Entrepreneurial Processes in the Era of Digital Transformation 9783110790313, 9783110790153

Table of contents :
Contents
Introduction
1 Fostering Digital Entrepreneurship by Developing Entrepreneurial Mindset
2 Digital Innovation and Incubation Process
3 Digital Sustainable Entrepreneurship Business Model and Its Contribution to Sustainable Development Goals
4 Digital Technologies in Entrepreneurship and Shifting of Entrepreneurial Trajectories
5 Entrepreneurial Orientation: An Assessment of Empirical Evidences from Italy and Some Hints for Further Research
6 Gender Contribution to the Competitiveness of Social Media Entrepreneurs in Saudi Arabia: Context of the National Transformation
7 How to Locate Resources in the Personal Networks Along the Entrepreneurial Processes? Follow-Up of a Nascent Digital Nomad Entrepreneur
8 Managing Conflicts to Improve Performance in Start-Ups: A Theoretical Analysis
9 Start-Ups and the Hurdles of Scaling-Up
10 New Technologies as a Lever for the Scalability of Italian Start-Ups
About the Editors
Index

Citation preview

Entrepreneurial Processes in the Era of Digital Transformation

Advances in Entrepreneurial Processes

Series Editors Diego Matricano, Laura Castaldi, William E. Jackson III and Lou Marino

Volume 1

Entrepreneurial Processes in the Era of Digital Transformation Edited by Diego Matricano, Laura Castaldi, William E. Jackson III, Lou Marino

ISBN 978-3-11-079015-3 e-ISBN (PDF) 978-3-11-079031-3 e-ISBN (EPUB) 978-3-11-079045-0 ISSN 2751-8019 Library of Congress Control Number: 2023938396 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the internet at http://dnb.dnb.de. © 2023 Walter de Gruyter GmbH, Berlin/Boston Cover image: blackred/E+/Getty Images Typesetting: Integra Software Services Pvt. Ltd. Printing and binding: CPI books GmbH, Leck www.degruyter.com

Contents Diego Matricano, Laura Castaldi, William E. Jackson III, Lou Marino Introduction 1 Ehtisham Ali, Adele Parmentola, Usman Ali 1 Fostering Digital Entrepreneurship by Developing Entrepreneurial Mindset 5 Valentina Iscaro, Rigved Joshi, Roni Noueihed, Sami Abu Hadir 2 Digital Innovation and Incubation Process 23 Surabhi Singh, Urvashi Makkar, Djamchid Assadi 3 Digital Sustainable Entrepreneurship Business Model and Its Contribution to Sustainable Development Goals 35 Md. Tamim Mahamud Foisal, Md. Ashraful Alam, Md. Thasinul Abedin 4 Digital Technologies in Entrepreneurship and Shifting of Entrepreneurial Trajectories 45 Mariangela Vecchiarini, Laura Castaldi, Domenico Ferrara, Diego Matricano 5 Entrepreneurial Orientation: An Assessment of Empirical Evidences from Italy and Some Hints for Further Research 67 Bassem M. Nasri, Pablo Collazzo Yelpo, Ala’a H. Al-Hashim 6 Gender Contribution to the Competitiveness of Social Media Entrepreneurs in Saudi Arabia: Context of the National Transformation 85 Claire Bidart, Rym Ibrahim 7 How to Locate Resources in the Personal Networks Along the Entrepreneurial Processes? Follow-Up of a Nascent Digital Nomad Entrepreneur 109 Rosario Marrapodi 8 Managing Conflicts to Improve Performance in Start-Ups: A Theoretical Analysis 129

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Alessia Pisoni, Alberto Onetti 9 Start-Ups and the Hurdles of Scaling-Up

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Fabio Greco, Marco Tregua, Francesco Carignani, Francesco Bifulco 10 New Technologies as a Lever for the Scalability of Italian Start-Ups About the Editors Index

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Introduction The first volume of the series Advances in Entrepreneurial Processes deals with the issue of entrepreneurial processes in the era of digital transformation, which is generating profound changes in the business environment, blurring industry boundaries, and creating unprecedented threats and opportunities for entrepreneurs. Overall, scholars contributing to this volume have addressed their attention towards three main themes, respectively, dealing with: – digitalization of entrepreneurial processes (Part I); – personal traits in the era of digitalization (Part II); and – scaling and exponential growth linked to opportunities/threats of digitalization (Part III). Let us briefly analyse the content of each chapter. Part I comprehends four chapters. In Chapter 1, “Fostering Digital Entrepreneurship by Developing Entrepreneurial Mindset”, Ehtisham Ali, Adele Parmentola, and Usman Ali remark how the digital entrepreneurial mindset is becoming increasingly important in today’s rapidly changing and digitally driven world. With the proliferation of the Internet and the increasing reliance on technology in various industries, there are numerous opportunities for individuals to create value through digital means. It involves continuously seeking out and exploring new technologies and platforms as well as staying up-to-date on industry trends and consumer needs. Overall, the chapter is an attempt to provide a theoretical review of where the notion of the entrepreneurial mindset stands today, how it develops through meta-cognition, and how it may be adapted into a digital entrepreneurial mindset to foster entrepreneurship in the digital realm. Chapter 2, “Digital Innovation and Incubation Process”, is by Valentina Iscaro, Rigved Joshi, Roni Noueihed, and Sami Abu Hadir. According to the authors, in an economic and employment environment where uncertainty is the main feature, entrepreneurship has represented and continues to represent a solution adopted by several individuals and teams. However, the initial lack of managerial and entrepreneurial skills, the liabilities of newness (i.e. the new firms’ lack of social relations and stable ties and the presence of underdeveloped organizational processes and routines), and of smallness (i.e. the missing of resources for small firms competing with large companies) have determined a preoccupying mortality rate of start-ups in their first 5 years. In such an environment, business incubators play a key role as they help starting ventures by providing access to several services and resources not necessarily owned, often outside their value chain. Chapter 3, “Digital Sustainable Entrepreneurship Business Model and Its Contribution to Sustainable Development Goals” by Surabhi Singh, Urvashi Makkar, and Djamchid

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Assadi, explores how the firms are obliged to reduce their negative environmental impact by implementing digital sustainable entrepreneurship model innovation. The chapter takes an entrepreneurship and digital perspective on sustainable business model innovation and combines literature of business models and experimental models. The results have theoretical implications for the intersection of sustainability and lean approaches in innovation research as well as implications for practitioners by providing a comprehensive framework to support sustainable business model innovation. In the end, the chapter presents a business model perspective on digital sustainable entrepreneurship that hugely contributes to sustainable development goals. In Chapter 4, “Digital Technologies in Entrepreneurship and Shifting of Entrepreneurial Trajectories”, Tamim Mahamud Foisal, Ashraful Alam, and Thasinul Abedin argue that the domain of digital technology has shaped the dimensions of entrepreneurship, including entrepreneurial opportunities, business models, as well as the performance of entrepreneurial firms that opt for the demand of looking for a new window of entrepreneurship usually referred to as “digital entrepreneurship”. In this backdrop, this chapter looks for how digital technologies affect entrepreneurship as well as the trajectories and changes in those trajectories of newly digitalized entrepreneurial firms. In this respect, this chapter utilizes a theoretical underpinning to explore the fundamental concepts of digital entrepreneurship and how these relate to different aspects of entrepreneurial trajectories, specifically the opportunities, the business model, and the performance. Part II – focused on the personal traits in the era of digitalization – includes four chapters. Chapter 5, “Entrepreneurial Orientation: An Assessment of Empirical Evidences from Italy and Some Hints for Further Research” by Mariangela Vecchiarini, Laura Castaldi, Domenico Ferrara, and Diego Matricano, contributes to ever-evolving international debate about Entrepreneurial Orientation (EO) by analysing Italian Law no. 221/2012 disciplining innovative start-ups. According to this law, firms need to meet at least one of these three criteria in order to be classified as innovative startups: (1) expenses in R&D and innovation are required to be at least 15% of their annual costs or turnover; (2) some of the employees are required to be highly qualified personnel; (3) ventures are required to be the owner, depositary, or licensee of a registered patent or software. By an attentive reading and a careful analysis, some Italian analysts and practitioners agree on the idea that the above criteria correspond to the three dimensions of EO: risk-taking, proactiveness, and innovativeness. Based on binomial logistic regression models (14,264 observations), this chapter strives to rebuild the state of the art of EO among innovative start-ups in Italy and, by leveraging mixed-method research designs, to suggest some hints for future research. Chapter 6, “Gender Contribution to the Competitiveness of Social Media Entrepreneurs in Saudi Arabia: Context of the National Transformation” by Bassem M. Nasri, Pablo Collazzo Yelpo, and Ala’a H. Al-Hashim, addresses the questions of “how gender

Introduction

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impacts the competitiveness of social media entrepreneurs in Saudi Arabia, and how the national transformation plan to a diversified economy less dependent on oil might have influenced their level of competitiveness”. Gender gap in entrepreneurship and the difference in competitiveness between men and women are covered in literature. Most of this literature addresses entrepreneurship in general and overlooks the possible contribution of starting these businesses through online social media platforms, especially in the context of the Middle East, and in Saudi Arabia in particular, which witnessed major changes at multiple levels since the year 2016. This research tries to mind this gap and follows an exploratory qualitative case study methodology to examine how these changes might have influenced the level of competitiveness in female entrepreneurs who founded social media businesses in Saudi Arabia. The conservative nature of the Saudi society, insufficient support by each of the family, the society, and the government were found to have contributed to the success of social media businesses owned by females in Saudi Arabia. The introduction of the Vision 2030, and the set of reforms and social changes associated with the National Transformation Plan, revealed a high level of competitiveness and entrepreneurial readiness in female Instagram entrepreneurs. The research has implications for theory, private sector, and policy makers and suggests giving the subject more attention in future research. In Chapter 7, “How to Locate Resources in the Personal Networks Along the Entrepreneurial Processes? Following-Up of a Nascent Digital Nomad Entrepreneur”, Rym Ibrahim and Claire Bidart start with the assumption that transition to entrepreneurship is a complex process and so its study requires innovative adapted methods. The social sciences can help shed light on this process, taking into account, in particular, the social and technological contexts that are involved in these trajectories. To specifically address this objective, they propose to focus on the roles that personal networks of the entrepreneurs, combined with digital tools, play in accessing resources. The digital transformation of communication media tends to shorten the paths of access to information and to opportunities, but the uses of these tools are often embedded in relational resources. In particular, the scholars propose a precise scientific method to better understand the emergence of resources from personal networks along the entrepreneurial processes. This method is particularly powerful for considering relationship-based strategies for finding resources and opportunities, including when relationships are distributed across multiple geographical locations or are digitally mediated. Indeed, they consider that rather than being an alternative, technological resources are articulated in continuity with relational resources. Thus, they intend to contribute to the body of work that focuses on the dynamics of entrepreneurial networks and on entrepreneurship as action and interaction. In Chapter 8, “Managing Conflicts to Improve Performance in Start-Ups: A Theoretical Analysis, Rosario Marrapodi focuses on the multiple challenges in the entrepreneurial journey. Unlike large, established companies, start-ups are agile and more adaptable to new opportunities. However, they face significant challenges involving the emer-

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gence of new digital platforms and associated ecosystems and limited resources and identities that are yet to be established. If these challenges are not addressed, they could lead to start-up failures or at best diminished performance. Entrepreneurs and start-up actors facing these challenges often find themselves in certain aspects of a tense and variable business environment. Therefore, using the analytical research method through literature review, this study examines conflict as an essential causal attribute if not recognized and managed in time. It could have negative impacts on the performance of start-ups. In particular, the study focuses on how conflicts can vary and take on different dynamics and impacts in start-ups and among the actors that usually participate in the venture’s development phase. On this basis, the author presents a comprehensive research agenda that can stimulate future research on the strategic management of conflicts that may arise in start-ups. Part III – dealing with scaling – comprehends two chapters. In Chapter 9, “Startups and the Hurdles of Scaling-Up”, Alessia Pisoni and Alberto Onetti remark that the start-up world is obsessed by the concept of scalability and exponential growth. That’s why scholars and practitioners started making a distinction between early-stage initiatives (start-ups) and real companies able to produce revenue and employment (the so-called scale-ups). Recently, some scholars have argued that too often the start-up and the scaling stages are combined and the difference is mistreated. In turn, this has impeded new knowledge about these topics. Following in this wake, in the attempt of providing a clear-cut picture of the topic under investigation, the authors adopt the double-side perspective of practitioners and academics, who have been focusing their research efforts on this field for decades. In the end, the chapter also provides an overview of the main hurdles characterizing the scale-up process. Eventually, in Chapter 10, “New Technologies as a Lever for the Scalability of Italian Startups”, Fabio Greco, Marco Tregua, Francesco Carignani, and Francesco Bifulco focus their attention on what makes start-ups successful, one of the most popular areas of research in the domain of entrepreneurship. The related literature and the information databases that offer on the expansion of creative companies in Italy make clear the significance of scaling objectives in the start-up ecosystem. There is a strong relationship between the principle and the goal of scalability and the use of technologies. This chapter adopts a qualitative approach with multiple case studies that help show a crosssection of the state of the art in scale-up companies in Italy. Finally, through this proposal to look at the literature and at practical cases, some implications of practical nature are proposed by the authors, stimulating further research. Overall, scholars contributing to the first volume of the series “Advances in Entrepreneurial Processes” recall three main themes and several major issues related to entrepreneurship. They offer new perspectives, novel approaches, and original results but – at the same time – they evoke further contributions useful to advance knowledge about entrepreneurial processes.

Ehtisham Ali, Adele Parmentola, Usman Ali

1 Fostering Digital Entrepreneurship by Developing Entrepreneurial Mindset Abstract: The digital entrepreneurial mindset (EM) is becoming increasingly important in today’s rapidly changing and digitally driven world. With the proliferation of the internet and the increasing reliance on technology in various industries, there are numerous opportunities for individuals to create value through digital means. It involves continuously seeking out and exploring new technologies and platforms as well as staying up-to-date on industry trends and consumer needs. This chapter is an attempt to provide a theoretical review of where the notion of the EM stands today, how it develops through metacognition, and how it may be adapted into a digital EM to foster entrepreneurship in the digital realm. Keywords: Digital Entrepreneurship, Entrepreneurial Mindset, Digital Entrepreneurial Mindset, Metacognition, Soft skills, Digital Literacy

Introduction Ever since scholars in the field of entrepreneurship began to investigate the topic of entrepreneurial mindset (EM), they have been fascinated by the questions about why certain people recognize and grab opportunities while others do not. And how they are able to utilize and mix existing and new resources in a creative way given the complex and ever-changing settings in which they operate. The approach that was taken to answer these issues evolved quite a bit over the course of time and came from two quite distinct points of view. Initially, it was believed that certain personal characteristics, or traits, were responsible for an individual’s ability to recognize and pursue entrepreneurial opportunities. However, research on these traits has produced inconsistent and inconclusive results (Busenitz & Barney, 1997; Mitchell et al., 2007). As a result of these inconclusive findings, scholars have proposed a shift in perspective, viewing entrepreneurship as a mode of thinking rather than a result of inherent traits. This perspective posits that individuals who exhibit an (EM are able to identify and pursue entrepreneurial opportunities rather than being inherently born with these abilities. It is believed that mindsets are developed and prejudiced by an individual’s experiences and interactions with their environment (Mathisen & Arnulf, 2014). This suggests that entrepreneurship is not a fixed

Ehtisham Ali, Adele Parmentola, Usman Ali, Department of Management and Quantitative Sciences, Parthenope University of Naples, Italy https://doi.org/10.1515/9783110790313-002

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characteristic, but rather a dynamic mindset that can be cultivated and developed over time. EM is a way of thinking and approaching challenges that is characterized by innovation, risk-taking, and the ability to see opportunities where others might not. It is an important aspect of entrepreneurship because it allows individuals to identify and pursue new business ventures, take calculated risks, and adapt to change in order to achieve success. A vast and ever-expanding body of research pertaining to EM addresses the issues of coping with and adapting to complex settings as well as environments that are dynamic and uncertain. This idea is pertinent not just in the setting of entrepreneurial endeavours but also in the atmosphere of business in general. In today’s corporate world, complexity and uncertainty are not the exception but the norm rather than the exception itself. If an entrepreneurial attitude can be taught and cultivated, it may have a beneficial effect on the continued existence of businesses. It has been hypothesized by academics that successful future strategists will utilize an EM, which means the capacity to rapidly recognize, act, and mobilize resources even in the face of unpredictability (Ireland et al., 2003). This way of thinking presupposes that the roots of such a mentality are, at the very least, cognitive in character. In general, entrepreneurship researchers who are active in cognitive research strive to understand how individuals see and grab opportunities to take advantage out of them (McMullen & Shepherd, 2006). Further, the conceptualization and theoretical foundations of EM are still in the early stages of development despite the increased attention it receives from the academic community and its growing appeal as a consulting tool (Davis et al., 2016). A recent systematic review came to the conclusion that there is a paucity of insights about the nature of EM both theoretically and empirically. This is in part because there is “no commonly shared” consensus in the field for a consistent EM construct that applies widely across varied environmental and cultural contexts. In addition, there is a dearth of insights about the nature of EM both theoretically and empirically (Naumann, 2017, p. 149).

Entrepreneurial Mindset The EM refers to the way of thinking and acting in a way that enables one to successfully engage in entrepreneurial endeavours (Neneh, 2012). It is also defined by Davis et al. (2016) as the “constellation of motives, skills, and thought processes that separate entrepreneurs from non-entrepreneurs and lead to entrepreneurial success”. EM also aids business owners in making practical choices despite risks (Neneh, 2012). Moreover, French (2016) defined mindset as an idea borrowed from the fields of cognitive science and management theory. In the literature of cognitive psychology, it is defined as “the set of mental operations that get engaged in the performance of a given task”.

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Davis et al. (2016) outline a set of characteristics that make up the EM construct. Training and experience are more effective means of imparting skills, while attributes are more likely to be innate qualities. Skills such as vigilance, ambition, self-confidence, and persistence and attributes such as creativity, diplomacy, organization, and persuasion are among those listed by Stogdill (1974). The characteristics of effective leaders, as described by Stogdill (1974), are very congruent with the EM advocated by Davis et al. (2016). Baron (2014) emphasized the singularity that is created by entrepreneurs as a result of the way they “think, reason, make decisions, plan, and establish goals”. They are able to connect seemingly unrelated patterns by utilizing their internal frameworks, which are formed by their experience, knowledge, heuristics, and networks. This enables them to make connections between the patterns. Because of the environments they are in, it is vital for them to think in a different way. When they bring their ideas into the actual world, rather than following the traditional chain of causes and effects logic, they connect the dots between the pieces of knowledge in a novel way (Baron, 2014). According to Ekpe et al. (2015), exploitation of entrepreneurial opportunity is also dependent on the entrepreneur’s level of education, skills, or knowledge acquired via training, work experience, and social network. An entrepreneur needs to have an entrepreneurial style of thinking or mindset in order to have a better intention of working for himself. In addition, research conducted by Dasmani (2011) and Audu et al. (2013) discovered that graduates of entrepreneurship programmes were unable to secure jobs because they lacked the necessary self-confidence and skills required by various businesses. On the other hand, a large number of researchers suggested that receiving vocational training and entrepreneurial education could pave the way to business ownership or selfemployment (Stohmeyer, 2007). This is because educational institutions recognize the value of utilizing entrepreneurial education in order to cultivate an EM among their students (OECD LEED, 2016). The acquisition of new skills may result in the creation of new business prospects and inspire entrepreneurial behaviour (Emaikwu, 2011). Each and every description of EM that is offered by the various authors places a focus on the close connection between EM and thinking. Some people extend it by their actions and the unique way in which entrepreneurs integrate resources and use them to take advantage of possibilities. According to these definitions, it is possible to assert that the current concept of EM is founded on a cognitive point of view.

Metacognition and Entrepreneurial Mindset The process of formulating strategies that are positioned to choose from a set of available cognitive mechanisms is referred to as metacognition. This process takes place when an individual takes into account what they know about themselves in terms of

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their assumptions, motivations, weaknesses, and strengths (Flavell, 1987). For example, the act of thinking metacognitively refers to behaviours such as “to be self-aware, to think aloud, to reflect, to plan, to have a strategy in mind, to know what one knows, and to self-monitor” (Guterman, 2002). Importantly, metacognition is not portrayed as an inborn trait in the research or in this chapter, which is crucial. To the contrary, it is portrayed as a dynamic, learned response that can be honed with practice (Schmidt & Ford, 2003). Metacognition is the ability to regulate one’s own mental processes. This regulation is a result of differences in the inborn or acquired capabilities to switch between multiple cognitive strategies in response to changing circumstances. However, few researches have shown that those whose metacognitive abilities are limited, are less likely to use alternate strategies, and are, as a result, less adaptive when the environment of the decision shifts, especially when it is unfamiliar and unknown (Batha & Carroll, 2007).

Entrepreneurial Mindset Causal Chain Interaction with the Environment Many notable psychologists have increasingly come to embrace the situated cognition perspective, which suggests that an individual’s goals and context have an impact on the development and deployment of their cognitive processes. Some of these prominent psychologists include Schwarz (1998), Staw and Boettger (1990), and Tetlock (1990). The environment can be perceived and interpreted differently depending on the motivations of the observer (Griffin & Ross, 1991;). In other words, an entrepreneur’s drive serves to direct their attention to contextual cues that signify changes in the environment in which they are functioning, which, in the context of entrepreneurship, may offer opportunities. These changes can be either positive or negative (Shepherd et al., 2007). On the other hand, according to Wyer and Srull (1989), an individual’s surroundings might help to determine his motivations. (Figure 1) For instance, the motivation for decision-makers in a hostile environment is frequently to prevent losses, whereas the motivation for decision-makers in a munificent environment is to seek benefits (Davies & Walters, 2004). Metacognitive strategies are developed and implemented with the goal of fulfilling one’s motivations through entrepreneurial action, that is, producing a desirable entrepreneurial outcome, and are grounded on the interplay between one’s environment and entrepreneurial motivation. These strategies are developed and employed in order to satisfy one’s motives through entrepreneurial action. Moreover, discovery of opportunities (Shane & Venkataraman, 2000), swift decision-making (Alvarez & Busenitz, 2001), and the firm’s expansion and growth to new heights (Hmieleski & Corbett, 2008) are all examples of the types of results that entrepreneurs can expect to see. Consequently, the extent to which the entrepreneur understands and interprets the

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environment within the context of his or her own personal motives will lead metacognitive processing towards the development and evaluation of viable options for achieving the desired entrepreneurial goals.

Awareness of One’s Own Metacognition Metacognition awareness refers to the overall level of awareness an individual possesses of their own cognitions in the context of a certain entrepreneurial endeavour. An upsurge in the entrepreneur’s metacognitive awareness makes it more probable that she will use her metacognitive resources to come up with and evaluate several potential strategies for processing the entrepreneurial task and then take the activities most likely to provide the desired results. The degree to which he perceives novelty, ambiguity, and the inherent activity of the work all contribute to his level of metacognitive awareness. It can be thought of as the volume on a stereo system, as the perceived novelty and uncertainty in entrepreneurial tasks increase, so too does metacognitive awareness (Kahneman, 1973). These tasks involved in entrepreneurship can been labelled as having a high degree of uncertainty (McMullen & Shepherd, 2006); also involve novelty in terms of new markets with new products and new organizations (Lumpkin & Dess, 1996); and they have to contend with an environment that is constantly shifting (Eisenhardt & Martin, 2000). This indicates that entrepreneurs are more likely to have high levels of metacognitive awareness than those of more established businesses (see Figure 1). It is also possible that, within the framework of entrepreneurship, the entrepreneur will come to perceive certain activities as routine, well-defined, and constant. This is because of the

Stage 1

Stage 2

Stage 3

Stage 4

Stage 5

– Interaction with Environment

– Metacognition Awareness

– Metacognitive Knowledge and Experience

– Metacognitive Strategies

– Metacognitive Monitoring

Figure 1: Metacognition Stages. Source: Adapted from Haynie et al. (2010)).

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nature of the entrepreneurial process. In such circumstances, the level of metacognitive awareness in reaction to the activity at hand is lowered.

Metacognitive Knowledge and Experience The extent to which metacognitive resources are utilized in the process of devising a strategy to think about a particular entrepreneurial activity is determined by the level of metacognitive awareness that is awakened in response to an entrepreneurial task. It was pointed out by Flavell (1987) that there are two distinct kinds of metacognitive resources, namely metacognitive knowledge and metacognitive experience, which both play important parts in the process of formulating metacognitive strategies. According to Flavell (1987), the term “metacognitive knowledge” relates to an individual’s conscious and cognitive awareness of people, tasks, and strategies. Knowledge of people’s metacognitive processes reflects perceptions about oneself and about others, in terms of one’s own strengths and flaws, as well as about the ways in which other people think. It also refers to the type of information that an individual has gained regarding a certain endeavour. Knowledge of tasks gained through metacognition can influence how information is used in a variety of circumstances or in relation to a number of different goals. Experience is the second form of metacognitive resource. During the course of doing a specific task, it consists of a collection of affective, cognitively based individual experiences that operate as a channel via which one can draw upon one’s own accumulated knowledge, intuitions, and emotions (Flavell, 1987). For instance, persons who run their own business may have a metacognitive experience if they have the impression that something is difficult to accomplish or understand. Likewise, one can have a metacognitive experience if the entrepreneur has the perception that he is failing at some cognitive task or has the impression that achieving a goal will be challenging. Another illustration of this would be the sensation that one is aware of the likely course of events. These experiences are part of regular life, and they become easier to explain as one gets older and gains more life experience (Flavell, 1987). Entrepreneurs have a deeper understanding of their social environment through the application of metacognitive skills (Earley & Ang, 2003). Therefore, these experiences, along with metacognitive information, assist to frame how an entrepreneur will evaluate a given business activity. More than that, the sum of an entrepreneur’s intuitions, affective experiences, and emotional states is a reflection of the metacognitive experience they have amassed. These mental tools can be used to develop a metacognitive plan that increases the likelihood of success. It is crucial to keep in mind that knowledge and experiences can only be categorized as metacognitive if the person is aware of how the knowledge or experience in question relates to the process of forming a strategy to deal with the activity that is

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now being performed. The more metacognitively aware an entrepreneur is, the more effort he or she will put into consciously controlling his or her cognitions.

Metacognitive Strategies Haynie et al. (2010) described metacognitive strategy as an individual’s strategic approach to thinking about the entrepreneurial task at hand in light of the entrepreneur’s motivation and the perceived qualities of the environment. This definition of metacognitive strategy can be found in Haynie et al. (2010). To be more specific, a metacognitive strategy is the framework that the entrepreneur constructs in order to assess many various approaches to the task of processing the entrepreneurial venture. This analysis is done so that the entrepreneur may make better decisions. For the purpose of processing a certain task, for instance, an entrepreneur may normally rely on a strategy that is founded on an approach that is totally empirical and datadriven. When this entrepreneur is faced with a task in the context of a highly ambiguous situation – one in which the data is unclear or unavailable – a person who is metacognitively aware will draw upon metacognitive resources to formulate a metacognitive strategy that is positioned to generate alternatives to the original cognitive strategy (data analysis), such as the use of analogies. This will allow the person to generate alternatives to the cognitive strategy that was being used previously, which may include the use of analogies. In Fiske and Taylor’s (1991) definition of metacognitive strategies, “the selection of what is believed to be the best appropriate cognitive response (depending on motivation and the environment) from a collection of accessible cognitive responses is delineated as a metacognitive strategy” (Fiske & Taylor, 1991). For example, an experienced entrepreneur who is confronted with the intimidating task of determining the approach that would yield the best results in terms of securing financial backing for his or her enterprise. The entrepreneur is familiar with a variety of methods for securing this type of funding, in addition to having previous experiences funding businesses that are comparable. Given the specifics of the business endeavour in question, the entrepreneur also possesses intuitions about the type of funding that will be most beneficial. With this information in hand, a metacognitive strategy – a method for thinking about thinking – is developed and implemented in response to the task at hand. A metacognitive method, as demonstrated by Staw andBoettger (1990), is more likely to aid an individual in avoiding the employment of the improper technique to address an issue, given the individual’s motivations and the perceived external environment.

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Metacognitive Monitoring Metacognitive monitoring involves actively seeking and using feedback to evaluate and adjust goals, metacognitive resources, and strategies for effectively managing a changing environment. It involves actively evaluating one’s own thinking processes and adjusting them as needed in order to achieve a desired outcome. According to Flavell (1987), the purpose of cognitive strategy is simply one that helps an individual work towards some cognitive goal or subgoal. The objective is not so much to complete the task as it is to arrive at the point where one is certain that the task has been finished successfully. Monitoring of an entrepreneur’s own cognitions might take place not only while the entrepreneur is paying attention to a specific entrepreneurial task but also as a reaction to some consequence that is the result of the decision-making process. Monitoring one’s own metacognition gives an entrepreneur the ability to consider how, why, and when to implement particular methods in the context of an ever-shifting environment and his or her own personal goals. Instead of giving careful consideration to each concept at the outset, a serial entrepreneur who has a great deal of experience in locating and assessing potential business opportunities may quickly browse potential ideas and then circle back to a subset of those concepts for additional in-depth research and consideration. The entrepreneur might, after looking over a variety of company ideas, realize that one of the ideas for a new business is related to an idea for a business that he or she had previously successfully implemented. Due to the fact that the entrepreneur is already familiar with the subject matter, this may force the entrepreneur to alter the specific evaluation technique and investigate the particulars of this idea with greater monitoring. Monitoring contributes to the formation of an entrepreneur’s perspective on the interaction between his or her environment and the variety of reasons driving his or her cognitive endeavours, both broadly and specifically. This holds true for both the monitoring done on the outside and on the inside. It will be up to the cognitive consequence to decide whether or not the performance monitoring mechanism will lead the entrepreneur to re-evaluate his or her metacognitive knowledge and/or metacognitive experience. A performance monitoring device will push an entrepreneur to reevaluate his or her motivation in light of the relationship between the entrepreneur’s current performance and their motives. This will occur since there is a correlation between the two (Locke et al., 1984; Nelson, 1996). It is reasonable to assume that the information gained from monitoring will serve to alter and define later metacognition as well as lead to subsequent adaptation that is congruent with a changing entrepreneurial environment and motivation. This is something that should be anticipated.

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Digital Entrepreneurial Mindset Digital entrepreneurial mindset (DEM) can be defined as a way of thinking that enables individuals to identify and take advantage of opportunities to create and grow a business using digital tools and platforms. It involves a combination of creativity, innovation, risk-taking, and adaptability. One key aspect of a DEM is the ability to identify and pursue opportunities in the digital world. This includes finding ways to use technology to solve problems or meet customer needs as well as spotting emerging trends and identifying new markets or niches. Digital entrepreneurs are also skilled at leveraging the reach and connectivity of the internet to build and grow their businesses. In addition to being opportunistic, digital entrepreneurs also have a willingness to take risks and embrace change. Starting and growing a business is inherently risky, and digital entrepreneurs must be comfortable with uncertainty and able to adapt to changing circumstances. This requires a high level of resilience and the ability to pivot or change course as needed. Another key component of a DEM is the ability to think creatively and innovate. Digital entrepreneurs are constantly looking for ways to improve upon existing products and services as well as develop new ones. This requires a willingness to think outside the box and challenge conventional wisdom. As the economy and society continue to become more digitized, a greater premium is being placed on people who are skilled in digital media to the extent that their knowledge and abilities advance at a rate that is proportional to the rate of technical advancement (Chetty et al., 2018). The impact that these digital abilities have on the attitude that underpins entrepreneurial activities is not yet at its full potential. The efforts that were made in the past to comprehend the inner working of Entrepreneurial Mindset has become increasingly out of reach with the progression of society in this digital age. As a result, there is a pressing requirement to understand the complexities that lie behind the DEM in the future (Richter et al., 2017). Moreover, individuals who are in the vanguard of modernization are able to form the environment in which additional innovations may be made as a direct result of the digital society, which is characterized by its never-ending technological advancement. There has been an increase in the quantity of knowledge and resources that can connect the perspectives and judgments of different people as a result of the proliferation of new technological breakthroughs. Outside the traditional educational system, new communication and knowledge-sharing channels are emerging, highlighting the need of an individual having a skill set that allows them to obtain relevant information in support of their cause (Cheston et al., 2013).

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Transformation of Conventional Entrepreneurial Mindset to Digital Entrepreneurial Mindset In today’s digital age, the way entrepreneurs do business has been transformed by technology. No longer is it enough to simply have an EM; to succeed in today’s world, it is necessary to have a DEM as well. There is a growing recognition of the importance of DEM in today’s digital age. To have a DEM, it is important to understand the role that technology plays in business today. This includes understanding how to use technology to create and grow businesses as well as how to leverage technology to solve problems and create value. In addition, it is important to build a strong online presence and knowing how to use online marketing and advertising to reach and engage customers. Data and analytics are also crucial for digital entrepreneurs. They need to be able to collect and analyse data and use tools such as Google Analytics to track the performance of their businesses. By using data and analytics, they can make informed decisions about their businesses and identify areas for improvement. The digital world is constantly changing so they need to be open to change and innovation. They also need to be willing to try new things, experiment with new technologies, and adapt to changing customer needs and preferences in order to stay ahead. By developing these skills and approaches, individuals can succeed in today’s digital world and turn their ideas into successful business. Few key factors have also been identified in the literature as contributing to the development of a DEM are access to education and resources that teach about entrepreneurship and innovation. Studies have found that individuals who have access to courses, programmes, and workshops that teach about digital entrepreneurship and innovation are more likely to develop an EM, including a DEM (Fayolle et al., 2016). In addition to education and resources, experiential learning opportunities, such as internships, co-ops, and other hands-on experiences, have also been found to contribute to the development of a DEM. These experiences allow individuals to apply what they have learned in the classroom to real-world situations, which can help them develop their skills in entrepreneurship and innovation (Dodgson et al., 2018). Other factors contributing to the development of a DEM include access to mentorship and networking opportunities as well as a culture that encourages entrepreneurship and innovation (Shane & Venkataraman, 2000). Moreover, there are also various strategies and approaches that can be used to foster a DEM in individuals. These include hosting events such as pitch competitions and hackathons, providing resources such as business plan templates and access to funding, and partnering with local businesses and organizations to create opportunities for students to work on real-world projects and gain experience in entrepreneurship (Hsu & Sandberg, 2015). Literature suggests that access to education and resources, experiential learning opportunities, mentorship and networking opportunities, and a culture that

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encourages entrepreneurship and innovation are all important factors in the development of a DEM.

Digital Literacy and Development of Digital Entrepreneurial Mindset Digital literacy (DL) is a prerequisite for creative endeavours, innovative ideas, and entrepreneurial endeavours (McLoughlin, 2011). It is necessary for the mind of an entrepreneur to possess certain core abilities in a digital realm in order for them to be competitive in the modern age of entrepreneurship. Old businesses that are unable to evolve alongside technological advancements are being challenged by new businesses that are more manoeuvrable, less wed to the idea of centralized control, and more open to the possibility of collaborative endeavours. This is a result of the fact that technological advancements are reshaping all aspects of the economy (Freedman, 2012). DL is the impetus that pushes one from being an entrepreneur to becoming a digital entrepreneur, who possesses the attitude required to seize new chances and expand a business through technology transformations. Previous literature presented the implications of technology use in academic institutions, particularly with regard to the familiarity of teachers with technology and the possibility that they will pass on these abilities to their pupils (Tour, 2015). According to the findings of these studies, an individual’s views of the affordances offered by various technologies may either facilitate or obstruct their acquisition of new digital information and the assimilation of new literacies. From this premise, we move on to the relevance of the fact that staying current with technological advances provides an opportunity for an individual to succeed in their career. The implementation of digital technologies within the education industry paves the way for the expansion of ESE, as users have demonstrated a growing conviction that, as a result of their successful utilization of an e-learning platform, an e-learning programme has the potential to improve a learner’s abilities as well as their levels of motivation and knowledge (Capece & Campisi, 2013). The digital entrepreneur gives oneself the ability to mobilize in the search of accomplishment and affirmation of their efforts by making the most of the resources that are offered to a mentality that is digitally literate. In addition, exposing oneself to newly discovered knowledge reveals the iterative impacts of DL on a changing mindset, compounding increased attention with prior characterizations towards attractiveness. In terms of business, there are a multitude of different ways that DL can be applied to the realm of business. It makes it possible to join new markets, which in turn leads to the development of new products and services, which in turn can lead to an increase in productivity and profitability. Big data presents what is arguably the single most valuable opportunity available to an entrepreneur who is fluent in digital technologies. Individuals who are able to comprehend the information that is presented to

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them and make use of their existing digital expertise are in a position to gain significant competitive advantages as a result of the proliferation of data gathering and management. The approach to problem-solving that the individual takes, which involves the establishment of patterns and cause-and-effect relationships, as well as the analysis of current data, which is essential for creating models and predicting future scenarios, is the most notable benefit of all of the advantages (Lyapuntsova et al., 2018). Accessing, understanding, and making use of large data call for the simultaneous use of an elaborate and implemental perspective. The E-Mind employs predictive analysis based on the available data to ascertain whether or not a venture is viable. The digital entrepreneur’s mindset also includes the ability to remain vigilant as they surf the web in search of fresh data from which they can draw actionable insights. Finally, in today’s digital culture, the capability to synthesize digital technology and employ DL abilities is critical for entrepreneurs to generate novel ideas and pioneer new fields of endeavour. An individual’s ideas can’t be put into action without DL, and the entrepreneurial mind serves as a toolbox for traits and skills. The external environment can be shaped to better equip entrepreneurs by increasing the number of people who have access to the knowledge, skills, and experiences necessary to develop an E-Mind and amass and deploy the resources necessary for a successful entrepreneurial endeavour (Solesvik et al., 2013).

Soft Skills and Digital Academic Entrepreneurship The advent of new digital technologies has resulted in a shift in organizational structure (Nambisan & Baron, 2013), which has opened the doors for a new kind of entrepreneurial spirit (Song, 2019). As a result, there is a growing demand for those who possess the skills necessary to function as innovators. Because of this circumstance, digital entrepreneurship can be distinguished from “conventional” forms of business because it demands an understanding of digital technology (Hair et al., 2012). Although both academic and business entrepreneurship have the goal of commercializing business possibilities, academic entrepreneurship and business entrepreneurship are distinguished from one another by the shape and setting of the business (Secundo et al., 2020a, 2020b). In this light, it is of utmost importance for higher education institutions to cultivate entrepreneurial skills in their students, most importantly the soft skills necessary to build digital academic entrepreneurship. There has not been a consistent body of knowledge developed by research into business education that is capable of providing appropriate guidance regarding the approaches that instructors should use to teach soft skills (Hagg & Gabrielsson, 2019). Nevertheless, it is possible that soft skills play an essential role in the formation of a DEM (Edelman et al., 2008). Due to the complexity of entrepreneurship education, educators need to decide which pedagogical approaches are most suitable for their

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teaching circumstances. The focus of lecturers should be on encouraging practices of understanding how to do (Hagg & Gabrielsson, 2019; Ratten & Jones, 2021). It is recommended that educational institutions host workshops (Secundo et al., 2020a, 2020b) and establish centres for the education of entrepreneurs that are equipped with digital technologies. In addition to this, they should apply an immersion-based form of gamification to the challenges (Buzady & Almeida, 2019) and establish educational programmes for digital technology entrepreneurship (Secundo et al., 2021). Researchers have a comprehensive understanding of academic entrepreneurship in the digital realm. Due to the large amount of tacit information that must be acquired, it believes that its premises should foster an ecosystem that encourages the development of soft competences in students (Haase & Lautenschlager, 2011; Ratten, 2020), adding the requirement for relational capital. One way that universities can teach soft skills is through experiential learning opportunities. These can include internships, co-op programmes, and simulations, which allow students to apply their knowledge and skills in real-world settings and gain hands-on experience. In addition, universities can offer courses and workshops specifically designed to develop soft skills, such as communication, teamwork, and leadership. These soft skills are important for entrepreneurs, as they can help with decisionmaking, problem-solving, and adapting to change. Gaglio & Katz (2001) found that selfconfidence, motivation, and social skills were positively related to entrepreneurial success. Another effective approach is to incorporate soft skills training into traditional coursework. For example, professors can incorporate group projects and case studies into their curriculum, which require students to work together and communicate effectively to solve problems. This not only helps students develop their soft skills but also enhances their critical thinking and problem-solving abilities. In addition to formal education, universities can also provide extracurricular activities and resources to help students develop their soft skills. These can include student organizations, mentorship programmes, and guest lectures from industry professionals. Overall, universities can play a crucial role in teaching soft skills and helping students develop a DEM. By providing experiential learning opportunities, incorporating soft skills training into coursework, and offering extracurricular activities and resources, universities can help students become well-rounded, adaptable, and successful professionals in the digital age.

Conclusion The objective of this chapter was to present an overview of the current state of the EM concept and to demonstrate how that concept might be adapted into a DEM in order to encourage digital entrepreneurship. The review led to the identification of

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many stages of entrepreneurial metacognition and also brought to light the techniques for the development of a digital entrepreneurial mentality. The literature review provided (1) synopsis of the metacognitive process that underlies the development of an EM. It used to be widely believed that entrepreneurs who did not have a business history or who did not have naturally EM and personality traits believed that they lacked the same level of EM as their business-savvy colleagues who came from successful family enterprises. The chapter allayed their concerns and demonstrated that a mindset is not something that can only be inherited, but rather is something that can be acquired via the accumulation of a variety of experiences and actions. Second, it focused on the significance of digital entrepreneurship and the mindset of digital entrepreneurs and offered suggestions for how to transform from a conventional EM to a DEM. It is revealed, as well as proposed, that educational institutions, digital literacy, soft skills, and digital academic entrepreneurship all play significant roles in the development of a mindset that is conducive to digital entrepreneurship. Overall, by broadening perspectives on the development of an EM and making theoretical inroads through investigation of this notion, this chapter contributes to the advancement of entrepreneurship research in the digital arena. Further studies can be conducted to investigate these concepts empirically in particular demographic settings.

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Valentina Iscaro, Rigved Joshi, Roni Noueihed, Sami Abu Hadir

2 Digital Innovation and Incubation Process Abstract: Entrepreneurship is an essential lever of economic development, and business incubators (BIs) represent an essential support in this process. Over the past decades BIs experienced two important transformations that caused the transition from an offer tangible and internal (office spaces and infrastructures) to an intangible one based on external elements such as networking, mentoring, and access to finance. An additional global revolution that poses new challenges and offers new opportunities to every company, including BIs, is the digitalization. Digital technologies are not only improving the processes of incubatees attraction and selection, business support, and access to network and finance, but also allowing BIs to overcome their geographical coverage and expand their support to include new digital services, giving rise to the virtual business incubators (VBI). After presenting dynamics and main aspects of the evolution of BIs and analysing how these changes modified the support to the entrepreneurial processes, the chapter presents the case of the Invention to Innovation Center (I2C) at the University of Alabama in Huntsville (UAH) with a focus on its digital adoption strategy and the story of Meister, one of I2C’s incubatees. Keywords: Business Incubators, Virtual Business Incubators, Digital Transformation, Entrepreneurial Processes

Birth and Evolution of Business Incubators In an economic and employment environment where uncertainty is the main feature, entrepreneurship has represented and continues to represent a solution adopted by several individuals and teams. However, the initial lack of managerial and entrepreneurial skills, the liability of newness (Stinchcombe, 1965), and the liability of smallness (Aldrich & Auster, 1986) have determined a preoccupying mortality rate of start-ups in their first 5 years. The liability of newness refers to new firms’ lack of social relations and stable ties and the presence of underdeveloped organizational processes and routines that has an impact on their death rate (Singh et al., 1986). Similarly, the liability of smallness identifies the impact of size on survival, as small firms often lack the resources to compete with large companies (Aldrich & Auster, 1986).

Valentina Iscaro, Department of Management, Marketing & Logistics. Alabama A&M University Rigved Joshi, Invention to Innovation Center, University of Alabama in Huntsville Roni Noueihed, Meister Company Sami Abu Hadir, Meister Company https://doi.org/10.1515/9783110790313-003

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In such an environment, business incubators (BIs) play a key role as they help starting ventures by providing access to several services and resources. The global entrepreneurship monitor (GEM) measures entrepreneurial activity across 115 economies. Their analysis begins with potential entrepreneurs, the next phase focuses on nascent entrepreneurs, third phase studies new business owners, and final phase explores established business owners. GEM also defines the elements of the entrepreneurship ecosystem that makes a country entrepreneurial; the list includes financial resources, support from government, entrepreneurship education, research and development (R&D) transfer, commercial and legal infrastructure, entry regulation, physical infrastructure, cultural and social norms. Some of these elements represent the core offer of BIs. What does exactly a business incubator do? The American National Business Incubation Association defines business incubation as a dynamic process of firm development (Aernoudt, 2004). “Business incubators nurture young firms, helping them to survive and grow during the start-up period when they are most vulnerable” (Aernoudt, 2004, 127). The Batavia Industrial Center, commonly known as the first US business incubator, was established in Batavia, NY in 1959, and even though the concept, the offer, and the defining structure of BIs have faced severe transformations we can agree that it is a structure that supports entrepreneurial processes of new ventures. Over the past decades BIs went through two important transformations that caused the transition from the first to the third generation (Bruneel et al., 2012), as shown in Figure 1 (Iscaro et al., 2017). The first generation of incubators (1970s/1980s) was mainly focused on offering infrastructures to help new ventures save money during the start-up phase. As a consequence, the value proposition of the first generation of incubators was related to their ability to control scarce tangible resources (Boschetti et al., 2011). In the late 1980s the second generation of incubators emerged. At

Intangible

II° GENERATION End of ‘80s

III° GENERATION Second half ‘90s

Resources

Tangible

I° GENERATION ‘70s–‘80s

Internal

External Value chain

Figure 1: The evolution of incubators. Source: Iscaro et al. (2017) [adapted from Boschetti et al. (2003)].

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that time the principal obstacle to the likelihood of success was the lack of business competencies of new venture entrepreneurial teams. Hence, incubators started offering intangible “knowledge-based” resources in addition to tangible infrastructures. With the wide diffusion of entrepreneurship, the third-generation incubators (mid-1990s) focused the offer on networking activities (Bruneel et al., 2012). While the second-generation incubators provided proprietary resources within their value chain, in the third generation, incubators’ offer is based on resources not necessarily owned, often outside their value chain (Boschetti et al., 2003).

SMAC Technologies and Incubation Processes Digitalization is a revolution that is transforming our reality and is challenging current paradigms in every aspect of the economy, culture, and society. Concepts such as digital markets, digital companies, digital communication, digital education, and digital organizations are the centre of attention of several research that are dedicated to study the impact of what is “digital”. While several studies have focused on the impact of digital technologies on firm-customers connections, operational efficiencies, network activities, decisionmaking processes, and strategic management (Nambisan, 2017; Srinivasan & Venkatraman, 2018; Iscaro et al., 2021), it is still relatively unclear how incubators can use technologies to facilitate their incubation processes. More specifically, it is interesting to investigate how technology has impacted applicants’ selection, improved business idea development, and enhanced the networking offer to support incubatees’ growth. Among the new technologies available, a crucial role for the incubators’ business model is played by the SMAC: social media, mobile, analytics, and cloud computing (Ross, 2014), which offer powerful, affordable tools to improve everyday dynamics and outreach. IT has changed and continues to change entrepreneurial, managerial, and marketing processes of companies in every industry. This means that organizations – including incubators – are abandoning traditional technology resources, such as enterprise resource planning and customer relationship management. In fact, these systems are considered too expensive and their impact on companies’ revenue is difficult to measure. Thus, many organizations take advantage of affordable, accessible technologies to thrive (i.e. SMAC; Chan et al., 2022). How exactly do incubators use new digital technologies? We can consider incubators as organized on some main activities: incubatees attraction and selection, business support, and access to network and finance. The pioneering research of Chan et al. (2022) offers some key insights concerning new technologies and incubation processes. It emerged that when working to attract and select new incubatees, BIs use social media technologies, and more in particular

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Facebook, Twitter, and LinkedIn, to present their success stories and to share the events and activities of the larger entrepreneurial ecosystem they belong to. In addition, incubators launch advertising campaign with the goal of attracting potential applicants. Besides the wider creation of awareness and reputation, in this stage, BIs also take advantage of cloud computing technologies during the application process, analytics technologies to track and understand potential incubatees’ behaviour and online management systems to better understand the entire application process. To support new ventures in the core of their business activities, BIs use SMAC technologies to help them develop and implement their ideas. More in particular, considering the offer and role of the third-generation incubators (as specified in Section Birth and Evolution of Business Incubators), social media technologies are used to encourage synergy among tenants and resource sharing, to connect incubatees with mentors, and to guarantee a continuous and reliable stream of information to facilitate and promote access to opportunities. More in particular, incubators use cloud computing to store information, monitor new ventures workflows, and help them pass the product development stage. In addition to helping incubatees develop their new ventures, incubators also track tenants’ progress and evolution to understand their own performance against the set success indicators. Considering that third-generation incubators offer resources not necessarily owned, often outside their value chain such us networking, they leverage SMAC technologies to connect incubatees with the surrounding entrepreneurial ecosystems. Thus, social media are used not only to facilitate communication among incubated start-ups but also to connect them with external networks and more in particular with investors, mentors, industry partners, alumni, and the broader community.

Digital Transformation: The Rise of Digital Incubators The emergence of a digital society and the problems and risks associated with it are raising new challenges as regards to how to reshape the actors of entrepreneurial ecosystems in order to respond to the criticism of the exponential technological innovation. Entrepreneurial ecosystems are dynamic, local, social, business, and institutional processes to cultivate and support new venture creation and growth (Shrader & Siegel, 2007). An entrepreneurial ecosystem can be characterized by three elements: (1) it is geographically defined, (2) it involves many different actors (institutions, companies, individuals, teams, etc.), and (3) it is open to new actors that want to contribute to further enhance the overall scenario (Audretsch, 2015). Key actors of these entrepreneurial ecosystems that are facing a digitally evolved society and market are the BIs, which are required to change and adapt to integrate the technological transformation with the human side of the new venture creation process.

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As the economy transitions from labour-based to knowledge-based, the challenges and characteristics of start-ups change, and their need of physical presence is reducing and being replaced by virtual presence. Digital technologies have not only helped incubators improve the processes of incubatees attraction and selection, business support, and access to network and finance (see Section SMAC Technologies and Incubation Processes), but they have also allowed BIs to overcome their geographical coverage and expand their support services to include new digital services, giving rise to the virtual business incubators (VBIs). In comparison with traditional incubators, virtual incubators offer no physical workspace and support. Instead, they focus on supporting their start-ups over the internet by offering online access to an ecosystem of entrepreneurs, investors, and advisors (Zedtwitz, 2003). Due to the absence of geographical constraints, VBIs are able to better serve their incubatees in terms of networking, as they have an ampler poll (as compared to traditional incubators) to match supply and demand of management and technical talent. There are two main functions of virtual incubators: online matchmaking and service aggregation. The online matchmaker offers a platform to find conferences and seminars, learning groups and mentorship. Service aggregation is based on access to professional services such as accounting, finance, legal, marketing, and general business support (Zedtwitz, 2003). While virtual incubators are still getting defined and searching for their own identity, they have a potential of disrupting the traditional business incubation model.

Case Study: The Invention to Innovation Centre The Invention to Innovation Center (I2C) is part of the Office for the Vice President for Research and Economic Development (OVPR) at UAH and serves as a regional initiative that fosters, promotes, and accelerates the commercialization of technology-based ventures through incubation, co-working, mentorship, funding, and strategic support. I2C focuses on the powerful collaboration of resources aimed at accelerating entrepreneurship through expertise, training, and mentorship to the regional workforce, entrepreneurs, companies, and local communities. Furthermore, I2C serves as the focal point for incubation, education, and support for entrepreneurs across the 15-county region in North Alabama and South-Central Tennessee including Blount, Colbert, Cullman, DeKalb, Etowah, Franklin, Giles, Jackson, Lauderdale, Lawrence, Limestone, Lincoln, Marshall, Madison, and Morgan counties. I2C’s activities and programming elements conducted by/for the entrepreneurial communities are to encourage sharing, build cross-sector connections, help achieve innovation, and attract like-minded members/participants to contribute, collaborate, and thrive.

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I2C aims to support and stimulate co-creation and open innovation with a focus on tech start-ups that consist of one or few persons. These small teams need a shared working environment to save office costs, and they have a strong desire for knowledge-sharing and networking. The I2C’s physical footprint on UAH’s campus consists of a state-of-the-art 45,000 sq. ft. facility that combines three interconnected elements: shared workspace, co-working community, and collaborative co-creation and embodies the ideal working environment – one that fosters inspiration, teamwork, and fun. The I2C environment is developed for adaptable space design and management with a keen focus on style, flow, and flexibility, transforming it into an “urban hotspot” conducive to ideation. I2C offers affordable and flexible occupancy agreements for co-working and incubation. The facility opened its doors in mid-2019. Since its inception, I2C has incubated over 45 technology start-ups spanning a wide variety including robotics, cyber security, government tech, fintech, edtech, AI/ML, enterprise software, apps, B2B, and B2C platforms. The companies at I2C have raised over $20M in venture funding. In addition to incubation spaces, I2C has launched key initiatives including internships, pitch competitions, boot camps, workshops, educational content, podcasts, and community platforms, and executed 100+ networking events to support innovation and entrepreneurship in the region. The centre is supported by several federal and state agencies including the Economic Development Authority (EDA), the State of Alabama, the Tennessee Valley Authority (TVA), and the Huntsville Chamber of Commerce. Additionally, I2C has strategic partnerships with Google, Amazon, IBM, and HubSpot, which offer low to no-cost technology to I2C start-ups. As of December 2022, the centre’s overall economic impact exceeds $15M in the North Alabama region.

I2C’s Digital Adoption Strategy Digital inclusivity is at the forefront of I2C’s operational strategy, specifically the enhanced adoption and use of SMAC technologies to maintain and accelerate engagement with its entrepreneurial innovation ecosystem. I2C’s digital adoption strategy (DAS) focuses on the following activities: incubatee search and selection, strategic support, and community building. I2C utilizes SMAC technologies extensively to facilitate ideation, collaboration, and partnership activation. Since the COVID-19 pandemic, I2C has adopted an open-ended digital innovation landscape, where value creation and knowledge sharing have led to better connectivity and entrepreneurial outcomes among the incubatees. I2C’s social media strategy is spread across several platforms including Facebook, Twitter, Instagram, and LinkedIn. The centre’s staff have adopted these digital communication platforms as an effective mechanism to dissipate information and news on activities, events, and opportunities at the centre and drive engagement interest from the community as a whole. Furthermore, I2C is using social media to expand its

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reach globally and to establish pathways to connect and collaborate with entrepreneurs, mentors, strategic partners, investors, and service providers on a larger geographical footprint. The I2C has established a dedicated team to execute its social media strategy. This includes student interns and support from in-house and local digital media companies. In addition to social media platforms, I2C actively uses mobile platforms, specifically Slack and Discord, to efficiently share information on resources, policies, procedures, and general day-to-day announcements with incubators, partners, and stakeholders. Furthermore, these tools have rich collaboration features which allow users to create virtual work-rooms where the I2C community members can share files and build virtual channels that can be dedicated to different topics, teams, and projects. The centre has also deployed a project management tool called Mentornity to manage its mentoring program. Mentornity allows I2C mentors and mentees to interact virtually, capture mentoring session notes, and help establish continuity. This solution can also be integrated with video conferencing tools like Zoom, Microsoft Teams, and Google Meet. With an average user engagement of 85% these tools prove to be an effective means of staying in touch with I2C’s community. With an abundance of activity and flow of data across I2C’s “digital assets”, the deployment of analytics tools helps in the identification of strategic opportunities and engagement trends. The centre uses tools such as Google Analytics, Meta Business Suite, and HubSpot Marketing Dashboard to extract information on user interaction, demographics, page views, shares, subscriptions, email open rates, and many other data points which provides a detailed visualization of key business. With a strong focus on start-up resources, I2C has established partnerships with Amazon Web Services, IBM Cloud, HubSpot, and Google Cloud. These companies provide cloud credits, technology, and solutions at heavily discounted rates to help I2C start-ups scale and get to market. It also allows start-ups to plug into their respective ecosystems with technical training and support opportunities and access to thousands of global VCs, accelerators, incubators, and entrepreneurial organizations to help accelerate their business models. I2C teams also heavily utilize cloud services for their day-to -day operations by utilizing tools like Canva and Google Apps Suite (Drive, Sheets, Forms, Slides, and Docs) which allows for seamless data transfer, sharing, tracking, and collaboration across a variety of projects. In summary, I2C’s DAS has been critical to its success. The deployment of SMAC technologies across all business functions has allowed it to be operationally efficient, grow its entrepreneurial footprint, stay connected with its community, elevate programming standards, and accelerate deal flow. Additionally, the widespread adoption of DAS has resulted in better communication and connectivity with its community.

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Meister: An I2C’s Incubatee Meister started as an idea to help start-ups bring interesting concepts to fruition in Lebanon and the MENA region. With hyperinflation and economic recession, the opportunity for growth among entrepreneurs in Lebanon has nearly collapsed. The country is booming with bright minds but little funds or guidance to succeed. In helping these small businesses, we decided to bring the same concept to Huntsville, Alabama, the new hub of ideas, and start-ups in the Southeast. At Meister, we are a passionate team with over 50 years of combined background experience in design, UX/UI, marketing, PR, engineering, finance, business, and logistics. Our team consists of web developers, designers, content creators, and more to help business owners implement their mission and achieve their goals. The founders, Roni Noueihed, Sami Hadir, and Eddy Akl have lived in multiple countries and founded multiple businesses in marketing and logistics so they come with diverse backgrounds in understanding markets, people, and how the two interact. Meister’s mission is to provide the optimal marketing resources to all types of businesses and individuals. Meister’s resources are divided into four groups: Meister Media, Meister Decentralized, Meister Courses, and Meister Events. Under Meister Media, all services under the umbrella of marketing and digital marketing are covered. These services include website and app development, search engine optimization, content and media creation, advertisements, business strategy consultancy, branding, product and service design, targeting and positioning, and market research. Under Meister Decentralized, our dedicated team of blockchain developers helps businesses optimize their internal functions and identify pain points that can be solved using the most advanced blockchain technologies. Under Meister Courses and Meister Events, we plan to create two online platforms to help educate and connect today’s top talents in the tech and entrepreneurial industries.

Meister and the Digital World To be a leading marketing resource company, it is essential to have a strong understanding of digital and technology. We utilize these areas as part of our everyday operations. Our operations are being conducted at a global level, meaning that digital communication is essential to our success. We have teams situated in three different countries to help accommodate the clients’ needs and help finalize their projects. We use many digital tools to facilitate the process of digital communications. Some of those tools include WhatsApp, Zoom, Google Meet, ClickUp, and Slack. Also, many of the mentioned tools are used to communicate with leads and existing clients.

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In addition to communication, we use digital tools to track the progress of tasks and projects and to have control on the work being conducted by our overseas teams. For example, we use ClickUp as a digital tool to track the progress of tasks and the time spent on each task’s completion. Reporting and analysis is another benefit that we obtain from being digital and using digital tools. We are always conducting and receiving reports that give us insights and important information on our internal team’s performance and on how Meister is financially and operationally performing. At Meister, we conduct our finances digitally through different accounting platforms and through Excel; to stay on the safe side. Moreover, our proposals are made digitally and sent electronically to our prospect clients. Social media is another digital tool that contains lots of social platforms. At Meister, we are present on Instagram, Facebook, LinkedIn, and TikTok. We think that social media is on the most powerful digital tools that can spread awareness and convert clients. Our strategy on social media platforms revolves around giving value to our audience. We do that by constantly posting content about marketing tips, news, design advice, and many more. We are trying to build a digital presence and a digital community of followers who can benefit from our content and apply to their businesses or ideas. Meister’s aim behind the usage of the digital world is to spread awareness about the existence of our business, and how we are offering global resources to fill out the marketing gaps that businesses face. On the other hand, we aim to use digital to place advertisements for our services and for our clients. At Meister we believe that the return on investment from digital advertisements is way higher than traditional advertising and marketing. A very high percentage of the world has access to the internet nowadays and with proper targeting, the right audience for a business can be targeted and in many cases converted by being digitally active and engaging. At Meister we offer Meister Decentralized, a branch that is dedicated to researching and applying the right blockchain technology into the right business needs. At Meister Decentralized, we develop and deploy various solutions on the blockchain to help businesses leverage blockchain to optimize, advance, and scale their processes, products, and services.

Meister and the UAH Invention to Innovation Centre (I2C) Upon starting our business in the Huntsville area, we decided to take part in a tech incubator known as the UAH I2C. The main reason we chose this incubator is because it provides the necessary tech and digital tools and networks that play a role in the scalability and growth of a start-up. I2C has a great facility that is technologically up to date. The facility is closed only to tenants and internally all the equipment and rooms have the needed technology to conduct seminars, meetings, online meetings, and events. We

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have conducted numerous overseas digital meetings in what is called a “zoom room” at the I2C. The zoom room contains high-tech devices that connect to our devices to make sure the online meetings run smoothly with no interruptions. Our office space contains high-speed internet which is essential for our work and has eco-friendly lighting systems that shuts off whenever no one is at the office. In addition to providing technological rooms and great office spaces, the I2C provides its tenants with access to a huge network of tech companies and mentors. So far, Meister’s main benefit from the I2C revolved around the network and connections that the team have met. The I2C are always sponsoring and hosting tech events with the biggest companies in the USA such as SAIC, Accenture, and more. Most of the time tenants can access those events. Meister has worked with several other tech tenants from the I2C. Also, Meister had received advice and guidance from the director of the I2C himself. His guidance was backed by a tech digital background. Finally, I cannot imagine how hard it would be to conduct our day-to-day tasks and projects without having all the digital tools available and the technology behind those tools. They are the base for our business that makes all our operations convenient and productive. Having digital tools and being part of an incubator such as the I2C are one of the main reasons for the success of Meister. They both contributed in lowering our costs and definitely increasing our revenues through the services utilized and provided.

References Aldrich, H., & Auster, E. R. (1986). Even dwarfs started small: Liabilities of age and size and their strategic implications. In L. L., Cummings & B. M., Staw Eds., Research in Organizational Behaviour (pp. 165–198). Greenwich, CT: JAI Press. Aernoudt, R. (2004). Incubators: Tool for entrepreneurship? Small Business Economics, 23(2), 127–135. Audretsch, D. B. (2015). Everything in Its Place: Entrepreneurship and the Strategic Management of Cities, States and Regions. New York: Oxford University Press. Boschetti, C., Grandi, A., & Grimaldi, R. (2011). Risorse, competenze e incubatori di impresa. Sinergie Rivista di studi e ricerche, 61–62. 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. Chan, Y. E., Krishnamurthy, R., & Sadreddin, A. (2022). Digitally-enabled university incubation processes. Technovation, 118, 102560. Iscaro, V., Castaldi, L., Sepe, E., & Turi, C. (2017). ExperimentaLab: A tool for the entrepreneurial university. World Review of Entrepreneurship, Management and Sustainable Development, 13(5–6), 684–706. Iscaro, V., Castaldi, L., & Buccino, G. (2021). Networked business incubators: A systematic literature review. Global Business and Economics Review, 25(3–4), 331–354. Nambisan, S. (2017). Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. Entrepreneurship Theory and Practice, 41(6), 1029–1055.

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Ross, J. (2014). Do You Have a Great Digital Business Strategy? Center for Information Systems Research – MIT Sloan School of Management. Singh, J. V., Tucker, D. J., & House, R. J. (1986). Organizational legitimacy and the liability of newness. Administrative science quarterly, 171–193. Shrader, R., & Siegel, D. S. (2007). Assessing the relationship between human capital and firm performance: Evidence from technology–based new ventures. Entrepreneurship Theory and Practice, Vol. 31(6), 893–908. Center for Information Systems Research – MIT Sloan School of Management. Srinivasan, A., & Venkatraman, N. (2018). Entrepreneurship in digital platforms: A network‐centric view. Strategic Entrepreneurship Journal, 12(1), 54–71. Stinchcombe, A. L. (1965). Social structure and organizations. In Handbook of Organizations. Reprinted from J. G. March Ed., Handbook of organizations. Zedtwitz, M. V. (2003). Classification and management of incubators: Aligning strategic objectives and competitive scope for new business facilitation. International Journal of Entrepreneurship and Innovation Management, 3(1–2), 176–196.

Surabhi Singh, Urvashi Makkar, Djamchid Assadi

3 Digital Sustainable Entrepreneurship Business Model and Its Contribution to Sustainable Development Goals Abstract: In the midst of turbulent times of social and environmental challenges, the firms are obliged to reduce their negative environmental impact by implementing digital sustainable entrepreneurship model innovation. The chapter takes an entrepreneurship and digital perspective on sustainable business model (SBM) innovation and combines literature of business models and experimental models. This also employs the qualitative method and analyse the views of different digital entrepreneurs from sustainability perspectives and their contribution to sustainable development goals. The findings have theoretical implications for the intersection of sustainability and lean approaches in innovation research as well as implications for practitioners by providing a comprehensive framework to support SBM innovation. The current study proposes to present a business model perspective on digital sustainable entrepreneurship that hugely contributes to sustainable development goals. No study in the past has so far provided the contribution of digital sustainable entrepreneurship on sustainable development goals. Keywords: Sustainable, Innovation, Business, Digital, Technology

Introduction The businesses with the digital sustainable entrepreneurship model are gaining immense popularity in these days. The businesses survive on the digital models and with the sustainable perspectives. There have been previous studies that emphasise on digital sustainable entrepreneurship. The digital sustainability can be defined as the organizational activities that aim to address sustainable development goals through the creative use of digital technologies. Sustainability and digitalization are two omnipresent discourses guiding contemporary societal, political, and scientific debates (Dwivedi et al., 2022; Nishant et al., 2020; Pan et al., 2022). The development of business model can be developed using IOT and digital platforms (Yousaf et al., 2021). Digital technologies enable novel configurations of SBM components: a blended value proposition, integrative value creation, and multidimensional value capture Surabhi Singh, GLBIMR, India Urvashi Makkar, IMS Ghaziabad, India Djamchid Assadi, Burgundy School Business, France https://doi.org/10.1515/9783110790313-004

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(Gregori & Holzmann, 2020). Organizations displaying a high orientation towards optimization, customer interaction, and utilization of digital technologies are more susceptible to achieve sustainable digital innovation and digital transformation (Bican & Brem, 2020). Some recent works have demonstrated sustainability when the digital transformation takes place in the organization frame (Ordieres et al., 2020). Recent research has adopted the notion that digital technologies can support tackling the challenges sustainable entrepreneurs face (George et al., 2020; Parida & Wincent, 2019). Sustainable entrepreneurs face severe challenges as their businesses need to merge environmental, social, and commercial logics, which often diverge concerning their values, practices, and objectives (Laasch, 2019). Digital technologies offer possibilities for new practices that provide entrepreneurial opportunities and enable novel business models (Tauscher and Laudien 2018). Pioneers in sustainability have made the concern for environmental and social issues a feature of their products and services, thereby transforming this challenge into a sustainable competitive advantage (Eikelenboom & de Jong, 2019). Achieving resource optimization for sustainable businesses can be reached using digital technologies, representing sustainable digital innovations in digital platforms and environments. Nambisan (2016) has shown that digital technologies, in conjunction with an essential characteristic of digital media, contribute to the evolving emergence and evolution of entrepreneurial opportunities and digital innovation. Embedded within the firm’s overall business model, the different digital terms and innovations thrive to eventually master the digital transformation sustainably (Schalmo et al., 2017). If the firm has a digital orientation, it will support transforming its traditional business activities into the digitalized ones. Digital technologies can substantially contribute to sustainable development goals (Seele & Lock, 2017). Sustainable offerings often lack financial value for the customer because sustainable products and services are associated with higher costs of value creation than their less sustainable counterparts (Davies & Chambers, 2018). IT has had a significant role in spreading novel advancements in Africa, although it also possesses the capability to marginalize specific segments of the population (Howell et al., 2018). Le Bas (2016) has proved that the innovation can be more used into the business models based on services because they combine product innovation with service innovation. According to Rogers’s theory, the capability of innovation adoption affects the entrepreneurial decision. The researches on the dynamic role of sustainable entrepreneurship processes business model are still unexplored, and the social end ecological values are essential as it can only upgrade mass market players (Schaltegger et al, 2016).

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Theoretical Background Based on the previous arguments (George et al., 2021; Parida & Wincent, 2019), this chapter contributes to the literature by leveraging business models in combination with other perspectives as a productive approach to advance the theoretical development of the link between digitalization, sustainability, and entrepreneurship (Dwivedi et al., 2022, George et al., 2021, Gregori & Holzmann, 2020, Nishant et al., 2020). Sustainable ventures benefit from communities because they actively drive change through the active participation of their members (Ryu & Kim, 2018). The discussions about the terminology concerning business models remain a growing body of literature postulates that they are composed of value propositions, value creation processes, and value capturing mechanisms (Bocken et al., 2014; Foss & Saebi, 2017; Holzmann et al., 2017). Value proposition is considered as the core component of every business model and describes the value a potential customer receives with the company’s offer and the promise of a distinct value (Osterwalder & Pigneur, 2010; Teece, 2010). The adoption of innovation of digital entrepreneurship models depend mostly on value proposition and value creation mechanisms for enhancing the aspect of sustainability. The value creation architecture is dedicated to the question of how the company is to create the value in the form of products or services. This component is composed of resources as well as key activities needed to realize the product in the form of market offering (Osterwalder et al. 2005). The customer interface determines how the services are communicated and distributed and includes an assessment of the target groups and the elaboration of distribution and communication channels (Osterwalder et al., 2005; Osterwalder & Pigneur, 2010). Digital sustainable entrepreneurship is the broad area that can immensely contribute to sustainable development goals. Entrepreneurship with sustainability shows the business model perspective, and the previous studies have extensive gaps in the given area. (Schaltegger et al, 2016) formulated a theoretical framework aimed at examining the coevolutionary progression of business models for both sustainable niche pioneers and traditional mass market entities. From the literature review, three factors are derived for digital entrepreneurship model namely value proposition, value creation, and innovation, thereby forming the basis of framework of digital sustainable entrepreneurship model (Figure 1).

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Value Prepositions

Value Creation

Innovation

Digital Development Entrepreneurship

Sustainable Development Goals

Framework of Digital Sustainable Entrepreneurship

Figure 1: Framework of digital sustainable entrepreneurship. Source: Bocken et al. (2014), Foss and Saebi (2017), and Holzmann et al. (2017).

Method The study has used qualitative research and collected the data by interviews of 10 digital entrepreneurs who have been running sustainable digital business models for last 10 years and is engaged in improving their business The data for the same is given in Table 2. The open-ended questions were asked from the entrepreneurs of 10 digital organizations based on purposive sampling, namely online companies in retail, consumer goods, industrial goods, automobiles, financial services, and consulting. The goal of data collection from practice was to provide research alignment between practice and theory. The literature works by previous researchers were examined on the theory of dynamic capabilities. In the interviews, the data collection was based on collection from digital businesses. Our interview with the academicians was usually 1-h long and was conducted via video conferencing. The literature was used, feedback from the academics to form the interview questions that are present in Table 1. Finally, to ensure that the findings from the current literature reflected practices and to increase the generalizability of the paper’s suggestion, 10 entrepreneurs were interviewed between 15 September 2021 and 15 November 2021 (details of industries are available in Table 2). The interview with each entrepreneur was conducted through videoconferencing and continued for half an hour. The further analysis of the data was done by using NVivo.

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Analysis and Discussions The opinions of different entrepreneurs of digital world have provided immense insights. The sustainability in digital platforms is attributed by value preposition, value creation, and innovation. Table 1: Interview questions. .

How has digital platforms contributed to sustainable growth in your organization?

.

What are the sustainable models you have adopted in your organization?

.

What digital entrepreneurship models have made a significant contribution to promoting sustainable development?

.

Is digital entrepreneurship contributing to SDGs of UN?

Table 2: Profile of digital entrepreneurs. Experience (in years) Industry/academy

Factors for their sustainable business

              

Value creation Value creation Value creation Value preposition, innovation Value preposition Value creation, innovation Innovation Value preposition Innovation Value preposition Value creation Value creation, innovation Value creation, innovation Value creation Value preposition, innovation

Medical devices Consumer durable Consumer goods Consulting Online retail Food ingredients Automobiles Financial services Engineering/logistics Fashion goods Pharma Hardware/software Industrial manufacturer Consumer durable Consulting

Source: Data collected by authors.

The customer interface leads to value proposition and results in value creation, and then the business model with financial viability is achieved. The three pillars of sustainable marketing-people, planet, and profit help in providing the sustenance of digital businesses. The digital business models use technologies for improving the different aspects in organization. The use of IOT, artificial intelligence, and augmented reality attributes to cost saving in its operations and serves to be useful for people and society. Digital platforms offer new market opportunities and allow the idea of the sharing economy to be realized, thus moving away from “owning” to “using”, which, as a consequence, will lead to reduction in consumption and a reduction in the negative

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impact on the environment. A SBM describes, analyses, manages, and communicates (i) a company’s sustainable value proposition to all its stakeholders; (ii) how it creates and delivers this value; and (iii) how it captures economic value while maintaining or regenerating natural, social, and economic capital. The different digital business models which are adopted by most of the entrepreneurs for sustainability are either economic, social, or environmental. An SBM provides companies with more than an improved external image. It also saves costs due to lower material costs and resource consumption. Repairing instead of creating something lowers energy consumption, but also sales revenues – at least at first glance. This is why evaluations of how an SBM can be implemented in a financially feasible manner must be performed at an early stage. Besides the right technology, companies can also use the approach of the product service system (PSS). It shifts the business focus from the development and sale of physical products to the provision of an entire system consisting of products and services. After all, they work together to meet specific customer requirements. Anyone who has already placed products successfully in the market can offer complementary services by adding digital services such as an app or a platform. The companies like BMW and Daimler Chrysler offer a car sharing service through digital platform – Share Now platform. The entrepreneurs also use the following options for sustainability in digital technologies: – Maximize the use of materials and energy efficiency – Use renewable resources and natural processes – Fewer product sales, more usage-based sales – Incentives to save (lower consumption of products) – Partnership with non-profit organizations and projects – Increase efficiency through extensive scaling Figure 2 aptly describes about the importance of digital, sustainability in products in businesses. The feedbacks received from businesses has components like services, economic and consumption. This indicates that for developing Digital Sustainable Entrepreneurship model, the economic product and services are important. The answers often suggest sustainable PSSs that are based on high scaling and products as a service. For example, many devices and services can be leased or used jointly. Examples range from cars and electric scooters to residential units and offices and Cloud-based mail and storage services. The companies from industries like Uber, Amazon, Microsoft 365, and AWS show that such services are sustainable and also sell extremely well. Many software and hardware forms sell their products in the form of SAAS, IAAS, and PAAS as this is also part of SBMs of digital businesses. The sustainable digital entrepreneurs are self-sustainable. Three popular business models of digital entrepreneurship are Cloud-based, Hybrid model, and Data-driven model. The prime benefit of

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environment consequence examples external energy consisting communicates analyses cloud creation delivers attribute market answers already entire different app businessess achieved glance amazon focus use model

customer

artificial social captures aspects extremely chrysler helps economy environmental implemented

allow

consumption

365

system feasible

service

companies

people

offer reduction aws

based also

value services

approach

devices

digital

costs

product

products

business

platform

models

sustainable economic

image example idea improving dalmler electric financially creating either high besides creates evaluations bmw adopted away car anyone sharing like adding cars

financial

early

cost proposition capital due

first augmented complementary describes company entrepreneurs impact development improved

Figure 2: Word cloud of responses. Source: Developed by authors.

digital entrepreneurship model is that it can work with others to exchange value and create a network. Thereby it is sustainable and contributes vastly to SDGs of UN. In fact most of the experts opined that innovation must be the key to digital sustainable businesses (Refer to Figure 3).

Implications Digital sustainable entrepreneurship is the future trend that will be visible in the market. The traditional business is re-modelled as digital business and the SBM will definitely replace the commercial business model. The academia may take the study further to develop the framework for the digital businesses. The practitioners may take the insights of the survey to strengthen their weak areas.

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Value Proposition

Value Creation

Customer Interface

Economy

Environmental

Social

Sustainable Digital Model

Innovation

Figure 3: Framework on digital sustainable entrepreneurship. Source: Created by author.

Limitations and Future Research The limitations of the study were restricted in terms of data size. The further studies can be taken forward to explore the best practices of digital SBMs. The researches can be initiated for identifying the relationship between factors affecting the digital sustainable entrepreneurship models. The contribution of sustainable model of digital entrepreneurship on each SDG can be studied.

Conclusion The digital sustainable entrepreneurship displays the best models as per the study and it contributes to the sustainable development goals (SDGs) of UN which includes 17 points, and the chapter discussed the perspectives of business models that is useful for all the 17 goals of SDG. The businesses which use digital technologies to enhance the sustainability of their business model are truly the icons in the world market. Such companies function for the development of society, economy, and nature. The

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digital sustainable businesses will emerge as the role model for many companies to imitate. The best practices of such businesses will lead to the inclusive and exclusive development of world economy.

References Bican, P. M., & Brem, A. (2020). Digital business model, digital transformation, digital entrepreneurship: Is there a sustainable “digital”?. Sustainability, 12, 5239. Bocken, N., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56. https://doi.org/ 10.1016/j.jclepro.2013.11039. Davies, I. A., & Chambers, L. (2018). Integrating hybridity and business model theory in sustainable entrepreneurship. Journal of Cleaner Production, 177, 378e386. https://doi.org/10.1016/j.jclepro.2017. 12.196. Dwivedi, Y. K., Hughes, L., Kar, A. K., Baabdullah, A. M., Grover, P., Abbas, R., & Wade, M. (2022). Climate change and COP26: Are digital technologies and information management part of the problem or the solution? An editorial reflection and call to action. International Journal of Information Management, 63, Article 102456, http://10.1016/j.ijinfomgt.2021.102456. Eikelenboom, M., & de Jong, G. (2019). The impact of dynamic capabilities on the sustainability performance of SMEs. Journal of Cleaner Production, 235, 1360–1370. Foss, N. J., & Saebi, T. (2017). Fifteen years of research on business model innovation. Journal of Management, 43, 200–227. https://doi.org/10.1177/0149206316675927. George, G., Merrill, R., & Schillebeeckx, S. (2021). Digital sustainability and entrepreneurship: How digital innovations are helping tackle climate change and sustainable development. Entrepreneurship Theory and Practice, 104225871989942. 10.1177/1042258719899425. George et al 2021 vol 45, N. 5 pp. 999–1027 Gregori, P., & Holzmann, P. (2020). Digital sustainable entrepreneurship: A business model perspective on embedding digital technologies for social and environmental value creation. Journal of Cleaner Production, 272, 122817. 10.1016/j.jclepro.2020.122817. Holzmann, P., Breitenecker, R. J., Soomro, A. A., & Schwarz, E. J. (2017). User entrepreneur business models in 3D printing. Journal of Manufacturing Technology Management, 28, 75–94. https://doi.org/10.1108/ JMTM-12-2015-0115. Howell, R., van Beers, C., & Doorn, N. (2018). Value capture and value creation: The role of information technology in business models for frugal innovations in Africa. Technological Forecasting and Social Change, 131, 227–239. Laasch, O. (2019). An actor-network perspective on business models: How ‘being responsible’ led to incremental but pervasive change. Long-range Planning, 52, 406e426. https://doi.org/10.1016/j. lrp.2018.04.002. Le Bas, C. (2016). Frugal innovation, sustainable innovation, reverse innovation: Why do they look alike? Why are they different?. Journal of Innovation Economics & Management, 21, 9–26. Nambisan, S. (2016). Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. Entrepreneurship Theory and Practice, 41, 1029–1055.

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Nishant, R., Kennedy, M., & Corbett, J. (2020). Artificial intelligence for sustainability: Challenges, opportunities, and a research agenda. International Journal of Information Management, 53, Article 102104. 10.1016/j.ijinfomgt.2020.102104. Ordieres-Meré, J., Prieto Remón, T., & Rubio, J. (2020). Digitalization: An opportunity for contributing to sustainability from knowledge creation. Sustainability, 12, 1460. Osterwalder, A., Pigneur, Y., & Tucci, C. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the Association for Information Systems, 16, 10.17705/1CAIS.01601. Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken: Wiley. Pan, S. L., Carter, L., Tim, Y., & Sandeep, M. S. (2022). Digital sustainability, climate change, and information systems solutions: Opportunities for future research. International Journal of Information Management, 63, Article 102444. 10.1016/j.ijinfomgt.2021.102444. Parida, V., & Wincent, J. (2019). Why and how to compete through sustainability: A review and outline of trends influencing firm and network-level transformation. International Entrepreneurship and Management Journal, 15, 1–19. 10.1007/s11365-019-00558-9. Ryu, S., & Kim, Y. G. (2018). Money is not everything: A typology of crowdfunding project creators. Journal of Strategic Information Systems, 27(4), 350–368. 10.1016/j.jsis.2018.10.004. Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. (2016). Business models for sustainability: A co-evolutionary analysis of sustainable entrepreneurship, innovation, and transformation. Organization & Environment, 29(3), 264–289. Retrieved August 3, 2021, from, https://www.jstor.org/sta ble/26164769. Schallmo, D., Williams, C. A., & Boardman, L. (2017). Digital transformation of business models – best practice, enablers, and roadmap. International Journal of Innovation Management, 21, 1740014. Seele, P., & Lock, I. (2017). The game-changing potential of digitalization for sustain-ability: Possibilities, perils, and pathways. Sustainability Science, 12, 183e185. https://doi.org/10.1007/s11625-017-0426-4. Taeuscher, K., & Laudien, S. M. (2018). Understanding platform business models: A mixed methods study of marketplaces. European Management Journal, 36(3), 319–329. Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Plann, 43, 172–194. https://doi.org/10.1016/j.lrp.2009.07.003. Yousaf, Z., Radulescu, M., Sinisi, C. I., Serbanescu, L., & Păunescu, L. M. (2021). Towards sustainable digital innovation of SMEs from the developing countries in the context of the digital economy and frugal environment. Sustainability, 13(10), 5715. https://doi.org/10.3390/su13105715.

Md. Tamim Mahamud Foisal, Md. Ashraful Alam, Md. Thasinul Abedin

4 Digital Technologies in Entrepreneurship and Shifting of Entrepreneurial Trajectories Abstract: The domain of digital technology has shaped the dimensions of entrepreneurship, including entrepreneurial opportunities, business models of the entrepreneurial firms, and the performance of entrepreneurial firms that opt for the demand of looking for a new window of entrepreneurship usually referred to as digital entrepreneurship. Despite the growing significance of digital entrepreneurship, our knowledge of digital aspects of it remains inadequate. In this backdrop, this chapter looks for how digital technologies affect entrepreneurship as well as the trajectories and changes in those trajectories of newly digitalized entrepreneurial firms. In this respect, this chapter utilizes a theoretical underpinning to explore the fundamental concepts of digital entrepreneurship and how these relate to different aspects of entrepreneurial trajectories specifically the – opportunities, business models, and performance. Keywords: Digital Technology, Digital Entrepreneurship, Entrepreneurial Trajectories, Business Model, Entrepreneurial Opportunities

Introduction As a result of new digital technologies such as mobile computing, cloud computing, social media, 3D printing, and data analytics, the nature of the inherent uncertainties in entrepreneurial processes and outcomes as well as the strategies for dealing with such uncertainties has altered. This has led to numerous inquiries regarding digital entrepreneurship at the intersection of entrepreneurship and digital technologies (Nambisan, 2016). Technology created by humans with non-material and calculated components and algorithmically arranged is known as digital technology (Faulkner & Runde, 2019). These technologies influence entrepreneurial processes, outcomes, and locations and the other way around (Nambisan, 2017; Yoo et al., 2010). As numerous innovations occur at the intersection of digital technology and entrepreneurship, these innovations have opened up previously closed-off entrepreneurial networks, ecosystems, and communities (Bogusz et al., 2019; Bruton et al., 2015), digitalized previously analogue assets and economic goods, creating new entrepreneurial market offerings

Md. Tamim Mahamud Foisal, University of Naples Parthenope and University of Chittagong Md. Ashraful Alam, University of Brescia and University of Chittagong Md. Thasinul Abedin, University of Naples Federico II and University of Chittagong https://doi.org/10.1515/9783110790313-005

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Md. Tamim Mahamud Foisal, Md. Ashraful Alam, Md. Thasinul Abedin

(Porter & Heppelmann, 2014), and sped up the start-up, scaling, and expansion of entrepreneurial endeavours. Digital entrepreneurship is the development of a new economic activity that is either embodied in or enabled by digital technologies. Just a few of the numerous entrepreneurial activities that might generate new economic activity include the creation of entrepreneurial firms, intrapreneurial projects, and social movements (Shepherd et al., 2019). Recent advancements in digital technology, like big data, AI, and 4.0 machines, have completely changed how businesses operate. Digital technology, however, may enhance market orientation through enhanced market knowledge and operational efficiency through process management optimization (Cenamor et al., 2019). Firms nowadays focus on implementing cross-border digital technologies to alter how they create value, interact with, and exchange value with consumers. Fichman et al. (2014) and Nambisan (2013) claimed that digital technologies help to innovate products and services individually. However, when it is merged with entrepreneurship, new problems and challenges emerge as a result of significant entrepreneurial processes. Although digital technologies converge heterogeneous and unconnected knowledge and information to create new products and services, it is not clearly explored how entrepreneurial enterprises manage product and service innovation by a proper utilization (Dougherty & Dunne, 2012). According to numerous growing literatures (Davidsson, 2003, 2015; Gartner, 1989; McMullen & Dimov, 2013; Shane & Venkataraman, 2000), entrepreneurship is a process, through which new economic activities and organizations come into existence. The new trend in entrepreneurship that has been sparked by the adoption of digital technology is known as digital entrepreneurship (Davidson & Vaast, 2010; Lyytinen et al., 2016; Nambisan, 2016). Digital entrepreneurship is expected to play an increasingly important economic and societal role in terms of the source of innovation, job creation, and economic growth (European Commission 2015; Gimmon & Levie, 2010; Grilli & Murtinu, 2014; Leong et al., 2016; Nambisan, 2016). The importance of digital technologies for entrepreneurship is already beginning to be recognized by politicians. For instance, to promote entrepreneurship generally and the use of digital technologies for such efforts in particular within the European Union, the European Commission has launched an initiative called the Entrepreneurship Action Plan (European Commission, 2015). Digital technologies like 3D printing, cloud computing, and electronic development platforms affect different aspects of entrepreneurial processes and results (von Briel et al., 2017; von Briel & Recker, 2016; Yoo et al., 2012). The nature and substance of entrepreneurial processes and outputs are evolving as a result of the rising importance of digital technology in the context of digital entrepreneurship (Lusch & Nambisan, 2015; Nambisan, 2013, 2016; Nambisan et al., 2017). In other words, digital technologies change how contemporary businesses (such as those that develop new goods and services) innovate in terms of processes. Through the integration of diverse sources of knowledge and the emergence of a wide range of digital tools and infrastructures, for example,

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digital technologies can launch entirely new types of innovation in terms of organizational routines and processes that are impossible to exist otherwise (Yoo et al., 2012). They also demonstrated how new sorts of knowledge (such as bioinformatics or genomics) are produced by digital technology that might alter medication discovery procedures and help product developers to deal with challenging innovations more skilfully. The incorporation of digital technologies into entrepreneurship necessitates a focus on outcomes as well as processes, goods, and services (Svahn et al., 2017; Yoo et al., 2010). In this way, digital technologies both embody and facilitate the goods and services created by entrepreneurial enterprises and permit dramatic reconfigurations of those products and services (Henfridsson et al., 2014; Lusch & Nambisan, 2015; Nambisan, 2013, 2016; Yoo et al., 2010). Digital technologies thus open the door to new categories of goods and services and play an increasingly important role in entrepreneurship outcomes. For example, how e-book readers, for instance, replaced a previous physical artefact with a new one with equivalent form factors and enhanced digital capabilities (Yoo et al., 2010). Hence, the role of digital technologies to entrepreneurial processes and outputs in the context of digital entrepreneurship is away from avoidance (Nambisan, 2016; Nambisan et al., 2017). However, this digitization of entrepreneurship presents new issues and challenges at the intersection of digital technologies and entrepreneurship (Nambisan, 2016; von Briel et al., 2017). More specifically, the use of digital technologies has altered the kind of uncertainties that affect entrepreneurial processes and results as well as how to deal with it (Benner & Tushman, 2015). Careful analysis of the unique characteristics of digital technology is required in order to address the difficulties associated with digital entrepreneurship (Nambisan, 2016). In conclusion, digital entrepreneurship can be denoted as more effective in terms of both processes and outcomes (Arend, 2015; Leong et al., 2016). As a result of the development of digital technologies, entrepreneurial processes have become more fluid and porous and entrepreneurial outcomes have increased in malleability, extendibility, and modifiability (Lyytinen et al., 2016; Yoo et al., 2010, 2012). Rising digital entrepreneurial companies seeks to invoke effects to deal with the new nature of uncertainties as entrepreneurship becomes more digitalized (Sarasvathy, 2001). Emerging digital entrepreneurial firms rely on the resources they already have (such as expertise, money, partnerships, and human capital) in order to accomplish that purpose and they use digital technologies to produce constantly evolving goods and/or services while quickly responding to emerging contingencies (Fisher, 2012; Leong et al., 2016; Sarasvathy, 2001). This chapter aims to explain the fundamental relationship between digital technologies and digital entrepreneurship with a focus on the elements of entrepreneurial trajectories (opportunities, business models, and performance), and more specifically, the role of digital technologies in the trajectories and shifts of emerging digital entrepreneurial firms.

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Conceptual Underpinning: Exploring “Digital Technologies and Digital Entrepreneurship” On the verge of new challenges in twenty-first century, there is a call for digital transformation to re-organize the society in the way of contemplating, acting, promoting, and creating new business opportunities (Haefner & Sternberg, 2020). Digitalization, in general, refers to the acceptance or increased use of digital technology by enterprises, governments, and other organizations. Examples of digitalization include edge technology, 3D printing, and cognitive computing and cloud-based apps (PrendesEspinosa et al., 2021). Digital capabilities are new possibilities for action in relation to a particular user or usage environment that can be exploited by actors like entrepreneurs and are created as the distinctive properties of digital technology (Lamba & Jain, 2021). The implementation of digital innovation manifests itself in new market mechanisms, bringing the novel values, practices, and procedures that have an impact on the game’s rules and challenge the logic structures in place (Muafi et al., 2022). Enterprise resource planning programmes and other widely used and adaptable digital components are a few examples in this context (Muafi et al., 2022). Moreover, blockchain technology and market platforms are two examples in this set up as well. The digital capabilities that surround digital platforms and components expand the alternatives and open up new avenues for the creation, delivery, and capture of value among the other things (George et al., 2021). All fundamental novel business models are created with the digital components as a result of the digital transformation in economic activity. Manjon et al. (2022) claimed digital entrepreneurship as the foundation of contemporary technology, innovation, and entrepreneurship in the digital age. Bogachov et al. (2021) argued that digital enterprises constructed on digital technologies generate revenue through electronic communications that needs to be developed and expanded more. To support this claim we can cite the claim of Ngugi and Goosen (2021) and Bican and Brem (2020) that digital technologies affect entrepreneurship. They also claimed that ‘digital technologies are not only a framework for studying entrepreneurship but also function as an active element in entrepreneurship development” (Bican & Brem, 2020). Moreover, digital technologies enhance marketing efforts, particularly communication with customers (current and potential), making it possible to better understand their needs and facilitating the development of new goods and customized solutions (Barnes et al., 2012). Additionally, the development of new distribution channels is made possible by digital technologies which enable their integration into an omni-channel approach (Verhoef et al., 2015). The development of new behaviours, attitudes, and frameworks demonstrates how digital technologies continue to have their advantages while developing a logic that coexists with and influences the interpretations and performance of previous models (Bogachov et al., 2021). Hull et al. (2007) claimed that inheritability, variability,

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availability, connections, interactions, and accessibility are the guiding concepts to explain how digitization takes place. Considering these ideas, this chapter suggests that a digital logic built on these ideas, enabling contemporary advances, might be added to the range of alternative justifications that can be constructed into the business model. If we see from the process perspective, “digital entrepreneurship” is the process of creating value for the digital world through the application of various sociotechnical tools that facilitate the efficient gathering, handling, sharing, and consumption of digital data. This term can be expanded to include particular kinds of endeavours, such as start-up businesses and digital self-employment. Technologies like social networking, open-source hardware and software, crowdsourcing, crowd finance, e-trust, online reputation assessment, 3D printing, digital imaging, and big data have the capacity to drastically lower the barriers to entry for new businesses (Steininger, 2019). The term “digital entrepreneurship” also refers to any creative endeavours as well as the transformation of incumbent firms that provide economic and/or social value by creating and applying novel digital technology. Digital enterprises are characterized by a high intensity of usage of novel digital technologies (particularly social, big data, mobile, and cloud solutions) to improve business operations, develop new business models, hone business intelligence, and connect with customers and stakeholders. They create opportunities for expansion and new jobs in the future. Steininger (2019) highlights that information and communication technology plays four important roles in digital entrepreneurial operations: as a facilitator, simplifying start-up operations; as a mediator for new ventures’ operations; as an outcome of entrepreneurial operations; and as a pervasive enabler of new digital business models. Three distinct but related ways that digital technologies are present in the realm of entrepreneurship are through digital artefacts, digital platforms, and digital infrastructure. In this sense, a digital artefact is a digital component, application, or piece of media material that is a component of a new good (or service) and offers the user a specific feature or value (Ekbia, 2009; Kallinikos et al., 2013). Decoupling information from its corresponding physical form or device has created a number of opportunities for business owners across industries as a result of the gradual integration of such digital artefacts or components into a variety of goods and services (Porter & Heppelmann, 2014). Digital infrastructure is defined as digital technology tools and systems that offer communication, collaboration, and/or computing capabilities to support innovation and entrepreneurship. Examples include cloud computing, data analytics, online communities, social media, 3D printing, and digital maker spaces. The democratization of entrepreneurship or the inclusion of a broader and more varied set of individuals at all stages of the entrepreneurial process, from opportunity exploration through concept testing to venture funding and launching, has been made possible by such digital infrastructures (Aldrich, 2014). For example, crowdsourcing and crowd-funding plat-

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forms enable business owners to communicate with potential customers and financiers to locate different resources (such finances and ideas) on a global scale (Kim & Hann, 2013). Similar to how new enterprises may easily create and test creative concepts involving a larger pool of potential clients through the use of cloud computing, digital maker spaces, and data analytics (Hatch, 2013). Therefore, both in terms of the process and the outcome, digital technologies increasingly play a fundamental role in the entrepreneurial opportunity. Based on Davidsson’s (2015) framework for entrepreneurial potential, in particular, digital platforms and artefacts are a part of the new venture idea (outcome), whereas digital infrastructure is an external enabler (supporting the process). In order to develop new value in the market, new businesses are progressively integrating digitalization and innovation into their business strategies (Bican & Brem, 2020). An organization might create a brand-new digital business model using digital technology, which would boost the company’s ability to create an appropriate value. Businesses’ ability to realign and modify their competences, aims, processes, and business models to quickly changing needs and business conditions is essential to their survival (Vrontis et al., 2022). Scientific and Technological Developments

Global New Opportunities

Technological Entrepreneurial Capability Digital Entrepreneurship

Technological Infrastructure

Inter-agency Cooperation Enviroment

New Market Opportunities

Current Market Opportunities

Figure 1: Inputs and outputs of the digital entrepreneurship ecosystem. Source: Chaston (2017).

The basic behaviours to support the development of high technology-based entrepreneurship in the digital entrepreneurship ecosystem are shown in Figure 1: an increase in human capital, financial capital, and knowledge as a result of the emergence of the appropriate ecosystem, an entrepreneurial process involving the search for brutal opportunities regardless of resource limitations, an increased business development speed, a strategic global perspective, and incentives (Engel & del-Palacio, 2015). Because of the quick and simple information flow transmission provided by the emerging new generation technologies, there is an increase in worldwide entrepreneurial collaboration net-

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works. By creating a technological infrastructure and employing scientific and technological advancements, as a result of collaboration between institutions, digital entrepreneurship has enabled the emergence of new opportunities and markets on a global scale and also encouraged the intensive use of the existing market.

Components of Entrepreneurial Trajectories and Digital Technologies “Digital Technologies” and “Entrepreneurial Opportunities” This section explains how digital technologies help entrepreneurial firms to identify their opportunities. An entrepreneurial opportunity is “a practical, profit-seeking, potential enterprise that introduces a novel good or service to the market, enhances a good or service already in the market, or copies a good or service already in the market in a less-than-saturated market” (Singh, 2001). New business prospects have been found and used in marketplaces as a result of the entrepreneurs’ efforts to use digitization to satisfy the requirements of new consumers (McDaniel, 2005). When there is a clear consumer need and the capacity to provide the desired commodity or service, an entrepreneurial opportunity is created. Before materializing a concept into an opportunity in the world of entrepreneurship, certain conditions must be met. Starting with adopting the correct mindset, the entrepreneurs must deepen their understanding of consumer needs and desires and conduct research to determine whether the idea has the potential to become a successful new opportunity. Entrepreneurs frequently see opportunities in the markets they are operating in. They achieve this by monitoring developments in the economy, society, or technology. Opportunities require cognitive recognition. It depends on people being able to recognize patterns and connect the dots. Every new venture is built on the commercial opportunity that the entrepreneurs chase, such as prospects made possible by digital technologies (Kraus et al., 2019). According to Ardichvili et al. (2003), finding the right opportunities for entrepreneurs is one of the crucial steps that leads to success and acts as the starting point for entrepreneurial activity. However, it is necessary to identify or generate entrepreneurial opportunities before a business model or a business plan can be formed. According to Kirzner (1973), opportunities are waiting to be discovered and utilized within the context of opportunity discovery. These opportunities exist independently from a person’s activity. According to its creator (Schumpeter, 1934), opportunities in the framework of opportunity creation do not yet exist. Instead, they are developed through an iterative process of acting and reacting by an entrepreneur. The discovery and development of new ideas, as well as the networking of existing resources with existing and new possibilities, are the fundamental building blocks from which new and future business models are created (Ardichvili

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et al., 2003), particularly in the context of rapidly spreading digitalization. In the context of opportunity creation, which is characterized by high levels of uncertainty, examples such as Airbnb or Facebook shown how digital businesses may transform entire industries? In particular, the context of opportunity creation, Ojala (2016) looked into the problem of businesses creating their business models under very uncertain circumstances. Entrepreneurial opportunities can generally be found based on technological innovation (Drucker, 1985; Schumpeter, 1934), in which case market demand is unknown and the supply of technology is known (Sarasvathy et al., 2003), or they can be found because different market participants have unequal access to knowledge about the market conditions (Kirzner, 1973, 1997; Shane, 2000, 2003), in which the disparity in knowledge exists (Shane, 2003). Schumpeter’s approach relies on the creative entrepreneurs’ will to produce opportunities and possibilities rather than expecting that they will naturally arise (Buenstorf, 2007). According to Austrian economics (Kirzner, 1973, 1997; von Hayek, 1945), having information about a potential opportunity helps people and firms locate it. They recognize opportunities related to the information they currently have. Shane (2000) demonstrates that the three primary elements of prior knowledge that are significant to the process of entrepreneurial discovery in a high technology context are prior market information, prior knowledge of ways to serve markets, and prior comprehension of consumer problems. Existing market information is required when identifying an entrepreneurial opportunity related to a particular technology. An individual’s prior understanding of how particular markets operate may be complemented by new information about technology. However, there are three approaches to identify business opportunities – the Austrian approach, the neoclassical approach, and the contemporary approach (Matricano, 2020). According to the neoclassical perspective, opportunities are created by changes in technology, politics, regulations, social, and demographic trends (Schumpeter, 1934). In this regard, Drucker (1985), who attempted to reveal the likely sources of entrepreneurial chances, made an extremely significant contribution, strengthening the Austrian strategy. According to him, entrepreneurial opportunities are created by the unanticipated, incongruities, process needs, industry market and structures, demographic shifts, changes in public perception, new technology, and scientific discoveries. As a result, the sources of entrepreneurial potential in the current approach are different from those in the neoclassical and Austrian systems. According to the categorization suggested by Companys and McMullen (2007), the potential sources can be broken down into two groups: producers (such as robust design and cultural communities) and consumers (e.g. fads and user practices). Technologies are essential to identifying entrepreneurial opportunities in all of these strategies. The following figure summarizes the whole process:

4 Digital Technologies in Entrepreneurship and Shifting of Entrepreneurial Trajectories

Digital Technologies

Digital Entrepreneurship

Specific Features Outcomes – – – –

3D Printing Big Data Cloud Computing Electric Development Platforms

– Discovery and development of new ideas – Networking of existing resources with existing and new possibilities

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Entrepreneurial Opportunities

– Changes in technology – Changes in politics and regulations – Demographic trends – Unexpected – Incongruities – Process needs – Industry and market structure – Scientific discoveries

Figure 2: Digital entrepreneurship and entrepreneurial opportunities. Source: Authors’ own creation.

In Figure 2, it is found that how firms use digital technologies to identify the different sources of entrepreneurial opportunities. By properly recognizing opportunities through technologies, entrepreneurial firms can discover and develop new business ideas as well as create network of existing resources across organization with existing and new possibilities.

“Digital Technologies” and “Business Models” This section explains how digital technologies help entrepreneurial firms to develop their business models. The way a company does business with its clients, partners, and suppliers is determined by its business model, which is a system of interrelated and dependent activities (Amit & Zott, 2012). This perspective takes into account both the activities required to meet these needs, their interdependencies, and the advantages realized for the company (Schallmo, 2013). The foundation of an organization’s value creation, delivery, and capture strategy is based on a business model that it developed (Osterwalder et al., 2010). Business models describe organizations’ value offerings, the accompanying network, cost as well as revenue sources, and other crucial differentiators as a structural template (Zott et al., 2008).

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Entrepreneurs must understand that ignoring digital technologies is very risky and may substantially threaten the survival of the organization because they are crucial as the tools of competition. In fact, modern digital technologies enhance value creation and client interaction, which are the success elements for the entrepreneurial enterprises. When a company uses digital technology to construct a new digital business model that contributes into the creation and appropriation of greater value of the firms, it is termed as “digital transformation” (Verhoef et al., 2021). This transition could have an impact on organizational competencies, operational routines, and business processes (Li et al., 2018). When it comes to digital entrepreneurship, business models can be thought of as improved resource utilization through digital technologies, such as software as a service or mobility-sharing programs, interacting with entities and systems (Li et al., 2012). If improvements to digital technologies result in fundamental changes to how a company is operated and its revenues are made, the business model is said to be digitalized (Veit et al., 2014). These developments are best exemplified by the distinction between place (the world before internet business practices) and space (the digital world). Currently, a variety of businesses are going into different directions towards a digital landscape that is more immaterial, service-based, and focused on the client experience. The value proposition of a digital firm, in Weill and Woerner’s (2013) opinion, revolves around three elements – platform, content, and experience. Digital technology-driven business model innovation (BMI) has transformed a number of industries including the media and hospitality. These changes were mostly brought about by innovative start-ups like Airbnb and Amazon, which later became global powerhouses in their respective industries (Sorri et al., 2019; Zaheer et al., 2019). Therefore, the emergence of new venture concepts and the entrepreneurial process have been significantly influenced by digital technologies, which also present entrepreneurs with a variety of chances and novel business models (Nambisan, 2016; Kraus et al., 2019). The foundation for digital enterprise is created by the new opportunities brought on by digitalization. Making a digital start-up is the act of engaging in digital entrepreneurship (Zaheer et al., 2019). At least one component of a business model is made possible by digital technology in a way that is not only practical but also crucial to firms for growth and development (Klotz et al., 2014). Hull et al. (2007) proposed three levels of digitalization – mild, moderate, and extreme – each with distinct characteristics in order to better understand the characteristics of the business models used by digital entrepreneurs. According to Hull et al. (2007), empirical studies based on these traits should provide insight into the evolution of digital entrepreneurs and the degree of digitization of their business models. Kraus et al. (2019) also ask for more information about business models at the digital level. The proliferation of digital platforms like Alibaba, Amazon, and eBay has altered not only the mechanism of value delivery but also the interaction with customers (Li et al., 2018). According to Taiminen and Karjaluoto (2015), social media are truly thought of as the most significant form of communication and value creation

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inside the business models since they improve and alter consumer value propositions and coordinate creative delivery methods (Berman, 2012). New business models as well as the acquisition of new knowledge and skills are made easier by technology, especially digital technology. It has been demonstrated that digital technology may contribute to the development of features and advantages that include environmental and social advantages (He et al., 2022; Vrontis et al., 2022). Additionally, digital technology fosters community development, co-creation, and broader stakeholder interaction, all of which profit from particular constellations for value generation elements (Bogachov et al., 2021). Utilizing digital technologies that enable value spill-overs, sustainability of socio-environmental benefits, and potential effective synergies, the complex and diverse value can be collected. The findings also highlight potential logical problems inside and within various business model counterparts. Digitalization influences and innovates business models in three different ways – by improving (e.g., reducing costs), changing (e.g., reconfiguring, expanding scope, or creating new scopes), and creating (e.g., attracting new clients or offering new goods or services) (Loebbecke & Picot, 2015; Rachinger et al., 2019). Business model development and innovation can be distinguished according to Arnold et al. (2016). According to their viewpoint, digitization results in a BMI, or the changes made in the business logic for creating and extracting value (Bouwman et al., 2018).

DIGITAL BUSINESS MODELS CUSTOMER EXPECTATATIOS ON DIGITAL BUSINESS MODELS large product variety, high quality at low prices excellent service

instant availability with no transaction time

EVERYTHING

IMMEDIATELY

CONSUMER availability at any locations, across various technologies

EVERYWHERE Figure 3: Digital business models. Source: Dallos (2021).

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In Figure 3, we can observe that the value proposition of digital business models is unique, and investors and entrepreneurs find their growth profiles to be exceptionally appealing. Additionally, it modifies customers’ expectations for value delivery. Customers are simultaneously more than willing to spend money for the experience of having everything available instantly everywhere (Dallos, 2021). To sum up, innovative businesses that use digital business models can gain from having a unique value proposition built around everything-immediate-everywhere products and services, high scalability with low marginal costs, global reach, as well as high growth rates based on digital customer channels like social media.

“Digital Technologies” and “Performance of Entrepreneurial Firms” This section explains how digital technologies enhance the performance of entrepreneurial firms. Entrepreneurial firms are primarily identified by their high degree of newness, which indicates that no other firms previously engaged in the same core activity, and by their high degree of leadership independence, which indicates that there is no interference from other subjects pertaining to a new firm (Sorrentino, 2003). It is clear that entrepreneurial enterprises are not usually small businesses (Davidsson, 2016). Since they are characterized heavily by innovation, entrepreneurial enterprises differ from new businesses that may appear to be new but actually carry out already implemented operations (Decker et al., 2014; Sorrentino, 2003). They must therefore be fresh and imaginative. According to Audretsch (2003), innovation, economic growth (the creation of employment and money), and business expansions are all indicators of an entrepreneurial firm’s success. The performance of entrepreneurial enterprises can be used to reflect the level of innovation of country. Digital technologies have the power to support more fair and sustainable growth through fostering innovation, increasing efficiency, and improving services. It has even the growing relevance in the management and innovation domains as a result of the considerable changes that distinguish firms with their innovative activities. Nowadays firms are becoming more and more reliant on data and technologies developed outside their home country (Boutellier & Wagner, 2002; Dyer et al., 1998), as well as exchanging ideas with partners from other countries and charging licensing fees for the use of technology and intellectual property (Grotnes, 2009; Lind et al., 2012). Businesses can make use of and put digital technologies into practice to manage an innovation process that is even more open. By enhancing operational efficiency, O’Donovan et al. (2015) place special emphasis on the use of big data to create and develop technologies in the innovation processes in the manufacturing business. For example, the Internet of Things (IoT), which connects numerous machines, things, and devices, should be used and implemented in order to help businesses with the

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dynamic generation, analysis, and sharing of tradable data (Atzori et al., 2011; Gubbi et al., 2013; Miorandi et al., 2012; Weber, 2010). Boss et al. (2007) highlighted how firms can use the cloud to create, test, and make their innovations available to the user community. It is widely agreed that technology has a significant impact on how nations, regions, and cities prosper economically. Technology innovation makes it possible for more and better goods and services to be produced more effectively, which is essential for prosperity. Digital technologies, which are causing revolutionary change, are altering economic paradigms. The new technologies have a big impact on trade and employment since they are transforming the markets for products and factors. Since the performance of entrepreneurial firms is measured by their growth, digital technologies help firms to digitize the product market, business models, and future opportunities that collectively affect the growth of the firm. In this context, some effective managerial skills and controls are required. Digital technology helps to ensure those skills and controls that allow business owners to focus on the connection among the organizational needs. For example, big data, the IoT, and artificial intelligence (AI) are mentionable in this regard (Kraus et al., 2019; Nambisan, 2017). Moreover, organizations of all sizes are being transformed by digital technologies (Li et al., 2018). These technologies are altering daily tasks, as well as people’s talents and behaviours (Anim-Yeboah et al., 2020). We can summarize the whole in Figure 4.

Digital Technologies

Digital Entrepreneurship

Performance of Entrepreneurial Firms

Specific Features – – – –

3D Printing Big Data Cloud Computing Electronic Development Platforms

– Encouraging innovation – Creating operational efficiency – Quicker deployment cycles for new products and services – Instant availability

– Economic growth in terms of job and wealth creation – Creation of new ventures Entrepreneurial Processes

Results Figure 4: Digital entrepreneurship and performance of entrepreneurial firms. Source: Authors’ own creation.

In Figure 4, it is observed that digital technologies help firms to perform better. Digital technologies encourage entrepreneurial firms for innovations that create operational efficiency through the quick deployment cycles for new products and services and the

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ultimate outcome is the creation of new ventures that accelerate economic growth in terms of job and wealth creation.

Role of Digital Technologies in Shaping “Entrepreneurial Trajectories” This section primarily focuses on the key element of digital entrepreneurship, namely the impact of digital technology on the development and evolution of new digital entrepreneurial businesses that shape entrepreneurial trajectories (Nambisan, 2016). Due to digitization, the traditional connection between customers and businesses is shifting (Taiminen & Karjaluoto, 2015). In particular, customers experience a rapidly expanding number of touch points throughout their journey, many of which are digitalized, participate in active and simple conversation with businesses and other customers, and have access to a variety of media outlets (Verhoef et al., 2021). In regard to the growth of entrepreneurial activities or the creation of a successful business, academics have demonstrated a particular interest in entrepreneurial trajectories (opportunities, business models, and performance) (Dimov, 2010; Levie & Lichtenstein, 2010; Samuelsson & Davidsson, 2009). A start-up firm’s trajectory is its journey in the future with the goal of developing new products or services (Dosi, 1982; Garud et al., 2010; Henfridsson & Yoo, 2014). Entrepreneurial trajectories can be thought of as a series of acts that result in the formation of new economic activity (such as a digital firm), and they include the examination and usage of entrepreneurial prospects (Davidsson, 2015). During this stage, emerging (digital) entrepreneurial businesses focus their efforts on creating and advancing ideas, which causes them to become more dedicated to a particular trajectory (Bakker & Shepherd, 2017; Sydow et al., 2009; von Briel et al., 2017). If emerging entrepreneurial firms follow this trajectory, they may reassess or affirm the decisions they’ve made so far because they discover and consider new and previously unavailable knowledge (Dimov, 2010). The future survival and success of a firm today heavily depend on the entrepreneurial trajectory (Zhao et al., 2015). Digital technology changes the relationships between people, businesses, and society to produce new paradigms (Vial, 2019). Digital technology has been incorporated into entrepreneurship, and it is anticipated that these technologies will shape the future of growing digital entrepreneurial firms (Nambisan et al., 2017). Lyytinen et al. (2016) took the lead in demonstrating how digital technologies affect organizational innovation and management. In a similar vein, Nambisan (2016) asserts that due to digitization, entrepreneurial trajectories may become flexible and fluid, enabling them to evolve in a nonlinear way. Entrepreneurial acts are said to entail more trial and error because of the more flexible and dynamic avenues that digital technology

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makes possible. Entrepreneurial enterprises must therefore prepare to pursue these riskier and less certain trajectories (Nambisan, 2016). In order to see how entrepreneurial trajectories are affected by the digital technologies, we need to find out the methods and procedures through which digital technologies shape the trajectories and help the development of digital entrepreneurial firms. In this respect, Bhaskar (1998) and Bygstad et al. (2015) put forward a few empirical facts by a number of causal chains. They also mentioned some methods that have been used to explain how innovation in information infrastructure has occurred and how digital infrastructure has changed [also see Henfridsson & Bygstad (2013)]. von Briel et al. (2017) demonstrated how new digital technologies might operate as external enhancer for the formation of new businesses by using mechanism-based reasoning. In order to facilitate new start-up activity in the IT hardware industry, Von Briel et al. (2017) clearly specified six enabling processes (compression, conservation, expansion, substitution, combination, and creation) that digital technologies offer. By employing mechanism-based reasoning, it is possible to determine the relationships between causes (like digital technology) and results (like trajectories) in digital entrepreneurship (Davidsson et al., 2017; von Briel et al., 2017). An innovative, entrepreneurial digital organization can operationalize its trajectories and transitions in a variety of ways. Garud and Rappa (1994) imagined the routes of new technologies emerging in the context of the co-evolution of beliefs, objects, and evaluation methods. In this context, beliefs influence how an entity (in this instance, an emerging digital entrepreneurial firm) perceives the technological, historical, and institutional context in which it is embedded, whereas artefacts serve as a proxy for an innovation’s constituent parts (i.e., entrepreneurial outcomes), and evaluation routines serve as the rules that direct practices that legitimize an innovation (Garud & Rappa, 1994; Henfridsson & Yoo, 2014). By operationalizing trajectory shifts as alterations to at least one of the three constituent parts, Henfridsson and Yoo (2014) give an illustration of this concept. After that, they talk about how institutional entrepreneurs develop and put new innovation paths into practice. Emerging digital entrepreneurial firms are concerned with creating goods and/or services that are embodied in or enabled by digital technologies (Lyytinen et al. 2016, e.g.), so tracing the co-evolution of beliefs, artefacts, and evaluation procedures serves to sketch the trajectories of these businesses. By describing the above design elements, entrepreneurial firms are on a trajectory towards developing a scalable and repeatable business model (Blank, 2013). The business model idea may therefore serve as a sensitizing tool and a way of operationalizing the trajectory and changes of new digital entrepreneurial businesses. More specifically, the business model provides a framework for capturing and displaying the trajectories of emerging digital entrepreneurial businesses and enables them to monitor the evolution of trajectories and shifts thereto over time (Osterwalder & Pigneur, 2010; Wirtz et al., 2016). As a result, it is now possible to pinpoint the ways in which digital technologies affect the development of entrepreneurship.

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Digital Technologies Digital Entrepreneurship

Specific Features – – – –

3D Printing Big Data Cloud Computing Electronic Development Platforms

– – – – –

Exploit Opportunities Value Creation Value Proposition Product Variety Instant availability

Entrepreneurial Trajectories – Entrepreneurial Opportunities – Business Models – Entrepreneurial Outcome/Performance Entrepreneurial Processes

Results Figure 5: Digital technologies and entrepreneurial trajectories relationship.

Figure 5 illustrates how digital technologies can shift the trajectories of entrepreneurial firms. Digital technologies can help firms to find entrepreneurial opportunities, to develop new business models that improve the performance of entrepreneurial firms which can change the whole entrepreneurial processes and outcomes and also this can also alter the relationships between people, companies, and society through new business opportunities, value creation and proposition, and variety of products and services.

Conclusion This chapter explores the key concepts of digital entrepreneurship, especially the significance of digital technologies for the development of new digital entrepreneurial enterprises. By inspecting the role of digital technologies, this chapter helps to uncover the dimensions and areas covered in the domain of digital entrepreneurship. This chapter also reflects a unique theoretical perspective on digital entrepreneurship, especially in relation to the digital technologies. In this chapter, we also try to substantiate the decoupling of the digital components in digital entrepreneurship by providing a differentiated understanding of digital technologies and the mechanisms by which they affect the trajectory of digital entrepreneurship. For example, digital technologies change the landscape of future opportunities the firms might exploit. More and more possibilities and opportunities are created due to the widespread expansion in firms’ operations. Moreover, firms need to change their business models in order to exploit the future opportunities due to the digitalization in business envi-

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ronment. Here, firms may avail the options to integrate all the stakeholders in a single platform. Due to this attachment and integration, firms could be capable to improve their performance. Finally, we recommend that the theoretical findings will be useful for firms seeking to understand how digital technologies are shaping their entrepreneurial trajectories in addition to helping policymakers to understand the circumstances supporting the digital entrepreneurship. However, this chapter exposes some limitations too. First, how the digital technologies affect entrepreneurial trajectories has been generalized without any empirical assessment. Here it is recommended to explore this dimension in specific form or in any particular country context. Second, the role of digital technologies is not unique for all countries. However, in this chapter we assume the unique role of digital technologies on entrepreneurial trajectories. For the inclusive development in any particular sector, the role of digital technologies cannot be avoided. In the future investigation, it is recommended to see how digital technologies affect the inclusive development.

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Mariangela Vecchiarini, Laura Castaldi, Domenico Ferrara, Diego Matricano

5 Entrepreneurial Orientation: An Assessment of Empirical Evidences from Italy and Some Hints for Further Research Abstract: In order to contribute to ever-evolving international debate about entrepreneurial orientation (EO), this chapter analyses Italian Law no. 221/2012 disciplining innovative start-ups. According to the above-cited law, ventures need to meet at least one of these three criteria in order to be classified as innovative start-ups: (1) expenses in R&D and innovation are required to be at least 15% of their annual costs or turnover; (2) some of the employees are required to be highly qualified personnel; (3) ventures are required to be the owner, depositary, or licensee of a registered patent or software. By an attentive reading and a careful analysis, some Italian analysts and practitioners agree upon the idea that the above criteria correspond to the three dimensions of EO: risk-taking, proactiveness, and innovativeness. Based on the binomial logistic regression models (14,264 observations), this chapter strives to rebuild the state of the art of EO among innovative start-ups in Italy and, by leveraging mixed-method research designs, to suggest some hints for future research. Keywords: Entrepreneurial Orientation, Innovative Start-Ups, Italian Law

Introduction Despite some critiques and notes (Fritsch & Mueller, 2004; Van Stel et al., 2005), management and economics scholars strongly agree upon the idea that high growth potential entrepreneurship (i.e. taking shape of innovative start-ups) is able to create wealth and employment (Audretsch, 2004; Wong et al., 2005). Very often, in fact, entrepreneurship is considered (and used) as a panacea against economic and social crises. For this reason, policy makers worldwide define and implement dedicated plans and

Mariangela Vecchiarini, Mike Cottrell College of Business, University of North Georgia, Cottrell Center, 288, Dahlonega, [email protected] Laura Castaldi, Department of Management, Università degli Studi della Campania “L. VanvitellI”, Corso Gran Priorato di Malta, 1, Capua (CE), [email protected] Domenico Ferrara, Responsble of the Technology Transfer Office, Università degli Studi della Campania “L. Vanvitelli”, Viale Abramo Lincoln, 5 - Palazzina B - 81100 Caserta, [email protected] Diego Matricano, Department of Management, Università degli Studi della Campania “L. VanvitellI”, Corso Gran Priorato di Malta, 1, Capua (CE), [email protected] https://doi.org/10.1515/9783110790313-006

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tools able to support and foster entrepreneurship. The Lisbon Strategy, the programme Horizon 2020, and the US Small Business Administration and the US Small Business Lending Fund are just few examples that can be evoked in this vein. Among them, the Italian Government has adopted a new industrial policy (Law no. 221/2012) that can be considered as the “most advanced legislative packages aimed at new innovative enterprises in the European Union” (www.sviluppoeconomico.gov.it). From in-depth readings and careful analyses of the above policy, it results that “Italy has implemented most recommendations of the Startup Manifesto, a policy roadmap proposed by a team of successful European innovative entrepreneurs” (Ibid.). The positive opinions and comments about Law no. 221/2012 seem to be mainly due to the focus on innovative start-ups. Law no. 221/2012, in fact, establishes that Italian innovative start-ups are new businesses or businesses that have been operational for less than 5 years. Accordingly, they cannot be the result of company merger, split-up, or selling-off. Their headquarters are supposed to be in Italy or in another EU country (in this last case, at least a production site branch needs to be located in Italy). Their yearly turnover is expected to be minor that €5 million and they are not expected to distribute profits. They can be listed neither on a regulated market nor on a multilateral negotiation system. Eventually, they are likely to embody a clear character of technological innovation. In reference to the last point, Law no. 221/2012 (www.sviluppoeconomico.gov.it) establishes that Italian start-ups can be considered innovative if they satisfy at least one of the three following criteria: (1) their expenses in R&D and innovation are required to be at least 15% of either their annual costs or turnover (the largest value need to be considered); (2) their employees are required to be highly qualified personnel (at least one-third PhD holders and students or researchers or at least two-third master’s graduates); and (3) they are required to be the owner, depositary or licensee of a registered patent, or the owner of a registered software. By an attentive reading and a careful analysis, some Italian analysts and practitioners argue that the above criteria seem to correspond to the three dimensions of EO: risk-taking, proactiveness, and innovativeness. In fact, at a first glance, it is possible to argue that expenses in R&D and innovation recall the concept of risk-taking; the presence of highly qualified employees stands for proactiveness; eventually, being the owner, depositary, or licensee of a registered patent or software is a sign of innovativeness. Starting from the above correspondence, empirical data referred to 14,264 innovative start-ups (i.e. the whole universe of innovative start-ups in Italy as argued in the last report published by Italian Ministry of Economic Development on December 2022) have been retrieved from the official website and a binomial logistic regression model has been estimated. As a consequence, this chapter strives to rebuild the state of the art of EO among innovative start-ups in Italy. Contemporarily, the above-cited legislative text has been considered as a kind of case study and so the norms included in it have been carefully analysed. Accordingly, this chapter also attempts to contribute to ever-evolving international debate about EO by suggesting new – and hopefully interesting – hints for future research.

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In order to achieve the above aim, the chapter is structured as follows: in “Literature Review” section, the concept of EO is recalled and investigated. Attention is mainly addressed towards generally agreed and controversial issues related to EO. In the subsequent section, the theoretical framework and the research hypotheses are presented. The EO-performance nexus is the theoretical framework chosen for the analysis and starting from it some research hypotheses are developed and proposed. In the section “Research Design and Empirical Results”, the reason why binomial logistic regression models are chosen is clarified, the way empirical data have been harmonized is described, and achieved results are presented. In the section titled “An Assessment of Empirical Evidences from Italy and Some Hints for Further Research”, the state of the art of EO among innovative start-ups in Italy is rebuilt. After this, by leveraging mixed-method research designs (i.e. by reading the empirical results in the light of norms included in legislative text and vice versa), some highlights about EO are disclosed and this allows suggesting some hints for future research. The main limitations of the chapter are presented in the last section, before conclusions are drawn.

Literature Review Since Miller’s contribution (1983) and thanks to the works of Covin and Slevin (1989, 1991) – who have driven scholars’ attention towards this topic of research – the study of EO has largely been widespread among entrepreneurship scholars (Covin et al., 2006; Lumpkin & Dess, 1996; Wales, 2016). However, by reviewing dedicated literature about EO, results seem to be in fieri. On the one hand, entrepreneurship scholars agree on the relevance of EO (Lumpkin & Dess, 2001; Covin et al., 2006; Rauch et al., 2009; Covin & Lumpkin, 2011; Covin & Miller, 2014; Wales et al., 2013; Wales, 2016) until the point that it is considered among the cornerstones of entrepreneurial literature (Wales et al., 2013). On the other hand, there is a general consensus on the fact that studies about EO are still in an embryonic phase and further developments are needed (Wales et al., 2013; Wales, 2016).

Generally Agreed Issues The most largely agreed issue is EO relevance in entrepreneurship studies. Since its origin, this topic has been widely investigated and – nowadays – no scholar questions about its relevance. EO, in fact, stands for “a firm’s decision-making practices, managerial philosophies, and strategic behaviours that are entrepreneurial in nature” (Anderson et al., 2009: 220) or “constitutes an organizational phenomenon that reflects a managerial capability by which firms embark on proactive and aggressive initiatives

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to alter the competitive scene to their advantage” (Avlonitis & Salavou, 2007). Whatever definition is embraced, scholars agree on its relevance. Similarly, entrepreneurship scholars agree on the dimensions constituting EO. Even if Hughes and Morgan (2007) have supported the five-dimension model previously proposed by Lumpkin and Dess (1996) and comprehending risk-taking, proactiveness, innovativeness, competitive aggressiveness, and autonomy, Miller’s model (1983) is largely shared among entrepreneurship scholars (Covin & Slevin, 1989, 1991; Cools & Van den Broeck, 2007; George & Marino, 2011; Covin & Wales, 2012; Anderson et al., 2015; Wales, 2016). Miller’s model includes three dimensions of EO: risk-taking, proactiveness, and innovativeness. Generally speaking (Lumpkin & Dess, 1996; Wiklund & Shepherd, 2003), risk-taking stands for the involvement in uncertain activities and projects. More precisely, Miller (1983) considers risk taking as the managers’ proclivity to start risky projects and to prefer bold rather than cautious choices. Venkataraman (1989), instead, defines risk-taking dimension according to the evaluation of certain/risky projects. Eventually, Lumpkin and Dess (1996: 145), argue that “the range of risktaking behaviour extends from some nominal level . . . to highly risky actions such as borrowing heavily, investing in unexplored technologies, or bringing new products into new markets”. Despite terminological differences, involvement in hazardous projects can express the concept of risk-taking. Proactiveness, instead, stands for the willingness to exploit and anticipate emerging opportunities. Venkataraman (1989) defines proactiveness as the processes aimed at anticipating and acting on future needs by seeking new opportunities. In this vein, Lumpkin and Dess (1996: 147) define “a proactive firm as a leader rather than a follower because it has the will and foresight to seize new opportunities”. An anticipatory approach to the market stands for proactiveness. Eventually, innovativeness stands for the tendency to engage in and support new ideas, experimentations, and creative processes. According to Zahra and Covin (1993: 452), innovativeness is expressed by the firm’s commitment to “acquiring, developing, and deploying technology”. At a wider level, Lumpkin and Dess (1996: 143) argue “innovativeness can occur along a continuum from a simple willingness to either try a new product line or experiment with a new advertising venue, to a passionate commitment to master the latest in new products or technological advances”. In this vein, developed, hold, or acquired innovations stand for innovativeness. The last aspect on which there is a general agreement is the EO-performance nexus (Rauch et al., 2009; Wiklund, 1999). Since EO is included among strategic aspects (Ireland et al., 2009; Wales, 2016), performance achieved, thanks to those strategic aspects need to be properly measured (Covin et al., 2006; Avlonitis & Salavou, 2007; Hughes & Morgan, 2007; Covin & Wales, 2012; Kreiser et al., 2013; Covin & Miller, 2014; Lechner & Gudmundsson, 2014; Gupta & Batra, 2016), but this falls among the controversial issues (as explained hereinafter).

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Controversial Issues The review of dedicated literature about EO also discloses some controversial issues (Wales et al., 2013; Wales, 2016). Among them, the most discussed issue deals with the way of considering the three dimensions constituting EO. The question here is whether the three dimensions can be considered as multidimensional, standalone variables (Lumpkin & Dess, 1996; Kreiser et al., 2013) or they need to be considered as a collective “catchall” (Miller, 2011; Wales, 2016). In this last case, they need to be considered altogether, as a one-dimensional construct, a single variable, or a summed index (Covin & Slevin, 1989; Rauch et al., 2009). From the review of dedicated literature it emerges that entrepreneurship scholars have leveraged both the way of considering EO. Another debated issue deals with items and scales used to measure each of the three dimensions (Covin & Wales, 2012). According to Miller (1983) and Covin and Slevin (1989), three items measured on a 7-point Likert scale can express risk-taking, proactiveness, and innovativeness. Hughes and Morgan (2007) use a 7-point Likert scale but they include other items related to competitive aggressiveness and autonomy. Arshad et al. (2014), instead, use a 5-point Likert scale. Rauch et al. (2009) have modified the original scale proposed by Covin and Slevin (1989). In this vein, there seems to be no general agreement among entrepreneurship scholars who modify items and scales according to their research scopes. Still another controversial issue concerns the configurational approach (Wiklund & Shepherd, 2005). According to Wales (2016), Covin and Slevin (1991) were the first to suggest a configurational approach – even if the scholars “did not specifically advocate for it” (Wales, 2016: 8). The scholars, in fact, suggest that environmental, organizational, and individual variables need to be considered when investigating entrepreneurship and – in turn – EO. Other scholars (Lumpkin & Dess, 1996; Covin & Lumpkin, 2011; Miller, 2011; Wales et al., 2013) supported this suggestion by adding – time after time – new and different variables. Particularly, Lumpkin and Dess (1996: 152) propose a new conceptual framework able to investigate the impact of environmental and organizational factors on EO. Since it is an order to assess the above suggestions, it is worth underlying that the use of a configuration is required, even if variables can be modified according to the pursued research aims. Despite the general agreement on the EO-performance nexus, another issue attracting a lot of attention – but still far from a general agreement – deals with the way of measuring achieved performance. As argued by Wiklund (1999: 39), in fact, “there is no consensus on the appropriate measures of small firms performance”. Over the years, in fact, scholars have defined performance in terms of growth (Tsai et al., 1991; Wiklund, 1999), profitability (Zahra, 1991), sales growth (McDougall et al., 1992); financial performance (Wiklund, 1999), or assets held by the venture (Weinzimmer et al., 1998). In other contributions, performance is a construct made up of three indicators (Wiklund, 1999) or a wider concept (Arshad et al., 2014; Gupta & Batra, 2016) or, generally speaking, it can be defined a multidimensional concept (Rauch et al., 2009).

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The last controversial issue deals with the difference between “new entry” and EO (Wales et al., 2015). The scholars recall the idea that “new entry explains what entrepreneurship consists of and entrepreneurial orientation describes how new entry is undertaken” (Lumpkin & Dess, 1996: 136) and try to address entrepreneurship scholars’ attention towards these two topics and the differences/similarities between them. All the controversial issues cited above help realizing why Wales (2016: 13) evokes “additional significant advancements within the study of EO”. In order to respond to the above call, a thorough analysis is carried out in the following sections. This study, however, does not focus only on the empirical results concerning EO in Italy. The reference to theoretical assumptions made by Law no. 221/2012, in fact, can be read as a sort of case study that – in the light of mixed-method research design (Morse, 2003; Creswell & Clark, 2007; Teddlie & Tashakkori, 2009; Venkatesh et al., 2013; Zachariadis et al., 2013) – can add something to the controversial issues discussed above and thus can drive to the proposal of new hints for future research.

Theoretical Framework and Research Hypotheses The relevance of Italian Law no. 221/2012, the correspondence between the criteria proposed to identify innovative start-ups and the dimensions of EO and, eventually, the generally agreed and the controversial issues about EO seem to be lined up and seem to be an interesting starting point in order to respond to the call for more research about EO (Wales, 2016). Undoubtedly, the EO-performance nexus (Wiklund, 1999; Rauch et al., 2009) – one of the issues on which scholars agree – can be assumed as the theoretical framework for the present research. To support this choice, it is appropriate to recall the contribution authored by Wiklund (1999: 39) who argues that “there is a reason to believe that the relationship between EO and performance may be particularly strong among small firms. Most likely, smallness fosters flexibility and innovation”. In the following years, also other scholars (Zahra & Covin, 1995; Wiklund & Shepherd, 2005; Brettel et al., 2015; Reijonen et al., 2016) have embraced this view. Since the available data deal with Italian start-ups (i.e. micro or small ventures), this view is shared herein and the EO-performance nexus is assumed as theoretical framework herein. As for independent variables, the correspondence between the criteria defined ex Law no. 221/2012 in order to identify innovative start-ups and the three typical dimensions of EO (Miller, 1983) is a very promising aspect. Even if some scholars strongly invite to be cautious when making these links (Miller & Le Breton-Miller, 2011), most scholars largely embrace the ideas that: expenses in R&D and innovation can be assumed to be a proxy of risk-taking; the presence of highly qualified employees can be considered as a proxy of proactiveness; and the fact that ventures need to be the

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owner, depositary, or licensee of a registered patent, or the owner of a registered software can be seen as a proxy of innovativeness. As for the dependent variable of the model, the choice about measurement of performance is compelled by the use of second-hand data towards gross value of production, that is, the actual production output of an establishment. This is among the few data that Italian Ministry of Economic Development publishes in reference to innovative start-ups. Notably, in this case, validity of data is guaranteed. As argued by Yang (2008), in fact, public information is often unreliable as most of the firms are privately held and they have no legal obligation to disclose information. In this case, instead, since we consider only Italian innovative start-ups ex Law no. 221/2012, available data are verified and published by the Italian Ministry for Economic Development. Different from other studies, which aim to investigate the temporal stability or reasonable consistency of EO (Anderson et al., 2015), the present research aims to investigate whether and to what extent each dimension of EO affects performance (Wales et al., 2013); thus the research hypotheses tested herein are: H1: Risk-taking – RT is positively associated with performance. H2: Proactiveness – PR is positively associated with performance. H3: Innovativeness – IN is positively associated with performance.

Research Design and Empirical Results In reference to operationalization of the research (Miller, 2011; Wales et al., 2015), secondhand data retrieved from the Ministry of Economic Development offers other intriguing insights that need to be properly highlighted. The first concerns homogeneity of the sample. According to Wales (2016: 9), “the past research has too frequently relied on heterogeneous samples” that allow generalizing achieved results but miss context-sensitive insights. By referring to the universe of Italian innovative start-ups ex Law no. 221/2012, this limit seems to be overstepped because of the parameters recalled in the introduction of this chapter. The second insight deals with operationalization of independent and dependent variables. Law no. 221/2012 assumes risk-taking, proactiveness, and innovativeness (which respectively stand for expenses in R&D and innovation, the presence of highly qualified employees and the fact that ventures need to be the owner, depositary or licensee of a registered patent, or the owner of a registered software) as dichotomous variables. Italian start-ups are considered innovative if they meet at least one of the three criteria. Accordingly, innovative start-ups are invited to express if they meet one or more of the predetermined criteria. From the official report published by the Italian Ministry of Economic Development, if they do not meet one criterion, then the

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response is coded 0; if they do, then the response is coded 1. This is the categorization at the basis of the binomial logistic regression model that thus is used for the present research. This implies that Likert scale – generally used in studies about EO (Miller, 1983; Covin & Slevin, 1989; Hughes & Morgan, 2007; Arshad et al., 2014) – cannot be used to measure risk-taking, proactiveness, and innovativeness in this case. Consequently, in order to be able to estimate the binomial logistic regression model, gross value of production – the dependent variable – has been transformed from a continuous to a dichotomous variable. If the gross value of production is lower than 1 million euros (the threshold that scholars use to differentiate micro from small firms), then code 0 is assigned; if the value is higher, then code 1 is assigned. The third insight deals with the classification of Italian innovative start-ups that – according to the official report published by Ministry of Economic Development – are classified according to the predominance of entrepreneurial profiles (female, young, or foreign entrepreneurs) among the shareholders. Even if this is just an informative data that does not refer to any specific aspect of Law no. 221/2012, this classification seems to be of great interest since it might be interpreted as a sort of configurational approach. Generally speaking, female entrepreneurs are expected to be different from males. The reasons at the basis of their entrepreneurial involvement, their way of decision-making, and the results to achieve are very different between male and female entrepreneurs. However, the role that women have in the society has totally changed over the last decades (Lerner et al., 1997; Langowitz & Minniti, 2007; Minniti & Nardone, 2007; Minniti, 2010), and this has caused a different approach towards entrepreneurship as well. In this vein, a focus on the EO of Italian women might be very fruitful. In reference to the relationship between gender and EO it is worth citing a very interesting contribution authored by Goktan and Gupta (2015). In reference to young versus grey entrepreneurship, it is largely shared the idea that grey people differ from the young ones in terms of their previous experiences (Dyer, 1994). In this vein, Carr and Sequeira (2007) have empirically confirmed the influence of previous working experiences on entrepreneurial intentions while Curran and Blackburn (2001) have demonstrated the main reasons why older people do not prefer to be entrepreneurs. Very recent results show that young and grey entrepreneurs are not that different even if their involvement in entrepreneurship changes according to age. As a result, a deep investigation on the EO of young Italians might be productive. Eventually, debates about necessity versus opportunity entrepreneurs (Shinnar & Young 2008; Chrysostome, 2010) and about pull versus push factors (Clark & Drinkwater 2000; Harding et al. 2006; Uhlaner & Thurik 2007; Robichaud et al. 2010) are still awaiting for more robust results about foreign entrepreneurship, which assumes specific dynamics in reference to the destination countries and – more precisely – to the enclaves, those parts of cities where foreign entrepreneurs live and work (Kloosterman, 2003; Zhou, 2004). Social phenomena – such as social exclusion and discrimination – are very

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relevant factors that can be ignored neither in reference to entrepreneurship generally meant nor in reference to EO. Even if this classification is not usually considered when investigating EO, it is worth considering it since it can add some interesting results to the present work and to previous ones (Lechner & Gudmundsson, 2014). According to Law no. 221/2012, the universe of 14,264 Italian innovative start-ups is divided into four groups according to the predominance of entrepreneurial profiles among the shareholders. As shown in Table 1, the four groups are labelled as: no predominant profile – NPP, young, female, and foreign. Table 1: The samples. The samples

Size of the samples

No predominant profile – NPP Female Young Foreign

, , , 

TOTAL

,

As known, statistical elaborations might present two main problems: robustness of results and collinearity. In order to improve the former, further hypotheses are recommended. In order to avoid the latter, some preliminary checks are required. In reference to robustness of results, it is appropriate to consider and add some control variables (which are related to the dependent variable but from another perspective) to the original model to be tested. In this chapter, model 1 considers the relationship between EO (made up of risk-taking, proactiveness, and innovativeness) and performance. The control variable is location (LO) across Italy. In order to include the control variable in the binomial logistic regression model, it is coded 0 if innovative start-ups are located in the South of Italy and coded 1 if they are in the Centre or North of Italy. This is the model 2 that is going to be tested. In order to avoid collinearity among independent variables (the second of the problems listed above), attention needs to be paid over two collinearity statistics, in particular, Tolerance and variance inflation factor (VIF), and over one collinearity diagnostic, in particular, Condition Index. All these values are calculated using the SPSS software. Values of tolerance are shown in Table 2. According to the principles of statistics (Belsley et al., 1980; Giornetti, 2014), values of tolerance need to be higher than 0.50. From Table 2, it emerges that some values (written in bold) are not higher than the suggested threshold. This is an alert to consider before proceeding with the examination of values of VIF that are shown in Table 3. Values of VIF are expected to be lower than 10 (Marquardt, 1980; Hair et al., 1995) or, even better, lower than 5 (Ringle et al., 2015). From Table 3, it emerges that all the

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Table 2: Values of tolerance. NPP

Female

Young

Foreign

Model 

Model 

Model 

Model 

Model 

Model 

Model 

Model 

. . .

. . . .

. . .

. . . .

. . .

. . . .

. . .

. . . .

RT PR IN LO

Table 4: Condition index. NPP

Constant RT PR IN LO

Female

Young

Foreign

Model 

Model 

Model 

Model 

Model 

Model 

Model 

Model 

. . . .

. . . . .

. . . .

. . . . .

. . . .

. . . . .

. . . .

. . . . .

values are lower than the suggested threshold. Problems of collinearity should not exist among predictors. In order to remove any doubt, it is appropriate to calculate the Condition Index, a value included among collinearity diagnostics (Table 4). Table 3: Variance inflation factor. NPP

RT PR IN LO

Female

Young

Foreign

Model 

Model 

Model 

Model 

Model 

Model 

Model 

Model 

. . .

. . . .

. . .

. . . .

. . .

. . . .

. . .

. . . .

Statisticians argue that if values of condition index are higher than 30, then independent variables disclose strong collinearity; if values are comprehended between 15 and 30 reveal, then independent variables disclose a suspected collinearity; eventually, if values are lower than 15, then independent variables do not show any collinearity among independent variables. As shown by values included in Table 4, there is no collinearity among independent variables. Thus, it is possible to proceed with binomial logistic regression models. Elaborations have been conducted using a forward Wald approach (see Table 5). Statistically significant values are bold typed.

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Table 5: Estimated binomial logistic regression models. NPP

Female

Young

Model 

Model 

Model 

Model 

Constant

. (.)

. (.)

. (.)

. (.)

. (.)

RT

. (.)

. (.)

. (.)

. (.)

PR

. (.)

. (.)

. (.)

IN

. (.)

. (.)

. (.)

. (.)

LO

Foreign

Model  Model 

Model 

Model 

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

. (.)

Model diagnostics No. of cases

,

,

,

,

,

,





% of correct predictions

.%

.%

.%

.%

.%

.%

.%

.%

Omnibus test Chi-square

.

.

.

.

–

–

–

–

Omnibus test Sig. (p-value)

.

.

.

.

–

–

–

–









–

–

–

–

.

.

.

.

–

–

–

–

Degree of freedom Nagelkerke R (pseudo-R)

An Assessment of Empirical Evidences from Italy and Some Hints for Further Research At this stage, empirical results included in Table 5 are discussed. In reference to the NPP group, proactiveness and innovativeness are statistically significant. The control variable confirms that they both affect gross value of production in a positive way (the coefficients in model 2 are 1.293 for proactiveness and 1.479 for innovativeness). In reference to the group female, proactiveness and innovativeness are statistically significant (even if the control variable does not support this). In particular, proactiveness is inversely correlated to gross value of production (the coefficient is 0.332) while

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innovativeness is directly correlated to gross value of production (the coefficient is 2.269). Eventually, in reference to the groups, young and foreign, statistical models are not significant. None of the variables is included in the models. According to the above-mentioned research, empirical evidences from Italy show that EO varies according to the predominance of entrepreneurial profiles (NPP, young, female, and foreign entrepreneurs) among the shareholders. Data about young and foreign entrepreneurs do not produce statistically significant results. Data about NPP and female entrepreneurs, instead, need to be properly discussed. If entrepreneurs do not show a predominant entrepreneurial profile, gross value of production is likely to increase if proactiveness (number of highly qualified personnel) and innovativeness (related to the registered patent or software) increase. If female entrepreneurs manage the innovative ventures, then gross value of production is likely to increase if innovativeness (related to the registered patent or software) increases. However, gross value of production is likely to increase if proactiveness (number of highly qualified personnel) decreases. In this case, it is possible to hypothesize that the presence of highly qualified personnel can be wrongly perceived or it is possible to assume that its exploitation can cause some inefficiencies. Even if secondhand data do not allow further investigations in this sense, it is important to be aware of the differences emerging between the different entrepreneurial profiles. At this stage, by leveraging mixed-method research designs (Creswell & Clark, 2007; Venkatesh et al., 2013; Zachariadis et al., 2013; Shepherd & Suddaby, 2017) and without forcing empirical data (Kelle, 2007), some speculations on controversial theoretical aspects (previously recalled) can be derived and some interesting hints about EO can come out. This is done starting from the idea that norms included in the text of Law no. 221/2012 can be considered as a kind of case study (Venkatesh et al., 2013). First, by merging qualitative and quantitative data – that is, through triangulation (Patton, 1999; Creswell & Clark, 2007; Venkatesh et al., 2013; Zachariadis et al., 2013) – the research problem about the way of considering EO as a multidimensional or onedimensional construct has been investigated and spelt out. Different from some scholars, who propend towards the “catchall” (Miller, 2011), that is, the use of one construct to measure EO, but in line with other entrepreneurship scholars (Basso et al., 2009; George & Marino, 2011; Wales, 2016), the reference to three dimensions of EO seems more fruitful. By keeping the three dimensions of EO as independent predictors, or a multidimensional construct (Lumpkin & Dess, 1996), it is possible to disclose new insights about each dimension (George & Marino, 2011). The dimensions of EO are not always the same across innovative start-ups and the use of this conceptualization can really enrich previous results and gives “new impetus to creation of cumulative knowledge” (Wales, 2016, p. 6). Of course, scholar needs to be aware about the high risk of addressing very low potential research areas by considering the dimensions of EO in order to manage it in a proper way (Lumpkin & Dess, 2001). Second, through an embedded research design – based on the use of quantitative data to answer a research question with a largely qualitative study (Creswell & Clark,

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2007; Venkatesh et al., 2013; Zachariadis et al., 2013) – the configurational approach has been verified. As already said, scholars agree on the idea that environmental, organizational, and individual variables need to be considered when investigating EO (Covin & Slevin, 1991; Lumpkin & Dess, 1996; Wiklund & Shepherd, 2005; Covin & Lumpkin, 2011; Miller, 2011; Wales et al., 2011, 2013; Wales, 2016). In this chapter, the configurational approach has been tested in reference to Italy so that all the entrepreneurs share the same national culture (Marino et al., 2002). Moreover, the configurational approach has been tested by considering four different groups of entrepreneurs according to the predominance of the shareholders’ profiles. Thus, the idea that different entrepreneurial profiles can shape different organizational types (Hult et al., 2003) is embraced herein. As already said, individual variables (such as age, gender, and ethnicity) do affect EO. Despite this, more quantitative and qualitative research is evoked in reference to this topic. At a wider level, more qualitative research should be called out (Wales, 2016) in order to define the main aspects of the configurational approach. Third, by leveraging qualitative data to test and explain a relationship found in qualitative data, through an exploratory research design (Creswell & Clark, 2007; Venkatesh et al., 2013; Zachariadis et al., 2013), the idea that dimensions of EO can be considered as dichotomous variables needs further discussion and – confidently – validation. As already said, the debate about items and scales to measure EO is still on (Miller, 1983; Covin & Slevin, 1989; Hughes & Morgan, 2007; Rauch et al., 2009; Covin & Wales, 2012; Arshad et al.; 2014). However, different from already known alternatives, this study leverages binomial logistic regression models in order to investigate the EOperformance nexus. Even if the choice to use dichotomous variables is compelled by the nature of data (second hand data), it seems that it can be considered as a new, potentially interesting, methodology to be used. Management scholars and methodologists might collaborate in order to highlight strengths and weaknesses of binomial logistic regression model in reference to EO.

Main Limitations of the Study and Conclusions As with most studies, this study is not without limitations. The main ones are identified and discussed herein. First, this chapter is based on Law no. 221/2012 that discipline innovative start-ups in Italy. The criteria used to identify Italian innovative start-ups (expenses in R&D and innovation, the presence of highly qualified employees, and the fact that ventures need to be the owner, depositary, or licensee of a registered patent, or the owner of a registered software), corresponding to three dimensions of EO (respectively, risk-taking, proactiveness, and innovativeness), are not used by other governments. This has a twofold implication. On the one hand, Italy represents a sort of case study (allowing mixed-method research design); on the other hand, this implies that it is not

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possible to replicate the same study in other countries. Further studies, useful to compare, validate, or reject achieved results are not so easy to carry out. Second, the norms included in Italian Law no. 221/2012 and the empirical data related to it allow statistical elaborations and mixed-method research design but – contemporarily – they can stand for a limitation as well. For example, the “new entry” versus EO debate (Wales et al., 2015) cannot be analysed since innovative startups are already established. Moreover, further investigations about proactiveness and innovativeness – that result statistically significant in the above-mentioned models – cannot be carried out. Third, the dichotomous variables (presence/absence of EO dimensions) take to statistically robust results, but – for sure – they cause the missing of nuanced interpretations that come out of Likert scales and that can help to investigate – in a more detailed way – the EO-performance nexus. Despite the limitations, this study can hopefully be considered a starting point for future studies. In reference to the concerns to be addressed for research to progress (Gupta & Gupta, 2015), new and still up for debate questions are derived. Is it worth considering EO a “catchall” (Miller, 2011)? And to what extent is it worth? If so, do entrepreneurship scholars risk losing interesting results about EO? Or not? Moreover, if scholars do not leverage the configurational approach (referred to a country and based on age, gender, and ethnicity or on other aspects), the risk of losing interesting results is too high, isn’t it? From an empirical perspective, which are the implications linked to the trial of simplifying the independent and dependent variables? In this study they are dichotomous. How should we consider the achieved results? Are these results more or less interesting? Of course, this chapter only suggests new and hopefully promising areas of research linked to EO. It is among the duties of other entrepreneurship scholars to state whether these areas of research can inspire additional research or advice on different paths to be addressed.

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Bassem M. Nasri, Pablo Collazzo Yelpo, Ala’a H. Al-Hashim

6 Gender Contribution to the Competitiveness of Social Media Entrepreneurs in Saudi Arabia: Context of the National Transformation Abstract: This research addresses the questions of “how gender impacts the competitiveness of social media entrepreneurs in Saudi Arabia, and how the national transformation plan to a diversified economy less dependent on oil might have influenced their level of competitiveness”. Gender gap in entrepreneurship and the difference in competitiveness between men and women are covered in literature. Most of this literature addresses entrepreneurship in general and overlooks the possible contribution of starting these businesses through online social media platforms, especially in the context of the Middle East, and in Saudi Arabia in particular, which witnessed major changes at multiple levels since 2016. This research tries to mind this gap and follows an exploratory qualitative case study methodology to examine how these changes might have influenced the level of competitiveness in female entrepreneurs who founded social media businesses in Saudi Arabia. The conservative nature of the Saudi society, insufficient support by each of the family, the society, and the government were found to have contributed to the success of social media businesses owned by females in Saudi Arabia. The introduction of the Vision 2030 and the set of reforms and social changes associated with the National Transformation Plan revealed a high level of competitiveness and entrepreneurial readiness in female Instagram entrepreneurs. The research has implications for theory, private sector, and policymakers and suggests giving the subject more attention in future research. Keywords: Woman Entrepreneurship, Social Media, Competitiveness, Saudi Arabia, Vision 2030

Bassem M. Nasri, Director, MBA & EMBA Programs, Assistant Professor of Entrepreneurship & International Business at Prince Mohammad Bin Fahd University, Half Moon Bay, Al-Khobar 31952, Kingdom of Saudi Arabia, e-mail: [email protected] Pablo Collazzo Yelpo, Professor & Senior Researcher, Danube University Krems, Dr. Karl Dorrek Strasse 30, 3500 Krems, Austria, and IEEM Universidad de Montevideo, Lord Ponsonby 2542, 16000 Montevideo, Uruguay. E-mail: [email protected] and [email protected] Ala’a H. Al-Hashim, Contracts Industrial Relations Analyst at Saudi Arabian Oil Company – Saudi Aramco, Dhahran, Kingdom of Saudi Arabia, e-mail: [email protected] https://doi.org/10.1515/9783110790313-007

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Introduction Web-based technologies and digital culture have become the top of the agenda for many researchers and policymakers. Social media offers a set of computer-mediated tools that allow people or companies to create, share, or exchange information, career interests, ideas, and pictures/videos in virtual communities and networks. They introduce substantial and pervasive changes to relations between businesses, organizations, communities, and individuals (Agerdal-Hjermind, 2014). In Saudi Arabia, females account for approximately $45 billion of all capital in the country’s national banks, which suggests that they have the money needed to start their own businesses (Rajkhan, 2014). The role of female entrepreneurs and business leaders in Saudi Arabia is thus becoming more important than ever to studies of gender and entrepreneurship. Saudi Arabia has 25 million social media users, the highest number per capita in the world (The Statistics Portal, 2018). Saudi women entrepreneurs use social media tools to market their handmade products, homebased catering services, or advertising for others’ businesses in order to generate income (Gallarotti, 2013). The majority of the Saudi women entrepreneurs seem to be using social media tools such as Instagram, Snapchat, and WhatsApp to target as many interested users as possible. While Saudi women have felt that social and culture challenges have significantly limited their social media usage (Abdou et al., 2012), there are many examples of these women who have created their own businesses, which vary from fashion and cosmetics to cuisine and catering enterprises. Despite being faced with so many barriers, a small but rising number of female citizens of Saudi Arabia are entering the world of internet entrepreneurship and building their own relatively successful businesses. They adopt social media platforms, like Twitter, Snapchat, and Instagram, to market their businesses, today’s most widely used social media sites, and mobile phone applications that are being appropriated for business activity (Edosomwan, et al., 2011). With the dearth of literature covering Saudi women internet entrepreneurs, the challenges they face to start their own businesses, and the factors that contribute to their success, this research tries to highlight the factors that drive Saudi female entrepreneurs to start or shift their businesses to social media platforms and the competitiveness of the businesses they start and operate in this context.

Literature Review and Analysis Entrepreneurship and Social Media Schumpeter (1947) defined entrepreneurship as “the doing of something new or the doing of things that are already being done in a new way (innovation)” (Schumpeter, 1947). According to OECD (Organization for Economic Co-operation and Development, 2016), between 95% and 99% of SMEs in OECD countries contrib-

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ute to the creation of 60–70% of jobs. the United States, 25.8 million small businesses create more than 50% of the jobs and generate more than half of the nation’s gross domestic product. The advent of digital revolution in late 1950s ushered in a new era of modern technology, which was a result of constant innovation and change (Paranayil, 2016). With extensive market research, many entrepreneurs have been able to pinpoint current social media trends that could help in developing that kind of technology for both businesses and consumers (entrepreneur.com, 2015). Social media comprises websites and applications that are utilized via devices which include cell phones, laptops, and tablets. Social media allows users to post and share content including text, photos, links, and videos, all as means of communicating with others (Schoen et al., 2013). Social media provide platforms that are used for communication between friends, relatives, and companies, creating spaces for virtual, social, and professional interaction across a vast range of sites; these include Facebook, LinkedIn, YouTube, Twitter, WhatsApp, Instagram, and Snapchat. Social media platforms aid a wide spectrum of purposes; it encompasses social communication, business, marketing, advertising, banking, acquiring information, and entertainment (Malin, 2014).

Competitiveness of Female-Owned Social Media Businesses To attract more users in non-Western settings and to expand global presence, social media developers need to consider more than just technical and aesthetic concerns and to expand their scope to look at the cultural pressures acting on users in non-Western settings (El-Qirem & Cockton, 2012). Eighty-one per cent of teenage girls use their friends and peers as a source of trend information, while 45% seek the opinions of the same groups when deciding which clothes or footwear to purchase. These groups therefore influence consumer preferences (eMarketer, 2010). When entrepreneurs present their brands though social media, potential customers become active agents who help to generate content and, ideally, promote their products. The use of Instagram was found to improve client engagement with brands and businesses and considered a very inexpensive and easy-to-use tool for Emirati women entrepreneurs and that Instagram provides a safe and private platform for female Emirati entrepreneurs as they do not need to mix with people directly or meet face-to-face, particularly with men (Wally & Koshy, 2014). The review of literature indicates a dearth in the studies that investigate the role which social media plays in starting-up or developing businesses by women in Saudi Arabia. Gender difference in competitiveness between men and women, referred to in literature as the gender gap in entrepreneurship, has been well-documented (Niederle & Vesterlund, 2011), where women have a higher risk aversion (Caliendo et al., 2014; Boente & Piegeler, 2013) and are less willing and more shy to compete (Niederle & Vesterlund, 2011). Bönte and Jarosch (2011) suggested a group of personality traits which they called individual entrepreneurial aptitude (IEA), and which has a positive effect on latent and

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nascent entrepreneurship among women and men. Accordingly, individuals scoring high on IEA prefer self-employment because work environment of self-employed matches their personality. Women have a considerably lower level of IEA, and this in turn contributes significantly to the gender gap in entrepreneurship, these traits being autonomy, risk taking, innovativeness, proactiveness, competitiveness, general optimism, general self-efficacy, and internal locus of control. A recent case study by Monastyrskaya et al. (2019) shows gender differences in the assessment of entrepreneurial competencies and readiness to receive entrepreneurial education. While the contribution of social media to business competitiveness has been addressed in literature, no research was identified that examines the impact of female ownership on this competitiveness. It is not yet clear to what extent the challenges of accessing classic business channels facing females in a conservative society, like the Saudi Arabian subject of this research, might have contributed to the emergence of competitive online and social media businesses, especially in such a society.

Social Media and Instagram Female Saudi Entrepreneurs The location of Saudi Arabia as the centre of the Islamic world has given it a strategic importance in terms of trading links through the Red Sea with North Africa, southern Europe, and east Africa and through the Arabian Gulf with Eastern Asian countries. The country witnessed a dramatic shift in its economy from a rural period that relied on nomadic Bedouins and farmers (that was before the discovery of oil) to an oil industry period that impacted the world economy as a whole. Culturally, the family patriarchal plays an important role in shaping the values and attitudes concerning social relationships, and the father has the ultimate power by law between the family and relationships of the family and the rest of the society (Hamdan, 2005). Until 2016’s Vision 2030, Saudi male participants strongly believed that men are dominant, independent, competitive, and capable of leadership and that women are submissive, dependent, caring, and good for domestic tasks and childrearing (Elamin & Omair, 2010). Despite increased access to education, economic opportunities and participation were constrained for women in Saudi Arabia (Metcalfe, 2011). Major changes in women’s status started to proceed slowly (Halaoui, 2013). Since the Saudi Crown Prince, His Royal Highness Mohammed Bin Salman, unveiled Vision 2030 in 2016, significant economic and social reforms have swept across the country at a breakneck speed. This ambitious initiative focuses on diversifying Saudi Arabia’s economy beyond oil and gas, promoting private sector and small-to-medium-size enterprise engagement, and creating jobs for its large youth population, where nearly 70% of its citizens are under the age of 30. The Vision outlines goals and commitments in renewable energy, manufacturing, education, egovernance, entertainment, and culture (Saudi Arabia Development White Report, 2017). Facing the previously patriarchal society, female Saudi entrepreneurs discovered new ways to exploit social media for their consumer-oriented businesses, particularly for

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start-up companies in emerging economies. With no bricks-and-mortar presence, they used social media tools to market their handmade products or home-based catering services in order to generate income as these media maintained their privacy, confidentiality, and safety and enabled them to remain physically closer to their families, so as to maintain a household, and portrayed their hidden image by exposing their talents, strength, and success to the outside stereotypical world (Alghamdi and Beloff, (2014). Instagram has helped many Saudi women become successful entrepreneurs by allowing them to post and share beautiful photos/videos of their products and sell them while some women have found it useful to sell their image (Paranayil, 2015). The updated 2015 version of TOP’s report states that Instagram is considered as popular as Twitter in Saudi Arabia, with around 8.8 million active users recorded at mid-2015 (Saudi Gazette, 2016). Half of Saudi internet users are members of Instagram compared to a global average of 23% (Kemp, 2020). The quick and fast photo/video-sharing site, highly effective, time-efficient, and user-friendly enables anyone to create an account easily, allowing women to bypass the conservative Saudi’s guardianship laws to create their own small businesses on Instagram with just a smartphone or computer and an internet connection (Aziz, 2015). The potential of reaching out and interacting with a large number of consumers directly at little to no cost on Instagram has also proven to be a winning business option for small businesses and start-ups in the region (Aziz, 2016). Besides the obvious financial benefits, the advantage of creating and engaging with new network connections beyond the buy–sell interaction is what makes the online entrepreneurial venture worth it for many Saudi businesswomen (Rahman, 2015). The informal Instagram business sector is growing so fast that the government is still figuring out how to factor in their earnings and numbers into the country’s GDP (Taibah, 2015). Social media is one of the most important tools to reach customers.

Literature Gaps and Research Propositions Instagram has been a popular business agent in Saudi Arabia for a couple of years – giving women a chance to earn money and prove their entrepreneurship skills (Rahman, 2015). Yet, no studies were found to have examined the efficiency of Instagram for Saudi women entrepreneurs or reasons of its being a favourable application that contributes to the start-up and competitiveness of their businesses. While scarce, most of the studies identified in relevance to this research are based on intuition, observation, and perceptive analysis and are short of empirical data. Research did refer to the extent of conservative values, as they did to an emerging evidence of attitudinal shifts among working women and to the operation of male guardianship system in which females must gain permission in some major decision (Hamdan, 2005). In no instance, however, was a reference identified among previous researchers to the mode by which social media channels helped eliminate the boundaries that exist between women and Saudi Arabia society or to how these channels

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might have provided a context that helped them start an online business, which this study is trying to explore. However, to what extent these challenges might have driven Saudi ladies to think of alternative pathways to start their businesses is not evident in literature reviewed. While some researchers addressed the changing role of the Saudi women and its increasing contribution to the development of the economy, especially during the post-vision time, yet social media businesses owned by Saudi females are almost absent from these studies and discussions. In a country where women have historically played a restricted public role, relatively little attention was paid to the inspiring aspirations when Vision 2030 was first published. It is true that this restriction is now rapidly changing so that traditional societal boundaries are starting to collapse, in line with the belief that a more inclusive attitude will benefit the overall economic progress (ajl.com, 2017). However, despite the importance of this transition and change in beliefs, scarcely did any literature refer to it, and to whether it included any change in the performance of social media businesses owned by ladies in Saudi Arabia. We propose: P1: The conservative nature of the Saudi society contributed to driving female competitiveness of social media female entrepreneurs in Saudi Arabia. P2: Insufficient support by the family, the society and the government, contributed to the proliferation of social media businesses started by females in Saudi Arabia. P3: Public policy reforms and social changes that followed the national transformation plan contributed to an increased competitiveness of female social media entrepreneurs in Saudi Arabia

Methodology Considering the research question How do the changes in the nature of the local society contribute to the development and competitiveness of social media based-businesses owned by females in Saudi Arabia as well as its derived propositions leads the researcher to follow an Exploratory Qualitative Case Study Methodology, being the most convenient to answer the research question, in light of the how nature of the research, and makes use of existing literature in order to verify their observations and come up with preliminary ideas regarding the research goals (Baxter, 2008; Yin, 2009, p. 9). The case study research method is an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident (Hollweck, 2015). The methodology allows investigators to retain the holistic and meaningful characteristics of real-life events such as individual life cycles, small group behaviour, organizational and managerial processes, neighbourhood change, school performance, international relations, and the matura-

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tion of industries (Yin 2009, p. 4). It should be mentioned that the how question in an exploratory research issues does not mean that an experiment is required to establish a direct cause and effect link between A and B (Perry, 2001). However, as the exploratory type of case study is used to explore those situations in which the intervention being evaluated has no clear, single set of outcomes (Baxter & Jack, 2008), the use of this methodology is justified and appropriate for the subject topic in hand. Based on the research question, the unit of analysis has been defined to be Saudi female business ladies who started and are still running and leading their own social media businesses in Saudi Arabia, where businesses can be in any industry, as long as they are online businesses, and they should be operational and running by the time of this research under the leadership of the founders. Entrepreneurs have been bound by gender to females and geographically to the ones in Saudi Arabia. The researchers selected the cases based on several criteria being her own experience and exposure to Saudi business ladies, especially through platforms like Instagram and Snapchat. Considering proximity to the researchers’ residence, only respective business women who live in the Eastern Province of Saudi Arabia have been contacted, namely those living in any of the cities of Dammam, Dhahran, Al-Khobar, Jubail, and Al-Ahsa’a. Other criteria include the researcher’s acquaintance with the founders themselves, their availability and reachability during the time of the research, and their readiness to share information required, considering the social and family constraints. Seven female entrepreneurs who match the definition of the unit of analysis have been contacted by the researcher via email for the content of the email sent to potential case candidates and by direct phone calls. Out of the seven, four female entrepreneurs responded and expressed their interest to share their start-up circumstances, successes, and challenges as well as their personal views with the researcher. The researcher assured that any information shared shall be exclusively used for pure academic purposes. In order to collect the data relevant to answering the basic research question, sources of data collection needed to be identified. This research interviews were applied as a primary data source supported by documentation, archival records, physical artifacts, and direct observations (Baxter & Jack, 2008, p. 554) as secondary sources. The use of multiple sources of evidence allowed the researcher to achieve construct validity by meeting the process of the triangulation of data sources which provided multiple measures of the same phenomenon (Yin 2009, pp. 116–117). Throughout the interviews, the researcher was “following a certain set of questions derived from a case study protocol” (Hollweck, 2015). The goal of the protocol is to achieve reliability through minimizing possible errors and biases of the case study and to allow a later investigator to arrive at the same findings and conclusions (Yin, 2003, p. 45). The case study protocol detailed the procedures followed for collection and analysis of the raw data. The researcher followed Yin’s instructions (2009) on the sections included in the case study protocol.

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Results and Data Analysis Case 1: “Joe’s Bakery” The number of followers as of 14 March 2019; Instagram: joes.bakery.sa (71.3k followers), nouf_y_alsultan (128k followers); Snapchat: noufy_alsultan (112k followers). The owner of Joe’s Bakery is a young lady named Nouf Al-Sultan. She is specialized in naked cakes and fine breakfast banquets. Nouf graduated with BA in Arabic Language from Dammam College for Ladies, Eastern Province, Kingdom of Saudi Arabia. After graduation in 2008, she tried but failed to find a job, and so she started looking around to find a source of income. Back into that time, people were under the influence of the trend of giveaways and souvenirs in their parties like weddings, bridal shower, baby shower, and graduations all of which were not quite available like they are now. So, she started receiving orders of giveaways from her family members and friends for a variety of occasions, which she used to fulfil at home using raw little stuff for the ordered giveaways she used to source by visiting the Kingdom of Bahrain every week to buy the materials needed according to the theme of the occasion. At home, she worked on the design and decoration till distributing them with her business coordinates printed on the top. People in the Eastern Province started knowing her, and she kept receiving orders on this work till one day when her eldest sister was coming back from abroad with her family, and she wanted to surprise the family with home-made sweets, the ingredients were not all available. After searching on YouTube for those ingredients, she was the first to introduce the first version of the “naked cake”, and many of her family members liked it. Nouf repeated the baking trial again and again, every time having invited her friends and neighbours to taste it, and received very good feedback. She then decided to stop the giveaways and souvenirs business to move to baking naked cakes and special kinds of breakfast items.

Case 2: “Safirat Buraidah for Real Estate Services” The number of followers as of 14 March 2019 – Twitter: NewShaleehat (6.2k followers); Instagram: NewShaleehat (48.9k followers); Snapchat: NewShaleehat (34k followers). “Safirat Buraidah” is an Arabic term that means “The Ambassadress of Buraidah”, Buraidah being a city in the North-Central Province of Al-Qassim, Saudi Arabi, Riyadh, the capital, being located in the Central Province (see Appendix A). “Safirat Buraidah” is a nickname of a Saudi business lady called Taif Almuneef, one of the first ladies in Al-Qassim province, who opened a real estate services business office, specialized in selling, leasing, and brokerage of lands and properties. Taif works as an employee in the medical sector and opened this business to operate it after working hours. Taif decided to go for the real estate field because most of her friends’ and family recommendations are for the traditional mentality of people thinking that real state is the best choice for investment.

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Case 3: “Style-me-Sausan” The number of followers as of 14 March 2019: Blog stylemesausanblog.com (393k followers); Instagram: stylemesausan (129k followers); Snapchat: stylemesausan (132k followers); Twitter: stylemesausan (1k followers); Facebook: stylemesausan (30k followers). “Style-meSausan” is the name of a business blog owned by Miss Sausan Al-Kadi, a social media influencer, stylist, fashion blogger, buyer, and marketer for high-end Italian brands. Driven by passion for fashion and styling, she became a big fan for celebrities and models since she was a kid. Sausan lived in Los Angeles, Hollywood, for 10 years of her life. She studied and practiced styling next to the biggest fashion boutiques and famous “haute couture” houses, where she got the motivation to transfer her passion and experience to Saudi Arabia.

Case 4: “Bravo Shbab” The number of followers as of 14 March 2019: Twitter: EnasAhenti (30.2k followers); Instagram: NewShaleehat (1M followers); Snapchat: NewShaleehat (1.2M followers). Miss Enas Alhenti, social media influencer, is the founder of “Bravo Shbab”, a social media initiative that supports the talented youth’s businesses. Bravo Shbab was her thesis project for her master’s study in the USA. Through her study, she was wondering how the purchasing power of luxury products and unnecessities in Saudi Arabia exceeded that of the Chinese population by over $1 billion plus? Enas then started to look for the reasons behind the Saudi youth avoidance from the crafts and vocational jobs. Enas questioned whether the majority of the Saudis are consumers or producers. Enas thinks that Saudis are successful entrepreneurs, but that they would been even much more successful, had they employed their talents and skills more in commercial projects. From this point, the idea of Bravo Shabab raised up. Enas opened a public account through Snapchat named “Bravo.Shbab” to make it easier being contacted with the young Saudi talented entrepreneurs where she can collect data for her study. Lately, this account became the cornerstone for her to establish her own business, a youth-based company, where employees’ ages ranges between 22 and 34 years old, which provides legal, financial, and marketing consultations for the beginner talented entrepreneurs. Additionally, she assists them in human resources, product innovation, investment awareness, and technology training through social media.

Summary of Findings Competitiveness Pre-transformation Conservative Society; Lack of social support; Public Male Dominance; Family needs; Challenge spirit; Exchange of female experiences; The “social media” escape; Hidden identity. The

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conservative conditions resulted in the dominance of males at the social level and the governmental level, where it was difficult, and even strange, for ladies to apply to a license to start a business, if at all this was allowed by her family. This challenge increased the need for females, who started online businesses under fake names to hide their real personality and were able to prove themselves as income generators to the household.

Competitiveness Post-transformation Female Support public policy; Women driving allowed; Previous online experiences; Ready network; Woman employment quota; Feminist Will: Pride of gender ownership & Challenge vs. masculinity; Money does not matter; Western Educated back; Social Openness. The new policies that were introduced following the introduction of the National Transformation Plan and the Vision 2030 created a general dynamism and an atmosphere of full support to females who relied on their previous online skills and experiences to prove themselves as successful online business owners. While the openness was for both genders, females found this environment more of an opportunity to be free for the first time of their lock down and a relief off the various types of previous pressures. Driven by a “feminist” will to prove themselves versus males, viewed as source of previous pressures, most online lady entrepreneurs declared caring more for the quality and differentiation of their offering than the profit. This increased the end-user interest in their products and contributed to further success of their businesses. Table 1 shows a sample of responses.

Research Implications Implications for Theory This exploratory research might be the first which opens the discussion in an untapped topic about the global trend of social media businesses in the special context of the Saudi Arabian society and, more interestingly, about the female business lady in this country, which is undergoing a chain of dramatic changes at multiple levels since 2016, yet still considerably under-researched. The study is an attempt to explore the main factors which influence Saudi women entrepreneurs and drive them to utilize social media platforms to start-up, operate, and market their new business concepts. While previous researchers did address the Saudi Arabian society, entrepreneurship, drivers, and motivators thereof, and to a much less extent the factors that contribute to their success and development, studies were hardly identified, which examined the genderspecific side of subject, being Saudi business ladies who start their businesses through social media platforms, with makes having been excluded from the study. Because of the scarcity of scholarly literature on the business environment of the Saudi women

Age of the business

 years

–

–

 years

–

Real state is the top choice for investments Rarity of women working in this field

–

–

Company description Reason for choosing the business Not being employed after graduation Rarity of business sells parties’ giveaways. Learned online how to bake cake with limited ingredients

Selling/leasing/broker for lands and properties.

Specialized in naked cakes and high-end breakfast boxes.

Company description Type of business

Safeerat Buraidah – real estate services

P: The conservative nature of the Saudi society contributed to driving competitiveness of social media female entrepreneurs in Saudi Arabia.

Joe’s Bakery

Sample responses

Proposition

Sample of responses per case

Table 1: Sample of responses.

 years

(continued)

Bravo Shbab was a graduation project for her master’s study in the USA. She opened a public social media account to increase awareness about investments.

Social media influencer, founder of Bravo Shbab initiative that supports talented youth’s businesses.

Enas Al-Henti

Passion for fashion – and styling A big fan for celebrities and models Studied and practiced – in LA, Hollywood, and wanted to transfer that experience to Saudi Arabia.  years

–

–

–

Social media influencer, stylist, fashion blogger, buyer, and marketer for high-end Italian brands.

Style-me-Sausan

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Proposition

Extremely standing against the idea Many try to stop the business and threaten to complain to government officials. After searching and series of communications, at the final stage, they leave to other “male office” to pay him the commission.

The over-strict families – around her family rejecting the idea of women could be – independent and start her own business as they think this is against the principles of religion –

Effect of male dominance

She used to live in a private compound, surrounded with multi-national newborns, friend, studied at international schools and the family has adequate space of freedom so she did not face a direct effect or objections.

So discouraging It was difficult at the Many attempt for beginning for the local inhibiting the business people to accept a Saudi young lady came from the USA to introduce a new type of culture, way of dressing, modern styles of outfits, new colours of abayas, and so on.

Brothers, uncles, and – relatives always feel – frustrated and embarrassed by people calling their home “The bakery home”.

Style-me-Sausan

Social impact

Safeerat Buraidah – real estate services

Joe’s Bakery

Sample responses

Sample of responses per case

Table 1 (continued)

–

–

Father did not welcome the idea that she led the volunteering initiative as a young lady within a conservative community but he did not show her any objection.

Some of strict individuals approach her to stop this initiative in order to avoid opening a door for their wives, daughters, and sisters for freedom either by joining her or doing the same.

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P: Insufficient support by the family, the society, and the government contributed to the proliferation of social media businesses started by females in Saudi Arabia. Father The self-will power

Father passed away. Mother, brothers, sisters, neighbourhoods, and the rest of family and friends were and still totally disagree with converting this talent to a business.

– –

– –

No support

Major challenges at start-up

Governmental support at start-up stages

Wherever there is a moderation and balance in beliefs and thoughts that will be good place for creativity and innovation.

Who stands behind success

Business in different context

Location: Buraidah, Al- – Qassim – one of the most popular provinces known with “conservatism/highly social barriers on females” Lack of trust in women

– –

It was very hard for her to fulfil all the commitments with the company and being a blogger, personal stylist, influencer, and marketer for other brands

Personal networking Multi-national friends

Course in Commerce from a No support training centre headed by Princess Noura bint Mohammed

–

–

Sisters

The thoughts about women She started a little bit while to own a business in this studying in the USA and it field has no big difference was much easier. in the Arabic/Islamic societies in general but the situation may look better in the GCC countries.

Big faith in herself The internal feeling of social responsibility

Saudi Arabia was the best place to develop her project. She started as volunteering initiative in the USA and then it has grown up very well in the Saudi environment.

(continued)

Scholarship in the USA

Unsupportive husband, discouraging relatives, and large companies liked to imitate the idea of the business.

– –

–

–

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Sample responses

Establish free training centres in each district for ladies and young students to learn a new skill.

What lacks in governmental support?

Legislate new rules and policies to secure women rights in business.

The large efforts for women Honoured for being called empowerment recently by to greet King Salman when the Crown Prince HRH visited Al-Qassim Mohammed bin Salman made big change in the mindset of the disagreeing people.

Gain trust, credibility, and approve that Saudi women are qualified to pioneer in sectors that were confined and allowed for only males for so long time.

Safeerat Buraidah – real estate services

Post-Vision governmental support

Open a not regular bakery and breakfast shop where the customer visits the place and can enjoy. Joe’s bakery is named after her father (Yosuof) and wants to expand the branches and take his name globally.

Joe’s Bakery

P: Public policy reforms Personal goals – and social changes that followed the national transformation programme contributed to driving an increased – competitiveness of female social media entrepreneurs in Saudi Arabia.

Proposition

Sample of responses per case

Table 1 (continued)

To have a collaboration with her favourite brand to launch a collection of fashion-line by her own designs. To style her favourite Hollywood star at the annual events.

Allow academics and training institutions to introduce fashion as a major and courses.

The new national transformation strategy by the government gives high attention to youths and entrepreneurs.

–

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Style-me-Sausan

Hopes that Bravo. Shbab business be later her doctoral dissertation. To help in providing pure Saudi-made productive or services in international standard levels that can compete, substitute, and replace the imported ones.

Emphasis on the importance of wise spending and investing the youth talents to become a commercial business.

Government nowadays pays more attention to young female entrepreneurs.

–

–

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In the beginning, using social media was not that popular even for personal accounts. She used YouTube to learn baking, cake decoration, and also creative ways to cook and present the breakfast.

–

Impact of social media on business –

Most of the clients she receives orders from are young men/male teenagers and students.

–

Post-Vision change in social mentality

–

No one can deny how social – media has great role in advertising and make any business famous.

People in Buraidah are still – strict and tough by their nature against any business owned by women, but the youths and new – generations are slightly open-minded to accept such practices. Instagram to post her styling look and tag each piece she wears with the brand account. Snapchat for marketing for many brands.

Huge difference in the mentality and behaviours for both males and females. People became more aware and they look for the newest fashion and latest trends.

–

–

(continued)

Social media is the base of her initiative and has a big favour on her achievements. She still cannot imagine life without social media.

The society consists of % youth who are highly educated and aware. This is the era of youth to work hard, rise, and shine.

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Proposition

Joe’s Bakery Mainly Instagram – She posts photos of her home-made cakes and sweets on Facebook, then BBM, WhatsApp, and later Instagram. – She created Hashtag on Instagram named #Nouf’s Breakfast and she has 70k followers. – She uses Instagram channel to conduct paid learning courses.

Sample responses

App. Used: Instagram and/or other social media applications as business platform

Sample of responses per case

Table 1 (continued)

Instagram, Snapchat, and Twitter – For real estate services, considering the geographical area and demographics: Twitter and WhatsApp are the most favourable by the customers for communication.

Safeerat Buraidah – real estate services Snapchat and Instagram – Instagram has a very excellent feature. They keep updating the app every now and then in a way that serve the demand of their users whether for personal or business purposes.

Style-me-Sausan

Snapchat, Instagram, and Twitter – She has a different concept in using the social media apps. – Snapchat for business as advertising and conveying meaningful messages and spreading the awareness of investing the youths’ talents. – Instagram for documenting the products and businesses that she advertises for and some of her trips and travels and also getting feedback from followers. – Twitter is used for discussions about the businesses and entrepreneurs’ hip and top trending topics.

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–

Social effect on female luxury shopping Young ladies nowdays are not satisfied with the typical Saudi traditional home designs because of following celebrities, watching their lives, their luxury homes and furnishings, and this affected the real estate market in the few last years.

Dramatically huge, a lot of social media influencers were paid to advertise for the business in the other provinces and major cities in the country.

Saudi ladies now are – very obsessed with high-end brands and shopping for luxurious stuff.

She does not call any of them to advertise for her business even this could increase her sales significantly.

Impact of influencers on the business

Saudi young ladies become so mad with trends, fashion, luxuries, and branded personal belongings.

As a famous influencer, she has a little message that she wants to spread and reach every influencer: When people follow your account/visit your page: do they walk away better or worse? A lot of influencers are looking only for being famous and wealthy without any clear objectives or goals. Other part of them are there to present a meaningful, informative, and awareness content.

(continued)

She advertises for the public and works as a personal shopper. She is addicted to shopping so she can’t answer this.

–

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Proposition

Joe’s Bakery

Future trends With globalization and and impact on social media, no one can economy predict how future is going to look like but this definitely will have major economic changes.

Sample responses

Sample of responses per case

Table 1 (continued)

Catching up with the fast and swift changes in the customers’ taste and requirements is the biggest challenge in this market especially with the current economic recession.

Safeerat Buraidah – real estate services

Her initiative concurring with the Kingdom’s Vision  which will have impact on all aspects of life.

– The change has already existed in all aspects. Billions of riyals spending annually by Saudi ladies on luxuries and sky-high prices for unnecessary stuff like perfumes and accessories.

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entrepreneurs, this study is hoped to have a considerable contribution to the existing relevant body of knowledge. Culture plays a significant role in the growth and prosperity of entrepreneurship. The literature shows how culture could have a positive or a negative impact on the total entrepreneurial activities in a region. It is therefore important to understand how the conservative culture impacts entrepreneurship. The lack of research regarding women’s businesses in Saudi Arabia has been noted as a gap in literature. Much of the Western academic literature depicts females in the Middle Eastern region as subjective and dependent figures and suggests that this has its foundation in Islam and the cultural system. The findings might accordingly contribute to a radical change of this stereotypic view to the Saudi women and are worth being pursued and given more attention by future researchers. The literature about entrepreneurship has shown that entrepreneurship in general plays a significant, positive role in the private sector of a region. Women entrepreneurs, in particular, were also sought to be significant contributors in providing jobs and reducing unemployment. With ample examples of women role models in other regions, the literature lacks women models in Saudi Arabia, which may possibly play a significant role in inspiring and motivating other women to become entrepreneurs. The research also attempts to provide an understanding of the factors that drive individuals to enterprise. There are the ones who are driven to entrepreneurship out of necessity, meaning that their options for work are either absent or unsatisfactory. There are others who are opportunity-driven, meaning that they seized a business opportunity. Examples were provided from different economies. However, factors that motivated Saudi women entrepreneurs were not available in the existing literature and naturally appreciably scarce were studies relevant to social media business ladies. This study tries to provide analysis, insight, and definitive guidelines about the important role of social media in helping women move out of the home in Saudi Arabia. More generally, it demonstrates how women, even those living under ultraconservative circumstances, can benefit from the latest technologies.

Implication for Public Policy The research is a response to the major changes that are taking place following the global descent in oil prices and the public administration’s transformation in Saudi Arabia towards a diversified, oil-alternative economy. The transformation was an integral part of Prince Mohammad bin Salman’s Vision 2030, which sets the long-term strategies and tactics to develop local professional and entrepreneurial capacities. Government officials are advised to work out policies that limit the restrictions put on Saudi women entrepreneurs and provide them with the freedom of choosing their business activities as long as it complies with the social and cultural norms and values. The government should harness this underground entrepreneurial spirit and make it easier for women to officially establish themselves in the business. Government agen-

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cies would need to cooperate with each other and remove the inconsistencies in their rules and regulations across all regions of Saudi Arabia. An example of this coordinated effort could be the availability of a one-stop office where Saudi women entrepreneurs can start and finish their business registration forms. The Saudi government could create a simple framework for the Instagram businesses to be legally set up because they are actually currently operating informally from home, with no commercial licenses. Government organizations would need to provide entrepreneurship-training opportunities for women, where they can develop business management skills, in addition to mentoring and coaching programmes that would help women obtain the techniques required to run their businesses successfully. The research raises a call upon the Saudi society to change its negative attitudes towards Saudi women entrepreneurs and business ladies and to put an end to the unwritten social norms that are restricting women entrepreneurial activities in Saudi Arabia. Saudi women entrepreneurs in general lack career support from their family and friends. Everyone is used to living like their parent’s generation did, which relied on comfort and stability. An entire ecosystem for entrepreneurship is hereby called for.

Implications for Practice and Private Sector Social media have become one of the most valuable marketing assets, specifically for Saudi women entrepreneurs. Not only did they provide them a benefit by reaching to their audience in a new and interactive way. They also enabled them to expose and exhibit their products and to adopt the various social media platforms for this purpose, especially Instagram, Snapchat, and Twitter, through which their clients can easily find. These platforms also helped to navigate through certain challenges which are unique to Saudi women, make the business process more streamlined, and keep entrepreneurs up-to-date with the Saudi market. Therefore, business development service providers, government initiatives, and other support initiatives in Saudi Arabia are called to emphasize how valuable the adoption of social media is and how women entrepreneurs can leverage these technologies to do business and navigate through business challenges that they face. These service providers and initiatives should also support women entrepreneurs and facilitate loans which would help them start up or improve their businesses. This study is hoped to provide a view of the specific benefits of the adoption of Instagram in business. The Saudi businesswomen need to be active on Instagram to interact with followers, keep the followers updated, and work hard to create quality images. They should take lots of pictures, while considering composition and lighting. They should add a competitive advantage to their businesses before rushing to create an Instagram account so that they stand out among the numerous competitors. Despite the spread of social media, and the broad adoption of these various communication tools, there is a notable lack of studies about this topic in the Saudi Arabian region.

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Implications for Future Research The study provides useful information that could be used for future research about Saudi women entrepreneurs and the challenges they faced. Future studies may need to target women who chose not to start their own businesses in general in order to improve the knowledge about the factors that are preventing entrepreneurship among Saudi women. Future researchers may want to explore more cases of Saudi businesswomen to reveal more important factors and the business environments in which they operate. Studies may also expand to look in depth at business profiles on Instagram and at the factors that enable women entrepreneurs to gauge the competency of Instagram. Researchers are advised to adopt qualitative methods to be able to capture more scrupulously the opinions of the businesswomen. Overall, this research contributes to the growing empirical research on Saudi women entrepreneurs and provides some rich information about the factors that motivate Saudi women to enterprise on social networking sites.

Research Limitations Saudi Arabia is chosen as a context for this exploratory qualitative research, and it would be interesting to look into more empirical studies and quantitative data which would confirm the findings of this research and test their generalizability to other Middle Eastern and international contexts. The Eastern Province of Saudi Arabia, where the four cases’ business ladies live, happens to be geographically the Kingdom’s centre of the four neighbouring, relatively much more liberal, Arabian Gulf countries, being those of Bahrain, Kuwait, Qatar, and UAE. Moreover, the majority of Dhahran city is composed by the headquarters and the spacious residential compound of Saudi Aramco, where, unlike all other Saudi cities, there exists no gender segregation ever since the company was established under the American management. This geographic location might have influenced the cultural values of the ladies interviewed and possibly rendered them relatively more liberal than other Saudi cities. Consequently, the applicability of the research findings needs to be examined and confirmed across all of the Kingdom of Saudi Arabia. While the research studies the advantages and disadvantages of entrepreneurship specific to women, examining why women enter into business, it would naturally be questionable whether some of the obstacles and circumstances found around social media business start-ups might apply to male entrepreneurs as well and are not genderrelated. Despite these limitations, the rigour of the research lies in starting a new discussion on a global trend in an interesting context and in highlighting a gap in the body of knowledge that has not been addressed in previous literature.

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Claire Bidart, Rym Ibrahim

7 How to Locate Resources in the Personal Networks Along the Entrepreneurial Processes? Follow-Up of a Nascent Digital Nomad Entrepreneur Abstract: The transition to entrepreneurship is a complex process, and the study of which requires innovative adapted methods. The social sciences can help shed light on this process, considering in particular the social and technological contexts that are involved in these trajectories. In this chapter, we focus on the roles that personal networks of the entrepreneurs, combined with digital tools, play in accessing resources. We propose a precise scientific method to better understand the emergence of resources from personal networks along the entrepreneurial processes. Indeed, a very precise and longitudinal collection of personal network data allows to better shed light on the emergence of resources and opportunities during the entrepreneurial process, sometimes in unexpected pockets. This method is particularly powerful for considering relationship-based strategies for finding resources and opportunities, including when relationships are distributed across multiple geographical locations or are digitally mediated. Our network analysis relies on four dimensions: quality of alters (meeting context, similarity, diversity, etc.), of ties (strength, focus, emotional intensity, etc.), of whole network structure (density, modularity, centralization, etc.), and of alters’ positioning in the structure. Finally, we directly illustrate our propositions through the specific case study of a recruiter who started and managed to develop his activity on his own, as a digital nomad. Keywords: Digital Nomadism, Social Network Analysis, Entrepreneurial Process, Processual Analysis, Methodology

Note: The two authors contributed equally. Acknowledgments: This work was supported by the French government under the Programme Investissements d’Avenir, Initiative d’Excellence d’Aix-Marseille Université – A*Midex (AMX-19-IET-005), the French National Center for Scientific Research (CNRS), and the Technology Transfer Accelerator (SATT Sud-Est). Thanks to the Association for Executive Employment (APEC Marseille) that facilitated our access to the field of study, and to all included entrepreneurs to their participation to the study. Rym Ibrahim, Senior Lecturer in Management Sciences, University of Lyon, UJM-Saint-Etienne, Coactis, F-42023 Saint-Etienne, France; Research Fellow, LEST, CNRS, Aix Marseille Univ, Aix-en-Provence, France Claire Bidart, Research Director in Sociology, LEST, CNRS, Aix Marseille Univ, Aix-en-Provence, France https://doi.org/10.1515/9783110790313-008

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Introduction The transition to entrepreneurship is a complex process, and the study of which requires innovative adapted methods. The social sciences can help shed light on this process, taking into account in particular the social and technological contexts that are involved in these trajectories. To specifically address this objective, we propose to focus on the roles that personal networks of the entrepreneurs, combined with digital tools, play in accessing resources. The digital transformation of communication media tends to shorten the paths of access to information and to opportunities, but the uses of these tools are often embedded in relational contexts. In this chapter, we propose a precise scientific method to better understand the emergence of resources from personal networks along the entrepreneurial processes. This method is particularly powerful for considering relationship-based strategies for finding resources and opportunities, including when relationships are distributed across multiple geographical locations or are digitally mediated. Indeed, we consider that rather than being an alternative, technological resources are articulated in continuity with relational resources (Bailliencourt et al., 2011). Thus, we intend to contribute to the body of work that focuses on the dynamics of entrepreneurial networks and on entrepreneurship as action and interaction (Shepherd, 2015; Elfring & Hulsink, 2019). The social resources and opportunities associated with the personal network of entrepreneurs evolve along the process of development of their activity. Their localization requires to choose the relevant approach(es) of network analysis, the kinds of networks to consider, and to identify the precise features of the networks that need to be evaluated. This proposal is based on a bi-disciplinary approach (sociology and management science) that contributes to fill the gap between social network analysis, processual analysis, and entrepreneurial studies. Its theoretical foundations lie upon some statements: (1) the entrepreneurial process unfolds along distinct sequences; (2) it mobilizes resources and opportunities through the people around who form the personal network; (3) the structure of this network is decisive, as the characteristics of the people and of the ties they maintain with the entrepreneur, but also the specific position they occupy in this structure; (4) the whole of this relational system evolves from one sequence to the next; and (5) the relationship between the entrepreneurial process and the network is twofold: one influences the other and vice versa. We consider entrepreneurship “as a practice, a creative and social/collective organizing process that materializes a venture” (Johannisson, 2011 p. 137). Sharing this view of entrepreneurship calls to gather and generate actionable knowledge (Sarasvathy and Venkataraman, 2011), and thus, we attempt here to examine which academic knowledge stemming from the entrepreneurial networks research field can be considered as such. We hence start by considering the network analysis dimensions that best fit our objective. To overcome some limits that are inherent to the historical development of

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this field (Hoang & Yi, 2015; Jack et al., 2008), we get “back to the origins” by mobilizing consistent knowledge, and specifically the contribution of sociology. We propose an analysis framework with four dimensions, and methodological recommendations on how to collect and analyse relevant data with the entrepreneurs. We then directly illustrate our propositions through the specific case study of a recruiter who started and managed to develop his activity on his own, as a digital nomad. In this case study, the network of the nascent entrepreneur is examined empirically and different relational ways through which he could get closer from his objectives are then identified. Our approach demonstrates the value of knowledge transfer, supported here by interdisciplinarity. A very precise and longitudinal collection of personal network data allows to better shed light on the emergence of resources and opportunities during the entrepreneurial process, sometimes in unexpected pockets.

How to Find Resources in Entrepreneurial Networks? . . . And how to help entrepreneurs analyse, use, and develop their personal network along the stages of their business development? These questions are not trivial because (1) the representation of the personal network as a whole does not exist intuitively (no one has this image in mind); (2) the resources identified in the relationships are most often oriented directly to perceived usefulness, while they may reside in unexpected areas; (3) access to these resources depends on the position of the individuals in the network structure; and (4) it can only be constructed with methods appropriate to the specific objectives elucidated. Thus, the choice of approaches, scopes of analysis, constructs, and variables matters. Several wide literature reviews on the network approach of entrepreneurship have already been published over the two last decades (Hoang & Antoncic, 2003; Jack, 2010; Slotte-Kock & Coviello, 2010; Hoang & Yi, 2015) and reported a multiplicity of research approaches and nodal constructs, with sometimes, contradictory results. This can be explained by a marked tendency in entrepreneurial network research to focus on the effect of one or few network parameters (like the size, the ratio between strong and weak ties, the intrinsic “quality” of the network). Concepts (like “tie strength”) and their definition can also be heterogeneous (Jack, 2010). It remains even true for the concept of “social network” in itself as it is very often confused with the big blackbox concept of “social capital”. This makes it difficult in the first instance to extract some generalities that could be taught and mobilized in an actionable way. In addition, the main approach adopted in the entrepreneurial networks research field often consists of identifying resources as associated with functional networks and functional ties, with little depth to their specific characteristics and contexts (Slotte-Kock & Coviello, 2010). This also implies that it may suffer from the lack of multilevel developmental analysis. By contrast, since its precursors (Moreno, 1953, Barnes, 1954), the so-

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cial network analysis field proceeds to a systematic collection of very precise data identifying nodes, edges, and interconnections that allow to trace the structure of the network (e.g. White, 1961, Burt, 1982, Wasserman & Faust, 1994). Here, the mobilization of two disciplinary traditions and interests, sociology (though social networks analysis) and management sciences, makes it possible to combine the precise description and analysis of the dynamics of the personal networks of entrepreneurs, with the suggestion of convenient strategies for resource mobilization.

Which Approach? Entrepreneurial networks can be approached in different ways, as it can be seen from past contributions. For example, they can be approached through three distinct research lenses (Hoang & Antoncic, 2003): the network relationship, network governance, and network structures (the latter representing the bulk of past contributions). Second, attention can be focused on different types of entrepreneurial actors: entrepreneurs, firms, and teams (Hoang & Yi, 2015). Most strikingly, as Hoang and Yi (2015) note, depending on research trends, entrepreneurial networks are most often approached as “independent” or “dependent” variables. In our view, these last approaches are more problematic. As stressed by Slotte–Kock and Coviello (2010), this focalization on networks as “dependent” or “independent” variables comes from a positivistic view, widespread in the entrepreneurial networks field. Unfortunately, these one-sided approaches may have limitations when it comes to understanding networks as dynamic over time and subject to multiple contextual factors. For that matter, while falling themselves in this positivistic paradigm, Hoang and Yi (2015) for their part encouraged researchers “broadening the scope of future work to include multiple levels of analysis and to explicitly incorporate multiple empirical methods” (Hoang & Yi, 2015 p. 42), and also called for “a greater integration between (these) process and outcome-oriented research”. SlotteKock and Coviello went however further in their 2010 review, by advocating the introduction of a more interpretive and contextualized view of dyadic relationship, in order to unveil the “motors”1 of the network development process. More widely, as also pointed out by Jack et al. (2008), a general theory of networks development is still to be build and supported by empirical evidence. Actually, adopting a processual and even developmental approach to the network is undoubtedly necessary when one is called upon to advise an entrepreneur on networking “paths” that s/he may need to follow to access resources or create opportunities. Several preeminent studies showed that in the same way that the pool of necessary

 As theorized by Van de Ven and Poole (1995) for processual analysis, these motors can be life cycle, teleological, dialectical, or evolutionary.

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resources (and “relational mixes”) evolve along the progress and realization of the entrepreneurial project (Greve & Salaff, 2003; Lechner et al., 2006), entrepreneurial networks’ configurations evolve following different patterns, according to evolving needs (Elfring & Hulsink, 2007). Hence, it is important to adopt a double orientation: the first towards the resource entrepreneurs can access through their network according to the objectives they wish to achieve, and the second towards the most relevant network configurations depending on the phase of the entrepreneurial activity. This obviously implies adopting a double level of analysis, as proposed by Jack (2010): the network dyads (to provide relational context) and the general structure of the network (to provide structural context). On its part, since the 1990s, social networks analysis has focused on issues of network structure, providing a range of robust and relevant indicators with interdisciplinary validity. The most recent trend in this tradition is precisely to reintroduce the characteristics of individuals, relationships, and contexts into network analysis, and to consider their dynamics. Several authors have noted the importance of considering contexts when studying networks (Feld, 1981; Mollenhorst et al., 2014), even entrepreneurial (Coviello, 2005). This contextual dimension is even more significant when one is placed in an advisory relationship with an entrepreneur – “flesh and bones”. Larson and Starr (1993) already claimed for viewing of the entrepreneur “as a whole person, a socioeconomic actor with a personal history and private concerns as well as economic interests” (p. 11). It calls for taking an interest in the relationships that s/he may had to develop over time, and therefore in the contexts in which these relationships have emerged. While research on entrepreneurial networks generally underestimates the dynamic dimension (Coviello, 2005; Kerr & Coviello, 2020), it becomes more common in qualitative network studies. The entrepreneur’s current networks are captures of their past life stories, so they have a temporal depth. The relationships they depict are anchored in the different strata of the entrepreneur’s previous life (Bidart, 2013; Bidart et al., 2020a). “Networks aren’t static; they evolve. Entrepreneurs may better manage this evolution if they are aware of the processes involved” (Hite, 2005, p. 115). This temporal depth can explain the state of the network at the initial entrepreneurial condition (Greve & Salaff, 2003; Hite, 2003; 2005), and it allows adapting advice accordingly. This especially implies grasping the notion of relational dynamics (Hite, 2005; Bidart et al., 2020b). Considering both context and dynamics implies adopting a more comprehensive approach to the entrepreneur’s networks. If we understand how ordinary relationships have been spontaneously constructed in the past, we can rely on these probable and routine dynamics to lead the entrepreneurs towards relevant suggestions, far from generalist advice that might turn out to be out of step with their own reality. Making these contexts and dynamics explicit can help entrepreneurs to “enact” resources or opportunities (Jack et al., 2008; Johanisson, 2011), as they generally do not

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spontaneously succeed in identifying them within their networks, apart from those that might be obviously apparent.

Which Network? The question of which network to consider is far from being unproblematic (Jack, 2010; Bidart & Charbonneau, 2011). First, there is the question of the choice of the network nodal construct, when the aim is to give to the entrepreneurs some clues about the relationships they may purposely maintain, mobilize, or structure following the current stage of their activity. Focusing on the entrepreneurs as individuals (instead of teams or firms) seems to be the most accurate and adaptable dimension according to our objective. Indeed, at the start of their activity, from the pre-entrepreneurial to the early stage of development of their business, entrepreneurs are embedded in their personal relationships (Hite, 2005) including their former job partners. The decoupling between personal network and organizational network is only gradual and sometimes partial (Larson & Starr, 1993; Lechner et al., 2006; Elfring & Hulsink, 2007). Moreover, the entrepreneurs still must rely on social, cultural, or normative rules or mechanisms – better known by sociologists (Bidart, Degenne, Grossetti, 2020b) – in order to form or maintain direct or indirect ties. Using an ego-centred network approach hence makes sense. It reflects the different temporal strata of personal history: childhood friends have other resources than recent encounters, the former giving more confidence, intimacy, and social support while the latter are more contemporary with current needs and offer more relevant information (Granovetter, 1973). Then comes the choice of the type of network to consider. For long time now, and for some methodological reasons, researchers from entrepreneurial networks or business networks have made clear distinctions between the different entrepreneur’s networks (social, reputational, venture capitalist, informative, advisory, market-based, cooperative, coopetitive, etc.). These distinctions are made on a utilitarian base – following the transactional contents of the network (Fombrun, 1982). But some researchers focused on other different kinds of networks, like “discussion networks” (Wellman & Leighton, 1979; Jack et al., 2008), “support networks” (Fischer, 1982), or “core networks” (Burt, 1984) introducing more personal dimensions. As noted by Burt (1997 p. 357), some structural features of the network – as important as structural holes for job-finding or for professional promotion, and even as a source of “competitive advantage” (Burt & Burzynska, 2017) – can only be spotted in personal networks, which are diversified in terms of kind of relations (Klyver & Hindle, 2007 ; Klyver, Evald & Hindle, 2011). Thus, business-relevant resources and potentialities do not only reside in business networks, but more in the “relational mix” (Lechner et al., 2006) and its structural arrangement.

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For our part, we see the “social” less as a network qualifier than as a mode of interaction. Moreover, in terms of network qualification, there is not a necessary ontological or practical disconnection between personal and business networks (as the former can include the last and reciprocally) (Davidsson & Honig, 2003). Indeed, and for instance, by definition, multiplex ties can be both socially embedded and business relevant (Anderson et al., 2005; Jack et al., 2010).

Which Features? The size, composition, connectivity, and structure of the personal network of entrepreneurs give indications of the resources it may provide, their circulation, and their availability. These features can be very precisely described through indicators developed and tested in social network analysis. For example, a dense network of strong ties promotes cohesion, but risks being redundant. Weak ties are more likely to provide new information. Structural holes reinforce the power of individuals who control them. The betweenness centrality of certain alters2 conceals an important potential for diffusion control. Isolated alters are interesting for innovation. These well-known results can thus be mobilized for measurements of these indicators, to compare different networks, or networks at different stages. Thus, considering simultaneously different characteristics of alters (meeting context, homophily, diversity, etc.), of ties (strength, focus, embeddedness, duration, multiplexity, emotional intensity, etc.), and of structure (density, modularity, diameter, centralization, etc.) can be indicative of reservoirs of opportunities, resources, and constraints (Granovetter, 1973; Burt, 1984; Coleman, 1990). Most studies focus on one or the other of these indicators, emphasizing its explanatory power. Other, more recent works seek to account for the overall structure of the network by selecting and ordering groups of factors and constructing network typologies (Bidart, Degenne, Grossetti, 2018; Vacca, 2020). It is also very important to go back and forth from the structure to the alters, because the positioning of alters in the structure gives them particularly interesting qualities: depending on whether they are central or peripheral, whether they are isolated or gather many connections, whether they form the only bridge between isolated components, they will play different roles in the network development and resource management. A network graph visualization can also give a more integrated envision of the whole network and give a more meaningful overall vision of the person’s relational universe; this also helps sharing the analysis process. Thus, the chosen representation algorithm can play a major role: for instance, those that arrange nodes according to their mutual interconnections give more visibility to the structure than standardized

 Ego is the main subject of a personal network (or ego-centred network), i.e. the interviewee (here the entrepreneur), while alters are people with whom s/he has a relationship.

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sociograms where nodes are a priori arranged according to social roles and tie intensity. A telling visualization can also be a matter of colours: colouring the nodes and their outlines helps to identify the ongoing contexts of the relationship alters share with ego (friend, colleague, associate, family member, etc.), as well as multiplexity (i.e. whether a second context is shared).

Proposing a Four-Dimensional Analysis Framework Building on the previous discussion, we propose a four-dimensional analysis framework of entrepreneurial networks (Table 1). This framework is based on the one side on the qualitative analysis of the alters and the ties of the network (giving relational context), and on the other side on the overall structure of the network and alter’s positions in this structure (giving structural context). As a complement, structural indicators such as the networks’ density, modularity, or diameter, and others that specify the way in which each alter fits into it (degree and betweenness centrality, for example) can also allow very precise comparisons of these positions and their evolution. Table 1: Our four-dimensional analysis framework. Qualities of the alters

That is, position, skills, similarities/complementarities with ego Other qualities, that only the respondent knows, can emerge from the story by proving to be collaterally relevant (a sporting talent or a contact that can be mobilized ad hoc). Only the contextualization in the story can complete this list of qualities.

Qualities of the ties

That is, family/friendship, strong/weak tie, specialized/polyvalent or multiplex, old/recent, accumulated shared experience (especially in terms of support), level of trust, etc. Other qualities or flaws in the ties may emerge and alter the plausibility and desirability of the tie, as the story unfolds, and specific examples of past interactions are given.

Overall structure of the network

That is, density, profile of components, diameter, centralization, etc. It is generally not conscious by the respondents, and a first learning of the reading of the graph is realized together. It gives information on Egos’ position: they may suffer from the constraint induced by the high density of a cohesive group around them, or conversely, from an excessive dispersion of resources.

Alters’ positions in the structure

That is, alters included in cliques, central, isolated, intermediaries between two components, etc. Certain combinations may be examined following the entrepreneur’s needs: central people with strong multi-purpose ties, people located on the periphery of the network, etc.

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Two uses can be made of it. The most classical one consists in studying, through a longitudinal survey, the evolution of the entrepreneurial networks. This needs a rich contextualization based on follow-up interviews. The second one consists in locating resources and opportunities within the entrepreneurial networks as they progress, and in orienting their development according to their needs at these precise moments. Both require to co-analyse with the entrepreneurs their personal networks, in order to contextualize the analysis at each stage of the process. More contextual depth can be added again by following along time certain variables relating to their environment (labour markets, cities, business sectors, and social groups), the development of their activity (current state of their activity on several dimensions, path undertaken, and projections), or their emotional and volitional states. This allows to identify, from different sequences of combination of these ingredients, different evolutions of the driving forces animating the process and certain moments of bifurcation (Bidart, Longo, Mendez, 2013).

An Illustrative Case Study At the beginning of our study, Paul is a 34-year-old nascent entrepreneur (although he prefers to call himself a freelancer) who has just left his job in a large international recruitment firm. Disgusted by the company’s managerial methods (that were based on quantitative approaches to candidate sourcing and pressure on performance indicators), Paul decided to tackle the business on his own. The post-pandemic period had first offered him the opportunity to escape from a difficult period in his emotional life by leaving to Malta. Fully fulfilled in this experience, he decided to develop his activity as a “digital nomad”, in order to continue to travel while working for his clients. Research Methodology Our qualitative exploratory research takes part of a design science research (Dimov, 2016) that aims to develop a method to support entrepreneurs in reading, interpreting, and developing their network to find the necessary resources for the development of their activity. To this end, our interactive longitudinal data collection method consisted in following entrepreneurs throughout the development of their activity. Through regular interviews, we followed the evolution of their project, their activity, and their network, as well as the way in which they project themselves in the next steps of their activity development process. During these long interviews, we also taught them to read their own network graph with its specificities and their social significance, we asked them expose their thoughts and reasoning about their perception of their network features, we helped them locate the resources useful for the development of their activity and considered with them different subsequent network development strategies. The paths finally adopted among or outside the different strategies discussed were then questioned in the following interviews and so on. Data Collection and Analysis Paul was included in the study (that is still ongoing) on April 2021 and was followed over 9 months to date, during 4 interviews, for a total of 12 h (approximately 3 h each). Each interview was audio re-

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corded and note taken. The very first interview was dedicated to network data collection. We collected Paul’s personal network data through a set of name generators whose purpose was to produce an overview of his relationships in a variety of personal and professional contexts and kinds of ties. We avoided limiting this network to ties considered useful for the moment, knowing that resources can be found by surprise and in unpredictable niches. Name interpreters were jointly used to gather information about the alters whose names were cited. We took care not to question Paul about his project before this first stage of data collection. Thus, we also took care to conduce the first interview about the entrepreneurial process before revealing to the entrepreneurs their network representation, because we know that the process of inquiry in general, and the visualization of the network, has effects on respondents’ attitudes and narratives (Ryan, Mulholland, Agoston, 2014; Tubaro, 2021). The network structure was then manually collected through a matrix of interconnections between the alters cited. The interviews dedicated to project clarification and follow-up (from step 2 onwards) are all structured in the same way: a first interview phase consisted of gathering information about the entrepreneurial project, the activity development process and the personal context of Paul, as well as the names of the people involved in the story; a second interview phase consisted of comparing the mentioned names with those cited in the previous interview, especially those Paul had planned to contact or solicit. We updated his network graphs by removing alters or ties and adding others. During the very last part of the interview, we taught him to read his network graph according to the three dimensions of structure, alters, and ties, and to identify reservoirs of resources or opportunities that could serve his entrepreneurial goals as previously expressed. It was therefore equally important in this joint analysis to be precise about both the structural positions of the alters and their nominal and contextualized information. Qualitative data were coded from the interview transcripts with the NViVo 12 software. The entrepreneurial networks graphs and their updates were drawn using the “VisNetwork” R package, with a ForceAtlas2 visualization algorithm.

At this moment, Paul had many ideas. In particular, he would like to develop a mutual aid network of digital-nomadic recruiters and maybe co-working spaces abroad. At this time of our first interview, Paul knows that he doesn’t want to work anymore as a company employee and doesn’t want to be forced into it by necessity. Although some of his former clients remained loyal by calling him back to entrust him with missions, he doesn’t feel very confident in terms of economic viability and wishes to develop a strong customer base anchored in his region of origin. At that time, he doesn’t consider relying solely on his personal network to find clients and candidates, as he felt that his relationships were “powerless”. He feels also concerned by the need to access to specific work tools, in order to ensure his work efficacy. However, the cost of these tools represents a heavy investment for a nascent independent. Yet, Paul already collaborates with Sarah, a former employee colleague who also left their former company and started freelancing, and has given him the benefit of her experience. She introduced him in the co-working space she manages and gave him access to a CV library to help him get started and find potential candidates. But actually, Paul doesn’t feel very legitimate as an entrepreneur either: he is seriously thinking about the opportunity to franchise with Yann. The latter, owner of a quite large company, would provide him with expensive work tools, and reciprocally, Paul would help him cover the construction sector in which he is a specialist. Paul talks about it

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with one of his best friends, Maxime. In parallel, Dennis, a German friend he met in Malta, proposes to become a partner and to help him to develop his corporate identity and to initiate to inbound marketing. Paul mentions as possible resource providers people who already helped him or share his new experience: Maxime, Marc-Antoine, Xavier, and the father of his expartner Elodie. These alters are very different: Maxime is a former friend of studies with whom he also plays sports; Marc-Antoine is a friend who works in a consulting firm; Xavier is a friend who works in real estate and whom he met in Australia; Elodie’s father is president of a medical association and has introduced him to important people. The relationships with these people, whether recent or old, professional or friendly, are all strong ties and Paul has experienced the trust he can give them. At this time, Paul’s network structure is quite dense (see Figure 1), its core being centralized on his parents, a former colleague Maxime, and his ex-partner Elodie. To consolidate his value proposition and test it without risking ruining his reputation, Paul can rely on this core of security made up of strong ties with benevolent people who are connected to each other (like Maxime, with a multiplex tie and connections to people in diverse contexts). But such a density risks to become redundant and to prevent him from extracting himself from his professional routines. Besides, we can note that Sarah, Yann, and Denis, who give relational access to actual resources or opportunities, are all peripherical or isolated alters.

Figure 1: Paul’s network at the starting of his activity.

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Six weeks later, Paul has clearly broken away from his doubts. He has already achieved the half of his starting annual revenue target. He also feels positively surprised by the trust that his candidates and clients placed in him. One of his biggest clients even spontaneously recommended him to contacts and partners, who called him in turn. Finally, a major part of his new work opportunities came from a snowball effect within his personal network. A telling anecdote is that his friend Maxime called to give him the contact of one of a customer he didn’t want to work for himself. It was just exactly the contact that Paul was trying to find for days. This client was hiring and seeking for candidates. The same day, Loïc, a neighbour of him, called to take some news. He was seeking for a new job and had just the right profile. Paul matched them. The partnership plan with Yann did not work out because the contract was unfavourable to him. This led Paul to remove him from his network graph: he has decided to break this tie since he feels he has been cheated. Yet, his close friends, especially Maxime, warned him that he didn’t need to work with Yann and that it was only a mean to reassure himself. He also managed to tell Dennis that he didn’t really believe in their collaboration: he has a hard time getting hooked on inbound marketing; it’s not what he actually needs. This experience with Dennis taught him to not mix his familial or amical spheres in professional contexts to avoid emotional strains. He now wants to apply what he calls “the snail strategy”, which means starting from his trustworthy network, gaining self-confidence, clarifying his ideas, and enlarging his network with new people. Paul remains very attached to his new freedom: he isn’t interested to find associates anymore, and doesn’t want to grow and hire employee either. This is in how he distinguishes his project from Sarah’s one (who wants to grow up her own cabinet). However, they still collaborate by bringing business opportunities to each other, under a compensation agreement. That’s the model he wants to be part off: being a freelance surrounded by freelance collaborators to create synergies. In that respect, as a digital nomad, Paul already worked from four different places and two different countries at that date (and he was in the Emirates). He comes back in France periodically to meet his clients. Although at the outset he was sometimes reluctant to tell them that he was calling them from another country in fear of losing credibility, he now completely endorses it as a part of its professional identity. In this way, Paul really focuses on developing his professional skills. Giving himself a routine helps him to counteract the sometimes-destabilizing effects of digital nomadism. As part of his daily routine, Paul does a morning workout listening to professional practice-oriented podcasts. While he is always willing to gain efficacy with new work tools, finding a professional software is anymore an issue: he found a convenient one while assisting to a webinar and exchanging afterwards with one of the speakers, Pierre-André, who trained him to its use. He also subscribed to slack channels in order to learn good practices and exchange advices with other freelancers in his domain. Surrounding himself by experts is now his next objective. At this time, although his network kept its big dense component (see Figure 2), it lost a little density by the addition of isolated alters on the periphery, and has been diversified with new ties. As seen previously, a snowball effect plays within his client

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Figure 2: Paul’s network, 6 weeks later.

part of network, while interestingly, some great work opportunities keep coming from two reliable relations – Sarah and Maxime – with whom he has multiplex ties. Also, at the present, one part of his professional relations transits through digital medias but is circumscribed to learning activities. Six months later, Paul seems to have really fulfilled himself in his activity and has gained confidence in his abilities. Now, he has already managed to double the (comfortable) annual revenue target he had set himself. This allows him not only to choose his clients but also to take a break and focus on his personal development. Because he doesn’t want to change his living standards, but rather to become free from work, he even thinks to invest one part of his income in order to make it fructify, to be able to support Olia’s (his new partner) professional freedom, and to diminish again the work part of his time. Eventually, he would like to develop his own digital platform (allowing clients and candidates to match more easily), to increase his work efficacy. However, despite the difficulties he now faces in travelling, due to the pandemic context, Paul keeps the soul of a digital nomad. He is about to leave to the Canary Islands to develop his Spanish-speaking. He plans to stay in a co-living space first, to meet people with whom he shares the condition of a digital nomad. However, he is no longer interested in this type of space as such because he appreciates its autonomy. He knows now that dense cores of friendly or professional ties burden him. Later, Olia will join him for 3 months in a rented house.

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He is determined for the moment to develop the image of his brand, thus he called on a former football companion, Rémi, now a freelancer, for a website development and web design service. Paul meanwhile continues to collaborate with Sarah, and now also her sister Manel, with whom they exchange services between peers, and jointly invest in shared databases. He has also chosen a range of digital platforms and services that facilitate the management of his business: online banking, remote accounting, customer call back from abroad, etc. But Paul would still like to improve professionally, in communication and even in personal organization. It was through listening podcasts that he identified speakers (Bérangère, Claire, Tanguy, and Thibault-Louis) who could help him evolve in his professional practices, whom he contacted via LinkedIn to get their advice on training, or even to train directly with them. This is how one of them, Thibault-Louis, came to accompany him in copywriting, and how he is in discussion with Tanguy about a hiring software. Paul thus sorted out most of his friendships, leaving some of them who brought him additional difficulties when criticizing his plans, or when being too far from his new self, like his childhood friends. Indeed, he would like to build a network of ties that are dissociated from each other, to be enriched by new professional discussions and debates, by inspiring experiences (such as those of Tate, Marra, and Cheikhra met through Olia), and to learn even more. At this time (see Figure 3), Paul’s network lost density again by the adding of isolated ties, like Rémi (whom Paul didn’t consider before as a resource), and Tanguy (only met

Figure 3: Paul’s network, after 6 months.

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online). It also extended at its periphery, through Olia’s relations on the personal side, and through Sarah’s relations on the professional side (both are two reliable people). In sum, Paul has now entered the next sequence and strategy and has accumulated customers. He found lots of new ties through travels and digital networks, and became a typical mobile, cosmopolitan entrepreneur, used to remotly working with people, and few “anchored” in space. He’s more comfortable engaging people he doesn’t know, whose posts he’s just enjoyed or whom he has met on an online forum. Fluidity is characteristic of his sociability practices: he rejects any enrolment in a stabilized group and he comes closer to his self-definition of “digital nomad”.

Discussion These entrepreneurial stages and the elicitation of relational resources, some predictable and others not, could not have been so clearly illuminated without the articulation and precision of our methods. Without the visualization of his network, the observations and interpretations of its density, of the presence of important components of ex-colleagues, of the very strong centrality of certain alters, and the acknowledgement of the necessity to develop the periphery in order to diversify and become autonomous, Paul would perhaps have engaged less relational strategies in adequacy with the stages of his entrepreneurial process. Meeting with Slotte-Kock and Coviello’s (2010) call for multilevel and contextualized analysis, our contributions thus bond the strong findings of sociology concerning the dynamics of relationships and networks in social life in general, the very precise indicators proposed and widely shared by the network analysts, with the knowledge from management sciences concerning firm development perspectives and effective relationships for entrepreneurs. Our real-time entrepreneurial network analysis in the processual mode, which articulates the ties, the resources, the structure, with the precise sequences of the entrepreneurial process, proves to be innovative and promising. However, it does have some limitations. First, it is time-consuming; it requires a minimum level of skills to discuss these relational qualities at length on several levels and dimensions; it implies not limiting data to ties that are useful in the professional sector, and in the present time, it is complex to design, realize, and analyse. The data are extensive, thick, and there is a risk of “drowning” (Poole et al., 2000; Van de Ven & Poole, 2005) if we do not sequence them at each stage. Second, the longitudinal dimension does not resolve all the questions opened by the temporal nature of the process. For example, the entrepreneurial project is generally viewed as a teleological driving force, whereas the evolution of the network is more difficult to perceive and assess. It rather works as an evolutionary driving force, which proceeds by variation, selection, retention, or rejec-

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tion of ties without the person really noticing it (Van de Ven & Poole, 1995). These are two different levels of reality and agency that we are bringing into play here. Also, using a digital tool for data collection and visualization (like a prototype we have currently under test) could support this data collection and could allow us to follow groups with a slightly different design (for instance, including a sort of “control group” that will not benefit from the learnings related to the visualization of the network graph). The identification of typical entrepreneurial and relational sequences will hopefully lead to further generalizations.

Conclusion The case study we presented to illustrate our methodology showed the interest of a multi-dimensional approach that combines the overall structure, shape, and positioning of the alters in this structure. Combining these structural features with qualities of alters and those of the ties contributes not only to a better interpretation of their position in the structure but also to a better choice of some alters as valuable targets for developing, reinforcing, or mobilizing ties. It also provides an opportunity to see how relationships provide access to digital tools, and in turn how these tools allow, especially for highly mobile people, to create new relationships at a distance and maintain lasting ties. This emergence of a resource is often unpredictable: indeed, it is sometimes a secondary quality or shared activity of alters, or a personal tie that first appears far from entrepreneur’s needs that only becomes relevant in a particular context and circumstance. The account of the concrete help provided, placed in parallel with the potential resources identified, shows its heuristic force (in comparison with works that are based only on finite lists of standardized resources). Thus, an extremely precise analysis of the structure and composition of a network combining strong and weak ties with people in various roles (family, alumni, colleagues, hobbies, etc.) can therefore help to enlighten entrepreneurs about their relational resources and guide them towards favourable strategies for the current phase of their project. This opening up to the non-business network enables them to learn to detect less obvious and predictable resources. The longitudinal dimension also proves to be necessary for the study of processes. For each of the cases examined, the questioning aims at articulating the stages of the process (with its contexts and contingencies) and the multiple forms of recourse to alters (whose characteristics evolve according to these contexts) and to digital tools. Along the interviews we added and removed alters according to what was told and we modified the interconnections if necessary. In this way, we obtained combined biographical and relational evolutions.

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Compared to works that often infer resources directly from networks by arguing for the numerical increase of ties or for that of a single indicator, we insist on this multi-dimensionality of factors in the search of a most favourable configuration for each sequence of the entrepreneurial process. There is no “best network” in general. Not all resources are predictable. But going back and forth between respondents’ stories and experiences on the one hand, and a reading of their network profile (and changes) accompanied by scientists who do not know his alters but know how to read the particularities of their position in the network, brings a completely innovative and reproducible approach. In so doing, we seek to contribute to the formation of a body of practical knowledge that can be used to inform and accompany entrepreneurs along their process, and that can be taught in entrepreneurship programs. Indeed, the core of fundamental knowledge on entrepreneurial networks in its current form does not constitute in itself a stock of “ready-to-apply” knowledge, even if it were widely made available or vulgarized to entrepreneurs (Dimov, 2016). The challenge is to relate this knowledge to the different contexts in which entrepreneur find themselves, and to the complexity and evolving nature of the situations they face (Engel et al., 2017). This implies adopting a specific epistemological posture, i.e. rooting ourselves in the action sciences (Argyris et al., 1985).

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Rosario Marrapodi

8 Managing conflicts to improve performance in Start-Ups: a theoretical analysis Abstract: Start-up founders launch innovative products or services on the market and face multiple challenges in their entrepreneurial journey. Unlike large, established companies, start-ups are agile and more adaptable to new opportunities. However, they face significant challenges involving the emergence of new digital platforms and associated ecosystems and limited resources and identities that are yet to be established (Men et al. 2021). If these challenges are not addressed, they could lead to start-up failures or, at best diminished performance. Entrepreneurs and start-up actors facing these challenges to achieve success often find themselves in certain aspects of a tense and variable business environment. Therefore, using the analytical research method through literature review, this study examines conflict as an essential causal attribute if not recognized and managed in time. It could have negative impacts on the performance of start-ups. In particular, the study focuses on how conflicts can vary and take on different dynamics and impacts in start-ups and among the actors that usually participate in the venture’s development phase. On this basis, we present a comprehensive research agenda that can stimulate future research on the strategic management of conflicts that may arise in start-ups. Keywords: Entrepreneurship, Role Conflict, Start-Up, Organization, Self-Control

Introduction Over the past decade or so, the emergence of some new and bursting digital technologies, digital platforms, and digital infrastructure has transformed innovation and entrepreneurship significantly, bringing broad organizational and business implications (Nambisan, 2017; Nambisan et al., 2017; Yoo et al., 2010). Recent research on innovation and entrepreneurship has attempted to unfold these implications in more specific and concrete terms. For example, studies have shown how digital technologies fuel new forms of innovation and entrepreneurial ventures that cross traditional industry/sector boundaries, embracing networks, communities, and digital and non-digital ecosystems, thus accelerating the start-up and evolution of new businesses (Nambisan et al., 2019). Digital technologies, in this context, constitute an essential external enabler that can transform the nature and process of entrepreneurship (Nambisan, 2017; von Briel et al., 2018a). Many studies have considered different theoretical perspectives to examine

Rosario Marrapodi, Ph.D. student in Entrepreneurship and Innovation at Universitá degli Studi della Campania “L. Vanvitelli” and University Parthenope, Naples, Italy https://doi.org/10.1515/9783110790313-009

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how digital technologies, in various forms, stimulate and foster start-up development (e.g. Davidson & Vaast, 2010; Huang et al., 2017; Kuester et al., 2018; von Briel et al., 2018b). Arguably, many of these studies have focused on and emphasized the beneficial effects of digital technologies on entrepreneurship. However, it becomes imperative to carefully examine the potential “downsides” of digital and non-digital entrepreneurship for individual start-up entrepreneurs and the different actors espousing and being part of the new entrepreneurial project. It is important to note that given our current understanding of the costs of entrepreneurship in general (e.g. Shepherd et al., 2009; Spivack & McKelvie, 2018), the key gap lies in developing an understanding of the unique costs of entrepreneurship, i.e. the costs that are uniquely shaped by the distinctive characteristics of start-up entrepreneurs when faced with conflict situations. Conflict is “a process in which one party sees its interests opposed or negatively influenced by another party” (Wall & Callister, 1995: p. 517). Conflict can take many forms, but two are particularly important: relationship conflict and role conflict (Barki & Hartwick, 2004). Relationship conflict occurs when interpersonal incompatibilities arise from personality differences or divergent values. Whereas the role conflict occurs when the focal person disagrees about some aspects of the role they are performing, for example, disagreement about what the role consists of or how it should be performed, or situations in which the two roles may be incompatible, as in our case (De Drue & Beersma, 2005; Jehn, 1997). In this contribution, we specifically focus on the relationship conflicts that may occur between the actors who usually actively participate in the development of the new venture and subsequently address the role conflicts that individual entrepreneurs may experience in the context of digital platform ecosystems by identifying the role conflict. As we will see in this study, the role conflict that the entrepreneur may experience is closely related to situations in which he/she is called upon to play the dual role of company leader and platform follower, whereas relationship conflicts will refer to those that may arise from working relationships between co-founders, investors, and staff members. Forbes (2015) states that the most common relationship conflicts in start-ups may arise between co-founders, founders, and investors. Other forms of conflict may arise between individual employees or entrepreneurial teams in a new venture.

Conflict: A Synthetic Literature Review Conflicts are nowadays considered natural occurrences of individual, social, and organizational reality, allowing the growth of well-being in organizations through the confrontation of different ideas and points of view. Many definitions are inherent to the phenomenon, as each derives from disciplines and theorists with different backgrounds. In the organizational context, March and Simon (1959), strictly speaking, consider conflict as a complication that occurs in the decision-making process, i.e. when an individual or a group encounters difficulties in choosing between a set of

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alternatives. Another definition of conflict, in a broad sense, comes from Litterer (1966), who defines it as a type of behaviour that occurs when two or more parties are in opposition regarding activities or interactions with another person or group (Litterer, 1966, p. 180), whereas Smith (1966, p. 511) defines conflict as “a situation in which the conditions, practices, or goals of the different participants are inherently incompatible”. The difference between these two authors in defining conflict is that while Smith considers it a situation, Litterer considers it as a type of behaviour. Tedeschi (1973, p. 232) takes an intermediate position, defining conflict as “an interactive state in which the behavior or goals of one actor are to some extent incompatible with the behavior or goals of another actor or actors”. Coombs et al. (1988), in their work Structure of Conflict, provides a theoretical classification that later scholars have revised; he distinguishes three dimensions of social conflicts: intra-personal or role conflicts, which arise when an individual is torn between incompatible goals; interpersonal or relationship conflicts arise when two or more individuals want different things but have to do the same thing together; and interpersonal occurs when two or more individuals want the same thing but have to do different things (Coombs et al., 1988). A review of studies conducted by other conflict management experts shows that at least two other dimensions of conflict need to be studied in the organizational context: intra-group conflicts, which consist of disagreements between some (or all) members of a group to the extent that the dynamics and quality of team performance are at risk of being compromised, and inter-group conflicts, which consist of disagreements and tensions that develop between different groups, or inter-organizational conflicts that occur between groups belonging to different organizations. These distinct dimensions of conflict can add up and be interrelated. For example, an individual experiencing intra-personal conflict, if he or she continues to work in a particular company, may manifest hostility towards colleagues, thus triggering interpersonal conflict. It is, therefore, important to adopt a multi-dimensional approach to conflicts (Arielli & Scotto, 2003). A conflict that arises in one dimension of social interaction can be influenced and conditioned by other dimensions (Lederach, 1997), i.e. the originally intrapersonal conflict can become increasingly complex until it involves other dimensions within the organization, generating other types of conflicts, such as the interpersonal one, related to the example given (Slocum Jr, Don Hellriegel 2007). After a brief survey of the literature, we find it interesting to examine the types of conflict that can occur within and between the different actors of start-ups that might be involved.

The Damaging Effect of Relational Conflict in Start-Ups Blank and Dorf (2012) define start-ups as temporary organizations searching for a repeatable and scalable business model (Blank & Dorf, 2012). A start-up is a new enterprise with no previous operating history: they are zero-age enterprises, unrelated to any other organization except in the normal course of business and exploiting the market with an idea that may not be new. Technology start-ups are new enterprises

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without a predefined product and a pre-identified market at the outset. Thus, innovative start-ups share the common characteristic of being small organizations with typically informal structures and ties and, therefore, inherently flexible (Cavallo et al., 2021). The flexibility of these new firms may be an advantage in some respects but not others. In fact, an established enterprise with a clear hierarchical line, well-structured rules and processes would be able to cope with different stressful situations than those that might arise in new enterprises, and, on the other hand, they would have more experience and capacity in dealing with certain situations, as they might have occurred in the past. In the literature, several conflict situations that take place in the different stages of the growth of start-ups are discussed. The most common conflicts that have been found in start-ups, referred to as relationship conflicts are those that may arise from working relationships between co-founders, entrepreneurs, and investors and between staff members (Ganesaraman & Bala Subrahmanya, 2022; Forbes, 2015; Hickey, 2018; Zacharakis et al., 2010 Collewaert & Sapienza, 2016). Generally, this type of conflict negatively affects identification and trust (Jehn et al., 2008) and interferes with performance by reducing creativity and innovation (De Dreu & Weingart, 2003). De Wit, et al, (2013), in particular, argues that relational conflict leads to distorted information processing that negatively impacts decision-making. The relational conflict focuses on interpersonal differences, e.g. differences concerning personal problems, negative emotions, and unsatisfactory relationships between members of a company (Jehn, 1995). It has almost always been viewed negatively because it leads to increased hostility, distrust, and apathy among the members taking part in the new venture (Mooney et al., 2007). With this in mind, we begin by examining the most common conflicts that can take place in new ventures, namely those between co-founders (Ensley & Hmieleski, 2005). The main cause of such a divisive situation could stem from differences in ownership shares, control of the company, and, thus, the strategies that each co-founder would prefer to adopt in order to achieve the pre-established goals. A real clash of personalities is probably related to the experience and skills background of each co-founder. Power-hungry behaviour and lack of maturity in the initial phase of start-up formation often trigger conflict situations. In particular, the division of labour, mutual expectations, and assigned decision-making responsibilities between the co-founders often have a significant impact on creating conflict. The lack of a dispute resolution mechanism between the co-founders is a major concern regarding relationships, roles, and rewards (Hickey, 2018). Thus, the presence of multiple co-founders turns out to be a disadvantage in most cases (Ganesaraman & Bala Subrahmanya, 2022). Another common form of conflict occurs between founders and investors. The main cause of conflict situations is strongly linked to the diverging views of investors and co-founders. However, an important task to ensure the survival of start-ups is to attract investor funds. Investors are generally involved in helping the company grow. However, entrepreneurs sometimes do not foresee the loss of control that outside investment can entail. This creates tense situations that often undermine the relationship of trust between entrepreneurs and investors to the point of erupting into outright conflicts (Zacharakis et al., 2010; Collewaert & Sapi-

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enza, 2016). Finally, other disagreements may mature between individual staff members or between members themselves. For example, divisions may form between a company’s “first hires” and those hired later. Such divisions may result from disagreements that arise when the company’s structures and activities change over time in response to growth needs (Forbes, 2015). Another common cause could be cross-cultural differences that arise between team members. This type of conflict is increasingly present in companies today due to globalization. In particular, Gumperz (1982) states that in more developed societies, where the exchange of information is more frenetic and frequent, the increase in contact between individuals who do not belong to the same culture is often followed by the radicalization of misunderstandings (Gumperz, 1982). Intercultural conflict is rooted in the phenomenon of ethnic prejudice, defined as the negative attitude towards a target merely because of his or her membership of a particular social group, in this case, towards individuals belonging to a socio-cultural background different from one’s own, which can even result in outright racist episodes. In all these situations described so far, conflicts, if not managed in time and with appropriate management strategies, which the literature considers, would lead to negative consequences on the decision-making process, on the exchange of knowledge, and consequently on business performance. In this context, the role of the entrepreneur becomes crucial. It is not enough for the entrepreneur to possess the vision and resources, he or she must demonstrate or develop a high level of competence in supporting the growth of the new company, ensuring that there is a climate conducive to cordial and peaceful relations between staff members, and addressing from the outset the issues that arise during the start-up’s growth phases.

The Role of the Entrepreneur and Conflict: A Synthetic Literature Review The entrepreneur represents an individual or group of individuals who conceive, start, and maintain a business for a significant period of time. In this context, an entrepreneur undertakes a managerial process of innovation, supervision, and coordination of production activities (Nambisan & Baron, 2021). The goal of each entrepreneur varies from one person to the next, depending on the type of business he or she undertakes. These goals may include achieving independence, financial success, or social image. An entrepreneur plays different roles, which are reflected in different approaches to describing entrepreneurship. An entrepreneur realizes his or her goals with the help of the internal and external stakeholders of the new enterprise, motivating, directing, and guiding them. A prevalent perspective of entrepreneurs as leaders concerns how they get people to perform tasks and how they respond to the needs of these people/employees (Hemphill, 1959). Entrepreneurs, being at the helm of resource utilization, have to guide people towards the achievement of company goals. They can reach this by defin-

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ing an achievable vision and attracting people to believe in that vision (Kao, 1989). An entrepreneur is expected to use strategic management and leadership techniques to align resources in order to create value and wealth (Hitt et al., 2011). Since conflict is seemingly unavoidable, it is obviously necessary for entrepreneurs to be able to recognize the source of conflict, to view it as both constructive and destructive potential, to learn how to manage conflict, and to practice conflict resolution techniques (Fleerwood, 1987). In organizational life and realizations, means and boundaries are applied to a role in order to fit it into a total system of transforming organizational inputs (e.g. people, materials, and energy) into outputs (e.g. products and services). In such a system, roles are naturally related to a set of role expectations and prescriptions from other individuals interacting with the organizational system in which they play a focal role. According to the widely recognized work of Katz and Kahn (1978), different role senders communicate role expectations to a focal person who behaves according to the roledefining expectations within an organizational system. The entrepreneur is also positioned in an organizational context with role expectations. Like other organizational roles (e.g. accountants, salespeople, and leaders), entrepreneurs also have imposed roles, according to which certain behaviours are considered more or less appropriate within the boundaries of these expectations. One of the greatest inherent demands of any organization, even a start-up, is role performance. This means that in organizational processes, all actors involved must play their part (i.e. act according to their assigned role). For entrepreneurs, the requirements and demands of organizational role performance are also true and significant. For example, Gartner (1985) described six common activities of an entrepreneur who can help explain the expectations that are found and formed during entrepreneurial engagement. These activities include (1) identifying an opportunity (2) accumulating resources, (3) marketing products and services, (4) producing the product, (5) building an organization, and (6) responding to government and society. In performing each of these activities, the stakeholders of the new enterprise influence the cognitive processes of entrepreneurs. For example, customers expect products of a certain quality, and at a certain price, suppliers expect payment for the delivery of supplies within a reasonable time, and venture capitalists expect a return on their investments. Therefore, entrepreneurs must, in one way or another, address and manage the expectations underlying their role as entrepreneurs. These expectations may not be easily met, and some may be difficult to manage. With regard to acting on the expectations of the role, there are numerous accounts in the literature that state that the entrepreneur is often faced with obstacles and must look ahead, balancing risks and assessments of future repercussions. Although the entrepreneur’s conception of the role is not as predefined as that of other roles, and entrepreneurs may review the outcomes and tasks required to be completed, the expectations associated with entrepreneurship may turn into situations perceived as incompatible, ambiguous, or impossible to fulfil. Such situations are commonly conceptualized as role stressors. The first commonly cited role stressor in the role stress literature is role conflict, which indicates the degree to which a person perceives incongruent role demands and com-

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mitments from interlocutors. Role conflict is based on the idea that different actors may have different role expectations of a certain individual and may impose conflicting behavioural expectations on how to perform the role (Kahn et al., 1964). In entrepreneurship, role conflict can occur when the entrepreneur perceives that requirements are incongruently communicated and when the entrepreneur perceives stakeholder requirements as conflicting with their role (Nambisan & Baron, 2021). For example, consider an entrepreneur who, while looking for opportunities, has created a product prototype that perfectly meets customer requirements but at the same time violates the most recent revisions of environmental legislation. In this case, the entrepreneur is unable to meet the customer’s expectations and comply with legal regulations and, therefore, risks finding himself/herself in a role conflict. When the separation between the role and the self is marginal or absent, as indicated in the entrepreneurship literature (Shepherd, 2003; Smilor, 1997), these perceptions cause internal tensions and discomfort and put the entrepreneur’s role under stress. The second widely recognized role stress, role ambiguity, indicates the perception of insufficient information about priorities, expectations, and evaluation criteria from stakeholders. This results in the entrepreneur’s inability to adequately perform his or her job (Kahn et al., 1964). Although ambiguity in entrepreneurship is often seen as a source of opportunity, as it creates unforeseen and unpredictable complexity (Jelinek & Litterer, 1995), role ambiguity in entrepreneurship stems from the perceived uncertainty in performing the role of entrepreneur. To illustrate the role ambiguity of an entrepreneur, consider an entrepreneur who has the technical knowledge to create and produce a highly innovative product that completely satisfies customers; at the same time, however, the entrepreneur has the uncertainty of running an emerging business and meeting the expectations and requirements of governments, employees, trade unions, and other stakeholders. Although the product itself has potential, the entrepreneur is exposed to a situation in which he or she is likely to perceive role ambiguities that, in the worst-case scenario, may prevent him or her from implementing innovation through the creation of a new company. In a situation where a role is truly embraced and where the self may sometimes disappear altogether, entrepreneurs who perceive role ambiguity should find themselves in an unpleasant situation that causes stress to the role. Therefore, role ambiguity can cause discomfort and rather unpleasant role experiences. The third role stressor, role overload, occurs when perceived stakeholder expectations are impossible to meet within certain limits (Latack, 1981) because the demands of the job exceed personal and workplace resources. This role stress can be in entrepreneurial contexts. Indeed, role overload is a likely perception among start-up entrepreneurs who are new to a market and are under constant pressure to realize a perceived business opportunity. By assuming a role that is rich in nuance and complexity, the entrepreneur must seize a window of opportunity (Abell & Hammond, 1979) within which there is sufficient room to achieve economic returns from the newly introduced product before other competitors capture the market. In order to organize a company in a timely manner, the probability that the entrepreneur will face role overload is considerable. Role overload can therefore occur due to the

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perception of not being able to meet all the expectations of the company’s stakeholders, such as bankers, customers, and suppliers. Like the other two role stressors, entrepreneurs may perceive role overload as a rather unpleasant experience, as it causes stress on the entrepreneur’s role.

The Conflicting Role of the Entrepreneur in Technology Start-Ups Technology start-ups are exposed to multiple challenges. One of the main challenges is conflict, which plays a decisive role in the evolution of technology start-ups (Ganesaraman & Bala Subrahmanya, 2022). The emergence of digital platforms and, thus, associated ecosystems has led to a new and potentially important context for entrepreneurship (Nambisan, 2017; Nambisan et al., 2019; von Briel et al., 2018a). Technology platform ecosystems, referred to as “digital ecosystems”, allow new entrepreneurial firms to develop products and services that are complementary to those of the platform owner (Nambisan & Baron, 2021). For example, Apple’s iOS platform ecosystem offers entrepreneurs the opportunity to create applications (apps) that complement Apple’s core offerings. The subsequent growth in the number and diversity of such digital platforms has opened up a much wider set of opportunities for entrepreneurs (Davidson & Vaast, 2010; Nambisan, 2017; Porter & Heppelmann, 2014). More generally, digital ecosystems provide infrastructure for entrepreneurs and their companies. An important potential cost of belonging to a digital ecosystem for entrepreneurs is role conflict and its negative impact on business performance. In this context, entrepreneurs are exposed to a high degree of role conflict, a conflict that stems from the fact that they have to “wear two hats” and fulfil the obligations of two distinct roles: as a member of the ecosystem and as a leader of a new venture (Nambisan & Baron, 2013). As a member of the ecosystem, he or she must work within the vision, goals, and structures established as a leader of the ecosystem (Gawer & Cusumano, 2002; Nambisan & Sawhney, 2011). This requires the entrepreneur to ensure that the company’s goals, priorities, and strategies are in line with those of the ecosystem. At the same time, as the leader of the enterprise, the entrepreneur must ensure the longterm survival of the new venture, regardless of the fate of the platform in question. This may require sufficient differentiation of the enterprise’s value proposition and market strategies from those of the platform and the adoption of technological and commercial objectives that help sustain the new venture even if the digital platform in question declines (or fails). Therefore, to the extent that the platform’s ecosystem-driven goals, strategies, and policies are incompatible with the entrepreneurs’ goal of ensuring the success and growth of their businesses in a platform-independent manner (e.g. Srinivasan & Venkatraman. 2013), entrepreneurs will experience a role conflict. Role conflict is also likely to occur because, as studies indicate, an important reason why individuals become entrepreneurs is to gain greater independence, to “be their own boss”, and to run their businesses in the way they prefer (e.g. Baron, 2010; Rindova, Barry, & Ketchen, 2009). By joining digital ecosystems, entrepreneurs may have to abandon at least part of their “in-

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dependent mindset” and adopt an “ecosystem mindset” (Nambisan & Baron, 2013), as they have to follow the dictates of the ecosystem leader in order to remain members, both because of the distinctive characteristics and phenomena related to “digital” in entrepreneurship (Nambisan, 2017; von Briel et al., 2018b). Therefore, if role conflict implies potential cost, a better understanding of role conflict and its effects could provide entrepreneurs with key insights into whether or not to join such ecosystems and, more importantly, what skills they should acquire to succeed in such an environment. It is, therefore, at times of conflict in the business environment that the entrepreneur’s ability to manage conflict is tested and probably brought to the fore.

Start-Ups Between Conflict and Performance The literature reviews deal extensively with many elements that relate to organizational conflict (e.g. De Dreu, 2009; Jaffee, 2008; Ghiringhelli & Virili, 2020; Rahim, 2011), but little attention has been paid to the influence this phenomenon has on the entrepreneur and consequently on the performance of start-ups (Forbes, 2005; Nambisan & Baron, 2021). Some studies suggest that, by definition, conflict damages the economic and social performance of the organization by impairing communications by slowing down strategic decision-making and knowledge sharing (Gray & Starke, 1988; Hickson et al., 1986; Mintzberg et al., 1976). However, other studies tend to state that conflict can sometimes be beneficial for the organization (Tjosvold, 2008; Follet, 1995; Whyte, 1967; Van de Vliert, et al., 1994). Others even regard conflict as essential and conducive to good management or claim that it stimulates innovation within the organization (Walton et al., 1994; Putnam, 1994). Conflicts are, therefore, a fundamental component of organizational life and, as such, require constant attention from those involved in the business to ensure that disputes are managed in the most beneficial way for the organization (Van de Vliert, 1997). The common denominator among these perspectives is that in order to achieve performance goals, the entrepreneur of a start-up should be able to recognize and manage conflicts, as if not dealt with appropriately, they will surely give rise to various problems that can cause a setback for the new venture. In the era of digital ecosystems, as entrepreneurs have to manage two roles that often require incompatible behaviours (Nambisan & Baron, 2013), the extent of role conflict experienced will have a negative impact on the performance of their start-ups (Nambisan & Baron, 2021). Higher levels of role conflict and relationships will lead entrepreneurs and all actors in the start-up ecosystem to make less effective and less consistent decisions. The lower quality of decisions, in turn, will interfere with business performance. Therefore, conflict may lead the entrepreneur and other individuals who are part of the start-up ecosystem to take actions that go against each other, thus proving detrimental to the performance of the new venture. On the other hand,

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since time, energy, and commitment in enterprises such as start-ups are limited, the expenditure of these would lead to several problems in the short and long term. In addition to the direct impact of conflict on performance, we suggest that the aforementioned relationship is mediated, at least in part, by stress. Previous studies have proposed that the greater the amount of conflict individuals are exposed to, the greater the level of stress they experience (e.g. Alexander et al., 2015; Wincent & Ortqvist, 2009). In particular, intra-role (or person-role) conflict – i.e. the conflict between the focal person’s (in this case, the entrepreneur’s) time, resources, and capabilities and the required role behaviour (House et al., 1983; Rizzo et al., 1970) – can generate stress due to the perceived lack of sufficient capabilities and the resulting sense of powerlessness. For example, an ecosystem leader’s sudden requests to members to update their complementary offerings to align with the new technological standards of the platform may require entrepreneurs to expend considerable cognitive and other resources to assess the implications of such changes for their products and generate a sense of helplessness, especially when such required resources are scarce. In digital ecosystems, both roles (ecosystem member and business leader) are important (Nambisan & Baron, 2013), with the result that conflict between these roles produces higher levels of stress. For the success of their businesses, entrepreneurs must effectively perform many fundamental tasks, such as obtaining key resources, identifying and developing potential markets, obtaining intellectual property protection, and developing effective strategies for future growth (e.g. Baron, 2013). Given the intense competition between complementary firms (Tiwana, 2014), conflict management techniques and their timely execution take on added significance, as the entrepreneur’s ability to make the right decisions at the right time would result in better performance for the firm. Therefore, to the extent that stress and consequently conflict interferes with the general cognitive functioning of individuals (Lupien, Maheu, Fiocco, & Schramek, 2007) and their ability to perform effectively in different entrepreneurial activities (e.g. Baron, Franklin, & Hmieleski, 2016), the success of new ventures could be compromised. Therefore, high-stress levels generated by conflict may ultimately reduce business performance.

Self-Control and Other Conflict Management Styles If stress generated by role conflict represents a cost of belonging to digital ecosystems, given their negative effect on firm performance, then previous research (e.g. Carver & Scheier, 1999; Zimmerman, 2006) indicates that entrepreneurs’ self-regulatory skills may prove useful in mitigating the negative effects of such stress (and, thus, the costs of participating in these ecosystems). Self-control refers to the cognitive processes through which individuals focus on performing actions that help them progress towards important goals and refrain from performing actions that, although intrinsi-

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cally attractive, hinder or prevent the achievement of goals (Baumeister & Tierney, 2011; Baumeister et al., 2007). Self-control can moderate the negative relationship between stress and business performance by helping individuals with a high level of self-control to adopt effective strategies to manage the impact of stress in digital ecosystems, such as taking specific actions to solve stress-generating problems and seeking help from others (Baumeister & Alquist, 2009; Tice et al., 2007). For instance, entrepreneurs could exercise self-control by avoiding impulsive decisions (or actions), instead carefully evaluating and prioritizing their possible actions and focusing on those areas where cooperative behaviours with the platform owner (or complementary others) may enable them to mitigate the negative effects of stress. Furthermore, self-control inhibits the adoption of ineffective strategies such as denial of the problem’s existence (avoidance), distraction, and procrastination (McCrae & Costa, 1986). For example, as digital platform technologies evolve rapidly, procrastination of key technological decisions by entrepreneurs (due to lack of self-control) could undermine business prospects and enhance the negative effects of stress on business performance (Tiwana, 2014). More generally, we suggest that self-control helps entrepreneurs adopt effective but costly strategies to manage stress and avoid adopting ineffective and potentially harmful ones (Baumeister, Heatherton, & Tice, 1994). The role of the entrepreneur, therefore, in conflict situations will be to reduce conflict by stimulating cooperation and collaboration between members or between organizational units to support the achievement of organizational goals. The entrepreneurs or top managers involved in the conflict should allow for exchanges of opinions and points of view through the meeting of the members of the respective units. The communication style of an entrepreneur or manager is crucial in situations. A direct communication style stating one’s own clear point of view is not always the best form of communication with one’s members. Whereas a participative style invites individuals to make suggestions or at least stimulates them to comment and express their own opinion. The choice of words, as well as when, how (intonation of voice), and by what means (verbally, by e-mail, in a team meeting or privately) are elements of communication that must be kept in mind. Taking a passive, assertive stance, for example, calling for calm or downplaying the problem, may be an action that has short-term effects but will most likely cause the problem to reoccur after a short time. Similarly, the listening style is also important in managing a conflict. Listening but not following up on any feedback is unlikely to reassure a frustrated or tense individual. Not taking follow-up action can often lead to the problem backfiring on an entrepreneur, leaving him or her and the organization vulnerable to criticism for not having acted when the issue was first raised. In conclusion, the key to being an effective leader is not only to know which style to adopt to suit the circumstance, but to be sufficiently dynamic in switching from one style to another.

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Conclusions This theoretical analysis concludes that conflicts are inevitable in start-ups as in established companies. In each of the growth phases of start-ups, particular conflict situations are present, although the different forms of conflict analysed will not be the only ones a start-up will experience as its business grows. However, knowing how to recognize and manage them when they arise will ensure that they do not considerably interfere with the company’s performance. Therefore, this study analyses the role of the entrepreneur in managing and resolving conflict in a business environment, specifically in start-ups, where as per previous studies, managing conflict in the early stages of business start-up is highly relevant as it would affect performance, reducing it, and slowing down or blocking decision-making processes or knowledge (information) exchange. This contribution followed a literature review approach that has several advantages, such as increased rigour. However, this study also has limitations, which leave room for further research as studies concerned with addressing conflict within start-ups are scarce and the effects this phenomenon generates are probably underestimated.

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Alessia Pisoni✶, Alberto Onetti

9 Start-ups and the Hurdles of Scaling-up Abstract: The start-up world is obsessed by the concept of scalability and exponential growth. That’s why scholars and practitioners started making a distinction between early-stage initiatives (start-ups) and real companies able to produce revenue and employment (the so-called scale-ups). A recently published article by Shepherd et al. (2021) points out how “too often the start-up and the scaling stages are merged (and the difference ignored), [this] has obstructed knowledge creation”. Moreover, in this field of research “wisdom of practice” is often more advanced than theory. Therefore, in an attempt of providing a clear-cut picture of the topic under investigation, we adopt the double-side perspective of practitioners and academics, who have been focusing their research efforts on this field for decades. In the end, the chapter also provides an overview of the main hurdles characterizing the scale-up process. Keywords: Start-up, Scale-up, High-Growth, Life Cycle, Fundraising

When Does a Start-up Turn into a Scale-up? Nowadays, the term “start-up” has become a buzzword that is often used to define every kind of newly established venture. However, start-ups represent a subset – the most dynamic and relevant category – of the new ventures that are surveyed every year in the national statistics. Based on the well-known definition provided by Blank and Ries, a start-up is “a temporary organization designed to search for a repeatable and scalable business model” (Blank, 2010, 2013), “dedicated to creating something new under conditions of extreme uncertainty” (Ries, 2011). In this respect, uncertainty and scalability are to be considered as the crucial aspects of the start-up definition (Blank, 2010, 2013, Ries, 2011). Start-ups are subject to the liability of newness (Stinchcombe, 1965), that is, the higher the degree of novelty, the higher the mortality risk (Aldrich and Yang, 2012; Yang and Aldrich, 2012). Growth is therefore an unavoidable condition in order to survive, break the early-stage barrier, and scale up at global level (Tippman et al., 2018). Once the critical phase of crossing the so-called “growth chasm” (Moore, 1991) has been overcome, the start-up is ready to scale up. Based on this, scale-ups play a crucial role in introducing technologies into the market (Coutu, 2014) and are responsible for fostering economic growth and job crea-

✶ Corresponding author: Alessia Pisoni, Department of Economics, University of Insubria, Via Monte Generoso, 71-21100 Varese, Italy, e-mail: [email protected] Alberto Onetti, Department of Economics, University of Insubria, Via Monte Generoso, 71-21100 Varese, Italy

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tion (Stangler and Kedrosky, 2010). Also, for their potentials to disrupt innovationand entrepreneurial ecosystems in which they are embedded (Marcon and Ribeiro, 2021; Autio et al., 2018), they have been increasingly attracting the interest of scholar, practitioners, and policymakers (Autio, 2016; Autio et al., 2018). Despite the importance of scaling-up in improving national competitiveness (Audretsch and Acs, 1994; Gilbert et al., 2006; Audretsch et al., 2015; Mind the Bridge, 2019; Piaskowska et al., 2021), we still lack understanding of the factors able to influence the scale-up growth (Piaskowska et al., 2021). Even the definition of scale-up is still controversial (Coviello, 2019) and lack common understanding. By focusing on the sustainable growth over time, Coutu (2014) recalls the OECD (2007) definition of high-growth firms defining scale-ups as “those firms that achieve average annual growth in employees or sales turnover greater than 20% per annum over a three-year period and with more than 10 employees at the beginning of the period”. Other institutes1 have followed this definition (Coviello, 2019) by adjusting/revising the growth rate or the number of employees. By following the widely used definition of Blank (2010; 2013) and Ries (2011), and shifting the focus towards “innovation” and “scalability” prospects, Onetti (2014) further argues that a scale-up is “a development-stage business, specific to high technology markets, that is looking at growth in terms of market access, revenues, and number of employees, adding value by identifying and realizing win-win opportunities for collaboration with established companies”. In addition, Autio (2016) states that a scale-up is “a new venture that has crossed the growth chasm and settled upon a scalable business model”, thus suggesting focusing on the challenges of scaling-up. In other words, scaling involves “the delivery of a viable business model” (Tippmann et al., 2018; Reuber et al., 2021). These definitions are consistent with Duruflé et al. (2017), who define scaleups as companies that “past their initial exploratory phase, have found their initial product/service offering and market segment, and are entering a growth phase where they seek significant market penetration”. More recently, Piaskowska et al. (2021) focus on the objective to reach scale-related efficiencies and define scale-ups as “high-growth firms at an intermediate stage of organizational development (situated between the start-up and mature firm stage in the organizational life cycle), which pursue strategies that prioritize the attainment of economies of scale. Having passed their initial exploratory stage, settled on an offering and a viable business model (which is often digital), scale-ups are ready to grow rapidly”. However, according to Tippmann et al. (2018) scaling “is not just about persistent high-growth but involves assumptions on how growth is achieved and its outcomes”. In this respect, Coviello (2019) argues that too often scaleups have been confused with “high-growth firms” (Demir et al., 2017). Her publication points out that “scaling connotes a certain stage of development and transformation of processes in a company [while] growth can refer to any stage”. Coviello (2019) concludes

 See among the others: Nordic Innovation and Kauffman Foundation.

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suggesting that to be defined as a scale-up, you need to understand in what stage the venture is in. Given the fact that “scaling is not just about high-growth” (Tippmann et al., 2018; Coviello, 2019), the question that both scholars and practitioners need to answer when studying this phenomenon is how to operationalize these definitions to identify the right sample of ventures to be empirically investigated to enhance our understanding. Traditionally, firms’ growth can be measured by considering different aspects such as cash flow, net income, profitability indexes, sales growth, market share, employment, and customer base (Gilbert et al., 2006). However, there is a marked difference between young and fast-growing ventures and large mature established companies. Given the fact that most of the conventional indicators of performance are not applicable to all ventures when considering their stage of development – because they are negative or not available – the “financial capital raised” could be considered as an important measure of growth. Equity financing plays a critical role in the survival and successful development of new high-growth ventures (Mason and Harrison, 2000; Onetti, 2014, 2022; Cavallo et al., 2019), but also during the scale-up when the venture needs huge, and growing, amount of financial resources to acquire other resources (i.e. human capital – talented employees – and technological resources) that are fundamental for the development of the enterprise and to scale-up at global level (Tippmann et al., 2018; Onetti and Pisoni, 2021). Accordingly, on the practitioners’ perspective (Mind the Bridge/ Startup Europe Partnership,2 2015), the scale-up phase has been operationalized with the amount of capital raised, that is, a scale-up is defined as a tech company, founded in the new millennium, that has raised more than 1 million USD (including both capital raised through VC and the stock market), with at least one funding event since 2010. This definition has also been supported by the literature (Autio, 2016; Pisoni and Onetti, 2016; Cavallo et al., 2019). In the following, we provide more evidence that link start-ups life cycle to their fundraising path.

From Start-up to Scale-up: The Life Cycle Approach Starting from the “Gibrat Law” (1931) and the Penrose’ theory of firm growth (1959), the growth of organizations has been examined over time in the management/entrepreneurship literature by a number of authors who have proposed that organizations grow in stages/phases (Lippitt and Schmidt, 1967; Greiner, 1972; Churchill-Lewis, 1983; Miller and

 Established by the European Commission in January 2014 and led by Mind the Bridge, SEP (Startup Europe Partnership) is a Start-up Europe initiative dedicated to support the growth and sustainability of European start-ups able to compete and raise funds internationally.

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Friesen, 1984). Beyond the traditional “introduction-growth-maturity-decline”, several models of the new enterprises’ life cycle have been extensively discussed in the literature (Fisher et al., 2016; König et al., 2019). Even, if there is no common agreement among scholars in the field in how to categorize these stages,3 three major growth phases have been identified in the venture’s formation and scaling process (WEF, 2014; Mind the Bridge/Startup Europe Partnership, 2015). We distinguish among stand-up, start-up, and scale-up. The stand-up phase focuses on identifying an opportunity and the business idea to be pursued (Autio et al., 2018; Marcon and Ribeiro, 2021). Individuals, or the team of individuals, are inspired and prepared/willing to become an entrepreneur or join an innovative venture (Pisoni and Onetti, 2016). The start-up phase, instead, is focused on experimenting, refining, which according to Ries (2011) could also include a “pivoting” phase, and validating the business concept and the business model (Autio et al., 2018; Cavallo et al., 2019; Picken, 2017). Founders are involved in making the innovative organization a viable, operating venture; in particular they focus on securing the required financial and human capital and increasing the likelihood for the business to break even (Pisoni and Onetti, 2016; Onetti, 2022). Finally, the scale-up phase includes expanding the business, once a viable business model has been validated (Autio et al., 2018; Onetti, 2022). In other words, all the efforts are directed in assessing conditions to expand the company in terms of market access, revenues, added value, and number of employees (Pisoni and Onetti, 2016; 2018). While this distinction in phases helps the conceptualization of start-ups life cycle, it is worth noting that boundaries between phases tend to be blurred (Autio et al., 2018; Zaheer et al., 2019; Pisoni and Onetti, 2016; 2018). Specifically in the very early stage, the growth path of the new venture tends to be non-linear because business model assumptions need to be tested and refined and thus could lead to a “pivoting” stage (Ries, 2011).

 See among the others: Cardon et al. (2005), Sirmon et al. (2011), Fisher et al. (2016), Picken (2017), Pisoni and Onetti (2016, 2018), Autio et al. (2018), Marcon and Ribeiro (2021), Onetti (2022). Specifically, Cardon et al. (2005), by adopting the parenthood metaphor, identify the following stages: conception, gestation, infancy and toddlerhood, childhood and adolescence, maturity, and failure. Sirmion et al. (2011) identify four stages, namely start-up, growth, maturity, and decline. Similarly, Picken (2017) distinguishes among start-up, transition, scaling, and exit. While, Autio et al. (2018) and Pisoni and Onetti (2016, 2018) agree on the three-stage model, namely stand-up, start-up, and scale-up (or starting-up, growing-up, and scaling-up, according to Coviello, 2019), according to Marcon and Ribeiro (2021), the major growth life cycle phases that start-ups undergo from a business idea to a scalable business are creation, development, and market phases. Last but not the least, scholars have also tried to link the start-up life cycle to their fundraising path identifying a seed phase, an early and a late stage, and the exit phase (Onetti, 2022).

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These phases are usually associated to the access to equity finance, which plays a critical role in the survival and successful development of new ventures (Mason and Harrison, 2000; Davila et al., 2003; Onetti, 2014; Cavallo et al., 2019). The lack of financial resources is the most limiting factor for start-ups’ growth (Edelman et al., 2016). The acquisition of financial capital allows the firm to acquire other resources (i.e. human capital – talented employees – and technological resources) that are fundamental for the development of the enterprise; thus it is also a good predictor for the future growth of the firm (Davila et al., 2003). Furthermore, if financial resources are collected from investors, it implies a growing acceptance of the new venture by the environment (Davila et al., 2003; Fernhaber and McDougall-Covin, 2009). There are different typologies of investors who are usually associated to different stages of the start-up life cycle (Figure 1). The first category is represented by informal investors, who may be family and friends (the so-called 3F) and business angels (Edelman et al., 2016; Cavallo et al., 2019). Business angels are usually wealthy individuals, who typically have a previous managerial and entrepreneurial experience, and that willing to invest in the very early stage of new ventures also provide mentoring and support to the founders of the start-up (Cavallo et al., 2019). As said, in the very early-stage, seed capital funds play an important role in the development of the start-up. Usually, these investments rounds are characterized by the limited size of the amount of capital provided and are associated to acceleration programmes. Thanks to these programs, start-ups receive training and mentoring to support the scale-up (Drover et al., 2017). Venture capitals (VC) do not only provide funds (early-stage or later-stage; see Figure 1) but they also bring a network of contacts with experience in the field and usually take an active role in the board and in monitoring the evolution of the firm (Davila et al., 2003). Existing evidence indicates that the presence of VC themselves brings reputation to the start-up (the so-called “investor-related legitimacy effect”) and is relevant in explaining differences across start-up companies, distinguishing between VC-backed – which grow faster – and non-VC-backed ventures (Hellmann and Puri, 2000; Davila et al., 2003). The fact of being VC-backed also defines the start-up growth trajectory. Investors typically look for an “exit” of the start-up as soon as possible to realize their profits and re-invest the proceeds in other start-ups. Shane and Stuart (2002) argue that the cumulative amount of VC funding helps the start-ups go faster to the IPO. The IPO is an important turning point that transforms a privately held venture into a publicly owned company. Thus, the IPO highlights that the new venture reached an important milestone and indicates that the firm is ready for further growth. In this respect, the exit should not be considered as the end of a company; instead, it represents a change of control and a liquidity event for founders and early investors (Pisoni and Onetti, 2018).

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Figure 1: Start-ups’ growth life cycle and the fundraising path. Source: Mind the Bridge (2022).

The Hurdles of Scaling-up As said, so far limited attention has been paid to start-ups that are able to break through the early-stage barrier, scale-up, and produce returns for investors as well as employment and growth (Coviello, 2019; Piaskowska et al., 2021). Literature on the “transition” from start-up to scale-up is fragmented and provides disparate insights about the drivers of growth (Demir et al., 2017) and the hurdles that new ventures encounter in their growth path. In this respect, challenges to be faced in scaling-up and drivers of growth may be seen as the flip side of the same coin. Given that “too often the start-up and the scaling stages are merged (and the difference ignored)”, and that [this] “has obstructed knowledge creation” (Shepherd et al., 2020), there’s a huge research gap that needs to be fulfilled. Most studies have focused on the ecosystem perspective (Spigel and Harrison, 2018, Autio et al., 2018) and on the measures that may be taken to support growth with public policy. Yet the strategic/entrepreneurial dimensions of scalability are poorly understood (Simsek et al., 2017).

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So far, practitioner-oriented contributions,4 that is, literature typically written by authors with practical experience from the start-up/scale-up world pointed out that challenges for scale-ups are to be identified at the ecosystem/infrastructure level, and in relation to funding (availability and typology), to market and strategy, and to human capital (access to talent and leadership). Specifically, an entrepreneurial ecosystem has been defined as a set of interdependent actors and factors coordinated in such a way that they enable productive entrepreneurship within a particular territory (Acs et al., 2017). It includes “knowledge about the entrepreneurial process”, “contextual influences on entrepreneurial innovation”, institutional policy and structural element such as supporting institutions (Spigel and Harrison, 2018; Autio et al., 2018). Financing is also considered at the ecosystem level, as the availability of public–private funds to support entrepreneurial activity (Autio et al., 2014). As said, financing is fundamental to fuel start-ups growth. However, beyond the availability of funds in the system (in terms of amount and typology), the entrepreneur ability and “strategy” to raise funds (building relationship, establishing credibility) is also an important aspect to be considered (Picken, 2017). The access to skilled human capital (i.e. talents), a formal structure for roles and responsibilities, and the ability to manage rapid growth (i.e. the scale-up leadership; Coutu, 2014) are also important challenges for the transition between the start-up and the scale-up phase. Last but not the least, market and strategy complete the list. Every scale-up definition we’ve examined in the previous paragraph includes “increase in customer revenues” as a primary goal of the scale-up phase. Becoming a market leader is not just a matter of marketing actions. Nowadays, scalability and customer acquisition imply scaling-up at global level. Recently, Piaskowska et al. (2021) and Tippmann et al. (2018) have begun to explore the growth strategies of scale-up firms providing interesting results and opening avenues for promising future research directions. However, it is our opinion that more attention should be devoted to corporate start-up/scale-up collaboration under the Open Innovation perspective (Weiblen and Chesbrough, 2015; Onetti, 2020; Mind the Bridge, 2022a, 2022b). Establishing the right partnerships with corporates do not only allow the scale-up to benefit from the corporate technology or distribution channel but it also represents one of the scale-up modes that still need to be in depth analysed as a win–win strategy for both parties.

Conclusion The scaling-up of start-ups is a complex phenomenon to be investigated. Given that “too often the start-up and the scaling stages are merged (and the difference ignored)”, and that [this] “has obstructed knowledge creation” (Shepherd et al., 2020) the chal See among the others: Start-up Genome, The Scale-Up Institute, Mind the Bridge, Nordic Innovation, and Kauffman Foundation.

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lenges that researchers (either academic or practitioners-oriented) need to face to investigate this phenomenon are multifaceted. First of all, the definition of the terms “scale-up” and “scaling-up” as a peculiar phase of the start-up life cycle needs to be clarified. In an attempt to answer the “onemillion-dollar question”, that is, when does a start-up turn into a scale-up?, we’ve provided an overview of the main definitions of scale-up that academics and practitioners have shared over time. We’ve argued about the on-going debate about the differences between “high-growth” and “scaling-up” and identified the key elements that define a scale-up. An extensive analysis of the contributions published about the start-up life cycle (and its link to the fundraising path) has helped us in further depicting the topic under investigation. Summing up, a start-up becomes a scale-up after it has validated its business model hypothesis (i.e. has identified a scalable business model), solved all the start-up challenges (i.e. has crossed the so-called “growth chasm”; Moore, 1991), and thereby is ready for growth, “the” exponential growth. Second, the chapter also aimed at providing a clear-cut picture of the hurdles that characterize the scale-up phase. Literature on the “transition” from start-up to scaleup is spare and fragmented and provides disparate insights about the drivers of growth (Demir et al., 2017) and the hurdles that new ventures encounter in their growth path (Picken, 2017). To pursue our aim, we’ve combined the review of academic articles with practitioner-oriented contributions, that is, literature typically written by authors with practical experience from the start-up/scale-up world. In doing so, we identified challenges for scale-ups at the ecosystem/infrastructure level, in relation to funding (availability and typology), to market and strategy, and to human capital (access to talent and leadership). In other words, liability of newness and legitimacy, along with management inexperience, inadequate financial resources, untalented workers, scarce knowledge, and a lack of entrepreneurial abilities might keep a start-up from bridging the gap that hinders the business from scaling-up. As said at the very beginning, in the start-up world, “wisdom of practice” is more advanced than theory. That’s the reason why, to identify and address future research on this topic, academic and practitioners-oriented research should reinforce each other in a cross-fertilization logic to enhance knowledge creation.

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Fabio Greco, Marco Tregua, Francesco Carignani, Francesco Bifulco

10 New Technologies as a Lever for the Scalability of Italian Start-Ups Abstract: The most popular areas of research in the domain of start-ups are those that focus on what makes them successful. The related literature and the information databases that offer on the expansion of creative companies in Italy make clear the significance of scaling objectives in the start-up ecosystem. There is a strong relationship between the principle and the goal of scalability and the use of technologies. This chapter adopts a qualitative approach with multiple case studies that help show a cross section of the state of the art in scale-up companies in Italy. Finally, through this proposal to look at the literature and at practical cases, some implications of practical nature are proposed by the authors, stimulating further research. Keywords: New Technologies, Scalability, Start-Ups

Introduction In 2013, in Italy, there were 1,400 start-ups; today there are about 15,000 such companies registered in the business register. Approximately 65,000 employees work in start-up companies. A capital raising of around €2 billion is estimated for the whole 2022 (Sole 24 Ore, 2022). These data suggest that the start-up topic is not only of interest to those who want to become an entrepreneur but has increasingly captured the attention of practitioners and scholars. The start-up, to be such, must therefore be able to take advantage of the economies of scale (Blumberg, 2020), thus generating costs that grow less proportionally than revenue. In particular, the concept of “scalability” is particularly connected to that of new technologies. It is the latter that are the determining factors for obtaining a scalable business model. As a main example, just think of the logistics algorithms that have made it possible to optimize the entire delivery processes of delivery companies. Indeed, in Italy one of the requirements to register your company as an innovative “start-up” is to guarantee a minimum investment in research and development (registrodelleimoprese.it). In the information and communication technologies sector, scalability is represented by the ability of a system, netFabio Greco, Departement of Humanities, University of Naples Federico II, Naples, Italy Marco Tregua, Departement of Economics, Management and Institution, University of Naples Federico II, Naples, Italy Francesco Carignani, Departement of Economics, Management and Institution, University of Naples Federico II, Naples, Italy Francesco Bifulco, Departement of Humanities, University of Naples Federico II, Naples, Italy https://doi.org/10.1515/9783110790313-011

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work, or process to allow the management of an increase flexibly and dynamically in workload or the addition of new features. The intrinsic limits are therefore linked to the software and hardware architecture of the system itself (Priestley, 2018). The McKinsey & Company research identifies five “lessons” that large groups can borrow from innovative companies that have experienced rapid growth paths and from venture capitalists. And at the heart of it all is the ability to bring new technologies into processes and offers (McKinsey, 2022). Just think of virtual reality and its widespread implementation in numerous operating areas: many new businesses were born with the concrete aim of using virtual reality as a pillar of their business model, especially in sectors such as tourism (Balasubramanian et al., 2022), fashion (Ornati & Kalbaska, 2022), and entertainment (Lester et al., 2018). There is a large number of start-ups that focus on the combination of digital and tourism in a creative way, for example, providing users with unique experiences such as virtual tours through the streets of cities such as Rome, where it is possible to find oneself in the times of the Republic or the Empire simply by wearing of 3D visors. And so, getting on a bus, you can explore the capital and find yourself literally catapulted into another era, immersed in its extraordinary historical and artistic beauties, breathing, and literally touching history with your hand. And there are really many new innovative businesses that are aiming to infuse such new technological tools in their business, which thanks to the embedding in their business models are spreading in various locations in Italy. This chapter will show how new technologies can facilitate the achievement of the goal of scalability for some Italian start-ups. The authors will use the multiple case studies approach already used in entrepreneurship studies (Urbano & Toledano, 2011; Voinea et al., 2019) to provide evidence of the contribution that new technologies are currently offering to the growth of start-ups.

Literature Among the most debated issues in the context of start-up companies, the most in vogue are those on the factors that determine their success (Ries, 2011; de Mol, 2019; Schumacher, 2022) and the problems and obstacles that cause their failure (Cantamessa, 2018; Triebel, 2018; Ondas, 2021). There are also several studies on forms of support to encourage the development of start-ups within ecosystems (Cohen et al., 2019; Greco & Tregua, 2022), which in fact represent one of the most effective support tools. Among the various studies on start-ups, the importance of scalability objectives for such companies emerged remarkably (Blank, 2013; Picken, 2017; Deghuee, 2018; Nielsen 2018). Just to think about the most common definition of start-up that quotes: “a startup is a temporary organization designed to search for a repeatable and scalable business model” (Blank, 2013, p. 2). The adjective “scalable” and so the term “scalability” means a business that can increase its size – and therefore its customers and its volume of business – even exponentially without the use of proportionally growing resources used (Nielsen & Lund, 2018).

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Scalability and Scale-Up At the beginning of the last decade, the characteristics of companies that could be defined as “start-ups” were indicated, such as the search for repeatable, scalable, and profitable business models (Blank & Dorf, 2012). The start-ups differentiate from scale-ups, emphasizing that scale-ups are those start-ups that have reached a critical point in growth and are ready to take on an important role in an economic system, both in terms of profits and employment: they are not anymore looking for repeatable and scalable business models, but aim for exponential growth and market development and strategic collaborations with established corporates (Startup Europe Partnership, 2014). The term “scale-up” refers to a high-growth enterprise (>20% per annum, over a 3-year period). Growth can be measured by the number of employees or by turnover (Eurostat OECD, 2007). Despite this, it is clear that there is an extremely small number of start-ups that aim for growth and rapid evolution, which can lead to effective growth in terms of scalability (Teberga & Oliva, 2018), estimating that only one start-up (surviving the first 5 years of life, on average) out of 200 actually turns into a scale-up (the experience game, 2014). However, the characteristics that lead to the transformation from a start-up to a company capable of growing in a sustainable and profitable manner are not always evident in the early stages of a company’s life and in fact the founding phase is the most critical moment for an enterprise: it is at this stage that founders will need to establish solid foundations for the growth and scalability of a successful start-up (Picken, 2017). However, some studies in the start-up sector confirm that this evolution is mainly linked to the founding phase, where 25% of start-ups are actually designed with the possibility of scaling in the future (Italian Angels for Growth, 2015). Studies on the resilience of businesses also show that only 40% of new businesses attain 7 years of life and that only 3% of start-ups manage to scale up (Pérez Alonso & Moreno de Castro, 2020). However, one must not fall into the mistake of believing that a long initial phase of start-up leads more easily to capital growth and greater scalability: scholars indicate that even a short startup phase does not in any way preclude the transition to scale up, albeit in a highly competitive entrepreneurial scenario and strategically open to external stimuli (Bruneel et al., 2022). At the entrepreneurial level, normal companies expect the reduction of hiring during an economic contraction, while often it is precisely the resulting unemployment that triggers the birth of many start-ups (Audretsch & Acs, 1994). The literature on scale-up can mainly be divided into two strands: one analyses certain aspects of the phenomenon and the other analyses its contextualization in certain socio-geographical scenarios (Aloyce et al., 2011; Frate et al., 2021; Martens et al. al., 2012; Matricano, 2022; Schönenberger, 2014; Wallin et al., 2016). Among the aspects related to scalability, there is that of being, one of the characteristics that the markets recognize as fundamental in the success of companies that develop new products on the markets, especially on preference markets (Dahan et al., 2010); additionally, the speed of development is another key feature (Kohler, 2016). Industry 4.0 itself identifies scalability and flexibility as the essential factors for enabling innovative processes, in particular supply chain innova-

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tion, evaluating them as fundamental for the improvement of companies in the digitization process of the industrial sector (Hahn, 2020). The literature has paid a significant attention to the tools useful for the growth of a start-up (Okrah, 2018), while there are still scarce advances on those tools useful for the growth of a scale-up (Sharma, 2019). Among these tools, crowdsourcing and peer-to-peer models are fundamental, seen as extremely effective means for comparing and increasing the scalability of a company (Brabham, 2008). In this sense, the network proves to be an essential tool to enable innovative scale-up opportunities, connecting subjects, companies, and investors who can discuss business ideas and who manage to create a critical mass in changing or influencing the production models used and considered standard (Bocken et al., 2014). In this regard, it should be noted that a direct correlation has been observed between knowledge management – through practices, tools, and methodologies – and the scalability of a company, which is characterized, thanks to these elements by a strong organizational agility (Oliva & Kotabe, 2019). Four types of scale-ups are identified: network growers, whose priority is digital activity; focused scalers, who focusing on technological development focus exclusively on a specific market sector; organic innovators, who focus on the innovation of their products as a characteristic feature of their offer; and, finally, the constricted scalers, characterized by limited human and economic resources, and with lower growth rates (Piaskowska et al., 2021).

The Role of Technology in the Growth of Start-Ups If traditional start-ups are characterized by a strong dynamism, due to their very innovative nature, both in terms of processes and products, in digital start-ups, this dynamism towards innovation is even more accentuated: the digital aspect is an influencing factor for most start-ups, if 55% of them have a digital business strategy, against 38% of traditional companies (Gupta & Bose, 2019). Schumpeterian studies themselves correlate the presence of start-ups characterized by high growth with technological innovation, thus highlighting how economic growth is linked to technological start-ups (Adler et al., 2019). It is precisely the same technological posture of the entrepreneur, together with his/her skills of doing business, which are recognized in the literature among the most significant factors and which most affect the growth phase of a start-up (Santisteban & Mauricio, 2017). In fact, the most recently set start-ups, through the innovative processes linked to technologies, manage to compensate for their small size and lack of experience through such features, especially if compared to more mature traditional start-ups (Audretsch & Acs, 1994). Digital technologies are playing a central role in many types of start-ups, such as those involved in the sharing economy, by simultaneously connecting users, sellers, and buyers, where the line between them is becoming increasingly thin (Richter et al., 2017). Some studies in the US context have focused precisely on the differences between technological and non-technological start-ups, noting how non-technological ones often

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involve hiring a few employees and at a reduced salary, while technological ones have an extremely more significant impact on the employment and the level of wages (Wu & Atkinson, 2017). The effect of technologies, mostly digital ones, lead scholars to consider the relevance of new tools in leading key activities in the process of doing new businesses; indeed, Giones and Brem (2017) proposed the concept of digital technology entrepreneurship and stressed the support of digital technologies in achieving market validation for innovative offerings, as well as traction for the start-up itself, thus leading to additional goals in the long run, namely growth and scalability. It is equally important to note the fundamental role of investors and invested capital in the growth of a technological startup, especially in the initial phase: for this reason, policymakers actively support the growth process of start-ups through initiatives that aim to overcome its phases, surviving, overcoming the initial barriers, growing, and becoming a scale-up (Pisoni & Onetti, 2015). Digital start-ups have numerous characteristics that can lead to advantages over nondigital start-ups: digital tools foster collaboration that makes staff more agile and flexible, but at the same time also facilitates the creation and use of innovative ecosystems (Russo–Spena et al., 2017), especially through digital platforms (Sahut et al., 2021), the management of which, if managed effectively, is already extremely useful for businesses in general (Troise et al., 2021). Within digital start-ups, several factors play a key role: the scalability of the business, and above all the presence of digital platforms where a community of users and service providers is created (often overlapping roles), and therefore the possibility of intercepting new forms of value creation, thus redefining the relationship between supply and demand (Ruggieri et al., 2018). The digital start-ups of Industry 4.0 move within real innovative ecosystems, where collaborative relationships are developed with other subjects (other start-ups, suppliers, and users) of a typically informal nature: this type of relationship is seen as a real strategic asset of this type of start-up (Rocha et al., 2019). Among the new technologies, for example, the cloud has extremely positive repercussions on technological start-ups, creating greater opportunities towards larger markets, facilitating access to international venture capital, but also in positively influencing the scalability of the company (Ferri et al., 2020). Venture capital funding of external investors is precisely a recurring element of those digital companies that show growth paths that lead to transformation into digital scale-ups (Cavallo et al., 2019). The role of technologies, and more specifically digital, appears evident in the literature within start-ups, while the literature still offers few ideas on the role of digital tools in the transition between start-ups and scale-up (Holzmann and Gregori, 2023), and how the infusion of digital solution impacts on the processes related to the scalability of start-ups at a managerial level (Mithas et al., 2022).

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Body of Research Due to the gap highlighted in the analysis of the extant literature, the main goal of this research is to advance the understanding of the contribution of technological tools in the digital domain to the scale-up of start-ups. This topic has received limited attention due to its newness and to the continuous emerging of new solutions, especially in the framework of the so-called digital transformation. As per the call for research launched by Holzmann and Gregori (2023), the advances achieved by scholars should be partnered by empirical observations to further describe how digital technologies affect the scaling up of companies. Indeed, the authors have stressed that digital solutions have a generative power, thus meaning that they can lever the growth of a business and the scalability of new ventures, as start-ups are. This effect – according to the authors – depends on the magnifying effects of digital solutions on the socio-environmental impacts; therefore, the efforts of the entrepreneur and his/her team are needed anyway, but greatly supported by the opportunities brought by new technologies. Moreover, Holzmann and Gregori leaned on previous studies to suggest that such a growth for startups is partnered with the achievement of efficiency in the growth process itself, as well as in getting a scaling up path that is centred on lean trajectories. Anyway, the systematic literature review of the two scholars showed that further research is needed to show how technologies can help in overcoming complex challenges. Indeed, the recent advances support the understanding of the achievement of goals as the ones that startups usually deal with in the first stages of their lives, but digital solutions combine multiple forms of creating value, while “additional research is needed to identify the key digital resources required” (Holzmann & Gregori, 2023, p. 8). Therefore, this research adopts a qualitative research approach to describe the contribution new technologies offered to the achievement of scalability for start-ups. Authors adopted a qualitative approach for this research for multiple reasons: first of all, the topic is quite new and limitedly explored; therefore, the use of a qualitative approach brings the opportunity to consider issues that might be underestimated in a quantitative approach. Thus, the exploratory nature of this research supports such a choice (as in Khursheed & Mustafa, 2021). Moreover, a qualitative approach suits the need of observing the combination of new – and various – technologies in start-ups from different industries, while a unique view would limit the scope of analysis depending on the variety of digital solutions and the key features of industries (Aaldering & Song, 2021). Finally, a qualitative approach supports the understanding of a phenomenon as scalability that cannot be defined in a unique way, thus needs to be observed with reference to each units of analysis, as in previous studies on the impact of digitization on business models and their scalability (Lund & Nielsen, 2018). The units of analysis are firms scaling up and infusing new technologies; this selection criterion fits with the goal of this study, since the main focus is on how technologies supported the scaling up and not on whether this occurred. This consideration is also helpful to limit subjectivity and its related bias; therefore, the authors scanned the

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start-ups in the Italian context due to the availability of information on the local area and from local sources, as it is easily accessible for research (Clark, 2007). The selection of case studies aims at covering multiple industries in order to widen the scope of the analysis and avoid the bias that can derive from considering single industries with their own features and digital tools. Finally, the analysis has been run by combining multiple sources to ensure both validity and reliability (as in Lincoln & Guba, 1985); indeed, the use of multiple sources of information favours the achievement of validity and reduces the risk of considering sources that can be misleading. Therefore, authors compared the content of sources to look for their convergence (Creswell & Miller, 2000), achieving reliability because of validity and because of the triangulation of information throughout the multiple case studies considered.

Cases Studies Identifying a scale-up is not “simple”, in detail it is not possible to find a univocal explanation that conforms to all. However, it is possible to find various frameworks both theoretical (such as those seen in the review of the literature) and not including those that identify companies capable of obtaining 10 million revenues 5 years after its establishment or that of a business with at least 10 employees and an annual earnings of at least 20% in the last 3 years or innovative companies that in the first 3 years of life have raised at least €1 million in fundraising (Money, 2020; Deloitte, 2021). The criteria chosen in the selection of the six scale-ups reported followed these reference metrics. The will of the authors of the chapter is to propose a transversal overview of the main Italian business sectors. Casavo (Metric: 300 Million Raised) It assesses, in real time, the value of a house through an algorithm. Casavo is a start-up founded in Milan in September 2017. It was among the first to demonstrate how technological potential can increase transparency and efficiency in the real estate sector. The concept is simple: Casavo does not work as an intermediary, but as a buyer. The Casavo scale-up is not a real estate company. Casavo purchases the property by paying the agreed amount which will be offered to the seller in a totally innovative way. The price will be calculated by special algorithms giving a very precise evaluation of the property (Millionaire.it).

Cortilia (Metric: 40 Million Turnover) Cortilia is an innovative e-commerce that selects the best agricultural and artisanal producers to allow users to shop online as if they were in the countryside. The supplies, the choice of products, and the organization of the app: everything was developed internally by the technology team. The method used is that of the short supply chain, from producer to consumer, and thanks to artificial intelligence algorithms. Cortilia is able to minimize environmental waste, providing for the sale day after day of each individual product, thus avoiding having to order what is not necessary and in line with expected

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sales; as a result, food waste is reduced to about 1%. Unsold products are donated to Banco Alimentare Lombardia (Startupitalia.eu).

Scalapay (Metric: 400 Million Raised) Scalapay is the Italian leader in Buy now, pay later payments, which consists of a short-term “financing”, in three or four instalments and without interest, to purchase items on e-commerce sites. Scalapay does not want to replace banks or e-commerce sites, but to offer them and users a more convenient and faster payment service. The new solution dubbed “Magic” helps European merchants improve the customer checkout stage, growing their customer network and delivering repeat shopping experiences that drive significant conversion increases. The service takes away from the user the “long and boring” part of the payment experience: registration. Once done on a site that uses Scalapay, it is not necessary to repeat it on the others (Bebeez.it).

Vedrai (Metric: 40 Million Raised) A model of artificial intelligence in business consulting, to support small and medium-sized enterprises (SMEs) in decision-making processes, Vedrai aims to democratize artificial intelligence to help SMEs to be more competitive. Vedrai’s algorithm makes it possible to evaluate the impact that a decision will have on the main KPIs, both economic, financial, and production, intended for manufacturing companies. The Vedrai platform also promises to have marketing solutions to understand how to reduce the cost of customer acquisition. In 6 months, more than 100 companies have used the Vedrai platform. From October to December 2020, an Ebitda of around €1 million was produced (Bebeez.it; startupitalia.it).

Musement (Metric: 10 Million Raised) Musement is a scale-up that has developed a platform to propose a system for booking travel experiences all over the world. The start-up becomes scale-up when it lands in B2B, offering agencies the possibility of enriching the offer to customers with various activities (no longer just hotels and flights) and increasing revenues from commissions. The funds raised will allow the expansion of the start-up team, making it increasingly international by drawing on soft skills that will allow the development and improvement of the technological platform and the commercial offer. One of the key points will be the segmentation of the offer into various macro-areas and specific “verticals”: in this way, travellers will have the possibility to easily search and find the activity of their interest (Wired.it).

WeRoad (Metric: 13.5 Million Raised) WeRoad is the Italian scale-up specializing in long-range adventure travel. WeRoad is an innovative travel company that, with a strong community DNA, a large following on social networks of over 1 million followers, and the strength of 600 coordinators, has led over 30,000 travellers to discover the world and more new friendships of 190 long-haul and short-haul destinations, operating in three markets: Italy, Spain, and the United Kingdom. The main technological effort of the scale-up is to trigger increasingly performing algorithms to increase visibility on social networks. In this way, online communication can be well targeted and aimed at millennials (Forbes.it).

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Theoretical Implications From a theoretical point of view, the proposed case makes clear, and in line with part of the literature reported (e.g. Cavallo et al., 2019), that the scale-ups have in any case invested the available capital in the development of new technologies, thus recognizing the key role they can have in supporting the growth of the new ventures. Through the analysis of the literature and the study of Italian business cases it is possible to draw conclusions regarding what distinguishes a start-up from a scale-up. The latter is a company capable of identifying a scalable and profitable business model, stable in a phase of continuous growth and which aims to expand its reference market. It still needs forms of investment, but at least it no longer travels in the uncertainty that distinguishes the start-up to understand if there is anyone willing to pay for its product or service. A further prerogative that distinguishes a scale-up is that it is in a phase in which it is probably already capable of reimbursing its investors, through a possible exit or a listing on the stock exchange. With respect to what has been clarified in previous studies, such a consideration is in line with one of the propositions of Holzmann and Gregor (2023) as they stated that the effect of digital technologies in new ventures can be observed in business models and lead to the achievement of a growth path – including scalability – for start-ups that infuse new digital technologies in their activities.

Managerial Implication Additionally, the analysis of the case studies has homogeneous characteristics that allow to deduce some managerial implications to favour a further understanding of the ways in which some Italian start-ups have become scale-ups; these three key considerations are described below from a practical perspective and partnered with considerations from literature, thus contributing to this stream of research: – Engage in growth The first key is the desire to want to be disruptive in the sector of reference or even in the whole society. The management of the potential scale-up should strongly want the business to grow. Ambitious entrepreneurs need to create realistic growth goals and develop concrete plans and actions for how growth will and can eventually be achieved. Such a view advances the posture of Bowen et al. (2004), as they recognized the need for a change from standard growth of path, but the advent of digital technologies described how such a change may occur. – Focus on technological processes and automatisms Standardized and repeatable processes free up time and resources. It is important to make sure you implement them with proper delegation. Initially, this may require some investments in systems (IT) and training but will pay off in the long run. Soon you

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will be able to access data faster, hire faster, market better, pay easier, and streamline operations for a truly scalable model. Such a view is in line with the considerations offered by Giones and Brem (2017) and the conceptualization of digital technology entrepreneurship, since the cases investigated describe the efforts of such entrepreneurs as driven by the opportunities brought by digital technologies and shaping the path towards scalability because of the magnifying effect digital technologies can have on new business ideas and new ventures, thus being a not-to-be-missed investment. – Increase collaborations with the right actors Collaboration is not only necessary within the company: the growth mindset must extend to partnerships with people and organizations outside the company. Entrepreneurs should build a network of technology partners who increase their skills in this regard. The role of collaborations is part of such a debate, since digital tools have features that would make resource combination and value transformation in multiple forms a smooth process, particularly due to the chances digital platforms offer (Sahut et al., 2021) in line with the above-mentioned magnifying effect of digital technologies.

Conclusion The content highlighted suggests that the advent and further development of digital technologies will offer new opportunities for research in this stream of literature. There is still much to be studied on the role of technology with respect to the scalable growth objectives of start-ups, especially by focusing on the different sectors of the start-up ecosystems, e.g. the use of new enabling technologies to transform start-ups in the health sector into scale-ups could have completely different characteristics if we observe the same in the cultural heritage sector. Moreover, the effects in the long run should be observed to confirm such insights. This research may open to further advance to observe which are the features of other geographical contexts, due to the differences summarized in the digital divide and in context-specific characteristics and the use of other methodologies and research techniques, including interviews, may favour an additional understanding.

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About the Editors Dr. Diego Matricano is Associate Professor of Startup and Innovation at the Università degli Studi della Campania “L. Vanvitelli”, Capua, Italy, where since 2016 he has been teaching “Strategies for International Markets” and “Open Innovation and Digital Economy”. He has studied at the Jönköping International Business School, Sweden, and was a visiting scholar at The Wharton School, University of Pennsylvania. His research focuses on entrepreneurship, innovation, start-ups, and technology transfer. His articles, which deal principally with entrepreneurship, entrepreneurial opportunities, SMEs and innovation networks, have appeared in distinguished scientific journals. He has authored monographs with Italian and international publishing houses and contributed chapters to books published by national and international publishers. He is an experienced track chair focused on entrepreneurship both at the European Academy of Management (EURAM) international conference and at Sinergie-SIMA Italian conference. Dr. Laura Castaldi is Assistant Professor of Business Economics and Management at the Department of Economics of the University of Campania Luigi Vanvitelli. She received her Ph.D. in Entrepreneurship and Innovation from the Second University of Naples. She was a Visiting Scholar in 2004 and Visiting Research Scholar in 2015 at the Snider Entrepreneurial Research Center, The Wharton School. She currently teaches Innovation Management and coordinates the technology transfer activities at the Department of Economics, University of Campania Luigi Vanvitelli. Her main research areas are knowledge management, digital transformation, entrepreneurship and firm creation, entrepreneurship education, interorganizational collaborations, and servitization. Dr. William E. Jackson III is Professor of Management, Professor of Finance, and the J. Craig Smith Endowed Chair of Business Integrity in the Culverhouse College of Business at the University of Alabama. Dr. Jackson’s main research areas are entrepreneurial finance, venture capital and private equity, consumer finance, corporate governance, industrial economics, strategic economics, financial literacy, financial markets and institutions, and social justice and economic inequality. Dr. Jackson received a BA in economics and applied mathematics from Center College, an MBA in finance from Stanford University, and a Ph.D. in economics from the University of Chicago. Before joining the faculty at the University of Alabama, Dr. Jackson was a financial economist and associate policy advisor in the Research Department at the Federal Reserve Bank of Atlanta. Prior to his position at the Federal Reserve Bank of Atlanta, Dr. Jackson was a tenured professor of finance at the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill. Dr. Jackson’s research has been published in some of the leading academic journals in the areas of entrepreneurship, empirical economics, management, and finance such as the Journal of Business Venturing, Journal of Corporate Finance, Review of Economics and Statistics, Journal of Money Credit and Banking, Review of Industrial Organization, Journal of Banking and Finance, Management Science, Journal of Small Business Management, Small Business Economics Journal, and Annals of the American Academy of Political and Social Science. The prestigious Kauffman Foundation has sponsored his research on small firm and entrepreneurial finance. Dr. Lou Marino is the Department Chair of the Management Department, Professor of Entrepreneurship and Strategic Management, and the Frank Mason C&BA Faculty Fellow in Family Business in the Culverhouse College of Business at the University of Alabama. Dr. Marino earned his doctorate from Indiana University in 1998 and joined Culverhouse the same year. He helped found the Alabama Entrepreneurship Institute and has led the development of the Entrepreneurship Curriculum in the College of Business. Dr. Marino’s main research areas are neurodiversity in entrepreneurship, economic empowerment through entrepreneurship, minority entrepreneurship, entrepreneurial ecosystems, and the role of entrepreneurial orientation in firm performance. His research includes presentations in https://doi.org/10.1515/9783110790313-012

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national and international venues as well as more than 45 publications including 24 refereed journal articles in leading academic outlets such as the Academy of Management Journal, Journal of International Business, and Journal of Business Venturing, Entrepreneurship Theory and Practice. His research has been recognized with best paper awards at both the Academy of Management (AoM) and at the Babson conference. Dr. Marino has served the Academy and the field of Entrepreneurship in several ways. At the Academy, he has co-chaired the Early Career Development Workshop and the Mid-Career Development Consortium, served on the Research Committee where he headed up a subcommittee to award the Best Family Business Paper, and has served on the Innovations subcommittee. Outside of the AoM’s Entrepreneurship Division, he has served as a senior scholar at the Strategic Entrepreneurship Society, and on the Board of Reviewers for the Babson College Entrepreneurship Research Conference and the Sustainability, Ethics, Entrepreneurship (SEE) Conference.

Index American National Business Incubation Association 24 analytical research method 4 Austrian strategy 52 Batavia Industrial Center 24 binomial logistic regression models 68–69, 74–77, 79 BIs. See business incubators (BIs) blockchain technology 30, 31, 48 BMI. See business model innovation (BMI) business incubators (BIs) 1, 23–25 business management skills 104 business model innovation (BMI) 54, 55 business models 2, 25, 35–37, 40–42, 49, 51–56, 59, 60, 146, 148, 158 case studies – Bravo Shbab 93 – Casavo 163 – Cortilia 163–164 – I2C 27–32 – Joe’s Bakery 92 – Musement 164 – Safirat Buraidah, real estate services 92 – Scalapay 164 – scaling-up 163–164 – Style-me-Sausan 93 – Vedrai 164 – WeRoad 164 cloud computing technologies 26 cognitive psychology 6–7 cognitive strategy 11, 12. See also metacognition collinearity diagnostics 75, 76 collinearity statistics 75 communication media 3, 110 communication vs. participative style 139 competitiveness – female Instagram entrepreneurs 3 – female-owned social media businesses 87–88 – post-transformation 94 – pre-transformation 93–94 – sample of responses 94–102 – scaling-up 146 – social media based-businesses 90 condition index 75–76 configurational approach 71, 74, 79 https://doi.org/10.1515/9783110790313-013

conflicts – damaging effect 131–133 – definitions 130–131 – entrepreneur 133–137 – interpersonal/relationship 131 – intra-personal/role 131 – management styles 138–139 – performance 137–138 – relationship vs. role 130 – resolution techniques 134 Coombs, C. H. 131 Coviello, N. 146–147 customer relationship management 25 DAS. See digital adoption strategy (DAS) Davis, M. H. 6–7 DEM. See digital entrepreneurial mindset (DEM) Dess, G. G. 70–71 digital academic entrepreneurship 16–17 digital adoption strategy (DAS) 28–29 digital assets 29 digital business models 39, 40, 54–56. See also business models digital communications 28, 30 digital ecosystems 136–139 digital entrepreneurial mentality 17–18 digital entrepreneurial mindset (DEM) 1 – definition 13 – DL 15–16 – EM 14–15 – technical advancement 13 digital entrepreneurship 37. See also entrepreneurial mindset (EM) – business models 40, 54 – defined 2, 46 – digital technologies 48–51, 60 – economic activity 46 – ecosystem, inputs and outputs of 50 – element of 58 – entrepreneurial opportunities 53 – importance of 46 – performance of entrepreneurial firms 57 digital inclusivity 28 digital infrastructure 49–50 digital innovation 48 – BIs 23–25 – I2C 27–32

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– incubators 26–27 – SMAC technologies and incubation processes 25–26 digitalization 2, 25, 35, 48, 52, 54, 55 digital literacy (DL) 15–16 digital nomadism 111, 117–118, 120–121, 123 digital platform technologies 39, 40, 54, 136, 139, 161 digital sustainability 35 digital sustainable entrepreneurship 2, 35, 37–38, 41, 42. See also sustainable business model (SBM) digital technologies – business models 53–56 – defined 45 – digital entrepreneurship 48–51 – DL abilities 16 – domain of 2 – educational programmes 17 – entrepreneurial opportunities 51–53 – entrepreneurial trajectories 51–60 – entrepreneurship 129–130, 161 – impact of 25 – implementation of 15 – incorporation 47 – market orientation 46 – organizational routines and processes 47 – performance of entrepreneurial firms 56–58 – resource optimization, sustainable businesses 36 – SBM components 35 – start-ups 160 – sustainability 40 – sustainable entrepreneurs 36 digital transformation – communication media 3, 110 – defined 54 – digital incubators 26–27 – economic activity 48 – research 162 – sustainability 36 digital world, meister and 30–31 DL. See digital literacy (DL) Economic Development Authority (EDA) 28 EM. See entrepreneurial mindset (EM) embedded research design 78 E-Mind 16 enterprise resource planning programmes 25, 48 entrepreneurial actors 112

entrepreneurial ecosystems 26, 151 entrepreneurial firms 2, 56–60 entrepreneurial mindset (EM). See also digital entrepreneurial mindset (DEM) – business ownership/self-employment 7 – business ventures 6 – causal chain 8–9 – definition 6–7 – internal frameworks 7 – metacognition (see metacognition) – personal characteristics/traits 5 entrepreneurial networks – academic knowledge 110 – context and dynamics 113–114 – development process 112 – diffusion control 115 – double orientation 113 – ego-centred approach 114 – four-dimensional analysis framework 116–117 – graph visualization 115 – independent/dependent variables 112 – parameters 111 – processual mode 123 – research lenses 112 – types 114 entrepreneurial opportunities 5, 36, 51–53, 60 entrepreneurial orientation (EO) 2 – attention 69 – controversial issues 71–72 – dimensions 68, 70 – empirical evidences 77–79 – generally agreed issues 69–70 – limitations 79–80 – research design and empirical results 73–77 – samples 75 – theoretical framework and research hypotheses 72–73 entrepreneurial processes 24 – case study 117–123 – data collection and analysis 117–118 – limitations 123 – multi-dimensionality 124–125 – multilevel and contextualized analysis 123 – network analysis 110–111 (see also entrepreneurial networks) – Paul’s network structure 119–123 – personal networks 3, 110–112 – processual mode 123 – research methodology 117

Index

entrepreneurial trajectories – business models 53–56 – elements 47 – entrepreneurial opportunities 51–53 – shaping 58–60 entrepreneurs. See also entrepreneurship – activities 134 – of digital organizations 38 – digital profile 39 – education of 17 – Instagram female Saudi 88–89 – internal and external stakeholders 133 – male vs. female 74 – organizational context 134 – resource utilization 133 – role overload 135–136 – Saudi women 86, 103–105 – self-control 139 – social media 3, 88–89 – soft skills 17 – start-up actors 4 – stressors 134 – sustainability 40 – technology start-ups 136–137 entrepreneurship. See also digital entrepreneurship – ambiguity 135 – defined 86 – gender gap 3, 87, 88 – innovation 14–15, 129 – network approach (see entrepreneurial networks) – social media 86–87 – sustainability 37 – third-generation incubators 25 – young vs. grey 74 Entrepreneurship Action Plan 46 environment interaction 8–9 EO. See entrepreneurial orientation (EO) equity financing 147 evolution of incubators 24 exponential growth 4, 152 family patriarchy 88 female-owned social media businesses 87–88 Flavell, J. H. 10 French, R. P. II 6 fundraising path 147, 150

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GEM. See global entrepreneurship monitor (GEM) gender differences 87–88 gender gap 3, 87–88 Gibrat Law 147 global entrepreneurship monitor (GEM) 24 Haynie, J. M. 11 high-growth firms 146–147, 152 Hughes, M. 70, 71 Huntsville Chamber of Commerce 28 I2C. See Invention to Innovation Center (I2C) IEA. See individual entrepreneurial aptitude (IEA) implications, research – digital sustainable entrepreneurship 41 – future research 105 – practice and private sector 104 – public policy 103–104 – theory 94, 103 incubation processes 25–26 individual entrepreneurial aptitude (IEA) 87–88 Industry 4.0 159–161 informal investors 149 information and communication technology 49, 157–158 innovative adapted methods 3 innovativeness 70, 72–73, 77–78 innovative start-ups 68, 72–73 Instagram female Saudi entrepreneurs 88–89 intercultural conflict 133 Internet of Things (IoT) 56 Invention to Innovation Center (I2C) – activities and programming elements 27 – DAS 28–29 – elements, physical footprint 28 – incubatee 30 – resources 27 – UAH 31–32 investor-related legitimacy effect 149 IoT. See Internet of Things (IoT) Italian Law no. 221/2012 2, 68, 72–75, 80 Italian Ministry for Economic Development 73 life cycle approach 147–150 Lisbon strategy 68 Litterer, J. A. 131 Lumpkin, G. T. 70–71

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Meister – digital world 30–31 – I2C’s incubatee 30 – UAH I2C 31–32 mentornity 29 metacognition 7–8 – awareness 9–10 – entrepreneurial mindset 7–8 – knowledge and experience 10–11 – monitoring 12 – stages 9 – strategies 11 Miller, D. 69–71 mixed-method research designs 69, 72, 78 Morgan, R. E. 70, 71 necessity vs. opportunity entrepreneurs 74 new technologies 25, 57, 157–158, 161, 162 non-business network 124 OECD. See Organization for Economic Co-operation and Development (OECD) online matchmaking 27 organizational network 114 Organization for Economic Co-operation and Development (OECD) 86 Penrose’ theory of firm growth 147 personal networks – business development 111 – entrepreneurial processes 110–112 – organizational network 114 – snowball effect 120–121 – social resources and opportunities 110 proactiveness 70, 72–73, 77 processual analysis 112 product service system (PSS) 40 purposive sampling 38 relationship conflicts 130, 132 risk-taking 68, 70, 72–73 role conflict 130, 134–137 Saudi Arabia. See also social media – Eastern Province 91, 105 – exploratory qualitative research 105 – female citizens 86 – gender and entrepreneurship 86 – Instagram 89

– oil prices and public administration’s transformation 103 – women entrepreneurs 86 SBM. See sustainable business model (SBM) scalability 146, 157 – customer acquisition 151 – exponential growth 4 – Italian start-ups 158 – qualitative approach 162 – scale-up 159–160 scaling-up 4. See also start-ups – body of research 162–163 – cases studies 163–164 – definition 146, 147, 152 – ecosystem/infrastructure level 152 – hurdles 150–151 – managerial implication 165–166 – national competitiveness 146 – scalability 159–160 – theoretical implications 165 – types 160 self-control 138–139 SEP. See Startup Europe Partnership (SEP) service aggregation 27 SMAC technologies. See social media, mobile, analytics, and cloud computing (SMAC) technologies snail strategy 120 social capital 111 social conflicts 131 social media – businesses 3, 90 – competitiveness, female-owned businesses 87–88 – computer-mediated tools 86 – digital customer channels 56 – digital tools 31 – entrepreneurship 86–87 – female-owned businesses 87–88 (see also competitiveness) – I2C strategy 28–29 – influencer 93 – Instagram female Saudi entrepreneurs 88–89 – literature gaps and research propositions 89–90 – methodology 90–91 – research implications 94, 103–105 – research limitations 105 – results and data analysis 92–93 – strategy 28–29

Index

– technologies 25–26 social media, mobile, analytics, and cloud computing (SMAC) technologies 25–26 social network analysis 111, 113, 115 soft skills 16–17 Startup Europe Partnership (SEP) 147 Startup Manifesto 68 start-ups. See also scaling-up – business register 157 – conflict and performance 137–138 – definition 145, 158 – digital technologies 129–130 – ecosystems 166 – entrepreneur, conflicting role of 136–137 – fundraising path 150 – growth chasm 145–146 – growth of 160–161 – life cycle approach 147–150 – literature 158 – relational conflict 131–133 State of Alabama 28 Structure of Conflict (Coombs) 131 sustainability 35–36, 39, 40 sustainable business model (SBM) – analysis 39–41 – components 35 – digital entrepreneurs 40 – implications 41 – interview questions 38 – limitations 42 – method 38

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– research 42 – theoretical background 37 sustainable development goals (SDGs) 36, 37, 42 sustainable entrepreneurs 36 technology start-ups 136–137 Tennessee Valley Authority (TVA) 28 UAH I2C 31–32 unit of analysis 91, 162 value capturing mechanisms 37 value creation architecture 37 value proposition 37, 39 values of tolerance 75 variance inflation factor (VIF) 75–76 VBI. See virtual business incubators (VBI) venture capitals (VC) 149, 161 VIF. See variance inflation factor (VIF) virtual business incubators (VBI) 27. See also business incubators (BIs) virtual reality 158 Vision 2030 3, 88, 90 women entrepreneurs 86, 103–105 word cloud of responses 41 young vs. grey entrepreneurship 74 zoom room, I2C 31–32