Growth and inventiveness in technology-based spin-off firms

Abstract This study focuses on technology-based spin-off firms that have had their initial product idea originated in the previous employment of the founder. Such entrepreneurial spin-offs (ESOs) arise when an entrepreneur leaves an organisation to start a firm of his own. Using the data from 60 small Swedish technology-based firms, 30 such entrepreneurial spin-offs are identified. It was found that as many as two-thirds of the spin-offs had originated in private firms, and only one-sixth from universities. In this paper, the background and the performance, in terms of growth and inventiveness, are compared for the spin-off and the non-spin-off firms. It was found that, after an initial ten-year period, the spin-offs were growing significantly faster than the non-spin-offs. However, no significant difference in the inventiveness was found between the two groups. Neither the growth nor the inventiveness could be explained by pre-spin-off variables, but it is speculated that the earlier employment within the spin-off parent has indirectly influenced the performance of the spin-off firms.

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