks, bootstrapping and firm performance. Venture Capital, 12(3), 127–152. Jones, O., & Macpherson, A. (2006). Inter-organizational learning and strategic renewal in SMEs: Extending the 4i framework. Long Range Planning, 39(2), 155–175. Jones, O., Macpherson, A., & Jayawarna, D. (2014). Resourcing the start-up business: Creating dynamic entrepreneurial learning capabilities. London: Routledge. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. Englewood Cliffs, NJ: Prentice-Hall, Inc.. Lans, T., Biemans, H., Verstegen, J., & Mulder, M. (2008). The influence of the work environment on entrepreneurial learning of small business owners. Management Learning, 39(5), 597–614. Lukeš, M., Longo, M. C., & Zouhar, J. (2019). Do business incubators really enhance entrepreneurial growth? Evidence from a large sample of innovative Italian start-ups. Technovation, 82, 25–34. Man, T. W. Y. (2006). Exploring the behavioural patterns of entrepreneurial learning. Education and Training, 48(5), 309–321. Phan, P. H., Siegel, D. S., & Wright, M. (2005). Science parks and incubators: Observations, synthesis and future research. Journal of Business Venturing, 20(2), 165–182. Pittaway, L., & Cope, J. (2007). Simulating Entrepreneurial Learning: Integrating experiential and collaborative approaches to learning. Management Learning, 38, 211–233. Politis, D. (2005). The process of entrepreneurial learning: A conceptual framework. Entrepreneurship: Theory and Practice, 29(4), 399–424. Politis, D., Gabrielsson, J., Galan, N., & Abebe, S. A. (2019). Entrepreneurial Learning in venture acceleration programs. The Learning Organization, 26(6), 588–603. Rae, D. (2007). Entrepreneurship: From opportunity to action. Basingstoke: Palgrave Macmillan. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Taylor, D. W., & Thorpe, R. (2004). Entrepreneurial learning: A process of co-participation. Journal of Small Business and Enterprise Development, 11, 203–211. Tomkins, L., & Ulus, E. (2016). Oh, was that “experiential learning”?! Spaces, synergies and surprises with Kolb’s learning cycle. Management Learning, 47(2), 158–178. Toutain, O., Fayolle, A., Pittaway, L., & Politis, D. (2017). Role and impact of the environment on entrepreneurial learning. Entrepreneurship and Regional Development, 29(9–10), 869–888. Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The measurment of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. Wang, C. L., & Chugh, H. (2014). Entrepreneurial learning: Past research and future challenges. International Journal of Management Reviews, 16(1), 24–61. Wenger, E. (1998). Communities of practice: Learning, meaning, and identity. Cambridge: Cambridge University Press. Wenger, E., McDermott, R., & Snyder, W. (2002). Cultivating communities of practice. Boston, MA: Harvard Business School Press. Wenger-Trayner, E., Fenton-O’Creevy, M., Hutchinson, S., Kubiak, C., & Wenger-Trayner, B. (2014). Learning in landscapes of practice: Boundaries, identity, and knowledgeability in practice-based learning. New York: Routledge.

Chapter 8

Discussion: The INNOSPACE Community of Practice

8.1

Introduction

According to Hackett and Dilts (2004), the first business incubator was established in the Batavia Industrial Centre (New York) in 1959. Initially, growth was slow and the USA had only a few dozen incubators by the 1980s; after which, there was a fairly rapid expansion with over 1000 by 2006 and 1250 by 2012 (Harper-Anderson and Lewis 2018). A recent report for NESTA indicated that in the UK there are currently 205 incubators and over 160 business accelerators (Bone et al. 2019). Interest in linkages between business incubators and universities was stimulated by Etzkowitz’s (2003) concept of the ‘entrepreneurial university’. Growth in the number of incubators also coincided with various UK policy initiatives designed to promote the role of the third mission, which encouraged universities to establish closer links with business (Clark 1998; DTI 1998, 2000; Lambert 2003). Science parks pre-dated the emergence of business incubators in the UK although there is little consensus on their effectiveness. The first UK science parks were established in Cambridge and Heriott-Watt Universities in 1972 and by the late 1990s, this number had increased to 46 as other universities sought to replicate Cambridge’s success (Edwards and Jones 2008). According to UKSPA (United Kingdom Science Park Association 1996) science parks have three features: fostering the creation and growth of R&D intensive firms; enabling large companies to develop links with small high-tech firms; promote links between firms, universities and other research institutions. However, it is widely acknowledged that most science parks failed in their mission to improve expenditure on R&D or to promote the growth of high-technology firms (see Massey et al. 1992; MacDonald 2016). While evidence for the effectiveness of science parks and business incubators is inconclusive a number of UK universities regarded these initiatives as important for technology transfer and the promotion of entrepreneurship. INNOSPACE was established in 2007 to support students and graduates from Manchester Metropolitan © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_8

173

174

8 Discussion: The INNOSPACE Community of Practice

University in their efforts to establish new businesses. As explained in Chap. 10, the catalyst for the founding of INNOSPACE was a small technology incubator based in Manchester University and associated with a government initiative known as Science Enterprise Challenge (Handscombe et al. 2009). The concept of a ‘student’ pre-incubator was developed and implemented by a small group of staff working in MMUBS’s Centre for Enterprise (Jones et al. 2008). Soon after the launch, a Ph.D. student was recruited to examine the effectiveness of INNOSPACE in supporting inexperienced entrepreneurs (Meckel 2014). This study is important because the incubator was intended to develop a ‘community of practice’ amongst the tenants and encouraged engagement with the wider ecosystem of entrepreneurs and small businesses. The research took place in the first few years that the incubator was operating, and we discuss more recent developments in Chap. 10. Twenty tenants were interviewed although the detailed empirical material focuses on six incubatees because they were broadly representative of the larger group. In the following sections, we discuss the unique findings from this study and demonstrate how our work contributes to a better understanding of entrepreneurial learning in the context of a university-based incubator (UBI). We begin by reviewing our findings in the context of the conceptual framework developed in Fig. 3.3.

8.2

Entrepreneurial Learning and Business Incubation

Surprisingly, there are a limited number of studies focused on the process of starting a new business. Mueller et al. (2012) did carry out a detailed longitudinal study of six entrepreneurs operating new businesses, which had been established between 3 and 12 months. The main functional activities were marketing, sales, public relations, product development, administration, finance and environmental monitoring. Their activities, which were highly fragmented, mainly focused on the exchange of information, data analysis and networking (Mueller et al. 2012). Although some of the incubatees in our sample had previous experience of running their own businesses, at the time of the study all 20 were in the process of identifying opportunities and developing new business ideas. Hence, most were at a much earlier stage than the six entrepreneurs in the study by Mueller et al. (2012). There are extensive bodies of literature covering both entrepreneurial learning (Breslin 2019; Haneberg 2019; Jones and Giordano 2020; Politis et al. 2019; Wang and Chugh 2014) and business incubation (Albort-Morant and Ribeiro-Soriano 2016; Baraldi and Havenvid 2016; Hackett and Dilts 2008; Harper-Anderson and Lewis 2018; Kakabadse et al. 2020; Lee and Osteryoung 2004; M’Chirgui et al. 2018; Mian et al. 2016; Sedita et al. 2019; Zhang and Sonobe 2011). Various policy-focused projects associated with NESTA also provide a good overview of the number and quality of UK-based incubators (Bone et al. 2017, 2019). Literature examining university-based incubation is less comprehensive. There are a small number of studies based on fairly large samples: Lasrado et al. (2016) examine 152 university-based incubators in the USA; Soetanto and Jack (2016) compared 141 university spin-offs in the UK, Netherlands

8.2 Entrepreneurial Learning and Business Incubation

175

and Norway; Díez-Vial and Montoro-Sánchez (2016) studied 76 firms based on Madrid Science Park (Autonomous University of Madrid). Research focusing on universities in the UK and Ireland are mainly qualitative studies examining single institutions (Battisti and McAdam 2012; Gately and Cunningham 2014; McAdam and McAdam 2006; McAdam and Marlow 2007; Patton and Marlow 2011; McAdam et al. 2016; Voisey et al. 2006, 2013). Over recent years there have been a number of studies examining the role of incubation managers or the management team (Ahmad and Thornberry 2018; Kakabadse et al. 2020; Redondo and Camarero 2019b; Theodorakopoulos et al. 2014). For example, Galvão et al. (2019) stress the importance of incubation managers’ formal and informal networks in supporting incubatees. As stated in Chap. 2, our aim in this book is to make a significant contribution to knowledge by bringing together concepts from business incubation, opportunity identification, entrepreneurial learning and communities of practice.

8.2.1

The Business Incubation Process

Much of the existing literature focuses on quantifiable measures of incubator success (Allen and McCluskey 1990; Blok et al. 2017; Hackett and Dilts 2004; Lukeš et al. 2019). Treanor and Henry (2010) did suggest that a number of campus-based incubators placed more emphasis on skill development and knowledge transfer than counting the number of successful firms. Other authors also point out the importance of incubators for building softer skills (Bøllingtoft and Ulhøi 2005; Hannon 2005; McAdam and McAdam 2006). Nevertheless, the value of business incubation for inexperienced entrepreneurs remains a contested issue. Based on a large-scale survey of Italian start-up companies, Lukeš et al. (2019) found no convincing evidence that using public money to support business incubators was worthwhile. One key reason is that some entrepreneurs find incubator life comfortable, ‘too-safe-harbours’, which limits ambition and hampers performance. In contrast, data obtained from an extensive US study did establish that firms based in university incubators performed better in terms of job creation and growth in sales (Lasrado et al. 2016). A recent UK-based survey (Bone et al. 2019) confirmed that most firms benefitted from their incubation experience. Despite their critique, Lukeš et al. (2019: 26) do find that incubators provide a useful service for early-stage entrepreneurs whose ideas are not fully formed by offering a ‘sheltered environment, such as shared office space, under favourable rates’. Voisey et al. (2013) agree that incubators offer the opportunity for entrepreneurs to test their ideas and develop their business skills in a supportive environment. A number of authors identify networking and associated concepts such as relational and social capital as important benefits conferred by business incubators (Gately and Cunningham 2014; McAdam and McAdam 2006; Soetanto and Jack 2016). Although Battisti and McAdam (2012) warn that there is a tendency for those based in incubators to rely too heavily on their strong ties. Similarly, Eveleens et al. (2017) suggest that most incubators have limited brokerage to external business

176

8 Discussion: The INNOSPACE Community of Practice

networks. Others identify the key role played by incubation managers in developing effective incubation practices including regular review panels and external mentors (Patton and Marlow 2011). The importance of good infrastructure and shared facilities are also significant factors in successful incubators (McAdam and McAdam 2006; M’Chirgui et al. 2018). While McAdam et al. (2016) argue that it is essential for incubators to be embedded in their regional ecosystems. When launched in 2007, INNOSPACE was a unique approach to business incubation in UK universities. Although inspired by the University of Manchester’s SEC incubator, INNOSPACE was much larger and not limited to technology-based businesses. At that time, most existing university-based incubators concentrated on high-technology start-ups and were on a smaller scale than INNOSPACE, which had a capacity for well over 100 tenants (see Chap. 10). According to recent government data1 there are now a large number of incubators and accelerators linked to universities. However, with some exceptions, most are still technology-based with limited capacities and generally more costly than INNOSPACE. Institutions with larger, mixed incubators include Chichester, Coventry, Huddersfield, Leeds Beckett, London Southbank, Nottingham Trent, Wolverhampton and York (see footnote 1). The underlying ethos of INNOSPACE was similar to Allen and McCluskey’s (1990) early definition in that the incubator was intended to provide affordable, shared office space, offer business advice and create an environment that would promote the survival and growth of new ventures. Also, unlike many university science parks, it was intended to be non-profit making with a focus on supporting inexperienced entrepreneurs to develop feasible business ideas. In Chap. 5, we examined the incubation process by identifying a number of distinct pathways through INNOSPACE. Figures 5.1, 5.2, 5.3, 5.4, 5.5, 5.6 illustrate the stage pre-INNOSPACE and the various activities carried when they joined the incubation community. All six of the core cases had business ideas when they entered the incubator; four of those ideas were quite well developed (Andy, Jane, Ian and Tony) while Paul and Kath had ideas that were much less mature. This mirrors the larger sample with 11 incubatees having well-developed ideas and the other nine having business ideas that were still at the nascent stage. Their activities in INNSOSPACE were surprisingly similar and most expressed satisfaction at having a clearly defined work-space with a good range of facilities. Providing evidence of the value of the social aspects of business incubation, all respondents indicated that they discussed their business ideas with other tenants. Interestingly, most either worked with fellow tenants on different projects or had tenants/students working on their own business ideas. The majority also made use of their business mentors or business advisors. Only two of the six cases used the wider resources available from MMU such as the library, classes or the students’ union. The clear focus of all six respondents was to use the resource available in INNOSPACE to develop their business ideas so that they had greater chances of succeeding. In case studies of

1 https://www.gov.uk/government/publications/business-incubators-and-accelerators-the-nationalpicture (24th July 2020)

8.2 Entrepreneurial Learning and Business Incubation

177

successful INNOSPACE companies,2 Fiona McKay emphasises the value of accessing support and information through the University systems and Nick Richardson talks about access to knowledge through a KTP (Knowledge Transfer Partnership). Other aspects of INNOSPACE appreciated by the tenants included its location very close to Manchester city centre (M1 postal address) and the ability to book office space for meeting with various stakeholders including potential customers, clients and funders. That the location was available at a very low-cost made INNOSPACE accessible to anyone who had a reasonable business idea and the motivation to pursue that idea. In addition, a number of intangible factors were valued by tenants. As explained in the introduction, INNOSPACE was founded with the vision of developing a ‘community of practice’ within the incubator. It was explained to new entrants that they were expected to be active participants in developing the INNOSPACE communal spirit. It was particularly satisfying that many respondents mentioned the importance of ‘trust’ between tenants. In other words, no one felt inhibited about sharing ideas or problems with their peer group. Most existing literature dealing with business incubators either focuses on hard measures of success (number of incubating business, value of sales, etc.) or on smaller scale, cross-sectional studies of university-based incubators. Although we focus on a core of six incubatees, this research was based on a longitudinal study of 20 entrepreneurs in the process of mobilising 23 business opportunities. What we have demonstrated is the central importance of social interaction with their fellow incubatees and the management team during the incubation process (see Sect. 8.3).

8.2.2

Entrepreneurs, Prior Knowledge and Opportunity Identification

As pointed out by Jones et al. (2014), a considerable amount of intellectual endeavour has been dedicated to defining the term ‘entrepreneur’ (see Shane 2012). Davidsson (2016) adopts Kirzner’s (1973: 19) definition of entrepreneurship as ‘competitive behaviour that drives the market process’. As he goes on to state, ‘I favor this definition because it is succinct and gives a satisfactorily clear delineation of the role of entrepreneurship in society’ (Davidsson 2016: 6). However, for the purposes of this study, we adopt the definition by Jones et al. (2014: 7): ‘an entrepreneur is someone who is attempting to start his or her own business, or those who are currently managing their business’. Following Schumpeter’s (1934) seminal work, there were a number of significant contributors to the understanding of entrepreneurship during the course of the twentieth century: Ludwig von Mises (1949), Fredrich von Hayek (1990), Frank Knight (1921), Israel Kirzner (1973) and David McClelland (1961). Gradually, scholars pointed out that too much research 2

See case studies in Chap. 10 (Sect. 10.6)

178

8 Discussion: The INNOSPACE Community of Practice

focused on either the entrepreneur or the opportunity (Sarason et al. 2006). Shane and Venkataraman (2000) were explicit in stating that entrepreneurs and opportunity exploitation were linked together in a process. At the same time, the ability to discover and exploit new opportunities depends on the extent of entrepreneurial alertness (Chavoushi et al. 2020; Kirzner 2009; Minniti 2004; Monsson and Jörgensen 2016; Shane 2000; Shane and Venkataraman 2000). Sarasvathy (2001) describes this as the ‘causal approach’ to opportunity identification based on a linear process of the discovery, evaluation and exploitation of new ideas (Shane and Venkataraman 2000). In contrast, Sarasvathy’s (2001, 2008) effectuation theory suggests that opportunities emerge from a combination of the entrepreneur’s history and identity: who they are, what they know, and who they know. An effectual approach enables resource-poor entrepreneurs to act in the face of goal ambiguity as they create opportunities through practical engagement and experience (Sarasvathy 2004). The ability to identify and exploit new opportunities is the essence of entrepreneurship (Dimov 2007a, b; George et al. 2016; Schmitt et al. 2018; Shane 2000; Venkataraman 1997). Although in a more recent publication Venkataraman acknowledges that opportunities can be created as well as discovered (Venkataraman et al. 2012). According to Ardichvili et al. (2003), the entrepreneur’s prior knowledge of markets is an essential element of opportunity identification (Shane 2000). Prior knowledge can be based on education, work experience or previous entrepreneurial experience and it enhances the ability to analyse and synthesise complex market data (Smith et al. 2019). Based on Shane’s (2000) work, Sanz-Velasco (2006) adds two refinements to prior knowledge of markets: knowledge of ways to serve customers and knowledge of customer problems. Others acknowledge the role of what Ardichvili et al. (2003) describe as ‘special interests’ and customer market experience as being important to opportunity identification (see Ardichvili and Cardozo 2000; Gruber et al. 2013). Chapter 6 focused on the role played by incubatees’ prior knowledge on their aptitude for identifying new opportunities. In this study, there were 23 distinct opportunities associated with the 20 tenants comprising the full sample. We categorised four types of prior knowledge: personal interests, knowledge of markets, knowledge of customer problems and knowledge of the means to serve markets (Sanz-Velasco 2006; Shane 2000; Ardichvili et al. 2003). These four types of knowledge formed different combinations to influence each individual’s approach to opportunity identification. Eight tenants concentrated on exploiting their prior knowledge of markets and three based their business ideas on their personal (special) interests. The remaining 12 opportunities were based on two combinations of knowledge (mostly knowledge of customer problems + knowledge of markets) while three of the tenants (Jane, Tony and Neil) brought together three different forms of knowledge (see Fig. 6.1). The four types of prior knowledge led to three forms of opportunity identification, which were identified as: change and innovation (7), knowledge transfer (5) and knowledge replication (11). Change and innovation represents the identification of opportunities that were relatively new approaches to an existing business problem.

8.2 Entrepreneurial Learning and Business Incubation

179

Knowledge replication is associated with those tenants who copied an existing business model and tried to distinguish their offering by, for example, providing more personal services. Knowledge transfer is the mid-point between the radical and conservative approaches in which tenants adapted their previous experience to a completely new sector. In other words, the business idea was well-established but the existing service was offered in a different sector. As discussed in the next section, prior knowledge was extended by means of each individual’s experiential learning as they investigated the resources needed to exploit the opportunity and tested their ideas with potential customers. Secondly, most of the 20 respondents engaged in an on-going dialogue with other tenants about the nature of their ideas and the potential for success. Again, we suggest this study makes a unique contribution by establishing clear links between the various types of prior knowledge and opportunity identification (right-hand side of Fig. 3.3). Within INNOSPACE, the mechanisms for developing these links were very much based on regular social interaction between incubatees. Having a basic business idea was a prerequisite for entry into the incubator as that demonstrated applicants had identified potential opportunities they were hoping to exploit. Even though some incubatees retained their original ideas, all benefitted from engagement with their peer-group members as well as the management team. In other words, rather than remaining fixed, as suggested by ‘causal’ approaches (Shane 2000), business ideas evolved as the incubatees learned more about their ideas, the opportunities and themselves (Jones and Holt 2008; Read et al. 2016; Sarasvathy 2003). Hence, focusing on a ‘practice-based’ view of entrepreneurial learning shifts the focus from individual traits and cognition to the socially embedded experiences and relations associated with entrepreneurship (Jones et al. 2014: 15; Wenger-Trayner et al. 2014).

8.2.3

Entrepreneurial Learning in a Business Incubator

Lamont’s (1972) paper, published in the Journal of Small Business Management, was the first scholarly article explicitly referring to entrepreneurial learning. Interest in the topic of entrepreneurial learning started to become more widespread during the 1990s. As one of the key figures, it is important to note Cope’s various contributions to promoting the role of experiential learning in enhancing entrepreneurship skills (Cope 2003, 2005, 2011; Cope et al. 2007). Cope and Watts’ (2000) paper is certainly seminal in literature that draws on Kolb’s (1984) concept of experiential learning. Pittaway and Cope (2007) maintain that entrepreneurial learning occurs through experience and discovery and through doing and reflection (see Chang and Rieple 2018). While Corbett (2005) overtly linked experiential learning to the way in which entrepreneurs identify new opportunities. Also, as pointed out by Politis (2005), given the complexity of entrepreneurial learning, Kolb’s (1984) model cannot be followed mechanistically in terms of the four learning stages. Kolb and his colleagues did explicitly extend ELT to account for the social processes of

180

8 Discussion: The INNOSPACE Community of Practice

learning as well as the cognitive processes (Baker et al. 2005). The authors propose that conversational learning helps learners construct new meaning and transforms their collective experiences into knowledge and knowing (Baker et al. 2005: 412). In addition, Kolb and Kolb (2005) argue that the concept of learning space is important in enhancing experiential learning (Lave and Wenger 1991; Nonaka and Konno 1998). This revised view of experiential learning theory has strong overlaps with the concept of communities of practice. According to Lave and Wenger (1991), individuals develop their identities and practices through participation in situated learning activities (Brown and Duguid 2001; Handley et al. 2006; McDonald and Cater-Steel 2017; Mercieca 2017). Originally, situated learning in communities of practice was associated with relatively small groups of learners such as tailors and midwives (Handley et al. 2007). Hence, the idea of legitimate peripheral participation (LPP) stemmed from Lave and Wenger’s interest in recapturing the term ‘apprenticeship’ as a form of situated learning. There are strong similarities between situated learning in communities of practice and the concept of Ba (Nonaka and Konno 1998; Nonaka and Toyama 2015). For example, Rennemo and Åsvoll (2019:3) argue that trust is central to the meaningful dialogue that underpins reflective learning. In Chap. 7, the focus was explicitly on the way in which tenants developed their business ideas while engaging in experiential learning (left-hand side of Fig. 3.3). We distinguished between information (for example, identifying fellow incubatees with useful technical skills, sectoral information or external contacts) and knowledge (markets, customers, customer problems and personal interests). We also identified two transformational processes that occurred as opportunities were developed: transformation of knowledge and transformation of identity. Most tenants attempted to expand their knowledge into areas of weakness. If they had a reasonable understanding of markets then the focus was customer problems and ways in which to serve markets. While not all tenants adopted this approach rigorously, they were certainly encouraged by the management team to develop a sound understanding of the business environment before committing resources (this was done formally in regular progress reviews with each tenant). One of the key benefits of being based in a business incubator is that there is a clear focus on the importance of ‘becoming an entrepreneur’. Sharing experiences, problems, stories and knowledge helps build a ‘shared repertoire’ (Wenger 1998) amongst the incubatees. Belonging to the INNOSPACE community certainly helped even the most inexperienced members feel as if they were progressing towards becoming real entrepreneurs (Gartner et al. 1992). Finally, we identified the extent to which each of the 20 incubatees acquired new skills and competencies. Table 7.1 illustrates the importance of three sets of competencies: entrepreneurial, relational and functional for the majority of incubatees. Less evident was the development of conceptual, resourcefulness, and particularly, technical competencies. The development of entrepreneurial competencies is clearly strongly associated with the incubatees’ emerging identities as entrepreneurs. What we endeavoured to demonstrate in Chap. 7 was that the development of business ideas was inextricably linked to the incubatees’ experiential learning. Although we

8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development

181

accept that learning did not necessarily operate in a strict cycle there is no doubt that incubatees did experience the four modes of Kolb’s (1984) model: abstract conceptualisation, active experimentation, concrete experience and reflective observation (see Table 8.1). However, we have also demonstrated that this learning was supported and encouraged by dialogue and discussion amongst members of the INNOSPACE community.

8.3

Reconceptualising Entrepreneurial Learning and Opportunity Development

Following our ‘abductive’ approach (Mantere and Ketoviki 2013; Alvesson and Sköldberg 2018) discussed in Chap. 4, we now combine our empirical findings with knowledge gained from the literature to amend the existing conceptual framework (Fig. 3.3). We suggest that the revised model (Fig. 8.1) captures the essence of the business incubation process more effectively. From the discussion above it is clear that the transformation processes would have not been taken place without the existence of INNOSPACE. The incubator not only provided an important physical space but also acted as a social space where the tenants, management team, advisers, mentors and external speakers could meet and interact. This social space functioned as a location for networking activities and provided a safe environment for tenants to discuss ideas while working towards a common goal: to start up and grow their businesses. This finding supports Dimov’s (2007a: 723) assertion that, in a social context, ‘the social audience with which individuals engage to discuss their ideas affects the processes of interpreting and integrating through providing information, interpretation, resources, and reinforcement that help shape/develop the individuals’ ideas’. This confirms the view expressed by Tocher et al. (2015) that ‘social resources’ are fundamental to effective opportunity exploitation. Incubation managers have a key role in ensuring that incubatees are able to develop bridging and bonding social capital (Lee and Jones 2008; Redondo and Camarero 2019b). Taking together the findings from Chaps. 5, 6 and 7, this study followed the pathways participants took during their business incubation period and explores the incubation process in detail. Adopting a holistic view, Fig. 8.1 illustrates the role of a business incubator process in developing entrepreneurial learning, opportunity identification and development. This process is shaped by a complex interaction of knowledge, information, skills and learning that begins before potential entrepreneurs enter a UBI and continues throughout the incubation process. Four yellow boxes represent their prior knowledge gained before entering the incubator. The individual’s previous experience shapes the order of the three forms of knowledge and their personal interest. In other words, the order shown in the diagram is merely illustrative. The four grey boxes represent the information, skills, resources and experience gained by incubatees while in INNOSPACE. The outer ellipse represents the incubator community of practice where new skills are learned and new

182

8 Discussion: The INNOSPACE Community of Practice

Table 8.1 The Kolb cycle (quotes) Concept Abstract conceptualisation

Active experimentation

Concrete experience

Reflective observation

Illustrative quotes He helped me with my website and explained why it wasn’t generating cash-flow. How many sales I would need to get per month from what advertising . . . Yeah basically this is how many clients you would have to see per week to make this amount of money per year. So, he did it all out on a big blackboard and showed me you can do this advertising and it will cost this much, this is how many clients you should get. . . He took what my idea in business was and actually laid it down into figures and numbers and actual plans [Ian]. I did a Masters last year in Environmental Management and Sustainable Development, and it kind of came out of that really that there’s a lot of work to be done in that area. My business idea is about providing consultancy in environment management sustainability and people development linking the two together very much with that [Helen]. Becoming a freelancer was always gonna be something to do until I have a business idea that would bring me regular income. I don’t wanna be a freelancer for the rest of my life and going from freelancer to what I am doing now is has taught me massive amounts of all sorts of different businesses as well, so I’ve learnt a lot from Frank, I’ve learnt a lot from Angela, I’ve learnt a lot from Tom, and I continue to do so. It’s been a good eight months, is it? Felt just started, it’s going really well [Andy]. Being at INNOSPACE allowed me to have a better presence, I can do more things because I use the meeting rooms quite a lot and put on quite a lot of talks and events. When we came here, we realised how much potential it had for people to do networking and there wasn’t anything going on so we started running these events successfully. That was something that completely evolved from being here, it was something that we wouldn’t have done [without INNOSPACE] so that was really good [Ian]. WD is a web design company which offers bespoke web design to various clients, erm small to large. Online Job Search & Management is completely separate and is an on-line service . . . and whilst I was doing that [running WD] I gained experience in the kind of market and knew what was going on, different technologies and had the idea of Online Job Search and Management (OJSM) [Phil]. We were all students at the time when we started doing it and it was out of our direct experiences because we were working on projects together whilst students and learning how to use these computer programmes and by the end of our course the three of us knew so much more about what the computer programmes did than we did at the start that we kind of said if only there had been a book that was really quick to go through and had we read it at the start it would be much more useful [Paul]. It’s made me a lot more aware of . . . sounds silly, but a lot more aware of the bits that I’m not very good at. So, I watch other people networking and see how useful that is and how beneficial is for them. And I think that I should do that more. I see how other people market themselves, again, think I should do that a lot more and a lot better. I think being here has made me a lot more aware of how to market my business [Jane]. INNOSPACE made a huge difference, otherwise I won’t have met any of these people. I think a lot of these businesses survive, because they can come to INNOSPACE and have a bad day but still be around people that are smiling. It was when I listened to Neil’s speech, I’ve realised actually (continued)

8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development

183

Table 8.1 (continued) Concept

Illustrative quotes it’s not just the social side of it, it’s the motivation side of it, but also it’s meeting the right people. And as soon as I opened my mind, the possibility that we can meet, you know, the right people, so I then met all the right people [for this new business] (Tony).

knowledge acquired by interaction with peers, the management team, mentors, more experienced entrepreneurs and business owners. Learning activities by which knowledge and skills are transformed into opportunity identification and the beginnings of a new entrepreneurial identity are embedded within the inner boundary (feedforward/feedback). This is where learning occurs at a more personal level as well as via interactions between members of the incubator community. These interactions are based on their different types of prior knowledge as well as new information, skills, experiences and resources acquired while in the incubator. The centre of the model focuses on the learning processes which help incubatees develop their original ideas into feasible business propositions. Newly acquired information, skills, experience and resources from their time in the incubator are combined with existing knowledge to help solidify ideas about the nature of the business opportunity and their new identities as entrepreneurs. The eight boxes are linked together by the learning processes as individuals negotiate the meanings of new information and their identity as entrepreneurs. This process is interactive and mutually reinforcing because knowledge and identity are created and re-created (Kolb 1984). Berends et al. (2016) claim that because experiential learning occurs as individuals reflect on their previous experiences, it is ‘backward looking’. In contrast, cognitive learning is ‘forward looking’ as entrepreneurs plan how their business ideas will develop in the future (Crossan et al. 1999; Jones and Macpherson 2006). In our model, these two processes are part of a continual learning cycle where previous experience and understanding are the basis for the next stages in the opportunity identification and development process (Fig. 8.1). Also, individual incubatees, as well as the group, become more familiar with the issues associated with entrepreneurship (learning as becoming), then their identities as ‘real’ entrepreneurs are increasingly legitimised (Kasperova et al. 2018; Wenger 1998). While earlier writers did identify the importance of incubation managers (Ensley and Hmieleski 2005), their significance in shaping an appropriate culture has become increasingly recognised in the literature (Redondo and Camarero 2019a). In our study, INNOSPACE tenants acknowledged the importance of the incubator manager in providing them with key information, identifying knowledge gaps/ training needs, providing links to other tenants, allocating mentors/business advisors and introducing new ideas via various external speakers. One disadvantage is that much of the existing literature is focused on science/technology-based incubators (Battisti and McAdam 2012; Díez-Vial and Montoro-Sánchez 2016; Huynh et al. 2017; Mascarenhas et al. 2019; Patton and Marlow 2011; Redondo and Camarero

Policymakers

Resources Skills

Prior knowledge of ways to serve markets

Feedback learning

Prior knowledge of customer problems

Business Incubator Community of Practice

Prior knowledge of markets

Personal interests

Other incubators

Opportunity identification and development process Transformation of knowledge and entrepreneurial identity

Information

Feedforward learning

SMEs

Entrepreneurs

Experience

Funders

Business Incubator Community of Practice

Fig. 8.1 The business incubation process

Support groups

Mentors

Advisors

Graduation + new business creation

184 8 Discussion: The INNOSPACE Community of Practice

8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development

185

2019a; Wann et al. 2017). Nevertheless, scholars are clear that the incubator manager or management team is key in ensuring that incubatees benefit from their tenancy (Kakabadse et al. 2020). For example, it is increasingly recognised that the IM (incubator manager) plays a crucial role in creating relational social capital based on trust and reciprocity amongst incubatees (Carvalho and Galina 2015; Redondo and Camarero 2019b). Previous experience in business, or as an entrepreneur, is also regarded as highly desirable for successful incubator managers (Breznitz and Zhang 2019). Therefore, we suggest that the learning environment within any business incubator will be shaped by the manager or management team (Fig. 8.1).

8.3.1

INNOSPACE as a Community of Practice

As stated in Chap. 1 (with a more detailed account in Chap. 10), INNOSPACE was established by members of MMUBS’s Centre for Enterprise with the intention of helping students make the transition into entrepreneurs. The vision was based on creating a genuine ‘community of practice’ in which incubatees would be encouraged to share their knowledge and experiences. Hence, INNOSPACE was designed as an informal working space encouraging regular interactions between incubatees themselves as well as with various stakeholders associated with the incubator. Inevitably, some elements of the original vision were compromised as the incubator began to function. In particular, the idea that incubatees should pay only a ‘peppercorn’ rent to satisfy MMU’s institutional requirements to access University facilities including the library and classes offered by the Business School. Senior University managers wanted the incubator to be financially self-supporting and that meant fees did increase although they remained low for a central Manchester location. Nevertheless, despite some compromises, INNOSPACE has survived for over 13 years and in that time has supported at least 650 nascent entrepreneurs. A large proportion of those benefitting from the support of INNOSPACE have started their own businesses, some of which became very successful (see Sect. 10.6). This study, which reports on the early years of the incubator provides clear evidence that it did become a genuine community of practice encouraging a spirit of cooperation amongst those who used the incubator on a regular basis. Although there have been a number of changes to the management and location of INNOSPACE, the original vision of fostering a learning community of practice is shared by the current management team. Drawing together the findings from Chaps. 5, 6 and 7, the role of INNOSPACE in developing entrepreneurship can be summarised as follows.

A Physical and Social Space to Start a Business INNOSPACE provided a space where incubatees could interact informally to discuss their ideas, exchange experiences and share valuable contacts. It also provided a location that enabled them to present a professional image to the outside

186

8 Discussion: The INNOSPACE Community of Practice

world. That is, being based in INNOSPACE legitimised their role as entrepreneurs and encouraged various stakeholders to take them seriously. The cheap rent also helped incubatees by not adding to the financial liabilities of starting a new business.

A Trusted Place to Forge Collaborations and Alliances The informal and friendly environment promoted by the management team helped build trust between incubatees. Meeting others who were engaged in starting a business made incubatees feel that they were having similar experiences regarding risk-taking, which their family and friends might not understand. This shared understanding encouraged trust between members of the incubator community. Also, it is generally very difficult for start-ups to build their reputation quickly. By collaborating and working for each other, incubatees were able to get jobs done cheaply while at the same time building up a list of testimonials and recommendations. Some incubatees started strategic alliances with other incubatees, so that they could share each other’s knowledge and skills. Others developed alliances so that they could diversify and share the risks with other businesses. Jamie Bettles (Sect. 10.6) discusses the importance of a location on-campus in imbuing trust in potential partners.

A Resource Harbour As well as a physical space and office accommodation, INNOSPACE incubatees could access resources in a much wider sense. INNOSPACE provided professional services to incubatees including a full-time management team, business mentors and advisers, guest speakers, master-classes, social events as well as a professional city centre location and postal address. Through links between INNOSPACE and Manchester Metropolitan University, incubatees had free access to the library, professional audio and video equipment, the Students’ Union, Careers Services, and some University classes. These resources were useful, not only reducing the costs of starting and running a business but in providing high-quality and relevant information to incubatees that helped shape their business ideas.

A Learning Space for Acquiring Knowledge, Information and Skills As discussed earlier in the chapter, incubatees acquired new information and skills through INNOSPACE, which were crucial in creating new knowledge. The data suggest that it was often the specialist knowledge incubatees acquired that was important for idea development. Incubatees also found collaborating and partnering with other members of the incubator community provided a fast-track to the acquisition of new skills and new insights. As discussed in Chap. 7, central to that learning experience was the development of their relational and entrepreneurial skills.

8.3 Reconceptualising Entrepreneurial Learning and Opportunity Development

187

A Catalyst for Developing Business Ideas A small number of the 20 incubatees had a clear focus on the nature of their business idea and the related business opportunity. The remainder had relatively basic business ideas and a limited understanding of the opportunities they were hoping to exploit. What we demonstrate in Chap. 5, is that interactions between incubatees had a profound influence on shaping their business ideas. Fundamental to this process was the communal spirit fostered in INNOSPACE, which encouraged the creation of relationships built on mutual trust and respect. Consequently, most incubatees benefitted from feedback they received from members of their peer group in focusing or re-focusing their business ideas.

A Learning Community where Incubatees Become Entrepreneurs In Chaps. 5, 6 and 7, we demonstrate that incubatees learned to become entrepreneurs by engaging with the INNOSPACE community, which included other incubatees, the management team, the Steering Group, business mentors and advisers, guest speakers and various support organisations such as Blue Orchid. Through interactions with other members of the community and by participating in various activities, incubatees began to think and behave like entrepreneurs as they distinguished themselves from their former identities. The associated learning processes transformed their concept of learning, their original business ideas and their identities.

A Source of New Businesses and Jobs for the Region Since its launch in 2007, INNOSPACE has, on average, had between 95 and 120 tenants annually. There were always a small number of ‘dropouts’ each year they generally averaged between 10 and 12. Between 25 and 25 of the tenants ‘graduated’ each year with approximately 40 new entrants. An independent survey carried out by Deloitte3 (2018) indicated that 700 jobs had been created by incubators in the Northwest of England region and INNOSPACE was responsible for 46% of the businesses and 51% (357) of the jobs created.

3

https://www.mmu.ac.uk/news-and-events/news/story/8375/ (accessed second September 2020)

188

8.4

8 Discussion: The INNOSPACE Community of Practice

Summary

In this chapter, we have drawn together the empirical findings on which this book is based with current literature on incubation, opportunity identification/development, learning and communities of practice. Our revised conceptualisation of the incubation process is illustrated in Fig. 8.1. The model indicates that the process of opportunity identification and development is concurrent with the transformation of entrepreneurial identity (Downing 2005). As pointed out by Cope (2005), a key aspect of an entrepreneur’s experiential learning is ‘learning about oneself’ as individuals become aware of their strengths and weaknesses. These twin processes are shaped by their prior knowledge about the nature of potential business opportunities in conjunction with the information, resources, skills and experience gained during the incubation process. The feedforward and feedback learning processes illustrated in Fig. 8.1 are shaped by interactions between incubatees as well as their engagement with the incubation manager. The broader learning community of practice includes a range of other stakeholders including support organisations, mentors, advisors, more experienced entrepreneurs, potential funders and policymakers. Therefore, we suggest that INNOSPACE possessed the three core elements of a CoP: (i) a joint enterprise based on shared goals and interests; (ii) shared norms and values and a shared identity reflecting these interactions and values; and (iii) a shared repertoire encompassing the resources and capabilities associated with community (Wenger 1998). INNOSPACE is very different than the majority of university-based incubators (UBIs) discussed in the literature, which are generally devoted to the exploitation of scientific/technological knowledge. For example, in their recent literature review, Ratinho et al. (2020) point out that incubation research ‘disproportionately’ focuses on technology-based start-ups. From its inception, INNOSPACE attracted students undertaking business or social science degrees and their ideas were rarely based on state-of-the-art scientific knowledge. For example, very few of the entrepreneurs had access to unique scientific or technological knowledge that could be protected by IPR. Nevertheless, we have endeavoured to illustrate that INNOSPACE enabled a wide range of individuals to become part of a genuine learning community, which inspired the majority to develop realistic business ideas. The success of INNOSPACE is demonstrated by its contribution to the Greater Manchester ecosystem in terms of new business and new jobs. In addition, a number of incubatees used their INNOPACE experience to develop an extremely successful business (Sect. 10.6). In Chap. 9, we summarise the contribution to knowledge made by this study as well as setting out the implications for incubation managers, potential incubatees and for policymakers.

References

189

References Ahmad, A. J., & Thornberry, C. (2018). On the structure of business incubators: De-coupling issues and the mis-alignment of managerial incentives. The Journal of Technology Transfer, 43(5), 1190–1212. Albort-Morant, G., & Ribeiro-Soriano, D. (2016). A bibliometric analysis of international impact of business incubators. Journal of Business Research, 69(5), 1775–1779. Allen, D. N., & McCluskey, R. (1990). Structure, policy, services, and performance in the business incubator industry. Entrepreneurship: Theory and Practice, 15(2), 61–77. Alvesson, M., & Sköldberg, K. (2018). Reflexive methodology: New vistas for qualitative research (3rd edition). Newbury Park, CA: Sage. Ardichvili, A., & Cardozo, R. N. (2000). A model of the opportunity recognition process. Journal of Enterprising Culture, 8(2), 103–119. Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18, 105–123. Baker, A. C., Jensen, P. J., & Kolb, D. A. (2005). Conversation as experiential learning. Management Learning, 36(4), 411–427. Baraldi, E., & Havenvid, M. I. (2016). Identifying new dimensions of business incubation: A multilevel analysis of Karolinska Institute’s incubation system. Technovation, 50–51, 53–68. Battisti, M., & McAdam, M. (2012). Challenges of social capital development in the university science incubator: The case of the graduate entrepreneur. Entrepreneurship and Innovation, 13 (4), 261–276. Berends, H., Smits, A., Reymen, I., & Podoynitsyna, K. (2016). Learning while (re)configuring: Business model innovation processes in established firms. Strategic Organization, 14(3), 181–219. Blok, V., Thijssen, S., & Pascucci, S. (2017). Understanding management practices in business incubators: Empirical evidence of the factors impacting the incubation process. International Journal of Innovation and Technology Management, 14(4), 1750023. Bøllingtoft, A., & Ulhøi, J. P. (2005). The networked business incubator—Leveraging entrepreneurial agency? Journal of Business Venturing, 20, 265–290. Bone, J., Allen, C., & Haley, C. (2017). Business incubators and accelerators: The national picture, BEIS Research Paper No 7 (NESTA). Bone, J., Gonzalez-Uribe, J., Haley, C., & Lahr, H. (2019). The impact of business accelerators and incubators in the UK. BEIS Research Paper Number 2019/009. Breslin, D. (2019). Entrepreneurial learning; intuiting, scanning, internalizing and routinizing. The Learning Organization, 26(6), 604–616. Breznitz, S. M., & Zhang, Q. (2019). Fostering the growth of student start-ups from university accelerators: An entrepreneurial ecosystem perspective. Industrial and Corporate Change, 28 (4), 855–873. Brown, J. S., & Duguid, P. (2001). Knowledge and organization: A social-practice perspective. Organization Science, 12(2), 198–213. Carvalho, L. M. C., & Galina, S. V. (2015). The role of business incubators for start-ups development in Brazil and Portugal. World Journal of Entrepreneurship, Management and Sustainable Development, 11(4), 256–267. Chang, J., & Rieple, A. (2018). Entrepreneurial decision-making in a microcosm. Management Learning, 49(4), 471–497. Chavoushi, Z. H., Zali, M. R., Valliere, D., Faghih, N., Hejazi, R., & Dehkordi, A. M. (2020). Entrepreneurial alertness: A systematic literature review. Journal of Small Business and Entrepreneurship. https://doi.org/10.1080/08276331.2020.1764736. Clark, B. R. (1998). Creating entrepreneurial universities: Organizational pathways to transformation. Oxford: International Association of Universities and Elsevier Science Ltd.. Cope, J. (2003). Entrepreneurial learning and critical reflection. Management Learning, 34(4), 429–450.

190

8 Discussion: The INNOSPACE Community of Practice

Cope, J. (2005). Toward a dynamic learning perspective of entrepreneurship. Entrepreneurship: Theory and Practice, 29, 373–397. Cope, J. (2011). Entrepreneurial learning from failure: An interpretative phenomenological analysis. Journal of Business Venturing, 26(6), 604–623. Cope, J., & Watts, G. (2000). Learning by doing: An exploration of experience, critical incidents and reflection in entrepreneurial learning. International Journal of Entrepreneurial Behavior and Research, 6, 104–124. Cope, J., Jack, S., & Rose, M. B. (2007). Social capital and entrepreneurship: An introduction. International Small Business Journal, 25(3), 213–219. Corbett, A. C. (2005). Experiential learning within the process of opportunity identification and exploitation. Entrepreneurship: Theory and Practice, 29, 473–491. Crossan, M., Lane, H., & White, R. (1999). An organizational learning framework: From intuition to institution. The Academy of Management Review, 24(3), 522–537. Davidsson, P. (2016). Researching entrepreneurship: Conceptualisation and design (2nd ed.). New York, NY: Springer. Díez-Vial, I., & Montoro-Sánchez, Á. (2016). How knowledge links with universities may foster innovation: The case of a science park. Technovation, 50–51, 41–52. Dimov, D. (2007a). Beyond the single-person, single-insight atribution in understanding entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 31(5), 713–731. Dimov, D. (2007b). From opportunity insight to opportunity intention: The importance of personsituation learning match. Entrepreneurship: Theory and Practice, 31(4), 561–583. Downing, S. (2005). The social construction of entrepreneurship: Narrative and dramatic processes in the coproduction of organizations and identities. Entrepreneurship: Theory and Practice, 29, 185–204. DTI. (1998). Our competitive future: Building the knowledge driven economy. London: HMSO. DTI. (2000). Excellence and opportunity: A science and innovation policy for the 21st century. London: The Stationery Office. Edwards, T., & Jones, O. (2008). Failed institution building: Understanding the interplay between agency, social skill and context. Scandinavian Journal of Management, 24(1), 44–55. Ensley, M. D., & Hmieleski, K. M. (2005). A comparative study of new venture top management team composition, dynamics and performance between university-based and independent startups. Research Policy, 34(7), 1091–1105. Etzkowitz, H. (2003). Research groups as ‘Quasi-firms’: The invention of the entrepreneurial University. Research Policy, 32(1), 109–121. Eveleens, C. P., van Rijnsoever, F. J., & Niesten, E. M. (2017). How network-based incubation helps start-up performance: A systematic review against the background of management theories. Journal of Technology Transfer, 42, 676–713. Galvão, A., Marques, C., Franco, M., & Mascarenhas, C. (2019). The role of start-up incubators in cooperation networks from the perspective of resource dependence and interlocking directorates. Management Decision, 57(10), 2816–2836. Gartner, W. B., Bird, B. J., & Starr, J. A. (1992). Acting as if: Differentiating entrepreneurial from organizational behavior. Entrepreneurship: Theory and Practice, 16(3), 13–31. Gately, C. G., & Cunningham, J. A. (2014). Building intellectual capital in incubated technology firms. Journal of Intellectual Capital, 15(4), 516–536. George, N. M., Parida, V., Lahti, T., & Wincent, J. (2016). A systematic literature review of entrepreneurial opportunity recognition: Insights on influencing factors. The International Entrepreneurship and Management Journal, 12(2), 309–350. Gruber, M., MacMillan, I. C., & Thompson, J. D. (2013). Escaping the prior knowledge corridor: What shapes the number and variety of market opportunities identified before market entry of technology start-ups? Organization Science, 24(1), 280–300. Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation research. Journal of Technology Transfer, 29, 55–82.

References

191

Hackett, S., & Dilts, D. (2008). Inside the black box of business incubation: Study b-scale assessment, model refinement, and incubation outcomes. Journal of Technology Transfer, 33 (5), 439–471. Handley, K., Sturdy, A., Fincham, R., & Clark, T. (2006). Within and beyond communities of practice: Making sense of learning through participation, identity and practice. Journal of Management Studies, 43(3), 641–653. Handley, K., Clark, T., Fincham, R., & Sturdy, A. (2007). Researching situated learning: Participation, identity and practices in client-consultant relationships. Management Learning, 38(2), 173–191. Handscombe, R. D., Rodriguez-Falcon, E., & Patterson, E. A. (2009). Embedding enterprise in engineering. International Journal of Mechanical Engineering Education, 37(4), 263–274. Haneberg, D. (2019). Entrepreneurial learning as an effectual process. The Learning Organization, 26(6), 634–647. Hannon, P. D. (2005). Incubation policy and practice: Building practitioner and professional capability. Journal of Small Business and Enterprise Development, 12, 57–75. Harper-Anderson, E., & Lewis, D. A. (2018). What makes business incubation work? Measuring the influence of incubator quality and regional capacity on incubator outcomes. Economic Development Quarterly, 32(1), 60–77. Hayek, F. V. (1990). Economics and knowledge. In M. Casson (Ed.), Entrepreneurship (pp. 33–80). Aldershot: Edward Elgar. Huynh, T., Patton, D., Arias-Aranda, D., & Molina-Fernández, L. M. (2017). University spin-off’s performance: Capabilities and networks of founding teams at creation phase. Journal of Business Research, 78, 10–22. Jones, O., & Giordano, B. (2020). Family entrepreneurial teams: The role of learning in business model evolution. Management Learning. https://doi.org/10.1177/1350507620934092. Jones, O., & Holt, R. (2008). The creation and evolution of new business ventures: An activity theory perspective. Journal of Small Business and Enterprise Development, 15(1), 51–73. Jones, O., & Macpherson, A. (2006). Inter-organizational learning and strategic renewal in SMEs: Extending the 4i framework. Long Range Planning, 39(2), 155–175. Jones, O., Macpherson, A., & Woollard, D. (2008). Entrepreneurial ventures in higher education: Analysing organizational growth. International Small Business Journal, 26(6), 683–708. Jones, O., Macpherson, A., & Jayawarna, D. (2014). Resourcing the start-up business: Creating dynamic entrepreneurial learning capabilities. London: Routledge. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. Kasperova, E., Kitching, J., & Blackburn, R. (2018). Identity as a causal power: Contextualizing Entrepreneurs’ concerns. The International Journal of Entrepreneurship and Innovation, 19(4), 237–249. Kirzner, I. M. (1973). Competition and entrepreneurship. Chicago, IL: University of Chicago Press. Kirzner, I. M. (2009). The alert and creative entrepreneur: A clarification. Small Business Economics, 32(2), 145–152. Knight, F. (1921). Risk, uncertainty and profit. New York: Houghton Mifflin. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. Englewood Cliffs, NJ: Prentice-Hall, Inc.. Kolb, A. Y., & Kolb, D. A. (2005). Learning styles and learning spaces: Enhancing experiential learning in higher education. Adademy of Management Learning & Education, 4, 193–212. Lambert, R. (2003). Lambert review of business-university collaboration. London: The Stationery Office. Lamont, L. M. (1972). What entrepreneurs learn from experience. Journal of Small Business Management, 10(3), 36–41.

192

8 Discussion: The INNOSPACE Community of Practice

Lasrado, V., Sivo, S., Ford, C., O’Neal, T., & Garibay, I. (2016). Do graduated university incubator firms benefit from their relationship with university incubators? Journal of Technology Transfer, 41(2), 205–219. Lave, J., & Wenger, E. (1991). Situated learning: Legitimate peripheral participation. New York: Cambridge University Press. Lee, R., & Jones, O. (2008). Networks, communication and learning during business start-up: The creation of cognitive social capital. International Small Business Journal, 26(5), 559–594. Lee, S. S., & Osteryoung, J. S. (2004). A comparison of critical success factor for effective operations of university business incubators in The United States and Korea. Journal of Small Business Management, 42, 418–426. Lukeš, M., Longo, M. C., & Zouhar, J. (2019). Do business incubators really enhance entrepreneurial growth? Evidence from a large sample of innovative Italian start-ups. Technovation, 82, 25–34. M’Chirgui, Z., Lamine, W., Mian, S., & Fayolle, A. (2018). University technology commercialization through new venture projects: An assessment of the French regional incubator program. Journal of Technology Transfer, 43, 1142–1160. Macdonald, S. (2016). Milking the myth: Innovation funding in theory and practice. R&D Management, 46(S2), 552–563. Mantere, S., & Ketoviki, M. (2013). Reasoning in organisational science. The Academy of Management Review, 38(1), 70–89. Mascarenhas, C., Marques, C. S., Galvão, A. R., Carlucci, D., Falcão, P. F., & Ferreira, F. A. (2019). Analyzing technology transfer offices’ influence for entrepreneurial universities in Portugal. Management Decision, 57(12), 3473–3491. Massey, D., Quintas, P., & Wield, D. (1992). High tech fantasies: Science parks in society, science and space. London: Routledge. McAdam, M., & McAdam, R. (2006). The networked incubator: The role and operation of entrepreneurial networking with the University Science Park incubator (USI). Entrepreneurship and Innovation, 7(2), 87–97. McAdam, M., & Marlow, S. (2007). Building futures or stealing secrets? Entrepreneurial cooperation and conflict within business incubators. International Small Business Journal, 25(4), 361–382. McAdam, M., Miller, K., & McAdam, R. (2016). Situated regional university incubation: A multilevel stake-holder perspective. Technovation, 50–51, 69–78. McClelland, D. (1961). The achieving society. New York: A Free Press Paperback, The Macmillan Company. McDonald, J., & Cater-Steel, A. (Eds.). (2017). Communities of practice: Facilitating social learning in higher education. Singapore: Springer. Meckel, P-P. (2014). The role of business incubators in developing entrepreneurship. Unpublished PhD, Manchester Metropolitan University. Mercieca, B. (2017). What is a community of practice? In J. McDonald & A. Cater-Steel (Eds.), Communities of practice: Facilitating social learning in higher education. Singapore: Springer. Mian, S., Lamine, W., & Fayolle, A. (2016). Technology business incubation: An overview of the state of knowledge. Technovation, 50–51, 1–12. Minniti, M. (2004). Entrepreneurial alertness and asymmetric information in a spin-glass model. Journal of Business Venturing, 19, 637–658. Monsson, C. K., & Jörgensen, S. B. (2016). How do entrepreneurs’ characteristics influence the benefits from the various elements of a business incubator? Journal of Small Business and Enterprise Development, 23, 224–239. Mueller, S., Volery, T., & von Siemens, B. (2012). What do entrepreneurs actually do? An observational study of entrepreneurs’ everyday behaviour in the start-up and growth stages. Entrepreneurship: Theory and Practice, 36(5), 995–1017. Nonaka, I., & Konno, N. (1998). The concept of “Ba”: Building a foundation for knowledge creation. California Management Review, 40, 40–54.

References

193

Nonaka, I., & Toyama, R. (2015). The knowledge-creating theory revisited: Knowledge creation as a synthesizing process. In J. Edwards (Ed.), The essentials of knowledge management. New York: Palgrave. Patton, D., & Marlow, S. (2011). University technology business incubators: Helping new entrepreneurial firms to learn to grow. Environment and Planning. C, Government & Policy, 29(5), 911–926. Pittaway, L., & Cope, J. (2007). Simulating Entrepreneurial Learning: Integrating experiential and collaborative approaches to learning. Management Learning, 38, 211–233. Politis, D. (2005). The process of entrepreneurial learning: A conceptual framework. Entrepreneurship: Theory and Practice, 29(4), 399–424. Politis, D., Gabrielsson, J., Galan, N., & Abebe, S. A. (2019). Entrepreneurial Learning in venture acceleration programs. The Learning Organization, 26(6), 588–603. Ratinho, T., Amezcua, A., Honig, B., & Zeng, Z. (2020). Supporting entrepreneurs: A systematic review of literature and an agenda for research. Technological Forecasting and Social Change, 154, 119956. Read, S., Sarasvathy, S., Dew, N., Wiltbank, R., & Ohisson, A.-V. (2016). Effectual entrepreneurship (2nd edition). London/New York: Routledge/Taylor and Francis. Redondo, M., & Camarero, C. (2019a). University business incubators: Mechanisms to transform ideas into businesses. In A. Fayolle, D. Kariv, & H. Matlay (Eds.), The role and impact of entrepreneurship education: Methods, teachers and innovative programmes. Cheltenham: Edward Elgar. Redondo, M., & Camarero, C. (2019b). Social Capital in University Business Incubators: Dimensions, antecedents and outcomes. The International Entrepreneurship and Management Journal, 15(2), 599–624. Rennemo, Ø., & Åsvoll, H. (2019). Existential learning: Dialogues and places to be(come) in entrepreneurial Ba practice. Journal of Innovation and Entrepreneurship, 8(1), 1–29. Sanz-Velasco, S. A. (2006). Opportunity development as a learning process for entrepreneurs. International Journal of Entrepreneurial Behavior and Research, 12, 251–271. Sarason, Y., Dean, T., & Dillard, J. F. (2006). Entrepreneurship as the nexus of individual and opportunity: A structuration view. Journal of Business Venturing, 21, 286–305. Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. The Academy of Management Review, 2, 243–263. Sarasvathy, S. D. (2003). Entrepreneurship as a science of the artificial. Journal of Economic Psychology, 24(2), 203–220. Sarasvathy, S. D. (2004). Making it happen: Beyond theories of the firm to theories of firm design. Entrepreneurship: Theory and Practice, 28(6), 519–531. Sarasvathy, S. D. (2008). Effectuation: Elements of entrepreneurial expertise. Cheltenham: Edward Elgar. Schmitt, A., Rosing, K., Zhang, S. X., & Leatherbee, M. (2018). A dynamic model of entrepreneurial uncertainty and business opportunity identification: Exploration as a mediator and entrepreneurial self-efficacy as a moderator. Entrepreneurship: Theory and Practice, 42(6), 835–859. Schumpeter, J. (1934). The theory of economic development. Cambridge, MA: Harvard University Press. Sedita, S. R., Apa, R., Bassetti, T., & Grandinetti, R. (2019). Incubation matters: Measuring the effect of business incubators on the innovation performance of start-ups. R&D Management, 49 (4), 439–454. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Shane, S. (2012). Reflections on the 2010 AMR decade award: Delivering on the promise of entrepreneurship as field of research. The Academy of Management Review, 37(1), 10–20. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. The Academy of Management Review, 25, 217–226.

194

8 Discussion: The INNOSPACE Community of Practice

Smith, A. W., Moghaddam, K., & Lanivich, S. E. (2019). A set-theoretic investigation into the origins of creation and discovery opportunities. Strategic Entrepreneurship Journal, 13, 75–92. Soetanto, D., & Jack, S. (2016). The impact of university-based incubation support on the innovation strategy of academic spin-offs. Technovation, 50–51, 25–40. Theodorakopoulos, N. K., Kakabadse, N., & McGowan, C. (2014). What matters in business incubation? A literature review and a suggestion for situated theorising. Journal of Small Business and Enterprise Development, 21(4), 602–622. Tocher, N., Oswald, S. L., & Hall, D. J. (2015). Proposing social resources as the fundamental catalyst toward opportunity creation. Strategic Entrepreneurship Journal, 9, 119–135. Treanor, L., & Henry, C. (2010). Gender in campus incubation: Evidence from Ireland. International Journal of Gender and Entrepreneurship, 2(2), 130–149. UKSPA. (1996). The United Kingdom science park association annual report. Birmingham. Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor’s perspective. Advances in Entrepreneurship, Firm Emergence, and Growth, 3, 119–138. Venkataraman, S., Sarasvathy, S., Dew, N., & Forster, W. R. (2012). Reflections on the 2010 AMR decade award: Whither the promise? Moving forward with entrepreneurship as a science of the artificial. The Academy of Management Review, 37(1), 21–33. Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The measurment of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. Voisey, P., Jones, P., & Thomas, B. (2013). The pre-incubator: A longitudinal study of 10 years of university pre-incubation in Wales. Industry and Higher Education, 27(5), 349–363. von Mises, L. (1949). Human action: A treatise on economics. London: Hodge. Wang, C. L., & Chugh, H. (2014). Entrepreneurial learning: Past research and future challenges. International Journal of Management Reviews, 16(1), 24–61. Wann, J.-W., Lu, T.-J., Lozada, I., & Cangahuala, G. (2017). University-based incubators’ performance evaluation: A benchmarking approach. Benchmarking: An International Journal, 24(1), 34–49. Wenger, E. (1998). Communities of practice: Learning, meaning, and identity. Cambridge: Cambridge University Press. Wenger-Trayner, E., Fenton-O’Creevy, M., Hutchinson, S., Kubiak, C., & Wenger-Trayner, B. (2014). Learning in landscapes of practice: Boundaries, identity, and knowledgeability in practice-based learning. New York: Routledge. Zhang, H., & Sonobe, T. (2011). Business incubators in China: An inquiry into the variables associated with incubatee success. Economic Design, 5(7), 1–27.

Chapter 9

Conclusion: Contribution, Implications and Future Research

9.1

Introduction

In this chapter, we draw together findings, based on data from twenty incubatees to discuss the contribution to knowledge. We also discuss the implications of the research for those running or managing business incubators, prospective and existing incubatees, as well as policymakers. The overall aim of the research was to explore the role of business incubators in developing a learning community of practice for new entrepreneurs. After mapping the process of starting a business in INNOSPACE, we used six selected cases to demonstrate the varying pathways through the business incubation process. Chapter 5 unravels the experiences of starting up a business in a UBI environment. Chapter 6 mainly focuses on the impact of prior knowledge on opportunity identification. Chapter 7 explores the interaction between opportunity development and entrepreneurial learning during incubatees’ INNOSPACE tenancy. Figure 8.1 summarises the ideas developed in this research project about how the business incubation process works in practice. The model shows that to understand the complex impact of business incubation, it is important to unravel the process of learning and the development of business opportunities. Equally important is the development of individuals themselves as they progress through the incubation process. We accept that not all those entering a business incubator will go on to establish successful new businesses. However, we do suggest that being part of a learning community can enhance their business and social skills in ways that will be invaluable whatever career path individuals pursue in the future. The remainder of the chapter is organised as follows: the first section discusses how the research contributes to knowledge; this is followed by an examination of the implications of the study for various groups; finally, we provide a reflexive account of the strengths and limitations of the study and make suggestions for future research.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_9

195

196

9.2

9 Conclusion: Contribution, Implications and Future Research

Contribution to Knowledge

The principal aim of the study was to better understand the role of university-based incubators from the perspective of incubatees. Although there is an extensive literature on business incubation, most studies are either large-scale quantitative surveys (Breznitz and Zhang 2019; Lasrado et al. 2016; Soetanto and Jack 2016; Wann et al. 2017) or cross-sectional qualitative research projects (Ahmad and Thornberry 2018; Kakabadse et al. 2020; Nair and Blomquist 2019). In contrast, this study focuses on the experience of incubatees and the learning and opportunity development process that took during the early stages of their tenancy. This novel approach allows for a more in-depth exploration of the entrepreneurial process from the perspective of incubatees. The outcomes of the study contribute to knowledge by advancing the understanding of the process of business incubation. Specifically, we explore individual incubatee’s experience of the incubation process in terms of opportunity identification/development and those learning activities embedded in the knowledge and identity transformation processes. We also explore the start-up processes to provide insight into what Hackett and Dilts (2008) describe as the ‘black box’ of business incubation. Many existing studies examine business incubation from the manager’s perspective (Breznitz and Zhang 2019; Hackett and Dilts 2004, 2008; Grimaldi and Grandi 2005; Hannon 2005; Mian 2014; O’Neal 2005; Redondo and Camarero 2019). In this study, we concentrate on the incubation process from the perspectives of incubatees. This pertinently responds to calls for more incubation process-focused studies (Todorovic and Moenter 2010; Hackett and Dilts 2008). Moreover, drawing on individual narratives enabled us to map the distinct pathways individuals followed during the incubation process (Fig. 5.1). This novel approach draws on rich qualitative data, which provides a detailed exploration of the interactions between the cohort of incubatees, as well as between incubatees and the wider ecosystem. This approach is distinguished from earlier studies which seek causal relationships between incubator services and resources and incubatee performance (Albort-Morant and Ribeiro-Soriano 2016; Dvouletý et al. 2018; Hackett and Dilts 2008; Kakabadse et al. 2020; Lee and Osteryoung 2004; M’Chirgui et al. 2018; Sedita et al. 2019; Todorovic and Moenter 2010; Zhang and Sonobe 2011). The distinct pathways developed in Chap. 5 help build a more robust theory of the business incubation process. Using the narratives as a powerful tool to shed light on the incubation process, the chapter explored the left-hand column of the original conceptual framework (Fig. 3.3). Chapter 6 provides a detailed examination of how incubatees’ prior knowledge influenced the opportunity identification and development process. Drawing on four types of prior knowledge (Ardichvili et al. 2003; Shane 2000), the study examined the varying interactions of prior knowledge and their role in opportunity identification. By doing so, this chapter concentrates on the right-hand column of the conceptual framework (Fig. 3.3).

9.2 Contribution to Knowledge

197

Three themes emerged in terms of the role prior knowledge plays in opportunity identification: change and innovation, knowledge transfer and knowledge replication. These findings enrich the existing literature on opportunity identification by detailing the influences of prior knowledge. We confirm that prior knowledge has an impact on opportunity identification as well as offering an explanation of how it influences the process of opportunity identification. Unsurprisingly, the study found that prior knowledge of markets was the most common form of knowledge among participants in the study. This was followed by prior knowledge of customer problems and personal interests, which suggested that education, work and personal experiences play an important role in identifying opportunities. Prior knowledge of the means to serve markets was the least common form of knowledge among participants. This indicates that knowledge of means to serve markets alone is unlikely to be sufficient to identify new opportunities. However, where opportunities have already been identified, knowledge of means to serve markets can act as a catalyst and increase the likelihood of further developing the opportunity. The outcomes of Chaps. 5 and 6 provide a solid foundation for the data analysis in Chap. 7. Based on incubatees’ prior knowledge, the chapter looked at the information, skills and resources acquired during their INNOSPACE tenancy. This led to an exploration of how knowledge and experience are created and transformed during the incubation process. In this way, Chap. 7 examined INNOSPACE as a learning community of practice where individuals developed their business opportunities and their identities as entrepreneurs (Tables 7.2 and 7.3). We also explored the incubatees’ learning processes that were directly linked to INNOSPACE. In particular, time spent in the incubator helped incubatees obtain specialist knowledge and skills that were important in developing their business ideas. A novel finding was that incubatees used INNOSPACE as a ‘fast-track’ to acquire skills by collaborating and forging alliances with other incubatees. Developing skills in this way enabled incubatees to develop their businesses ideas more quickly than working alone. Helping them overcome the joint liabilities of newness (Stinchcombe 1965) and smallness (Aldrich and Auster 1986). Being based in INNOSPACE helped incubatees understand the process of business start-up, the importance of learning, the meaning of becoming an entrepreneur, and the bonds and mutual engagement within the community. The revised conceptual model developed in Fig. 8.1 demonstrates the important components of the entrepreneurial learning and opportunity development process. It captures the complex process of opportunity identification and development within an incubator. The model elucidates the roles of experiential entrepreneurial learning (feedback learning) and cognitive learning (feedforward learning) during the processes of opportunity identification/development and the transformation of entrepreneurial identity within the context of an incubation community of practice. Hence, we bring together a range of concepts from the literature [experiential learning (Cope 2005; Corbett 2005), cognitive learning (Berends et al. 2016), opportunity identification/development (Dimov 2007a; Shane 2000), entrepreneurial identity (Downing 2005; Kasperova et al. 2018) and communities of practice (Theodorakopoulos et al. 2014; Wenger 1998)] to provide greater insight into the functioning of the incubation

198

9 Conclusion: Contribution, Implications and Future Research

process. Viewing the incubation process in this way should help UBI managers identify important elements that aid incubatees in learning to develop their business ideas. The model can also be used as a heuristic to guide future research seeking to understand the complex interactions between learning, opportunity development and business incubation. Chapters 5, 6 and 7 offer a fresh perspective on how the entrepreneurial process in a university-based incubator links prior knowledge, learning and opportunity identification/development. The empirical data helps build on the existing incubation literature by providing a detailed account of how incubatees develop their business ideas and their identities as entrepreneurs. The outcomes of the study demonstrate the effectiveness of using learning theories to study the process of business incubation. The findings indicate that prior knowledge alone cannot fully explain the entrepreneurial process. Rather, it is the learning dynamic that offers a better understanding of how information, experience, skills and identity can be transformed into new knowledge, which in turn leads to opportunity identification and development. In doing so, the study advances understanding of the incubation process and highlights the importance of learning. This suggests that encouraging and supporting learning communities should be paramount for all incubators if they are to be effective in developing entrepreneurs who can establish businesses with a real chance of future success. Finally, in contrast to existing studies that look at the physical facilities, professional appearance and social networks in business incubators (Arlotto et al. 2011; Zhang and Sonobe 2011; Todorovic and Moenter 2010; McAdam and Marlow 2007; McAdam and McAdam 2006; Bøllingtoft and Ulhøi 2005; Voisey et al. 2006), this research suggests the strong influence of a learning community in shaping incubatees’ identity and encouraging opportunity development. For example, as pointed out by Bone et al. (2019: 32) based on their survey of UK incubators and accelerators: Startups place a strong emphasis on networks with peers and an environment that fosters mutual support and a sense of community. Help in obtaining finance and mentoring support are also seen as important. Interestingly, several startups mention the strong intangible impact that programmes had on their confidence and mind-set as an entrepreneur.

Other issues identified as important to respondents in the survey included the support of mentors in business skills development and connections to potential partners and customers. We suggest these findings strongly reinforce the approach to supporting nascent entrepreneurs adopted by those responsible for managing INNOSPACE over the last 13 years.

9.3

Implications of the Research

Having discussed the contributions to knowledge in Sect. 9.2, we now examine the implications for business incubator managers, prospective/existing incubatees and policymakers. One important outcome of the research is that the learning

9.3 Implications of the Research

199

environment is important for the incubatees’ idea generation and development. Equally important, time spent in an incubator gives less experienced incubatees the opportunity to develop their entrepreneurial identities. Hence, understanding how to develop and maintain this supportive learning environment has crucial implications for incubator managers, users and policymakers. As originally pointed out by Gartner et al. (1992: 17), new organisations are created by the actions of ‘entrepreneurs who talk and act “as if” equivocal events were non-equivocal’. Organisational emergence means that entrepreneurs must engage in appropriate interactions that are convincing for external actors, including customers, suppliers and employees as well as resource providers such as potential funders (Jones and Li 2017).

9.3.1

Implications for Incubation Managers (IM)

The data suggest several factors impact on opportunity identification, which in turn contribute to the effectiveness of business incubators in nurturing and developing nascent entrepreneurs. By identifying the important components and process of opportunity development, the research has the potential to raise awareness among incubation managers (IM) of the need to develop appropriate learning strategies. In particular, the study found that the information acquired during the incubation period is crucial to the learning process. This suggests that it is important to provide incubatees with relevant information to help them to start up and develop their businesses. This information might come from masterclasses in accounting, legal issues, marketing, public relations or enterprise-related skills such as bootstrapping (Jayawarna et al. 2020). Information of relevance to incubatees is the key point here. This requires IMs to have a close relationship with incubatees to identify their knowledge gaps and ensure that there are regular progress reports on the progress of their businesses. Also, as we have indicated above, INNOSPACE incubatees could have benefitted from a stronger focus on developing their conceptual skills. In contrast to the hostile and highly competitive environment identified by McAdam and McAdam (2006), incubator practitioners should develop and maintain a friendly working environment for incubatees. This environment should be a place where incubatees can build mutual trust so that more effective networking activities can be stimulated (Breznitz et al. 2018; Ebbers 2014; Eveleens et al. 2017; Galvão et al. 2019). One way to achieve this might be by having a less formal leadership style, organising informal social events, explaining the importance of joining a ‘family’ to new tenants. Hence, in addition to formal ‘business’ events, there should be incubatee-led informal events to help develop a strong sense of belonging to a team with strong interpersonal bonds and high levels of trust. There is evidence of good practice in the study, which suggests that incubatees benefit from a supportive environment that helped them share their business ideas and get informal feedback from peers as well as encouraging alliances between some tenants.

200

9 Conclusion: Contribution, Implications and Future Research

The study also indicates that the IM should act as a critical friend and mentor to those incubatees experiencing problems with the start-up process. This can help to ease anxiety incubatees may experience when they learn how long it can take to start a business. IMs need to create a tolerant environment where incubatees do not give up too early and learn that a key attribute for any entrepreneur is building personal resilience. At the same time, IMs should ensure that those with unworkable or unrealistic business ideas have an appropriate exit route from the incubator. Finally, IMs should not only select incubatees on the merits of their business ideas but also on their commitment to joining a supportive learning community. The findings of the study suggest that the incubation period is a crucial time for incubatees to develop and transform their entrepreneurial identities. Such a process needs support from IMs and more experienced members of the incubatee community to reinforce confidence and self-belief. This will enable those entering the incubator to better cope with various uncertainties associated with the opportunity identification and development process. Such support does not, of course, mean encouraging over-confidence in those with high-risk ideas. However, a friendly and supportive learning community built by IMs and incubatees can encourage the exchange of ideas and experiences in a ‘worry-free’ environment as well as gaining useful social contacts, which will help the incubatees critically reflect and improve on their ideas.

9.3.2

Implications for Prospective and Existing Incubatees

As for prospective and existing incubatees, the study highlights the importance of the transformation process (experience, knowledge and identity) that takes place in a business incubator. The key to the process of opportunity identification and development is learning, which requires incubatees to obtain relevant information, combine with prior knowledge and transform into new and useful knowledge. The study also finds that it is not only one type of prior knowledge that is important to opportunity identification but a mix of different forms of knowledge including personal interests. Therefore, incubatees can benefit from broadening their knowledge and experience by actively networking with fellow entrepreneurs who are likely to have different sets of knowledge, experience, skills and social contacts. This was certainly the case for both Fiona McKay and Jamie Bettles who tell their stories in Sect. 10.6. Sharing knowledge about their relative competencies can lead to strategic alliance as demonstrated among some INNOSPACE incubatees. Such alliances help start-ups to overcome liabilities of newness and smallness. In some cases, it can even help incubatees buffer their liabilities by working together with others on different business ideas. Personal interests generally play an important role in the creation of new business opportunities. The fascination many individuals have for their hobbies can lead to the creation and innovatory ideas. As discussed by Jones and Li (2017), a schoolboy interest in learning to trade on eBay eventually led to the development of an extremely successful and rapidly growing business. At the same time, incubatees

9.3 Implications of the Research

201

need to consider what other knowledge they need and how a business incubator could help them to develop a realistic business proposition. Finally, a note for prospective incubatees. In line with Dimov’s (2007a) proposition that the social context plays an important role in developing ideas. This study reveals that it is the social spaces and a supportive community learning environment that are most important to incubatees rather than the physical space itself. When choosing a business incubator, a key selection criterion for prospective incubatees should be whether the incubator has a friendly learning environment. This requires a caring management team that can provide pertinent information for incubatees and who nurture a supportive learning community. It also means that it may be worthwhile speaking to the manager as well as incubatees, to get a ‘flavour’ of the incubator before deciding to go ahead. Indeed, a friendly and supportive learning environment is difficult to spot beforehand but easier to recognise by observation and participation. Also, a learning environment needs to be populated by incubatees who are committed to building and sustaining a learning community. A state-of-art incubator without actively networked incubatees would not be the basis for an effective learning community. Fiona McKay emphasises the importance of accessing support and information and networking during her time in INNOSPACE (Sect. 10.6).

9.3.3

Implications for PolicyMakers

The outcomes of the study highlight the importance of the learning process that takes place during business start-up. It also provides a fresh view of how an effective business incubator should be operated. A deeper understanding of how incubatees explore, identify and develop opportunities suggests some important issues for the policy agenda. The study outcomes indicate that by gaining a deeper understanding of the UBI process, policymakers may be able to better target funds by adopting a more nuanced approach to recruitment, providing relevant information to individual incubatees, building knowledge and experience, developing a supportive learning community. This will help to set up and maintain a more effective incubator and enhance entrepreneurial activities in the UBI and the local ecosystem. Ultimately, the growth in entrepreneurship will have an impact on the regional economy (Pickernell et al. 2011; Packham et al. 2010; Matlay 2006, 2009). INNOSPACE case studies in Sect. 10.6 illustrate the contributions that former incubatees have had at the local, regional, national and international levels. These initiatives do not require a large financial investment in facilities, but rather an investment in training amongst UBI staff. This study suggests that it was the supportive learning community rather than state-of-the-art facilities that helped incubatees learn most effectively. Setting up a successful business incubator does not require huge amounts of public funds. Rather, UBI managers and incubatees should be encouraged to work together in building an effective learning community. In the study, incubatees enjoyed the open office space, open kitchen and the

202

9 Conclusion: Contribution, Implications and Future Research

hot-desking policy where new tenants could be introduced on an informal basis. This resulted in discussions of ideas, collaborations and even partnerships. What this study demonstrates is that there is no substitute for regular face-to-face communication between members of a genuine learning community. Incubators such as INNOSPACE have tangible benefits to inexperienced incubatees as well as those who have previous experience in the world of work. Therefore, we are sceptical of the value of the so-called virtual incubators and accelerators, of which there are a small number in the UK (11). As Bone et al. (2017: 40) point out in their report: However, by definition, such virtual programmes cannot satisfy the needs which some startups have for physical accommodation and laboratory space. Nevertheless, since virtual programmes can in principle be assessed from anywhere with an internet connection, it is worth asking whether the handful of virtual accelerators and incubators that were found could help new businesses in areas of the country which currently have less physical support

While we acknowledge there may be a case for virtual incubators in sparsely populated regions, we still believe there is no substitute for being part of a learning community for those trying to move from an idea to a genuinely economically sustainable business. Last but not least, the outcomes of the study demonstrate that a UBI with tenants from a range of different backgrounds with a broad range of prior knowledge can facilitate learning, which leads to the development of new business opportunities. This is an important finding for policymakers, who should consider shifting funding from high-technology incubators to mixed incubators. As we discuss in Chap. 10, the success of INNOSPACE over a 13-year period clearly demonstrates the effectiveness of the approach to business incubation discussed in this book. Therefore, we believe that this study confirms the value of investing public money to support new entrepreneurs in contrast to the negative view expressed by those such as Shane (2009).

9.4

Reflexive Research Account

According to Bell et al. (2019): 156), reflexivity requires ‘thinking deeply about the process of knowledge generation in research and questioning taken-for-granted assumptions’. The authors go on to say that this means specifically focusing on the methods, values, biases and decisions that underpin any research project. Alvesson and Sköldberg (2018) link their ‘reflexive methodology’ to both social construction and abduction. They also suggest that ‘reflexive research’ has two key elements (Alvesson and Sköldberg 2018: 11): 1. Careful interpretation—as any form of empirical data (observation, interviews, measurement) are always ‘interpreted’ by the researcher and do not represent unambiguous ‘facts’

9.4 Reflexive Research Account

203

2. Reflection—a critical self-exploration of the researchers’ interpretation of their empirical material We regard it as an essential element of the research process to provide a reflexive account of how and why we undertook this study. The reflexive methodological approach promoted by Alvesson and Sköldberg (2018: 12) begins at the outset of a project and shapes all aspects of research as stated in the book’s aim: ‘to provide ideas about care and reflection in planning, interpreting and writing during the research process’. Even though this reflexive account is more modest and mostly retrospective, we certainly believe that it is worthwhile considering the strengths and weaknesses of our approach to the study of INNOSPACE. One important issue is that most of the empirical data upon which this book is based were collected as part of a Ph.D. (Meckel 2014). While this material provides the core of Chaps. 5, 6 and 7, we have extended and deepened the data analysis (see Sects. 5.3, 6.3 and 7.3). We have also tried to be as transparent as possible about the way in which the research was carried out by providing an extensive list of appendices (A to H). We do, however, acknowledge that if we were starting this project again, there are a few things that we would almost certainly do differently. The original interviews were carried out while the incubatees were residents in INNOSPACE and this helped capture their feeling while they were intimately involved with the incubator. The research did not capture the process as incubatees progressed from identifying an opportunity to the creation of a functioning business. Also, although 20 incubatees were interviewed and their narratives provide valuable supporting evidence for our various claims associated with the research (see Figs. 5.7, 6.1 and 6.2; Table 7.4), the empirical chapters are based on six extended cases. Even in a book, which provides more scope than a journal article, presenting detailed empirical material based on 20 cases would certainly be challenging. Nevertheless, if we were designing the project today, we would make a concerted effort to collect longitudinal data from a broader cross-section of incubatees. It would have been worthwhile obtaining the views of those involved with mentoring INNOSPACE incubatees or providing other services such as legal advice. While we acknowledge that obtaining access to senior managers in any organisation is challenging, it would have been interesting to have included the views of MMU’s Vice-Chancellor and the Dean of MMUBS about the value of the incubator to their strategic vision for Manchester Metropolitan University. In the study, our aim was to provide a deeper understanding of how those associated with INNOSPACE created a genuine learning community in a business incubator. Hence, our revised conceptual model (Fig. 8.1) identified those components we identified as important in the creation of an entrepreneurial community of practice. In contrast to positivistic approaches to the topic of business incubation, this model is intended to provide a better understanding of the incubation process

204

9 Conclusion: Contribution, Implications and Future Research

rather than form the basis of ‘law-like’ predictions. As Gabriel (2018: 138) points out: Unlike the quantitative researcher who seeks to understand the particular as an instance of the general, the qualitative researcher is seeking to discover the meaning of particular events and experiences, aiming to understand these phenomena as outcomes, intended or unintended, of meaningful human actions, emotions and intentions.

All three contributors to the book played various roles in the creation and development of INNOSPACE (see Chap. 10). From the outset, INNOSPACE was designed to encourage regular interactions between incubatees so that they could share knowledge and experiences. The fieldwork itself was carried out in a professional manner and interviewees were certainly not prompted to talk about the ‘learning community’ nor the importance of ‘trust’ between members of their peer group (see Appendix A). Rather, the interviews were designed to encourage incubatees to talk freely about issues that were important to them, both positive and negative. At the same time, we were certainly expecting to find evidence confirming that a community of practice existed within the incubator. We also suggest that none of this detracts from the ‘trustworthiness and authenticity’ (Guba and Lincoln 1998) of our findings related to the strong sense of community that existed amongst INNOSPACE users as demonstrated in this research. In contrast to those adhering to the principles of objective social science, we believe that our longterm involvement with INNOSPACE provides a unique and privileged perspective on the nature of university-based incubation. This is important because INNOSPACE remains unique in UK universities for its scale and commitment to entrepreneurship that is not based on scientific knowledge or new technologies. Its success in developing entrepreneurs is also unmatched by any other UK university incubator. One of the key motivations for writing this book was that all three authors felt that it was important to have a tangible record of what has been achieved since INNOSPACE was established in 2007. This is made even more crucial by the uncertainty related to whether or not the incubator will continue to operate once the Covid-19 crisis is over (Giones et al. 2020). INNOSPACE has recently moved from ‘The Shed’ as the area is being redeveloped by MMU to a new location1: Based in Turing House, home to a fast-growing cluster of digital technology and data-centric businesses in internet, cloud hosting and security services, you will be located in the thriving Manchester Science Park adjacent to our city centre campus.

According to the INNOSPACE website, a wide range of services are offered including hot-desking, start-up offices and the opportunity to operate as a ‘virtual licensee’ as well as 24/7 access to the incubator. However, as we discuss in the next chapter, INNOSPACE lacks a ‘champion’ within the University and senior managers appear ambivalent about continuing to provide backing for aspiring entrepreneurs. Nevertheless, we hope that MMU continues to support the incubator and that

1

http://www.innospace.co.uk/join-us (accessed 7th September 2020)

9.5 Summary and Future Research

205

our research will help other institutions establish similar facilities. In fact, helping young people start their own businesses will be even more crucial as the UK economy begins to recover from the effects of Covid-19 (Kuckertz et al. 2020) and the likely impact of Brexit on the job opportunities of those graduating from universities in the next 5 years.

9.5

Summary and Future Research

In terms of developing existing understandings of business incubation, this study focuses on a UBI that supports entrepreneurs from diverse backgrounds working on a range of business ideas. Unlike the majority of incubation studies, most business ideas were not high-technology or science-based. Rather, they represent the kind of business opportunities likely to be identified by potential entrepreneurs entering from business education or from previous work experience. As we discuss in Chap. 10, INNOSPACE was originally established as a ‘pre-incubator’ that was intended to give time and space to MMU graduates developing business ideas. This ethos has remained a core element of INNOSPACE and it continues to attract those wishing to start up businesses that do not require large amounts of funding or the acquisition of IPR (Intellectual Property Rights: patents, copyright, etc.). Consequently, this makes it difficult to compare the outcomes of this study with literature focusing on high-technology and science-based incubators (Ahmad and Ingle 2011; Cooper and Park 2008; Díez-Vial and Montoro-Sánchez 2016; El-Awad et al. 2017; Hughes et al. 2007; McAdam and McAdam 2006; Marlow and McAdam 2015; Mian et al. 2016; M’Chirgui et al. 2018). Moreover, unlike other research based on UBIs that highlight the difficulties of encouraging trust between incubatees (McAdam and McAdam 2006; McAdam and Marlow 2007), this study demonstrates that trust between incubatees was central to the creation of a community of practice that helped forge alliances and overcome the liabilities of smallness and newness associated with business start-ups. INNOSPACE remains a mixed incubator, with businesses from a range of sectors (see Chap. 10). This heterogeneity helped create an environment in which incubatees with diverse skills and knowledge were able to talk freely about the problems of starting new businesses. Instead of a hostile, highly competitive environment, INNOSPACE encouraged individuals to exchange knowledge, skills and information. Future research could include comparative studies of mixed and high-tech incubators to explore the role of BIs in the context of knowledge transfer, learning and opportunity recognition. Another avenue for future research is to explore whether the positive experience of INNOSPACE could be transferred to other universities and high-tech incubators. Also, because the majority of the universitybased incubators (UBIs) are (partially) subsidised by public funding, much research looks at the outputs in relation to public funding, policy and implication. This, on one hand, highlights the unique nature of this study; however, it restricts the possibilities for drawing comparisons with other studies.

206

9 Conclusion: Contribution, Implications and Future Research

The conceptual framework developed in this study offers the possibility for future researchers to explore similarities and differences between UBIs and other types of incubators. With regards to the research methods adopted in this study, 20 in-depth interviews with incubatees, documents from first- and second-year incubatee reviews, and documents from the INNOSPACE office provide rich, in-depth data for the study. In addition, interviews were carried out with members of the INNOSPACE founding team, and this information is discussed in Chap. 10. We also present data on how the incubator has performed since it was created in 2007 as well as six case studies of successful companies that have emerged from INNOSPACE in that period. As an exploratory study, this research has advantages as well as limitations. The study offers meaningful insights into how incubatees experienced their start-up process in a UBI environment. By exploring the learning processes that took place in INNOSPACE the study goes some way to opening up the ‘black box’ of business incubation (Hackett and Dilts 2008). They criticise the BI literature for failing to shed light on the process of business incubation and highlight the importance of learning in an incubator. Although there have been many published accounts of business incubation in the last 12 years, none have provided a detailed account of incubatees’ experiences. Therefore, Fig. 8.1 provides a useful starting point for future research based on qualitative approaches to university-based incubation.

References Ahmad, A. J., & Ingle, S. (2011). Relationships matter: Case study of a university campus incubator. International Journal of Entrepreneurial Behavior and Research, 17(6), 626–644. Ahmad, A. J., & Thornberry, C. (2018). On the structure of business incubators: De-coupling issues and the mis-alignment of managerial incentives. The Journal of Technology Transfer, 43(5), 1190–1212. Albort-Morant, G., & Ribeiro-Soriano, D. (2016). A bibliometric analysis of international impact of business incubators. Journal of Business Research, 69(5), 1775–1779. Aldrich, H., & Auster, E. R. (1986). Even dwarfs starred small: Liabilities of age and size and their strategic implications. Research in Organizational Behavior, 8, 165–199. Alvesson, M., & Sköldberg, K. (2018). Reflexive methodology: New vistas for qualitative research (3rd edition). Newbury Park, CA: Sage. Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18, 105–123. Arlotto, J., Sahut, J.-M., & Teulon, F. (2011). What is the performance of incubators? The point of view of coached entrepreneurs. International Journal of Business, 16(4), 341–352. Bell, E., Bryman, A., & Harley, B. (2019). Business research methods (5th edition). Oxford: Oxford University Press. Berends, H., Smits, A., Reymen, I., & Podoynitsyna, K. (2016). Learning while (re)configuring: Business model innovation processes in established firms. Strategic Organization, 14(3), 181–219. Bøllingtoft, A., & Ulhøi, J. P. (2005). The networked business incubator—Leveraging entrepreneurial agency? Journal of Business Venturing, 20, 265–290. Bone, J., Allen, C., & Haley, C. (2017). Business incubators and accelerators: The national picture, BEIS Research Paper No 7 (NESTA).

References

207

Bone, J., Gonzalez-Uribe, J., Haley, C., & Lahr, H. (2019). The impact of business accelerators and incubators in the UK. BEIS Research Paper Number 2019/009. Breznitz, S. M., & Zhang, Q. (2019). Fostering the growth of student start-ups from university accelerators: An entrepreneurial ecosystem perspective. Industrial and Corporate Change, 28 (4), 855–873. Breznitz, S. M., Clayton, P. A., Defazio, D., & Isett, K. R. (2018). Have you been served? The impact of university entrepreneurial support on start-ups network formation. Journal of Technology Transfer, 43(2), 343–367. Cooper, S. Y., & Park, J. S. (2008). The impact of “incubator” organizations on opportunity recognition and technology innovation in new, entrepreneurial high-technology ventures. International Small Business Journal, 26, 27–56. Cope, J. (2005). Toward a dynamic learning perspective of entrepreneurship. Entrepreneurship: Theory and Practice, 29, 373–397. Corbett, A. C. (2005). Experiential learning within the process of opportunity identification and exploitation. Entrepreneurship: Theory and Practice, 29, 473–491. Díez-Vial, I., & Montoro-Sánchez, Á. (2016). How knowledge links with universities may foster innovation: The case of a science park. Technovation, 50–51, 41–52. Dimov, D. (2007a). Beyond the single-person, single-insight atribution in understanding entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 31(5), 713–731. Downing, S. (2005). The social construction of entrepreneurship: Narrative and dramatic processes in the coproduction of organizations and identities. Entrepreneurship: Theory and Practice, 29, 185–204. Dvouletý, O., Longo, M. C., Blažková, I., Lukeš, M., & Andera, M. (2018). Are publicly funded Czech incubators effective? The comparison of performance of supported and non-supported firms. European Journal of Innovation Management, 21(4), 543–563. Ebbers, J. J. (2014). Networking behavior and contracting relationships among entrepreneurs in business incubators. Entrepreneurship: Theory and Practice, 38, 1159–1181. El-Awad, Z., Gabrielsson, J., & Politis, D. (2017). Entrepreneurial learning and innovation: The critical role of team-level learning for the evolution of innovation capabilities in technologybased ventures. International Journal of Entrepreneurial Behavior and Research, 23(3), 381–405. Eveleens, C. P., van Rijnsoever, F. J., & Niesten, E. M. (2017). How network-based incubation helps start-up performance: A systematic review against the background of management theories. Journal of Technology Transfer, 42, 676–713. Gabriel, Y. (2018). Interpretation, reflexivity and imagination in qualitative research. In M. Ciesielska & D. Jemielniak (Eds.), Qualitative methodologies in organization studies: Volume 1 Theories and new approaches (pp. 137–157). London: Palgrave Macmillan. Galvão, A., Marques, C., Franco, M., & Mascarenhas, C. (2019). The role of start-up incubators in cooperation networks from the perspective of resource dependence and interlocking directorates. Management Decision, 57(10), 2816–2836. Gartner, W. B., Bird, B. J., & Starr, J. A. (1992). Acting as if: Differentiating entrepreneurial from organizational behavior. Entrepreneurship: Theory and Practice, 16(3), 13–31. Giones, F., Brem, A., Pollack, J. M., Michaelis, T. L., Klyver, K., & Brinckmann, J. (2020). Revising entrepreneurial action in response to exogenous shocks: Considering the COVID-19 pandemic. Journal of Business Venturing Insights, 14, e00186. Grimaldi, R., & Grandi, A. (2005). Business incubators and new venture creation: An assessment of incubating models. Technovation, 25(2), 111–121. Guba, E. G., & Lincoln, Y. S. (1998). Competing paradigms in qualitative research. In N. K. Denzin & Y. S. Lincoln (Eds.), The landscape of qualitative research: Theories and issues. Thousand Oaks: Sage Publications, inc.. Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation research. Journal of Technology Transfer, 29, 55–82.

208

9 Conclusion: Contribution, Implications and Future Research

Hackett, S., & Dilts, D. (2008). Inside the black box of business incubation: Study b-scale assessment, model refinement, and incubation outcomes. Journal of Technology Transfer, 33 (5), 439–471. Hannon, P. D. (2005). Incubation policy and practice: Building practitioner and professional capability. Journal of Small Business and Enterprise Development, 12, 57–75. Hughes, M., Hughes, P., & Morgan, R. E. (2007). Exploitative learning and entrepreneurial orientation alignment in emerging young firms: Implications for market and response performance. British Journal of Management, 18, 359–375. Jones, O., & Li, H. (2017). Entrepreneurial becoming: Sensemaking in a family-based start-up. Entrepreneurship and Regional Development, 29(5-6), 467–499. Jayawarna, D., Jones, O., & Macpherson, A. (2020). Managing social enterprises: The role of socially oriented bootstrapping practices. British Journal of Management, 31(1), 56–79. Kakabadse, N., Karatas-Ozkan, M., Theodorakopoulos, N., McGowan, C., & Nicolopoulou, K. (2020). Business incubator managers’ perceptions of their role and performance success: Role demands, constraints, and choices. European Management Review, 17, 485–498. Kasperova, E., Kitching, J., & Blackburn, R. (2018). Identity as a causal power: Contextualizing Entrepreneurs’ concerns. The International Journal of Entrepreneurship and Innovation, 19(4), 237–249. Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A., Steinbrink, K. M., & Berger, E. S. C. (2020). Start-ups in times of crisis—A rapid response to the COVID19 pandemic. Journal of Business Venturing Insights, 13, e00169. Lasrado, V., Sivo, S., Ford, C., O’Neal, T., & Garibay, I. (2016). Do graduated university incubator firms benefit from their relationship with university incubators? Journal of Technology Transfer, 41(2), 205–219. Lee, S. S., & Osteryoung, J. S. (2004). A comparison of critical success factor for effective operations of university business incubators in The United States and Korea. Journal of Small Business Management, 42, 418–426. M’Chirgui, Z., Lamine, W., Mian, S., & Fayolle, A. (2018). University technology commercialization through new venture projects: An assessment of the French regional incubator program. Journal of Technology Transfer, 43, 1142–1160. Marlow, S., & McAdam, M. (2015). Incubation or induction? Gendered identity work in the context of technology business incubation. Entrepreneurship: Theory and Practice, 39(4), 791–816. Matlay, H. (2006). View point: Researching entrepreneurship and education. Part 2: What is entrepreneurship and does it matter? Education and Training, 48(8/9), 704–718. Matlay, H. (2009). Entrepreneurship education in the UK: A critical analysis of stakeholder involvement and expectations. Journal of Small Business and Enterprise Development, 16(2), 355–368. McAdam, M., & Marlow, S. (2007). Building futures or stealing secrets? Entrepreneurial cooperation and conflict within business incubators. International Small Business Journal, 25(4), 361–382. McAdam, M., & McAdam, R. (2006). The networked incubator: The role and operation of entrepreneurial networking with the University Science Park incubator (USI). Entrepreneurship and Innovation, 7(2), 87–97. Meckel, P-P. (2014). The role of business incubators in developing entrepreneurship. Unpublished PhD, Manchester Metropolitan University. Mian, S. (2014). Chapter 15: Business incubation and incubator mechanisms. In A. Fayolle (Ed.), Handbook of research on entrepreneurship: What we know and what we need to know (pp. 335–366). Cheltenham: Edward Elgar. Mian, S., Lamine, W., & Fayolle, A. (2016). Technology business incubation: An overview of the state of knowledge. Technovation, 50–51, 1–12. Nair, S., & Blomquist, T. (2019). Failure prevention and management in business incubation: Practices towards a scalable business model. Technology Analysis & Strategic Management, 31 (3), 266–278.

References

209

O’Neal, T. (2005). Evolving a successful university-based incubator: Lessons learned from the UCF technology incubator. Engineering Management Journal, 17(3), 11–25. Packham, G., Jones, P., Miller, C., Pickernell, D., & Thomas, B. (2010). Attitudes towards entrepreneurship education: A comparative analysis. Education and Training, 52(8–9), 568–586. Pickernell, D., Packham, G., Jones, P., Miller, C., & Thomas, B. (2011). Graduate entrepreneurs are different: They access more resources? International Journal of Entrepreneurial Behavior and Research, 17(2), 183–202. Redondo, M., & Camarero, C. (2019). University business incubators: Mechanisms to transform ideas into businesses. In A. Fayolle, D. Kariv, & H. Matlay (Eds.), The role and impact of entrepreneurship education: Methods, teachers and innovative programmes. Cheltenham: Edward Elgar. Sedita, S. R., Apa, R., Bassetti, T., & Grandinetti, R. (2019). Incubation matters: Measuring the effect of business incubators on the innovation performance of start-ups. R&D Management, 49 (4), 439–454. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 448–469. Shane, S. (2009). Why encouraging more people to become entrepreneurs is bad public policy. Small Business Economics, 33(2), 141–149. Soetanto, D., & Jack, S. (2016). The impact of university-based incubation support on the innovation strategy of academic spin-offs. Technovation, 50–51, 25–40. Stinchcombe, A. L. (1965). Organizations as social structures. In J. March (Ed.), Handbook of organizations. Chicago: Rand-McNally. Theodorakopoulos, N. K., Kakabadse, N., & McGowan, C. (2014). What matters in business incubation? A literature review and a suggestion for situated theorising. Journal of Small Business and Enterprise Development, 21(4), 602–622. Todorovic, Z., & Moenter, K. (2010). Tenant firm progression within an incubator: Progression toward an optimal point of resource utilization. Academy of Entrepreneurship Journal, 16(1), 40. Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The measurment of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. Wann, J.-W., Lu, T.-J., Lozada, I., & Cangahuala, G. (2017). University-based incubators’ performance evaluation: A benchmarking approach. Benchmarking: An International Journal, 24(1), 34–49. Wenger, E. (1998). Communities of practice: Learning, meaning, and identity. Cambridge: Cambridge University Press. Zhang, H., & Sonobe, T. (2011). Business incubators in China: An inquiry into the variables associated with incubatee success. Economic Design, 5(7), 1–27.

Chapter 10

Postscript: Creating and Managing a University-Based Incubator

10.1

Introduction: Initiating INNOSPACE

This study addresses a research gap by focusing on incubatees located in a UK university-based incubator. INNOSPACE provided the case study for this book and falls between a non-profit incubator and an academic incubator on the continuum developed by Allen and McCluskey (1990). The overall aim was to help university students and graduates start new businesses with a view to creating jobs and enhancing the local economy. The set-up funding for INNOSPACE was provided by the European Regional Development Fund (ERDF), Manchester Metropolitan University Business School (MMUBS), and the Centre for Enterprise (CfE). A large office space provided by MMUBS was under-utilised before INNOSPACE was established. During the first operational year, management charged incubatees a rent well below market price. Before the ERDF funding was due to run out, the management team was thinking of ways of sustaining INNOSPACE financially. After funding the first year, the University agreed to continue to provide the office facilities but insisted that the management team had to be supported through rental income. Consequently, a tiered rent system was introduced depending on the facilities incubatees wanted (or could afford) to access. The rental packages ranged from postal address only with no other administrative support, hot-desking, a dedicated desk, and a dedicated office on a different floor (rent depending on size of office). Because of the benefits provided to incubatees and the increasing number of tenants, it was possible to increase the overall rent substantially and the incubator became partially financially self-sustaining financially and independent of MMUBS and the CfE. INNOSPACE fits with Todorovic and Moenter’s (2010: 28) definition of a university incubator: a university incubator is a programme sponsored by a university to nurture new and small businesses by providing support throughout the early stages of development. Most university incubators provide specialized resources, such as technical or other research capabilities that are not otherwise available to the firm.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5_10

211

212

10

Postscript: Creating and Managing a University-Based Incubator

INNOSPACE regularly had student visitors from MMUBS and other University departments who had studied or were studying subjects related to entrepreneurship or small firms. Some incubatees offered work experience to students. For example, Jamie Bettles (Sect. 10.6) saw the on-campus location as a platform for collaboration and recruitment (including opportunities for placements, internships, student-led consultancy projects, and part-time and full-time employment). In a sense, the incubator complemented existing educational programmes. The University and the CfE promoted INNOSPACE to students and encouraged them to turn their ideas into real businesses. Hence, MMU students had the opportunity to test out their ideas before or after graduation. When setting up and running INNOSPACE, academics and managers from various MMU Faculties, who were interested in supporting entrepreneurship, were invited to join the Steering Group, which we discuss in more detail below. In addition, most of the business advisors were associated with business support organisations such as Blue Orchid1 and Winning Pitch,2 which exposed incubatees to mentors with long experience of supporting new businesses. Unlike the two cases analysed by McAdam et al. (2016), INNOSPACE was not embedded within Manchester Metropolitan University’s (MMU) technology transfer office. There were two elements to this omission; first, although many of the original businesses had a technical component this was mainly via the use of digital technologies to engage potential customers. Secondly, although the objective was to attract students from all University Faculties very few of those who joined INNOSPACE had science or engineering degrees. This was very different from the SEC incubator in Manchester University and reflects differences between the two institutions studied by McAdam et al. (2016). Secondly, the impression gained by CfE staff was that there was little interest in the INNOSPACE initiative amongst the University hierarchy. For example, a report produced by CfE staff (Woollard et al. 2007), which attempted to stimulate interest in the concept of MMU as an ‘enterprising university’ was ignored by senior University managers.

10.2

The Evolution of INNOSPACE

Manchester Metropolitan University Business School hosted the Centre for Enterprise (CfE), which was launched in March 2001 to engage with entrepreneurs and the small business community (Jones et al. 2008). Initially, the main activity was a scheme known as ‘NES’ (New Entrepreneur Scholarship), which was being managed on a part-time basis by a mature Ph.D. student (Taylor et al. 2004). NES was promoted by the Chancellor, Gordon Brown, who wanted UK universities to follow the US model of business engagement. The pilot programme began in July 2000 and included three very different business schools: Greenwich, Manchester Metropolitan

1 2

https://blueorchid.co.uk/ (accessed 19th June 2020) https://www.winning-pitch.co.uk/ (accessed 19th June 2020)

10.2

The Evolution of INNOSPACE

213

and Plymouth (Taylor et al. 2004). Following a successful pilot, the NES programme, which operated from 2001 to the end of 2007, was launched in England. NES provided a 12-week part-time training programme to help those from socially deprived areas establish new business ventures. Social deprivation was a UK government measure and NES participants were recruited from postcode areas in the lowest 25% based on a composite measure of income, housing and education (Jayawarna et al. 2007). As NES activity increased in size and importance it provided a steady flow of funds into the CfE and supported a number of staff members. The part-time Ph.D. student became a full-time NES project manager with one administrator. In addition, a number of MMU academic staff and doctoral students were employed on a part-time basis to deliver the programme (Taylor et al. 2004). Ultimately, NES, which was funded by the Learning and Skills Council, ran from June 2001 to August 2007 and brought in £6.6 m to the CfE (Jones et al. 2008). In addition to NES, staff from the CfE prepared a successful bid to the European Regional Development Fund (ERDF), which was the catalyst for a substantial increase in the size of the Centre. The 3-year ERDF project (£364,000) designed to improve the competitiveness of Northwest SMEs began in 2002. This project supported the recruitment of four full-time business analysts/researchers and another project manager (Jayawarna et al. 2006, 2007; Macpherson and Jayawarna 2007). Following successful completion of the first ERDF project, a range of ESF (European Social Fund)/ERDF funded projects, to the value of £1.8 m, were undertaken by CfE staff between 2001 and 2008 (Jones et al. 2008). By that time, the Centre for Enterprise employed 21 full-time staff including project managers, administrators and those charged with the delivery of various programmes as well as conventional research outputs. There were also close links between the CfE and MMUBS’s doctoral programme and a number of recent graduates were recruited to the Centre. One doctoral student associated with the CfE compared nascent entrepreneurs from the NES programme with students participating in the SEC (Science Enterprise Challenge) at Manchester University (Lee 2009, 2017). SEC students were based in a business incubator that provided working space for those attempting to establish new businesses and helped create ‘a community of practice’ amongst students (Lee and Jones 2008). At the same time, the first author (OJ) was teaching a final year undergraduate module known as Advanced Enterprise Management and was surprised that few students appeared committed to a career as entrepreneurs. OJ believed that a lack of institutional support for enterprise students was inhibiting their commitment to starting new businesses. There was a desire to provide students with the opportunity to develop their business ideas and the SEC incubator stimulated debate amongst CfE staff about the possibility of creating a similar facility within MMUBS. Eventually, a conversation between the Head of the CfE (OJ) and the Dean of MMUBS led to the identification of a large working space in the ‘Minshull Building’ adjacent to MMUBS. It was agreed that CfE staff would establish a ‘pre-incubator’ for students from all seven MMU Faculties. INNOSPACE was established in 2007 using existing CfE staff resources and £300,000 in set-up costs provided equally by ERDF and MMUBS. The launch of the incubator took place in September 2007

214

10

Postscript: Creating and Managing a University-Based Incubator

and the guest speaker was Trevor Baylis, inventor of the wind-up radio, who attracted over 150 guests from MMU and the local business/policy communities (Appendix G). The space (800 m2) allocated to INNOSPACE had previously been used by MMUBS for student examinations and conversion into a suitable incubator facility took 6 months. Initially, the large, open-plan office space provided accommodation for approximately 100 incubatees. In addition, incubatees were provided with individual storage lockers, kitchen facilities, bookable offices for private meetings, telephone and internet access, an office for the incubator manager and administrator, as well as improved toilet facilities. Reconfiguration of the building was the responsibility of MMU Estates department and it was difficult to get their staff to buy in to the vision of INNOSPACE as an informal area where incubatees could mingle freely to exchange ideas, discuss problems and create a community of practice. OJ discussed the building design with Estates: They (Estates) were thinking along much more formalised layouts in design of the building, so we went to look at a number of other business incubators. There was one close to Piccadilly railway station managed by Urban Splash and it was very similar to the arrangements we wanted. I think then they started to get a reasonable idea of what we wanted.

Urban Splash3 were responsible for much of the early regeneration of Manchester City centre and the founder Tom Bloxham was invited to MMUBS to discuss the potential of INNOSPACE with OJ and the Dean of MMUBS. While Tom Bloxham was interested in taking over the running of the incubator, he also wanted to redevelop the Minshull Building and this proved impossible to negotiate with the University. Consequently, planning and managing INNOSPACE continued to be the responsibility of CfE staff (in addition to their day-to-day responsibilities). Prior to the official opening, CfE staff had held promotional events across the University to attract students from all seven faculties. As pointed out by the INNOSPACE administrator, these promotional events included a competition to name the business incubator: We called them ‘create your own workspace’ and the purpose of those events was to get as many students along from as many faculties as we could; we had speakers, we had various tasks and games as well as food and wine to entice them along. We wanted to stimulate them into thinking what enterprise and entrepreneurship was. We incorporated competitions including design of the name and the logo; the prizes were a year’s tenancy. We also had suggestion cards so a lot of what students said was incorporated into what the planning team were putting together.

Take-up of the facility was excellent and by the end of 2007, there were 75 registered users representing 56 businesses. As mentioned above, Manchester University’s facility for SEC students, based in the Vokonis Building, provided a working model for the operation of INNOSPACE. In particular, the objective was to encourage incubatees to form a learning community of practice in which they supported each other in their efforts to create new businesses. Inevitably, not all 3

See their website: https://www.urbansplash.co.uk (accessed 15th August 2020)

10.3

Managing INNOSPACE

215

those who registered as users wanted to attend the Incubator every day. In fact, incubatees were encouraged to use the space in flexible ways that suited their particular needs. A core of incubatees did use the incubator as their primary workspace and attended on a regular basis (i.e., every day). Others wanted the ‘prestige’ of a central Manchester address and used the incubator for their mail and to arrange meetings with customers and potential funders. However, all incubatees were encouraged to attend a range of regular events organised by the Incubator manager to encourage engagement between all incubatees (Fiona McKay explains the importance of engaging in INNOSPACE activities in Sect. 10.6). By 2010, INNOSPACE was well-established with over 100 registered users and the Incubator manager had gained experience in identifying candidates with real potential to establish successful businesses. Plans were also in place to extend the facility by converting space in the building’s basement into a workshop for those incubatees working on physical products. At this time the first major change occurred as the Director of INNOSPACE and the CfE (OJ) left MMUBS to take up a post at Liverpool University Management School. Eventually, another academic was recruited to take over as director of the CfE and staff continued to attract funding from a wide range of sources including EU structural funds (ERDF/ESF) as well as a Goldman Sachs initiative known as 10,000 businesses. In fact, the CfE doubled in size within 3 years and was employing more than 40 staff by 2011. In terms of the implications for INNOSPACE, the Dean of MMUBS took a more active role in managing the facility as we discuss below.

10.3

Managing INNOSPACE

From its inception, INNOSPACE was the responsibility of CfE staff who were involved with managing and delivering a range of other funded projects to support entrepreneurs and small businesses. In effect, this was a form of entrepreneurial ‘bootstrapping’ (Jones and Jayawarna 2010), where resources from one project were used to support other activities (the setting up of INNOSPACE). Initially, there was a very small group of CfE staff involved with planning the incubator: OJ (head of CfE), the NES project manager and the project manager for EU programmes. As the conversion of the building got underway it became obvious that a more formalised structure was required to oversee the day-to-day running of the incubator as well as monitoring ERDF funding. A Steering Group was assembled to help promote the incubator to other University Faculties and departments. OJ explained the reasoning about setting up a Steering Group: I don’t think we ever pretended that we had all the solutions for INNOSPACE and we always saw it as something that should belong to the University. Extending the Steering Group across the University to staff who had an interest in promoting business start-up was very important. People like CG (Engineering), SO (MMU EU Office) and DT (MMUBS) were strong advocates for INNOSPACE within the University.

216

10

Postscript: Creating and Managing a University-Based Incubator

We realised that we didn’t have enough reach into the University and we recruited 9 or 10 staff to form our Steering Group. They helped from the very beginning because they saw it as a good thing for the University and they helped guide the operational direction of INNOSPACE (INNOSPACE Manager).

Whereas the Steering Group was primarily responsible for operations, the Advisory Board (see Appendix H) was intended to have a much stronger strategic focus. The basic idea was to recruit the ‘great and the good’ from within the University and across the City to provide guidance on the development of INNOSPACE as well as linking to the Manchester business and policy communities. In addition to MMU’s Vice-Chancellor, there was a desire to bring in those with business expertise to help advise on the best approach to managing the incubator. The INNOSPACE Manager outlined the rationale for recruiting members to the Advisory Board: We selected members on their knowledge of either the city region or with business/ professional expertise. So we picked someone from a high-growth SME, a couple of solicitor firms, a business leadership organisation, the NWDA (Northwest Development Agency), Manchester City Council, people at quite senior levels who wanted to be involved in the board, plus we got JB (Vice Chancellor) and MN (Finance Director).

Unfortunately, the Advisory Board did not function in the way that the Steering Group intended and there was very little strategic direction for the incubator. It is difficult to be certain about why the Advisory Board had a limited impact on INNOSPACE although the Director (OJ) thought that it reflected a lack of real interest from senior University managers: There were a number of reasons why I felt the first advisory board didn’t go particularly well. I didn’t feel that INNOSPACE got the support from either the University or the Business School that it should have done. One of the things that I was keen to get on the agenda at the Advisory Board was what was going to happen to INNOSPACE once the NES programme was completed, because I guess what I’ve not said is that, you know, the creation of INNOSPACE was done by staff within the CfE.

The Head of the CfE (OJ) was concerned to identify another stream of funding to ensure that these key members of staff would continue to be employed by the University when the NES programme ended. At the time, MMU was receiving large amounts of HEIF (Higher Education Innovation Fund), which was established4 ‘to support and develop a broad range of knowledge-based interactions between universities and the wider world, which result in benefits to the economy and society’. It appeared that INNOSPACE fulfilled all the criteria to obtain HEIF support and OJ made a bid for £200,000 to the PVC for Enterprise. Now as I understand it, some HIEF money did support the post (INNOSPACE manager), but nothing like the amount that I was I was bidding for and there was never any explanation about why the money was not forthcoming. I certainly didn’t feel that the University was very supportive of something that, as I’ve already said, had the potential to set us (MMU/MMUBS) apart from what other institutions were doing in helping students start their own businesses (OJ). 4 https://re.ukri.org/knowledge-exchange/the-higher-education-innovation-fund-heif/ (accessed first July 2020)

10.3

Managing INNOSPACE

217

When OJ left MMUBS in 2008, a senior academic from the CfE was appointed interim director of the CfE and INNOSPACE until the appointment of a new professor. However, it became apparent that neither the interim director nor the new professor wanted to maintain links between the CfE and INNOSPACE. Consequently, as pointed out by the Incubator manager, the Dean of MMUBS took a more active role in managing the incubator: You’ve got to remember that the Dean has staked a lot of his reputation on getting INNOSPACE sorted and he’s really behind it and will help and support it to achieve what it’s got to achieve. It’s not like it’s suddenly left completely isolated. He’s invested money in the offices downstairs and wants to see Minshull Building do well so it’s not in his interest to let it fail. It’s not like we’ve not got a champion anymore, it’s just that INNOSPACE won’t sit within the CfE I suppose.

The work associated with planning and establishing INNOSPACE did not result in the CfE acquiring additional resources in terms of new staff members. Essentially, this meant that existing staff, who were responsible for managing and administering the NES programme, took on extra responsibilities associated with INNOSPACE. At the time, NES funding was only confirmed until August 2007 and it was assumed by CfE staff that NES would not continue beyond that date. Therefore, it was logical to begin the transfer of responsibilities from NES to INNOSPACE (to ensure there were no staff redundancies at the end of the programme). However, the downside was that there was considerable pressure on staff members involved in both projects. For the first year myself and two other staff members were all employed full-time on the NES project and we weren’t contracted to do INNOSPACE. We were contracted full-time hours to work on the NES project. So, we were kind of doing this off our own back, in-between getting everything else done and then trying to do INNOSPACE (NES/INNOSPACE administrator).

Eventually, after being retained on a series of short-term contracts, the uncertainty led to the incubator manager leaving INNOSPACE early in 2009. As we discuss in Sect. 10.7, this meant the loss of an individual with considerable experience in supporting nascent entrepreneurs attempting to establish their first businesses. In 2012, MMUBS moved from its existing site near Piccadilly railway station to a new building located nearer central University facilities on Oxford Road. INNOSPACE also moved to a central location known as ‘The Shed’ and responsibility for managing the incubator moved from the Business School to Research and Knowledge Exchange. After a number of short-term appointments, Louise Kenworthy was appointed Incubation Services Manager in 2014 with the support of administrator Sandra Wharton. Louise had extensive experience in providing practical support for nascent entrepreneurs and was committed to ensuring the incubator provided the best possible service to MMU and to the entrepreneurial ecosystem in Manchester.

218

10.4

10

Postscript: Creating and Managing a University-Based Incubator

INNOSPACE: Envisioning a Community of Practice

As discussed above, the University of Manchester’s incubator associated with its SEC programme provided a template for the creation of INNOSPACE. In particular, there was a desire amongst the founding team and the original Steering Group that the incubator becomes a hub for the business and the policy communities in Greater Manchester. As we discuss below, David Taylor was also keen to establish effective links between students taking enterprise-related modules and incubator tenants. Running the NES programme for 7 years had enabled key staff in the CfE to establish close working relationships with a number of organisations in Greater Manchester. The Incubator Manager explained: We’d do some student enterprise initiatives like YOMPing and Young Enterprise events. We’d do staff development enterprising events so, for example, if we wanted to help people understand academic enterprise, opportunities, we would then allow external organisations who had similar missions to run events in here. So, we had people like Unlimited and Blue Orchid to run events. We also had events that were about helping the tenants themselves; things like Her Majesty’s Revenue and Customs (HMRC), accountants, solicitors and events like that.

Business support organisations such as Blue Orchid and Winning Pitch had been closely involved with the NES programme and the INNOSPACE manager encouraged them to support the incubator; both organisations provided a number of mentors who helped tenants develop their businesses. Bolton Business Ventures5 (another NES contact) provided business mentors for tenants who needed additional expertise. Pro-Manchester6 (an organisation to promote business development in Manchester) also took an active role in supporting tenants and students by judging various competitions and providing staff to act as mentors. According to the Director of INNOSPACE, Manchester City Council were interested in creating a more coherent system of incubation in the City I think that was early 2008, there was a project commissioned by Manchester City Council to look at incubation space in Manchester as a whole and trying to link pre-incubators like INNOSPACE into the whole system of business incubation in Manchester. Potential entrepreneurs would start off in something like INNOSPACE and would ultimately feed through to more established organisations like Manchester Science Park7 or One Central Park.8 The firm was called Adroit Consulting, as far as I know nothing came out of that report.

There were also high-level discussions related to Manchester Metropolitan University and the City Council collaborating to build additional incubation space around All-Saints (MMU’s main campus) when the new Business School was completed in 2012. It appears that nothing came of either initiative and, to our knowledge, such 5

http://www.bbbonline.net/(accessed 18th July 2020) https://www.pro-manchester.co.uk/about/ (accessed fifth August 2020) 7 https://www.mspl.co.uk/(accessed fifth August 2020) 8 https://www.ahr.co.uk/One-Central-Park (accessed fifth August 2020) 6

10.4

INNOSPACE: Envisioning a Community of Practice

219

matters are no longer under consideration by either MMU or Manchester City Council. For example, a report in 2018 by the accountancy and consulting firm Deloitte,9 developed a strategic regeneration framework related to Manchester Science Park. This document makes no mention of INNOSPACE even though it focused on the ‘Oxford Road Corridor’ where the incubator was located at the time. There were close links between INNOSPACE and students taking enterpriserelated modules in the Business School. In particular, a programme introduced in 2010 was specifically designed to link the School and the incubator. Students taking an M.Sc. in Entrepreneurial Practice were located in INNOSPACE and the core unit was based on work they did in the incubator. David Taylor, who eventually took over as director of the MSc programme and was also responsible for a number of undergraduate programmes and modules. David was an early member of the Steering Group because he saw the opportunity to provide students with real insight into the process of establishing an entrepreneurial business: When they arrived in their first-year I would show enterprise students around INNOSPACE. I would run a lot of enterprise competitions in INNOSPACE and I think this was a really good bridge between the rest of the business school, indeed the University, and INNOSPACE. I do think that could have been formalized better. You don’t want INNOSPACE to be swamped by students but you want them to feel it’s a natural progression for them so they feel comfortable going from one area to the other. We’ve also started to support INNOSPACE tenants with our students doing consultancy projects for them.

At the same time, David acknowledged that not all enterprise students were interested in the incubator. Many students wanted experience of larger organisations and most tenants were operating very small, sole-trader, desk-based businesses. As David pointed out; ‘even the owners don’t really know what the business is or what it does or how it’s going to do it’. However, David remained committed to the mutual benefits for students and tenants working together and still is involved in promoting interaction between the two groups through consultancy, internships and student start-up competitions. Although the incubator quickly attracted over 70 tenants only a relatively small proportion attended on a regular basis. It was certainly a surprise to the INNOSPACE management team that less than 20 tenants used their desks every day during the first 12 months of operation. The low number of users was a potential barrier to creating a genuine learning community amongst the tenants. There was also concern that low occupancy levels would be viewed negatively by senior management in the University (the VC and Dean of MMUBS). This was also frustrating because of our efforts (see above) to create an informal, ‘user-friendly’ environment for the tenants. In an effort to encourage more tenants to attend on a regular basis the Incubator manager organised regular events aimed at the tenants themselves, participants in other programmes managed by CfE staff as well as students taking enterprise-related modules. Unfortunately, these events did not always meet with the approval of

9

www.manchester.gov.uk/download/downloads/id/26698/manchester_science_park_strategic_ regeneration_framework_update_august_2018.pdf (accessed eighth May 2020)

220

10

Postscript: Creating and Managing a University-Based Incubator

regular attendees as they resented the disruption to their routine. In part, the inability of the management team to have a more ‘hands-on’ approach to the tenants was a reflection of limited resources. As indicated above, in the early stages of operation, everyone involved with the day-to-day operation of INNOSPACE were responsible for other projects. In particular, the two-person incubation management team was also managing the NES programme and were unable to give the tenants 100% of their attention. As the Incubator Manager pointed out: The biggest challenge was that every single member of staff employed on INNOSPACE was full-time employed on another project called the New Entrepreneurs Scholarship (NES) Project. No-one was full-time on INNOSPACE and in fact there was no funding for anybody to do with INNOSPACE, full stop. We were all doing our day-jobs and were asked to work on this incubator so I was full-time employed on NES and doing INNOSPACE as a kind of favour.

Despite these frustrations, at the end of the first year of operation, there was certainly a feeling amongst those CfE staff who had taken the lead in developing INNOSPACE that it had been reasonably successful. Particularly because none of the team had any previous experience of managing an incubator. The Head of the CfE (OJ) commented as follows: It was clear to me that INNOSPACE far exceeded the objectives that we’d set ourselves. The only objective it hadn’t met was that there weren’t enough people using it. But in terms of getting people into INNOSPACE, getting them signed up for INNOSPACE and getting them to develop their businesses and the fact that there were lots of people trading. Probably far more than we’d anticipated on that level then INNOSPACE had proved to be a fantastic success.

The team’s desire to create a thriving, learning community had not, by the end of the first year, been fully realised. Nevertheless, at that stage, there was a very solid basis on which to further develop the potential of INNOSPACE. In addition, the INNOSPACE management team had gained a massive amount of experience in dealing with the day-to-day issues associated with managing a demanding group of clients facing the uncertainties of developing a feasible business proposition.

10.5

INNOSPACE: The Move to Maturity (2014–2019)

Under the stewardship of Louise Kenworthy, the Incubator Services Manager, INNOSPACE continues to thrive, initially using ERDF and then HEIF funds. INNOSPACE averaged 105 licensees10 per year between 2014 and 2019, with a

10

As Louise explained, the change from tenant to licensee gave the management team more rights to evict those who did not behave in an appropriate manner (abusive to staff members for example). Therefore, all new entrants must now sign a 12-month licence agreement, which can be renewed if they choose to stay-on. While misbehaviour was not a major issue, the licence agreement did give more control to the Incubator Manager.

10.5

INNOSPACE: The Move to Maturity (2014–2019)

221

Table 10.1 Recent INNOSPACE licensees (tenants)

MMU student licensees MMU graduate licenses External licensees

2017/2018 Total licensees 24

Renewing licenses from 2016/17 3

2018/2019 Total licensees 29

Renewing licenses from 2017/18 7

35

18

42

34

43

39

56

45

102

60

127

86

churn rate of 40% made up primarily of Student Licensees. Data from 2017/2018 and 2018/2019 is set out in Table 10.1. A recent Deloitte11 press release revealed that university-based incubators in the Northwest helped create a substantial number of TMT (technology, media and telecommunications) start-ups in the region. Deloitte examined TMT businesses associated with universities across Greater Manchester, Liverpool and Lancaster. As Claire Jolly, head of TMT at Deloitte in the Northwest, pointed out: These incubators, along with the North West TMT Hotspots that we have previously identified, are continuing to maintain the region’s reputation as a driving force for the UK’s technology industry. In total, these incubators have helped to create almost 700 jobs for the region. Manchester Metropolitan University’s INNOSPACE was responsible for 46% of these businesses and 51% of the jobs created, with firms at the incubator hiring approximately 313 employees (Deloitte Press Release—see footnote11).

The number of licensees (tenants) peaked in 2018 with 143, 56% of which were either current MMU students or Alumni, many returning after a number of years in business. Although there was a diverse age and ethnic profile the gender imbalance remained stubbornly close to 90% male. In contrast, the Business Start-Up Boot Camps, hosted in the incubator, attracted over 50% women. Licensees see INNOSPACE as an immensely beneficial space for establishing and cultivating a growing business, due to the opportunities to network with like-minded licensees involved with a range of different businesses. For example, Hassan Iqbal, founder of Creative Pixels and an alumnus of the University, places his financial success directly down to the opportunities to collaborate. INNOSPACE is one of the best opportunities you can get involved in, especially if you already are or thinking of starting a business. There is no way I could have grown without INNOSPACE. It’s the best decision I made whilst at University.

This positive story is echoed by many licensees and the collaborative working atmosphere is encouraged and managed by Louise Kenworthy and Sandra Wharton (see Sect. 10.6). New licensees are e-introduced to all tenants, a networking wall with photographs and details of when the many networking events take place. The 11

https://www.mmu.ac.uk/news-and-events/news/story/8375/(accessed second September 2020)

222

10

Postscript: Creating and Managing a University-Based Incubator

open planned space is a hotbed of collaborations with videographers, web designers, accountants and others exchanging services for mutual commercial benefit. The INNOSPACE team also continues to work with business partners in the City. The Business Growth Hub offers licensees monthly drop-ins for start-up and scaleup advice. The lobbying and support organisation, The Federation of Small Business, offers legal, tax advice and health and safety advice with the intent of signing up licensees as their businesses develop. The Institute of Directors works with INNOSPACE to offer support networks and professional development opportunities for those licensees looking to scale their businesses. Free legal advice for licensees as well as University students and staff interested in start-up is regularly on offer from local legal firms. As pointed out by Louise Kenworthy: We’ve got a legal firm called Farleys who come in every month and they offer free legal and HR advice, and then we also work with Gateleys on that, they are also legal. We also have the legal advice run by the law school so every quarter they do a Legal Café, so they work with Addleshaw solicitors and do drop-ins which the licensees can sign up for.

As well as supporting licensees, these events draw aspirational and active entrepreneurs into the incubator space, enriching the community. Pro-Manchester continues to be actively involved in supporting the licensees with intellectual property, marketing and financial advice. PeoplePlus (a public services provider) delivers a range of free general business advice workshops and DWF (a multinational legal services firm with headquarters in Manchester) is also part of this start-up community, working alongside INNOSPACE licensees to support MMUBS’s 140-strong young enterprise programme. In addition, there are one-off events such as an HSBC Senior Managers Away Day, which link INNOSPACE licensees to senior influencers in the Bank. Moreover, INNOSPACE hosts Breakfast Networking, Self-Employed Fairs, Business Start-Up Boot Camps and hosts an Entrepreneurin-Residence who mentors Licensees. There is also a Business Model Canvas12 competition for final year students on the Business Creation programme to identify those businesses that have the greatest chance of success and offer a serious career alternative to employment. INNOSPACE also cooperates with Santander Universities, who offer small startup grants of between £250 and £1000. Students attend the Business Start-Up Boot Camp then pitch to a panel of judges. INNOSPACE also runs Starter Visa and Innovator Visa13 schemes (formally Start-Up Visa scheme) for International students wanting to start businesses in the UK. The route into this scheme is through the Business Start-Up Boot Camp. One of the most successful initiatives is Going Freelance, predominantly aimed at Art School students, where experts from different sectors give advice around intellectual property, legal, accountancy, tax, branding and marketing, and generic business advice. Working with Careers and

12

The Al-Habeeb INNOSPACE Prize was established thanks to the generous support of MMU Governor and donor Mr. Mohammad Habeebullah OBE to support young people involved in education, employment training and business creation. 13 https://www.gov.uk/innovator-visa (accessed 28th August 2020)

10.5

INNOSPACE: The Move to Maturity (2014–2019)

223

Employability the event attracts over 50 students annually. Most recently, the Faculty of Business and Law is collaborating with the Faculty of Arts and Humanities to develop an affordable student ‘hatchery’ with diverse occupancy and flexible rents run based in converted shipping containers. INNOSPACE works across most Faculties and attracts a diverse range of tenants from podiatrists to travel agencies. There is still work to be done in building better links with the Faculty of Science and Engineering. The move to ‘The Shed’ (see Sect. 10.3) helped INNOSPACE expand its reach across campus and develop a number of exciting initiatives with students. There are still links between licensees and students, mostly managed by David Taylor, which benefits both parties. Students undertake projects that are difficult for licensees because they lack time, financial resources or necessary skills (undertaking deskbased research for example). At the same time, students enhance their employability through applied research projects and temporary internships with growing businesses. MMUBS alone has nine units on postgraduate and undergraduate programmes linked directly to INNOSPACE licensees. This includes 150 nascent entrepreneurs on the University’s start-up units. David Taylor and colleagues across the Faculty of Business and Law continued to innovate new ways to link the students and Licensees: We have students from across the Business School benefitting from our relationship with the INNOSPACE licensees. An internship project programme that offers students 100 hours work inside a business to undertake a live project as part of their studies. We have seven units offering consultancy services to INNOSPACE licensees and the wider business community. A legal clinic is run by law students. Not forgetting our student entrepreneurs who receive mentoring and advice from many of the licensees, and a self-employed placement scheme based in the incubator for students across the University (David Taylor).

A second-year MMUBS undergraduate module (Agency Life) offers INNOSPACE licensees marketing interns for one day per week, while giving students access to real-world experience. Licensees can recruit students for short unpaid consultancy projects through MMU Xchange or through a level 7 Internship unit. They can also contract consultancy services from students on a number of programmes within MMUBS including M1 Consultancy a student-led practice run by scholars on an integrated Masters programme. Licensees running marketing agencies can seek specialist consultancy services from students on a unit (The Big Agency) that provides practical experience of a twenty-first century marketing agency. These internships and consultancy provisions give students insights into the world of work whilst enhancing their employability and building the University’s influence and reputation in the region. In the following section, we illustrate the importance of INNOSPACE by means of six short case studies of ex-tenants.

224

10.6

10

Postscript: Creating and Managing a University-Based Incubator

INNOSPACE Case Studies

In this section, we introduce six INNOSPACE case studies of ex-tenants who have created successful businesses over the last 13 years. A diverse range of businesses covering fitness for well-being, marketing for the big brands, advice for leaders of ‘blue chip’ companies, applying technology into HR (Human Resources), and enhancing graduate CVs (curriculum vitae) through international experiences. These case studies give insight into both the variety of tenants and their businesses. Most importantly, they illustrate the role played by INNOSPACE in each of their entrepreneurial journeys.

10.6.1 Lee McAteer: Invasion Camp Group Lee McAteer is a graduate of Yale College, Leeds University and the University of Law. He works with a number of high-profile brands in the key 18–30 demographic. Lee started his entrepreneurial dreams from humble beginning in INNOSPACE in 2010 and now occupies a bespoke Head Office in The Foundry in Salford with 48 staff and a start-up incubator. Lee is a serial entrepreneur with a background in the legal and media industries who has taken his experience into the events, travel, sport, recruitment and digital media sectors. He co-founded Invasion Camp Group, which operates under 30 brands including AmeriCamp, Invasion.com, Camp Thailand, Wrestling Travel, Gap Year Travel and The Uni Bible. Invasion Camp Group is also the representative arm of the National Citizen Service on behalf of the British Government with a budget of up to £35million, and Lee co-founded digital disrupter Padoq, and marketing agency Nothing But EPIC before exiting both in 2017. Lee joined the board at Tranmere Rovers Football Club, working alongside Chairman Mark Palios, and sits on the Leeds University Advisory Board for Law with Labour Leader Sir Kier Starmer. Lee is a regular on Talk Sports and presents for FITE TV interviewing the likes of Ric Flair, Booker T and Bret ‘The Hitman’ Hart. Lee has appeared in a whole host of media outlets across the world including Forbes magazine and has received many awards and recognitions, achieving the accolade of Britain’s Best Boss in 2017. Lee has supported many students and alumni from Manchester Met with their entrepreneurial journey, and, inspired by his own early years at INNOSPACE, has launched his own start-up incubator, Invasion Hub. Today, Invasion Camp Group employs 112 staff in seven countries across the Globe, entertaining over 100,000 customers, and have a turnover in the millions.

10.6

INNOSPACE Case Studies

225

10.6.2 Fiona McKay: Lightbulb Leadership Solutions Fiona McKay is the founder and Managing Director of Lightbulb Leadership Solutions, a global strategic leadership and transformation consultancy with a team of 16 consultants and two support staff. She is also the founder of the elite consultancy Fiona-McKay.Com, which enables Senior Global Leaders, CEOs, Investors, Ultra High Net-Worth Individuals and Family Offices to engage with her directly on areas of personal growth and organisational change. As well as offering consultancy solutions, Fiona is a prominent keynote speaker, media contributor, writer and the author of a 10-year study on ‘Why Feedback Holds Women Back’ and the curator of the global campaign #FeedbackFirst, whose sole aim is to eradicate gender-stereotypical performance feedback from the workplace. Fiona also acts as a strategist, advisor and coach to some of the world’s leading organisations and their boards, and her global blue-chip brand portfolio includes Adidas Group, B&Q, BOC Group PLC, VWR, UniCredit, Dentsu Aegis Network & Publicis Media. Her sector specialisms are in Banking and Finance, Venture Capital, Private Equity and Investment, Hospitality, Professional Services, Media, Advertising and Property. An in-demand keynote speaker, Fiona has engaged audiences across the globe, including FTSE 100 and Fortune 500 company leaders. INNOSPACE was crucial in developing Fiona as an Entrepreneur. After joining INNOSPACE in 2008, Fiona made use of every opportunity, joined every network and worked hard to integrate herself into what she saw as a very supportive and driven community. Fiona accessed academic resources, got valuable information on grants and funded support, and built her network. However, it was touch and go whether Fiona would be accepted as a tenant. I started my business in December of 2007 and I first visited INNOSPACE in 2008 having attended a business event there in its co-working space. Immediately wanted in. There was a slight problem that I was 36 and a non-graduate and didn’t fit the age or qualification profile of a new grad. Ever tenacious and not to be deterred, I decided to convince to the then INNOSPACE Manager to give me a tenancy. He decided to give me a shot and in I moved.

Fiona used the event space for sessions with clients, hosted events and gatecrashed many more. One of Fiona’s highlights was being asked to be an Associate Lecturer in the University on the Undergraduate Business programme as an Entrepreneur in Residence. Fiona’s highlight was being the first recipient of The INNOSPACE Business Achievement Award, receiving an honorary graduation with cap and gown. Fiona still cherishes the photos and the award is still proudly displayed in her office. Even after she moved out of INNOSPACE, Fiona continued her relationship with the incubator, going on to work with, hire and employ key people from the incubator. Fellow tenants have undertaken associate engagements on behalf of Fiona, one of the accelerator programme advisors is now her Head of Associate Consultancy, and the previous INNOSPACE Manager (the one that took the punt on her back in 2008) has provided social media support and worked for Fiona over the years. It definitely a full circle success story.

226

10

Postscript: Creating and Managing a University-Based Incubator

10.6.3 Nick Richardson: The Insights People Nick Richardson is an MMU graduate in Marketing Management. After graduating Nick went on to have a successful career in marketing and commercial roles for organisations such as Hilton Hotels, Momentum WW, ExxonMobil and PennWell. He returned to Manchester in 2016, with the objective of setting up a disruptive market intelligence company. Since launching The Insights People business in May 2017, initially based within INNOSPACE, the company has grown quickly, to a business which employs 21 full-time people in Manchester, has operations in 8 countries and whose client list includes: BBC, Disney, F1, Kraft, LEGO, Mattel, MediaCom, Penguin Random House, SEGA and Warner Bros. The business and Nick’s efforts have not gone unrecognised, with Nick receiving a nomination from Pro-Manchester for Entrepreneur of the Award and with the business winning multiple awards including the coveted Big Chip Award and the International Trade Council’s Global Market Research company of the year. In January 2020, The Insights People collaboration with the University (MMU) went in a new direction with the organisation commencing a KTP (Knowledge Transfer Partnership) to bring further innovation into the business.

10.6.4 Jamie Bettles: Pagoda Projects Jamie Bettles is a graduate of the University of Liverpool and the founder of Pagoda Projects. Jamie and has been building the business in the International Higher Education sector since 2009, establishing offices in Mainland China, Taiwan, Vietnam, Mexico and Manchester. Delivering numerous high-profile funded work experience programmes, Pagoda Projects work with universities from around the world and deliver government-funded programmes for the British Council, DfAT Australia and Education New Zealand. Jamie left his graduate job in 2009 and decided to head to China in search of new adventures, language skills and business opportunities. Starting a business in China had its challenges, but the cheap cost of living and the momentum of the Chinese economic miracle inspired him to bootstrap a start-up. A decade later, Jamie is still bootstrapping the business, albeit with 25 staff in tow! Pagoda Projects has recently won several awards in relation to the innovative nature of their university partnerships and the success they’ve achieved in specific markets such as China. We consider ourselves a bit of a ‘poster child’ for INNOSPACE. I joined as a lonely entrepreneur back in 2013 and have since used INNOSPACE as my platform to recruit and retain staff, build contacts and avoid going insane by working alongside like-minded business owners. The on-campus location has helped us build trust within our sector and the cost-effective space has meant we’ve been able to put more money back into the business and fuel growth.

10.6

INNOSPACE Case Studies

227

Jamie sees a resource like INNOSPACE as vital for encouraging and enabling businesses to start and scale. Indeed, he grew his business from just a one-man-band to a 25 strong team whilst in the incubator. Jamie believed that the central Manchester location helped build trust with customers, and it gave him space to work away from his tiny 1-bed flat. Jamie also spoke about the loneliness of entrepreneurship, and that he valued being surrounded by like-minded people, facing the same challenges. Indeed, Jamie learned a lot during his time at INNOSPACE, mainly from listening to business owners who were full of ideas, energy and creativity. Indeed, he collaborated and continues to collaborate with numerous businesses that were and are based in INNOSPACE. Jamie also learned a great deal from students, who were always brought a fresh perspective to the table. Above all, Jamie found INNOSPACE to be an exciting place to meet, mentor and be mentored, by wonderful people, whether that be students, business owners, visiting experts or academic staff.

10.6.5 Dan Sodergren: Great Marketing Works and YourFLOCK Dan was involved with INNOSPACE from the very start, having been part of the focus groups that helped inform and shape how INNOSPACE operated. Dan had sold his events company Spearfish (which he had started as part of the New Entrepreneur Scholarship programme at the University some years previously) and had gone on to travel around the world. He had returned to Manchester and had been invited to the University by senior staff to give a talk about his travels. Dan’s talk led to other conversations that highlighted the need for an incubator in the region. Looking back Dan now sees INNOSPACE as a trailblazer as there was not any other co-working and incubator space in Manchester at the time or he was not aware of any. Dan was one of the earliest tenants in INNOSPACE (possibly the first) and joined the inaugural steering group. He started many businesses, one of which was his marking training agency, Great Marketing Works. Dan saw INNOSPACE as a blueprint for incubators and co-working spaces in the UK. Dan was able to launch webinars more than a decade ago due to the internet connectivity in INNOSPACE, something that we take for granted today. The networking events offered opportunities for Dan to support and be supported by his fellow tenants in the Incubator, many of whom have become Dan’s lifelong friends, peers and clients over the years. Like INNOSPACE, Dan’s own journey was more about the passion for ideation, creation and technology than financial rewards. Dan regularly appears on the BBC Breakfast show as their technology expert and he has had countless TV and radio show appearances. During his time at INNOSPACE and beyond he has launched ahead of the curve technologies and ideas, be that online products with the more technical-minded tenants like ‘Your Marketing Trainer’ or marketing ideas with the creatives, to creating whole separate businesses in cutting edge technologies like

228

10

Postscript: Creating and Managing a University-Based Incubator

augmented reality—with award-winning ‘Go Augmented’ a Manchester Met student-owned company. Being in INNOSPACE enabled Dan to do Knowledge Transfer Partnership projects (KTP) as both a consultant helping others and as a client. These KTPs led to new ideas in green and eco-marketing that were too far ahead of their time and working with academia on algorithms before they became a ‘thing’ in tech. Most recently, Dan has been exploring the importance of culture which led him to investing in and becoming a part of a tech HR start-up called YourFLOCK. In total Dan has started ten companies and attributes INNOSPACE to have influenced in one way or another at least seven of them, although only two of them were based in the incubator. The experiences there have been so impactful on and integral to my life and entrepreneurial journey. It is staggering when I think about it. Many of my fellow tenants have become highly financially successful. Most of whom like myself, have now started to give back to the local start up scene, fulfilling the plan of INNOSPACE in the first place. Even now ten years on, I am asked to work with people I met in INNOSPACE. Some now on their third or fourth businesses. Which is a true testament to the place and the real sense of community that was created there. That effect has lasted generations of companies. Long before such places became the fashion—INNOSPACE was truly ahead of its time. And that’s my point . . .

10.6.6 Rob Woollen: Rightway Wellbeing Ltd. Rob Woollen is the owner of Rightway Wellbeing Ltd., an employee well-being consultancy based in Manchester. Rightway specialises in the design, implementation and evaluation of strategic well-being services and training, enabling clients to support, protect and optimise their best assets—their people! In the 13 years since incorporation, Rob and his highly qualified coaches and trainers have provided their service to colleagues and managers at the likes of JP Morgan, GSK, IBM, Rolls Royce, Siemens plc, United Utilities, O2 Telefonica, Salford City Council and NHS North West to name but a few. For many years, the company also provided ‘ghostwriting’ services for health-related QCF approved qualifications. In addition to his corporate work, Rob has delivered award-winning academic presentations across Europe and has appeared on BBC Breakfast and has been published in Occupational Health magazine. He has given his time ‘pro bono’ to a number of projects designed to promote mental well-being in the workplace, including the development of NICE guidelines, and the Pan-European Resilience Project. He is a past-chair of the North West Health and Physical Activity Forum and was formerly Director of Health and Wellbeing for leading skills company PeoplePlus, a part of the Staffline Group. Rob joined INNOSPACE in 2007 and saw the incubator as being far more than a collective office space. Having left school at sixteen, Rob did not fit the usual mould of an INNOSPACE tenant. The Incubator Manager was keen to understand why Rob, in my thirties and with no degree, wanted to join. Rob was able to persuade him that he genuinely wanted to contribute to the community, and contribute he did. Rob was an integral part of the initial INNOSPACE tenant association and gave back

10.6

INNOSPACE Case Studies

229

regularly by speaking at events and holding his own speaking and networking events that were open to other tenants. Rob benefitted from the diversity of tenants in the incubator, who often provided support for each others’ businesses, and still keeps in touch with many of the great people that he met. The advisors in INNOSPACE were also able to help Rob to find funded business support, such as the Winning Pitch programme, which helped with marketing and growth planning. It was at INNOSPACE that Rob heard about the 2009 Manchester Entrepreneur of the Year competition, organised by Pro-Manchester, receiving a runner-up prize. In 2014, Rob graduated with an M.Sc. in Work and Wellbeing from the University of Plymouth. INNOSPACE opened my eyes to the possibilities of higher education. My decision to embark on the MSc in 2010 may never have come about without the encouragement of the community.

It was as an INNOSPACE tenant that Rob first became involved in the Integrated Masters in Business Programme at Manchester Metropolitan University, initially as a guest speaker, and eventually as an Associate Lecturer, gaining a Post Graduate Certificate in Teaching and Learning along the way. The INNOSPACE tenancy was a turning point in my career. Being surrounded by other early stage entrepreneurs, alongside experienced business advisors helped Rightway to become the business it is today.

10.6.7 Summary: Building Successful Companies What connects these diverse entrepreneurs is the crucial role INNOSPACE played in the development of their careers and businesses. All six entrepreneurs speak of a safe place where they shared their stories and ideas with like-minded people who were motivated to start their own businesses. They confirm the presence of a community of practice in which there was always someone prepared to listen, encourage, motivate, mentor or even collaborate on joint projects. The strength of the community spirit is demonstrated by the fact that most were still connected to INNOSPACE years after their time in the incubator had ended. They also talk about wider opportunities with the University including engaging with KTPs (knowledge transfer partnerships), volunteering as guest speakers, becoming associate lecturers, accessing resources and information as well as meeting academic staff, students and MMU alumni. Indeed, one of the entrepreneurs was so taken by the role INNOSPACE had in his own business’s development that he launched his own start-up incubator to help others with their entrepreneurial journies. What is undoubtedly true is that the INNOSPACE community continues to thrive beyond the physical walls of the incubator and INNOSPACE’s impact on the region has been overwhelmingly positive.

230

10.7

10

Postscript: Creating and Managing a University-Based Incubator

Conclusion: Fulfilling the Original Vision?

While INNOSPACE continues to support inexperienced entrepreneurs in developing their business ideas, the original vision of a dynamic learning community of practice was not fully realised for a number of reasons. There were tensions between the idealistic view that the incubator should support MMU students in their attempts to start new businesses and the desire of senior managers in the Business School and the University that, at the very least, the incubator should be financially selfsupporting. Certainly, most members of the original Steering Group did not see the incubator as being viable as a stand-alone facility. In part, this was because of a desire to keep the costs of entering the incubator as low as possible. Secondly, the Incubator manager, responsible for the day-to-day activities including interviewing prospective incubatees, monitoring attendance and progress with their businesses, was focused on developing successful start-ups rather than more esoteric concepts such as creating a ‘community of practice’. Thirdly, there was also an increasing tension between the Head of the CfE and Director of INNOSPACE (OJ) and the Dean of MMUBS about the lack of additional resources. One of the most contentious issues was the fact that all staff belonging to the CfE were on fixed-term contracts linked to particular funding streams. By the time INNOSPACE was launched, some staff members had been with the CfE for 6 years and OJ wanted these longer-serving staff members to be employed on permanent contracts. As discussed above, most of the resources to set up and manage INNOSPACE had been ‘bootstrapped’ from various CfE projects. By the time the incubator was launched, it was widely known that NES (new entrepreneur scholarship) was coming to an end and the salaries of three staff members working on the incubator were still funded via this programme. Despite the team’s contribution to the success of INNOSPACE, it was impossible for the CfE Head to convince senior managers in MMUBS or the University to reward either academic or administrative staff with permanent posts. As a consequence of this ongoing uncertainty related to his employment contract the Incubator Manager14 eventually decided to leave: It’s awful, you’re told by people within the University and by colleagues externally you’re doing a really good job and yet it’s not reflected in your contract. It makes you feel like what is the point of trying so hard. I mean like I’ve said to you, I’ve worked from 7 am–7 pm for 6 months to try and get INNOSPACE working and my contract lasted till the 31st December 2008; they then extended it by 3 months. I complained bitterly to the Dean and when I wrote my letter of resignation that was the reason for leaving, lack of an employment contact.

Therefore, despite considerable efforts by all members of the CfE to bring in large amounts of external funding as well as establishing the incubator, all employment contracts were linked to specific funding streams. There is no doubt that losing the Incubator Manager had a detrimental impact on the ethos of INNOSPACE because

14 Two other experienced project managers also left the Centre for Enterprise to take up permanent posts at local universities.

10.7

Conclusion: Fulfilling the Original Vision?

231

he had been involved from the very start. In response to a question about whether the changes in personnel had impacted the tenants, he responded: Absolutely, absolutely! The philosophy, the place, the reliance on people knowing what they’re supposed to be doing. Because I’m still on the e-mail list, for INNOSPACE, I see messages that clearly show very little understanding of some of the historical stuff that you need to be aware of. The incubator administrator is the only one that’s been there from the beginning and she wants to leave as soon as possible. It’s just not the place we anticipated when we were setting-up a year and a half ago and my understanding is there’s quite a number of tenants that feel the same way.

Another significant factor was the separation of INNOSPACE from the CfE following the appointment of a new professor who decided not to take on responsibility for the incubator. As indicated above, the original director (OJ) saw the operation of INNOSPACE as a core CfE activity. In part, this was because the incubator provided an ideal vehicle to bring together the theory and practice of entrepreneurship. Hence, the decision, taken by CfE staff, to fund a Ph.D. student who could examine the early experiences of incubatees. Nevertheless, this was certainly a missed opportunity for a longitudinal study of the business start-up process in the sheltered environment of a UBI. This is not to suggest that the incubator did not succeed because, as we have discussed, it continues to support nascent entrepreneurs in the process of establishing new businesses. The role of INNOSPACE in encouraging entrepreneurship is also illustrated by six case studies of successful graduates from the incubator (Sect. 10.6). The CfE also continued to thrive and took on a range of new projects including a Goldman Sachs initiative known as 10,000 businesses. Consequently, by 2011 the Centre had doubled in size and was employing over 40 staff supporting entrepreneurship and small businesses (Jones et al. 2008). As indicated in the discussion with Estates, the original vision was that the incubator would be designed to encourage the development of a community of practice. The informal design of the incubator was intended to develop a learning ethos amongst the incubatees by encouraging them to share knowledge, experiences and problems. It was also anticipated that the learning community would include other groups including students, policymakers, individuals and groups from various business communities (business angels and venture capitalists) who would engage with incubatees both formally and informally. As we have illustrated in the previous section, much of this activity is still happening as a result of the combined efforts of Louise Kenworthy, Sandra Wharton and David Taylor. However, the original vision of how INNOSPACE would operate was compromised with its separation from the CfE and the loss of the original Incubator Manager with his stock of tacit knowledge. None of these issues detract from the efforts made by Louise Kenworthy since she joined INNOSPACE in 2014 to revitalise the incubator by encouraging similar principles of cooperation between ‘licensees’ as originally set out by the Steering Group. When we began writing the book in May 2020 INNOSPACE was still located in ‘The Shed’ where there was certainly strong evidence of a healthy and thriving community of practice amongst the group of entrepreneurs who made regular use of the facility. As we discuss in Sect. 9.4, INNOSPACE has recently

232

10

Postscript: Creating and Managing a University-Based Incubator

moved to a new location in Turing House as the existing site is being redeveloped by the University. At the same time, it appears that senior University managers remain ambivalent about the importance of INNOSPACE as its future role is currently under consideration at MMU.

References Allen, D. N., & McCluskey, R. (1990). Structure, policy, services, and performance in the business incubator industry. Entrepreneurship: Theory and Practice, 15(2), 61–77. Jayawarna, D., Macpherson, A., & Wilson, A. (2006). Managers’ perceptions of management development needs in manufacturing SMEs. Education and Training, 48(8/9), 666–681. Jayawarna, D., Macpherson, A., & Wilson, A. (2007). Training commitment and performance in manufacturing SMEs: Incidence, intensity and approaches. Journal of Small Business and Enterprise Development, 14(2), 321–328. Jones, O., & Jayawarna, D. (2010). Resourcing start-up businesses: Social networks, bootstrapping and firm performance. Venture Capital, 12(3), 127–152. Jones, O., Macpherson, A., & Woollard, D. (2008). Entrepreneurial ventures in higher education: Analysing organizational growth. International Small Business Journal, 26(6), 683–708. Lee, R. (2009). Social capital and business and management: Setting a research Agenda. International Journal of Management Reviews, 11(3), 247–273. Lee, R. (2017). The social capital of entrepreneurial newcomers: Bridging, status-power and cognition. London: Palgrave Macmillan. Lee, R., & Jones, O. (2008). Networks, communication and learning during business start-up: The creation of cognitive social capital. International Small Business Journal, 26(5), 559–594. Macpherson, A., & Jayawarna, D. (2007). Training approaches in manufacturing SMEs: Measuring the influence of ownership, structure and markets. Education and Training, 49(8/9), 698–719. McAdam, M., Miller, K., & McAdam, R. (2016). Situated regional university incubation: A multilevel stake-holder perspective. Technovation, 50–51, 69–78. Taylor, D. W., Jones, O., & Boles, K. (2004). Building social capital through action learning: An insight into the entrepreneur. Education and Training, 46(5), 226–235. Todorovic, Z., & Moenter, K. (2010). Tenant firm progression within an incubator: Progression toward an optimal point of resource utilization. Academy of Entrepreneurship Journal, 16(1), 40. Woollard, D., Zhang, M., & Jones, O. (2007). Academic enterprise and regional economic growth: Towards an enterprising University. Industry and Higher Education, 21(6), 387–403.

Appendix A: Interview Schedule for Incubatees

1. First of all, could you briefly tell me about the business idea or ideas that you were developing when you came into INNOSPACE? 2. Could you tell me where this/these business idea(s) came from initially? • Did you develop the business idea(s) yourself or did it develop from talking to/someone else? • And in what ways, if any, did your initial idea relate to courses you have studied? When did you first have your business idea? How did your business idea develop before you came to INNOSPACE? Did you have industry knowledge/experience related to your business idea(s)? Could you please start from Day 1 in INNOSPACE and tell me about the development of your business idea(s) in as much detail as you can. 7. What influence has INNOSPACE had on the development of your business idea (s)? 3. 4. 5. 6.

• In what ways has being with other people starting a business affected the development of your idea(s)? • How have the people managing INNOSPACE affected the development of your idea(s)? • What about having a place to come, and an address in Manchester—how has that affected the development of your idea(s)? • How have the advisors and mentors influenced the development of your idea (s)? (knowledge and skills). • What about the general knowledge held by the university—how has access to the library or the knowledge of academic staff affected your business idea(s)? 8. How have people outside of INNOSPACE influenced the development of your

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

233

234

Appendix A: Interview Schedule for Incubatees

business idea(s)? • Family and friends • External advisors • Networks 9. What has your strategy been so far and will that change? 10. Overall, what do you think about the potential of your business idea(s) now? 11. What are your plans about staying on in INNOSPACE or leaving?

Appendix B: Interview Schedule for Management Team/Steering Group

1. When was the first time you heard about the setting up of INNOSPACE? 2. What did you think about this idea of having a business incubator, in relation to the business school, to the students, to the entrepreneurs, and to the wider entrepreneurial community? 3. I understand that you are a member of the steering group, so when and how you joined this group? 4. What responsibilities do you have as a member of the steering group? 5. Why did you join the steering group and what do you hope to achieve in this role? 6. Do you think that your expectations of these developments have been achieved? (why/why not?) 7. In what ways have contributed to the development of INNOSPACE? 8. Are there any factors that restrained you from contributing even more to INNOSPACE? (allocation of time, budget, etc.) 9. Do you think that the steering group has achieved its expectations? 10. What is your relationship with INNOSPACE now? 11. What is your relationship with the management of INNOSPACE? 12. What impact do you think INNOSPACE has had on the people you brought here, on INNOSPACE itself, on tenants, and on the Business School? 13. Ideally, how do you think INNOSPACE should be used, in terms of promoting and developing entrepreneurial culture, entrepreneurial aspiration, entrepreneurship education, UKU publicity, and so on? 14. What potential do you see in INNOSPACE? 15. Do you think that INNOSPACE has achieved its potentials (why/why not?) 16. INNOSPACE had business mentors were you one of them? (If yes, why did you choose to be one? and why are you not one anymore? If not, why not?) 17. How much influence you think the university and the business school executives have on the development of INNOSPACE?

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

235

236

Appendix B: Interview Schedule for Management Team/Steering Group

18. What impacts do you think INNOSPACE has had on its tenants, the business school, the students and the wider entrepreneurial communities in Manchester? 19. Looking back at your involvement in INNOSPACE, is there anything that you would have done differently? 20. Is there anything else you would like to tell me relating to INNOSPACE?

Appendix C: First Coding Template

Tree Nodes • Impact of INNOSPACE – Experience of INNOSPACE Collaboration Do not want to work alone at home Getting work done through other tenants Networking Share peer experience Working in an office environment – Reasons for entering INNOSPACE Cheap rent Do not want to work alone at home Networking Share peer experience Space University link Working in an office environment – Skills obtained in INNOSPACE – Experience of support from INNOSPACE Space Structured time frame Supported but not pressurised • Incubatees’ prior knowledge of – Markets – Customer problems © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

237

238

Appendix C: First Coding Template

– Ways to serve markets – Personal interests • Incubatees’ ways of developing ideas – – – – – – –

By testing in new situations Forming abstract concepts In INNOSPACE Through business advisor and mentor Through concrete experience Through networking Through reflection

Free Nodes • • • • • • • • • • • • • • •

Business strategy formation Comments on the idea Engagement Entrepreneurial alertness Entrepreneurial aspiration Future business plans Initial idea Learning as experience Learning through observation and reflection Opportunity discovery Opportunity exploitation Opportunity searching Personal interests Risk assessment Values

Appendix D: Final Coding Template

Tree Nodes • Impact of INNOSPACE (IS) • Experience of INNOSPACE Collaboration Do businesses with other tenants Do not want to work alone at home Getting work done through other tenants Share peer experience Work for other tenants Working in an office environment – Reasons for entering INNOSPACE Cost savings Do not want to work alone at home Networking Premises and resources Share peer experience University link Work for other tenants – Experience of support from INNOSPACE Business advisor-mentor Cost savings From management team Increased alertness to opportunity Increased professionalism Information hub Knowledge pool © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

239

240

Appendix D: Final Coding Template

Location—(not) important Management—encourage strategic thinking Premises and resources Skill inputs Structured time frame Supported but not pressurised University resources University supportive courses – Problems of INNOSPACE Not supported by university Pitfalls of INNOSPACE facilities Pitfalls of INNOSPACE communication management Problems of INNOSPACE advisers and mentors • Learning – Experiential learning Prior knowledge New information Skills New knowledge Transformation of experience Transformation of identity – Community of practice Community—learning as belonging Identity—learning as becoming Meaning—learning as experience Practice—learning as doing – In INNOSPACE • Opportunity development – Incubatees’ prior Knowledge of Customer problems Personal interests Markets Ways to serve markets – – – – – –

Business strategy formation Entrepreneurial alertness Opportunity development Opportunity creation Opportunity identification Opportunity evaluation and reflection

Appendix D: Final Coding Template

– – – –

Opportunity exploitation Opportunity searching Personal interests Resources

Free Nodes • • • • • • • • •

Comments on the idea/business stage Entrepreneurial aspiration Financial motivation Future business plans Initial idea Intuition Risk assessment Values Work creation

Sets • Mutual engagement – – – – – –

Collaboration Do businesses with other tenants Do not want to work alone at home Getting work done through other tenants Networking Work for other tenants

• Share repertoire – – – – – –

Business advisor-mentor Networking Share knowledge Share peer experience Skill inputs University supportive courses

• Experiential learning – – – –

By forming abstract concepts By testing in new situations Through concrete experience Through observation and reflection

• Learning perspective of opportunity development

241

242

Appendix D: Final Coding Template

– Knowledge Of customer problems Of the markets Of ways to serve markets – – – – – – – – – –

Skills Opportunity creation Opportunity discovery Opportunity exploitation Opportunity searching Opportunity development Resources Business strategy formation Entrepreneurial alertness Initial idea

• Social learning – – – –

Community—learning as belonging Identity—learning as becoming Meaning—learning as experience Practice—learning as doing

Appendix E: The Incubation Process

Respondent Helen

Pre-INNOSPACE – Master’s degree in Environmental Management and Sustainable Development – Freelance work for local airport in climate change – Planned to provide consultancy in sustainability management – A raw idea with assessment tools developed from the studies – Knew about INNOSPACE while studying and had a visit before applying

Tim

– Worked 7 years as a retail buyer – Idea fully formed and had a business plan

During INNOSPACE – Talked to a business advisor – Got a mentor – Refining and narrowing down the idea – Learning generic business skills from other incubatees – Got feedback from other incubatees on the idea – Submitted a tender with a fellow incubatee – Would not have carried on without INNOSPACE – Viewed the business as an experiment – Implemented the idea while in INNOSPACE – Used INNOSPACE’s space to store artwork before finding a gallery – Held an exhibition in INNOSPACE – Talked to a business advisor – A fellow tenant designed the logo and did branding – Updating business plan

Post-INNOSPACE N/A—still in first year of incubation

Just left INNOSPACE after own gallery was open

(continued)

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

243

244

Appendix E: The Incubation Process

Respondent Andy

Pre-INNOSPACE – Studied Design and Technology – Worked as a web developer and decided to start own business – Worked with a tenant and got to know INNOSPACE – Saw INNOSPACE itself as an opportunity which hosted many startups who needed websites

Jane

– Organising sports events as a social activity – Worked as a sports development officer – Studying and working for MMU when started the business – Had a full-time permanent job when running own business – Business was already running when coming into INNOSPACE

Ian

– Experience of being a customer at many networking events – Already trading as a business when coming to INNOSPACE, but came with a different business idea – Thought INNOSPACE was a good networking venue when visiting it – Was really interested in hypnotherapy

During INNOSPACE – Got to know a web designer (a tenant) and gave work to each other – Started a company with the tenant and sub-contracted work to own company – Spoke to another web developer a lot about ideas – Spoke to INNOSPACE management when needed information – Had two students working on projects – Managed to get 1-day off a week from work to come to INNOSPACE and work for own business – Felt much more productive when working from INNOSPACE – Learned how innovative other tenants were and the importance of networking – Had a business advisor discussing on expansion – Had a student doing a press pack – Felt INNOSPACE management were very supportive – Had a tenant to help with the administration of the business – Use INNOSPACE and its meeting rooms a lot for networking events and talks – Talk to a business advisor, who was also an incubatee (Tony). He helped Ian with marketing – INNOSPACE management helped running networking events – Brought in new incubatees for INNOSPACE through networking events

Post-INNOSPACE Moved out with two other tenants to form a new company, preferred a place with a soundproof meeting room and 24-h access

Staying on for another year

Staying on for another year

(continued)

Appendix E: The Incubation Process Respondent

Pre-INNOSPACE

Tony

– Had much experience in doing marketing and training – Had an events and marketing company with friends

Nick

– Experience in building websites – Had a business plan before joining INNOSPACE

245 During INNOSPACE – Used library and other university facilities – Teamed up Mark and some external people for the hypnotherapy and well-being business – Got to know other tenants in INNOSPACE and was forming a new marketing company – Disappointed by the location (difficulty with car parking space) and facilities of INNOSPACE (limited workshop rooms), the date training business could not be developed further – Planning to sell the date training business when having the new marketing company – Mentioned that the marketing company would not have existed without INNOSPACE – Met other incubatees and got their opinions on the business idea – Met some advisors and a mentor for general business ideas – Developing the business while in INNOSPACE – Trying out the new system for web design while having the first client – Developing marketing strategy – Viewed the business as an experiment – Used the library for journals – Unhappy with INNOSPACE’s procedures in changing Tenants Agreement – Viewed the INNOSPACE community as very important – Set up the Tenants Association

Post-INNOSPACE

Staying on for another year

Staying on for another year

(continued)

246

Appendix E: The Incubation Process

Respondent Neil

Pre-INNOSPACE – Experience in providing consultancy in knowledge-based and operational management – Studying a Ph.D., linking motivation, change, psychology and sociology – Had own ideas of how consultancy should be provided

Phil

– Had an online shop on eBay while studying – Was running a web-design business, specialising in blog design – Was working from home and wanted to separate work and private life – Was looking for office space and other places were much more expensive – Providing IT services to family and friends – Business was trading for a month before coming to INNOSPACE

Jeff

During INNOSPACE – Viewed the INNOSPACE community as very important – Set up the Tenants Association – Encouraged others to network actively – Formed a working partnership with another tenant – Got help from Tony on marketing strategy – Did some work for Laura’s business – Read a lot of books from the library – Mentioned only one academic staff was interested in INNOSPACE – Developed another business idea while in INNOSPACE – Helped James building a website – Often spoke to Nick about ideas

Post-INNOSPACE Staying on for another year

– Spoke to advisors and changed pricing and marketing strategy – Spoke to university and Students Union staff and promoted the business to them – Set up a stall at the Students Union – Got business from INNOSPACE tenants and their friends – Used library for books – Recruited a former classmate as a business partner (Paul) after 1 year in INNOSPACE – Started another business with Paul 3 months after

Staying on for another year

– Moved to an office where Phil invested in the tailor business – Organising events with associates in nightclubs – Still socialising with James

(continued)

Appendix E: The Incubation Process Respondent

Pre-INNOSPACE

Paul

– Was studying Masters in Enterprise in Environmental Innovation when got to know INNOSPACE – Wanted to become an entrepreneur and applied for INNOSPACE 6 months before graduation – Moved into INNOSPACE after graduation

Peter

– Was in the process of re-establishing the business before coming to INNOSPACE

Emma

– Was made redundant after 17 years – Had a business idea 2 years before being redundant – Worked part-time while developing the idea – Had the website set up when coming into IS

247 During INNOSPACE being in INNOSPACE – Viewed city centre address as useful – Preparing for the online food specialist business – The website for the business was near completion – Became Jeff’s business partner for the IT services business – Started to develop a third business idea with Jeff and a friend – When to classes to gain more business knowledge – Felt that INNOSPACE tenants should be able to go to any classes at MMU – Used the library and Careers Advice at MMU – INNOSPACE helped the business to look more professional – Good facilities – Had a business mentor – Had problems because the supplier was merged with another company – Working full-time while changing to a different supplier – Due to the problems Peter encountered, INNOSPACE Management gave the first 12 months for free – Viewed INNOSPACE as a professional place to meet clients and suppliers – Been to some networking events at IS and benefited from them, but felt that they were not specialised enough for her business’ contacts – In the beginning, used IS every day when was not working part-time – Felt the city centre address made the business

Post-INNOSPACE

Staying on for another year

Intended to stay for another year

As the rent was more expensive for 2nd year tenants, would work from home after the first 12 months and save the money.

(continued)

248 Respondent

Appendix E: The Incubation Process Pre-INNOSPACE

James

– Not happy as a landlord and wanted to set up own business – Had the idea before coming to IS – Chose IS because it did not take a stake of the business

Kath

– Already had a very successful business, with 10 childcare sites – Had the business idea for 3, 4 years but did not have time to develop until coming to IS – When to an entrepreneurial talk at MMU and got to know IS. Wanted to start another business and thought of the idea that she had for a few years

During INNOSPACE more credible – Although did not have much to do with other tenants, found IS an inspirational place – Had a business advisor and was not very useful – Had an MBA student to do a press pack – Liked the social interaction in IS – Had Phil to set up the website – Felt that IS added credibility to the business – Liked the facilities in IS but would have liked longer opening hours – Use IS as a separate place for a different business so that Kath could concrete on this business and not being disturbed – Spent a lot of time on researching the idea and the competitors – Developing an online system for the business – Asked the tenants to develop the system and the website. A former tenant’s company then did it – Although being a very experienced and successful businesswoman, Kath liked the entrepreneurial environment of IS and the honest opinions she received – Another idea came up during the time in IS – Used a business advisor but not very helpful – Tony helped with marketing

Post-INNOSPACE

Staying on for another year

Staying on for another year

(continued)

Appendix E: The Incubation Process Respondent Laura

Pre-INNOSPACE – Worked in recruitment for 20 years before being redundant – Doing ad-hoc training – Doing training for NES at MMU and got to know IS – Business was trading for 6 months before IS

Alex

– Had an idea for online social maps – Had been to a different university incubator but left (not many activities and wanted a percentage of the business)

249 During INNOSPACE – Used IS as an office for preparation, planning and training courses – Used IS to network to gain new businesses – Ran free courses for graduates and tried to recruit them for clients – Developing new clients and projects while working on current ones – Liked the informal relationship in IS – Had been helped and was helping other tenants for their businesses – Viewed exchanging ideas in IS important – Liked city centre location and facilities for running training courses – Used a business advisor and found it useful – Needed investment in the business to develop technology for the idea – Did not have enough money and thought of a different idea to make a living – After 6 months in IS, put the first idea on hold – After 6 months in IS, started the second business, making snapshots in nightclubs – Had a tenant working for the second business, admin and outreach – Enjoyed having conversations and debates with other tenants, seeing it as a source of ideas – Liked the office environment but would have preferred 24 h access – Spoke to Tony as a business advisor and fellow tenant about ideas

Post-INNOSPACE Staying on for another year

Staying on for another year and planning to go to Germany to develop business ideas

(continued)

250

Appendix E: The Incubation Process

Respondent Kelly

Pre-INNOSPACE – Got redundant and wanted to start own business – Just completed NES and drew up a business plan – NES offered graduates free 1st-year rent at IS, so took the offer

Mark

– Had been providing personal fitness training on an ad-hoc basis for 8 years – Intended to have a separate business in the corporate market, 8 months before moving to IS

During INNOSPACE – Worked part-time and was studying for a Master’s degree – Worked for Tony’s business on PR – Tony introduced a client – Doing a graphic design project – Was very excited about the business but had to slow down due to Masters dissertation and part-time work – Just started working on the business again after completing the dissertation – Viewed IS as a supportive learning environment – Had a business mentor but was not helpful – Changed business strategy and networked more purposefully with HR managers in large organisations – Felt IS made good PR for tenant companies – Had meetings with other SMEs at IS and liked that the venue was ‘free’ – Mentioned IS manager was very helpful – Used the library a lot and was helpful when writing training courses

Post-INNOSPACE Would pay for the basic rent for IS for 2nd year, keeping the address and network. But since working for UCU parttime, no other facilities were needed.

Intended to stay for another year

(continued)

Appendix E: The Incubation Process Respondent Karen

Pre-INNOSPACE – Worked for a production company in media as a journalist and producer – Just set up own company

251 During INNOSPACE – Purchased necessary equipment for making documentaries – Tendering for projects – Producing radio programmes – Making podcasts for a Scottish university – Used IS to have a business address, to meet clients and interviewees, to structure a working day and to have admin support (sending and receiving letters, etc.) – Informally networked with other tenants and to share the experience of starting up

Post-INNOSPACE Intended to stay for another year

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Respondent

Opportunity

Helen

Environmental sustainability management

Tim

Art gallery

Andy

Web development

Jane

Sports management

Ian1

Social networking events

Prior knowledge of. . . Customer Markets problems 1. Master’s degree in Environmental Management and Sustainable Development 2. Freelance work for local airport in climate change Worked 7 years as a retail buyer

1. Studied Design and Technology 2. Worked as a web developer 1. Organising sports events as a social activity 2. Worked as a sports development officer

Means to serve markets

Personal interests

A friend of Tim had a gallery. Tim knows that having artwork appealing to the customers is important.

In the UK there were very few sports for women to play as a fitness and fun social activity after work

A friend of Jane targeted at young professionals in a different city made a very good profit by organising sports events

Experience of being a cus-

(continued) © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

253

254

Respondent

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Opportunity

Prior knowledge of. . . Customer Markets problems

Means to serve markets

Personal interests

tomer at many networking events, believed that many networking events were not good Ian2

Hypnotherapy and well-being

Tony

Life coaching and business advice

Nick

Web design and development

Neil

Culture development training and consultancy

1. Studied psychology when doing a Law degree 2. Experience in doing marketing 3. Had an events and marketing company with friends 1. First degree in Electronic Imagining in Media Communications 2. Teaching web design in college 3. Experience in building websites 1. First degree in Sociology and Politics 2. Studying a Ph. D., linking motivation, change, psychology and sociology 3. Experience in providing consultancy in knowledgebased and operational management

Having had experience in being a customer for marketing advice and knew that it could be improved

‘For many years I have seen leadership and training programmes and I have delivered many of them in many kinds of organisations and they seem to operate in a language that people don’t understand. They operate in the made-up language of academic organisational

‘I’ve always been interested in hypnosis and NRP which is a like a form of hypnosis and I was reading about it and I was learning about it’ Interested in psychology, communications, and life coaching

‘I have always been interested in sociology and psychology, those have always been my primary interests’

(continued)

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Respondent

Opportunity

Prior knowledge of. . . Customer Markets problems

Means to serve markets

255

Personal interests

development and they talk about synergies and leverage and teamwork, they speak in analogies of sport to people who don’t play sport. . .’ Phil

Online job searching and management

Jeff

IT support

Jeff

Digital publishing, Jeff–Paul

1. First degree in E-Business 2. Had an online shop on eBay 3. Was running a web-design business, specialising in blog design 1. First degree in Computing Science and Master’s degree in Enterprise 2. Worked parttime in a massmarket computer superstore 3. Providing IT services to family and friends

Practical knowledge of IT support gained from working for family and friends

Experience of being a reader for computer manuals

‘When you are at university the text books that you are given specifically on things like how to use software programmes on your computer, they are not written in the way that students would like because if you are a busy student working hard on your research and you have to learn how to use a new programme, the books tend to

(continued)

256

Respondent

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Opportunity

Prior knowledge of. . . Customer Markets problems

Means to serve markets

Personal interests

tell you everything there is to know about that programme, so they’ll be that thick and loads and loads of writing and the way it is written is almost like they want to teach you everything there is to know about it and the only reason that the student is using that computer programme is because they have got something to do and that is all they care about, getting their work done’ Paul

Online food specialist

Peter

Mobile phone provider for businesses

Emma

Approved aeroplane parts database

First degree in Geography and Master’s degree in Enterprise in Environmental Innovation 1. Buying and selling mobile phones when 13 years old 2. Experience in sales and administration in a large mobile phone retailing chain aiming at end users 3. Worked for a friend who sold mobile phones to companies Having been a buyer, purchasing parts for airlines

To protect the environment.

Suppliers often did not provide enough information on whether the parts had been

(continued)

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Respondent

Opportunity

Prior knowledge of. . . Customer Markets problems

James

Online letting and estate agent

Kath

Childcare vouchers management

Had childcare business and was receiving childcare vouchers

Laura

Training services for recruitment agencies

1. Worked in the recruitment industry 2. Worked as an Operations and Training Director 3. Experience in developing training and development programmes

Alex1

Online social maps

Alex2

Nightclub snapshots Marketing, PR and graphic design

Kelly

Mark

Corporate well-being consultancy

1. First degree in Fashion Promotion and masters in Marketing 2. Worked as an office manager and was also involved in marketing for a magazine Experience in providing personal fitness

Means to serve markets

257

Personal interests

approved and the approval process took a long time for aircraft parts Having been a landlord, understood problems of being a customer for an estate agency As a childcare voucher recipient, Kath experienced lots of difficulties of using vouchers from different sources and systems

1. Interested in blending art with technology 2. Interested in maps Obsessed with an antique camera Interested in marketing

(continued)

258

Respondent

Karen

Appendix F: Dimensions of Prior Knowledge and Personal Interests

Opportunity

Radio documentary productions

Prior knowledge of. . . Customer Markets problems training on an ad-hoc basis for 8 years 1. Journalist 2. Radio producer 3. Worked for a production company in media 4. Master’s degree in Journalism 5. Experience in making radio programmes and doing research.

Means to serve markets

Personal interests

Appendix G: Director’s Welcome to INNOSPACE Launch Event

INNOSPACE Launch I would like to begin by welcoming everyone to the launch of INNOSPACE. Particularly all our external visitors as well as the VC and the MMU Directorate. And, of course, our two guest speakers—Trevor Baylis and Heather Wilkison. We hope that you have had a chance to look around INNOSPACE. And to meet some of the enterprising people who are in the process of starting their businesses. If not, then there will be time for you to do that when the formal activities have finished. The CfE was established in March 2001 and in the last 6 years we have continued to expand—we now employ 20 members of staff—engaged on a wide range of projects. Since the CfE began operating we have been providing support for entrepreneurs and more established SMEs. Perhaps the most important of our projects has been the NES programme—which has provided support for almost 1000 start-up businesses in Manchester. INNOSPACE happened after a conversation with the dean in which I suggested that MMUBS did not provide the same level of support for our enterprising students as other institutions in the region. I had been particularly interested in Manchester University’s incubator for their SEC students. In fact, one of my Ph.D. students (Robert Lee) carried out some comparative research—and we was impressed by the strong commitment to the entrepreneurial ethos amongst Master’s in Enterprise (SEC) students. The Dean agreed that we could convert SFM (this space) into a student incubator. In a little over 18 months, we have created this workspace for 120 nascent entrepreneurs. The project was generously funded by ERDF—and I would like to acknowledge the help of Marcus Lord in acquiring that money. I would also like to acknowledge the help of Kerr Hamilton and his team from estates who turned our vision of INNOSPACE as an informal and welcoming environment into the reality you see this evening. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

259

260

Appendix G: Director’s Welcome to INNOSPACE Launch Event

The Incubation Management team has taken on responsibility for most of the work involved with setting up and managing INNOSPACE. They have all done this in addition to their ‘day jobs’ of managing the NES programme. More recently the incubation manager has worked extremely hard to ensure the launch is a success. A number of other CfE staff have also taken on significant amounts of additional work to ensure that INNOSPACE succeeds. The steering group—particularly Chrissie Gibson, Sara O’Donnell and David Taylor provided lots of good ideas—including a number of events that we held in the University in the last academic year to publicise INNOSPACE. We are hoping very much that this is just the beginning—and we already have plans for INNOSPACE2. This will take the form of a more conventional incubator space on the first floor of Minshull. We in MMU are determined to ensure that INNOSPACE makes a significant contribution to Manchester and the region’s economic performance. Therefore, we will be encouraging our new entrepreneurs to have high aspirations for the exploitation of their business ideas. So, in 10/15 years’ time, we will be able to look back and see INNOSPACE as a catalyst for the creation of some significant and rapidly growing businesses which started here in INNOSPACE. To finish—I would like to thank the Dean and the VC (Vice-Chancellor)— because obviously none of this would have happened without their support. If academic enterprise is to thrive in an institution like MMU then senior managers have to trust those who are actually undertaking projects such as INNOSPACE. In fact, this reminds me of a friend who was interviewing R&D managers about the way in which they managed their staff—the manager replied—‘I don’t know what they’re doing—but I do know that they’re doing things I don’t know about’. That seems like quite a nice motto for academic enterprise! Thanks very much for coming to the launch of INNOSPACE and I would now like to introduce the VC of MMU.

Appendix H: Letter to Advisory Board

20 November 2007 Dear «First_Name», INNOSPACE Advisory Board On second October we successfully launched INNOSPACE, which is Manchester’s newest business incubator. The event was attended by over 150 guests and we were honoured to have Trevor Baylis (inventor of clockwork radio) as our guest speaker. We are now intending to establish an Advisory Board which will help guide the development of INNOSPACE over the next few years. In helping achieve our goal of contributing to business growth in the City, we would be delighted if you would be willing to become a member of our Advisory Board. The next several years promise to be exciting ones for INNOSPACE. Even though the incubator has only been open for 6 weeks it is already starting to have a positive impact with entrepreneurs in Manchester. With over 50 businesses already signed up, we hope that your expertise will continue to allow us to match INNOSPACE to the communities we serve. For more information on INNOSPACE please see our developing website: www.INNOSPACE.co.uk. The Advisory Board will play a central role in this important work. Your experience and involvement with the business community in Manchester and the North West region will play a major part in the future development of INNOSPACE. For your information we attach further details of your role and responsibilities as a member of our Advisory Board. We recognise the valuable contribution that you can make to this process and should you require additional information please do not hesitate to contact Professor Ossie Jones who is INNOSPACE’s director on 0161 247 XXXX. We would be delighted if you could join us so please let me know as soon as possible. Kind regards Dean of MMU Business School © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 O. Jones et al., Creating Communities of Practice, International Studies in Entrepreneurship 46, https://doi.org/10.1007/978-3-030-62962-5

261