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High tech spinn offs - limited impact!

  • Published 03/03/2004
  • Last updated 20/05/2011
The project studies the creation and performance of new establishments and enterprises in the Nordic countries, utilising administrative register data compiled by the national statistical agencies on enterprises, establishments and employees. Among the many different aspects brought up during the study, the central theme concerns how one specific category of new establishments perform, namely those that can be identified as “high-tech spin-offs”.

Frontpage report

Renewal is frequently pointed out as part of a solution to industrial challenges by policy makers. One question is, therefore, how much of the renewal that goes on within the frames of existing establishments and enterprises, and how important the newborn firms are in this process. In order for some kind of modernisation to take place, within this narrow category of changes, how large is the contribution of spin-offs that can be characterised as “high-tech”? Such quantitative comparisons have so far been difficult to carry out but have been assessed here utilising the register data.

Limited impact
A first point is that high-tech spin-offs in many respects seem to be a phenomenon of limited magnitude. The numbers of establishments involved and the numbers of employees in them are quite limited. The activity is to a large extent concentrated to particular parts of the business services industry, in many cases involving small consultancy firms that employ few others than the original members at the time of creation. 

More spin-offs in high-tech
Spin-offs seem to be more important in some cases than others. In particular, spin-offs are more widespread in high-tech sectors than in other sectors, and they have a higher survival rate than other new start-ups.

Experience important for survival
Higher survival among spin-offs indicates that the experiences that the employees bring with them when spinning out are important, and more important in high-tech sectors than in other sectors. This could be an argument for considering how to foster spin-offs in the high-tech sectors if the goal is to expand the presence of such sectors in the economy.

Success factors hard to identify
It is difficult to identify the factors influencing the likeliness of success. In isolation this is an argument against getting involved with policy measures, simply because we have not sufficient knowledge about the decisive or significant factors. In particular the variables included that directly bears on policy, such as localisation and in particular being eligible for regional or structural support has no impact on the likeliness of success. 

Should low achievement be compensated?
Even if high-tech spin-offs are not found to be of any major importance so far, that does not necessarily imply that it should continue on the same track. One can contrary argue that the limited activity we have had so far accentuates the need to achieve better in this respect. A rational could be that high-tech spin-offs are presumed to be a mechanism for bringing advanced knowledge to use in new businesses. The present work has had no means of settling such an issue.

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