Fostering innovations by spin-offs in SMEs

Abstract

In a global and dynamic environment all companies face the demand for constant innovation and adaption. Under ideal circumstances, businesses would optimize their exploitation of existing products and simultaneously generate new innovations for a long-term sustained competitive advantage. While large companies strive for ambidextrous organizations and spin off innovative projects, small and medium-sized enterprises (SMEs) have to face higher resource constraints and individual characteristics to both exploit and explore. Spin-offs are organizational structures to foster innovation that are already established in large companies but are only rarely seen in SMEs. Furthermore, SMEs are rather ignored in scientific literature, which is almost exclusively concentrated on spin-offs from large companies and from academic origin, leaving an important gap in the literature that this doctoral thesis aims to fill. Building on a spin-off model for SMEs based on the resource-based theory and the Resource Dependency Theory, this doctoral thesis opens up this field of research. By using a qualitative mixed methods approach combining a critical incident methodology and thematic analysis, the factors and resources that determine the decision to create spin-offs in SMEs are explored and discovered. Based on 14 SME spin-offs from Germany, a framework of tangible and intangible resources and factors is developed which helps to explain the spin-off decision of SMEs and gives implications for further research. The results show that the spin-off construct increases its advantage to exploit innovation with increasing risk and innovation level of the object of exploitation. Additionally, considerable differences in the spin-off motivation between entrepreneurial and divestment driven spin-offs are identified. The critical incident analysis indicates that financial constraints are the main obstacle for the creation of a spin-off from SMEs while the reduction of resource dependencies between business units are the main driver for divestment oriented spin-offs. [Resumen Teseo]