The role of Innovation Intermediaries in technology venturing

Transcription

1 The role of Innovation Intermediaries in technology venturing LUIGI CANTONE * NICOLA CIRILLO ** PIERPAOLO TESTA *** Abstract Purpose of the paper. The paper explores the role of Innovation Intermediaries (IIs) in Technology Venturing (TV). Design/Methodology/Approach. Case study research approach: ASP-Area Science Park (Trieste, Italy) and its in-house technology incubator, Innovation Factory (IF). Qualitative indepth interviews with key actors of the two organizations (ASP CEO, IF Managing Director). On-going research ( ). Findings/Originality. IIs are strategic enablers of entrepreneurship in TV. According to the literature review and the case study, the findings of the empirical research confirm that IIs perform inherent activities such as networking, technology development, other managerial supporting activities. The origin of the business idea and the capabilities of the TV team strategically determine the activities, competencies and role of IIs. Research Limitations. A case study approach was adopted. Furthermore, the experience of TV in Area Science Park is too recent (2008). Implications. Insights of TV s role and processes for IIs. Key words: Technology Venturing; Innovation intermediaries; New technology-based firm creation; Business incubators; Entrepreneurial team building; Case study method 1. Introduction In recent years, the strategic role of Innovation Intermediaries (IIs) in the innovation process has grown considerably. Indeed, IIs are relevant for economic development through entrepreneurship nurturing and technology advances (Howells, * Ordinario di Economia e Gestione delle Imprese - Università degli Studi di Napoli Federico II luigi.cantone@unina.it ** Assegnista di Ricerca in Economia e Gestione delle Imprese - Università degli Studi di Napoli Federico II nicola.cirillo@unina.it *** Ricercatore di Economia e Gestione delle Imprese - Università degli Studi di Napoli Federico II p.testa@unina.it sinergie, quaderni Ricevuto: 12/11/2014 n. 17 Giugno 2014, pp Revisionato: 13/02/2014 ISSN DOI /q Accettato: 05/06/2014

2 106 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING 2006; Dalziel, 2010; Mian et al., 2012). They work to enable the creation of new technology-based firms, and facilitate Technology Venturing (TV). TV builds businesses around sophisticated technologies that have not yet found commercial uses. However, in order to establish a technology driven start-up, turning promising technology into real services, products, processes or business models, it needs to combine technology and market competencies. Previous frameworks in literature suggest that two specific types of knowledge - technology and market knowledge - may have important implications for achieving desirable outcomes (Agarwal et al., 2004; Marvel and Lumpkin, 2007), particularly for technology ventures (Sullivan and Marvel, 2011). Technology innovators are holders of differentiated technology resources and competencies. Therefore, acquiring and combining managerial skills is key to unlocking the potential of technology innovation. This is critical during early venture development, particularly in relation to producing innovative offers, and generating early sales. Market knowledge, market segmentation skills, value proposition and business model definitions are strategic in building technology innovations that also meet market needs and economic value. The aim of this paper is threefold. Firstly, to review the literature on the issue of IIs. Secondly, to explore the strategic role of IIs in TV, focalizing on activities realized to develop and combine technology and managerial competencies into the team members of new technology ventures. Thirdly, to apply a conceptual model to analyze which kind of specific competencies an II intends to mobilize in the entrepreneurial team during the incubation phase, and how this objective is pursued. In sum, our interest is to understand how an II works in order to develop specific entrepreneurial capabilities of venture teams. The case study of Area Science Park (Trieste, Italy) and Innovation Factory, its in-house business incubator (which runs the start-up program of new technologybased firms), are the focus of the empirical research. The case study research method has been used in order to develop well-grounded theory about the topic. 2. Theoretical background IIs are organizations that operate to enable innovation, both directly by fostering the innovativeness of one or more firms and the entrepreneurship in technology venturing, and indirectly by enhancing, the innovative capacity of regions, nations or sectors. Indeed, IIs work on multiple tiers. At a meso-social level, by interacting with policy makers (Lundvall, 1992; Cooke et al., 2004); at a micro-social level, by intermediating resources and competencies among firms, public research institutions, technology venture start-ups (Hargadon and Sutton, 2000; Etzkowitz and Leydesdorff, 2000; Howells, 2006; Rothaermel, et al., 2007; Dalziel, 2010); at an individual level, working with technology venture teams (Bessant and Rush, 1995; Grimaldi and Grandi, 2005; Scillitoe and Chakrabarti, 2010; Bruneel et al., 2012).

3 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 107 Several sources in the literature explain the interest in the role of intermediaries in innovation processes, including in particular: - Systems of Innovation literature (Lundvall, 1992; Nelson, 1993; Camuffo and Grandinetti, 2006; Cooke et al., 2004; 2011); - Triple Helix model studies (Etzkowitz and Leydesdorff, 2000; Etzkowitz, 2003); - Inter-organizational Network Theory (Powell, 1990; Nohria and Eccles, 1992; Aldrich, 1999; Zaheer et al., 2000; Hargadon and Sutton, 2000; Adler and Kwon, 2002; Dagnino et al., 2011); - Resources-based Theories (Prahalad and Hamel, 1990; Grant, 1991; 1996); - Transaction Cost Economics Theory (Williamson, 1978; Ouchi, 1980; Hackett and Dilts, 2004); - Research into service organizations and, more specifically, Knowledge Intensive Business Services (KIBS) firms (Muller and Zenken, 2001; Bettencourt et al., 2002); - More generally, innovation research on the role and management of such activities and the firms supplying them (Aldrich and von Glinow, 1992; Hargadon and Sutton, 2000; Boschetti et al., 2003; Hackett and Dilts, 2004; Howells, 2006; Mele et al., 2011). Furthermore, the building of a more consolidated, holistic and clear theory on IIs as an object of research (Howells, 2006; Rothaermel et al., 2007; Dalziel, 2010) reveals of particular interest. Indeed, understanding IIs as a single class of organizations is useful for several reasons: 1. it draws attention to organizations that are often overlooked in studies on national (Lundvall, 1992; Nelson, 1993), regional (Cooke et al., 2004), or sectoral (Malerba, 2002) systems of innovation, and conceptual models and the data collection efforts of statistical agencies (Godin, 2005; Siegel, 2003); 2. the literature is so confused and eclectic about the definition, organization and role of these innovation actors (Howells, 2006; Link and Scott, 2007; Rothaermel, et al., 2007; Dalziel, 2010). In accordance with the ZIZO Movement Theory (Van Mele, 2006), this kind of approach has determined a zooming-in effect in the literature. Namely, it is too oriented towards analyzing specific details and situations concerning different kinds of IIs that don t favor a zooming-out process, namely a theoretical abstraction aimed at commonalities rather than the differences among actors that are recognizable as IIs; 3. several authors have pointed out the lack of theory on IIs, considered an important part of the innovation and entrepreneurship process (Phan et al., 2005; Howells, 2006). IIs operate in the innovation gap area the space between business and research communities where goals are incongruent and performance is highly ambiguous. In accordance with several studies in the literature, an innovation gap separates business and research communities, alternatively known as a commercialization gap or the valley of death (Branscomb and Auerswald, 2002; Dasgupta and David, 1994; Furman et al., 2002; Kaufmann and Tödtling, 2001; Wessner, 2005).

4 108 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING IIs, that work to reduce the innovation gap, face the dual challenge of high levels of performance ambiguity and high levels of goal incongruence. Performance ambiguity is a consequence of the lack of universal measures of progress for the transformation of early stage discoveries and technologies into commercially viable products and services. Goal incongruence is a consequence of their reliance on the engagement of members of both business and research communities, who have divergent goals (Dalziel, 2010). IIs organize and support technology venturing activities to transform innovative technology opportunities into future goods and services (at an individual level), establish new technology driven start-ups (at a micro-social level), and enhance innovation systems (at a meso-social level). According to Dyer et al., (2009), true innovators have discovery skills that allow them to build business success from creative ideas. The authors propose a theoretical framework to highlight the discovery skills of innovative entrepreneurs. They examine when and how they came up with the ideas on which their business were built (Dyer et al., 2009, p. 62). Their research aims to understand the skills that distinguish the most creative executives and entrepreneurs from the other business people. In searching for answers, we undertook a six-year study to uncover the origins of creative and often disruptive business strategies in particularly innovative companies. Our goal was to put innovative entrepreneurs under the microscope, examining when and how they come up with the ideas on which their businesses have been built. We especially wanted to examine how they differ from other executives and entrepreneurs [ ]. We studied the habits of 25 innovative entrepreneurs and surveyed more than 3,000 executives and 500 individuals who had started innovative or invented new products (Dyer et al., 2009, p. 62). As argued by the authors, these discovery, creative and visionary skills make up what they call the innovator s DNA and they can be cultivated and stimulated even in people who are not born with them (Dyer et al., 2009, p. 62). Studies of identical twins separated at birth indicate that our ability to think creatively comes one- third from genetics; two-thirds of the innovation skill set comes through learning - first understanding a given skill, then practicing it, experimenting, and ultimately gaining confidence in one s capacity to create. Innovative entrepreneurs in our study acquired and honed their innovation skills precisely this way (Dyer et al., 2009, p. 63). The discovery skills that distinguish innovative entrepreneurs are the following (Dyer et al., 2009, p ): 1. Associating, the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields, in order to generate new ideas; 2. Questioning, the ability to ask accurate, provocative and unconventional questions, that challenge the common wisdom ; 3. Observing, the ability to scrutinize any small detail of the social and business phenomena (like the behaviour of potential customers), in order to gain insights about new ways of doing things ; 4. Experimenting, active experimentation and exploration in order to create innovation; 5. Networking, the conscious effort in finding and testing ideas through a network of diverse individuals [ ] with different kinds of ideas and perspectives, in order to extend one s own knowledge

5 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 109 and competency domains. These innovation skills are out-and-out action patterns that distinguish the mindset of innovative entrepreneurs from other business people and the approach through which they come up with creative and visionary business idea. 3. Research design and methodology The research purpose of this paper is to explore how hidden incubation mechanisms work in incubator-entrepreneurial teams relationships. Qualitative instead of quantitative research approach is adopted. As pointed out by Gummesson (2005), theory generation is moving from raw data and description to conceptualization and contextualization. Conceptualization means going behind the façade provided by the label of a topic. In terms of conceptualization, there is a cognitive gap in literature in analyzing the relationships between business incubator organizations and entrepreneurial teams of emerging technology-based firms. Contextualization, instead, refers to the need to place single data in a broader context, that is, generate theory. In terms of contextualization, it has been decided to explore the technology ventures activities of Area Science Park (ASP), located in Trieste (Italy), known as the most important technology and science park in Italy. In order to analyze the topic, an empirical research in the form of an embedded longitudinal case study has been conducted (Hamel, 1993; Yin, 1994; Easton, 1992, Perry, 1998; Saunders et al., 2000). The case study mainly involved Innovation Factory (IF), namely, the in-house incubator conducting the technology venturing in ASP and three entrepreneurial teams that have survived the pre-incubation selection. The research question investigated in the case study is the following one: how do ASP and IF develop business competencies in the technology-venturing teams of incubated firms? In order to investigate the way ASP and IF mobilize competencies in entrepreneurial teams to generate thriving firms, we adopted the action patterns of the Innovators DNA theoretical framework proposed by Dyer et al., (2009). In our opinion, this conceptual framework can make a valuable contribution in understanding the rationale of the operational approach of an II in sustaining the entrepreneurial team of new technology-based ventures during incubation stages. Therefore, one of the aims of the present ASP case study is to analyse if the initiatives carried out in the park during the period of incubation mobilize the patrimony of discovery skills of innovative entrepreneurs in order to stimulate, reinforce and consolidate the breakthrough business idea and sustain the entrepreneurial team building. ASP and IF have been surveyed with the embedded case study methodology. The empirical research considers several perspectives of analysis - those of managers of ASP and IF, entrepreneurs of technology ventures incubated in the park - as well as more organizational units, namely, ASP, IF, and a sample of three technology ventures incubated in the park (G&life, modefinance, Amped Software). The case study here analyzed has also requested an in-depth longitudinal

6 110 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING examination or a systematic observation of the activities of ASP and IF by interviewing managers, collecting qualitative data, analyzing information, interpreting and reporting the results over a long period of time ( ) 1. This case study has been previously explored in April 2008 and its first findings published in Cantone (2010). Five managers who were strongly involved in the technology venturing process at ASP, were interviewed in the May - September 2013 period: the ASP CEO, the Managing Director of IF, and three CEOs of technology ventures that were incubated in the park. The interviews were conducted by using project narrative techniques. The interviewed 2 managers told us about the project they implemented in the TV field starting from the early stages, outlining its evolution throughout the years and discussing future ambitions. The elaboration of the case study has concerned speculative reflections by the authors, comparing theoretical background on IIs role in technology venturing with empirical research findings. Furthermore, the empirical research design implicated a double check of empirical findings. In fact, a discussion about the findings in the scientific community took place during a workshop organized by Sinergie journal at the University of Naples Federico II (May 24 th, 2013). Moreover, a final debate session was set up with the ASP CEO and the Managing Director of IF to discuss the author s case study results. Both double checks have made a valuable contribution to the further refinement and in-depth analysis of the study s research findings. 4. Technology venturing in Area Science Park 3. The core activity of Innovation Factory (IF), the in-house technology venturing incubator at ASP, is scouting for new business ideas from the university research or the professional world. IF is closely integrated into the activities of ASP. In the early years, IF mainly focused on business ideas coming from university laboratories. During this period in ASP the strategic management model of IF was defined in order to implement effective and efficient actions on technology venturing. In a In 2008 two top managers of the Technology Transfer Office were interviewed: Paolo Cattapan, Head of Technology Transfer Service in ASP (1/4/2008); Paolo Mander, Responsible for the research relationships the Technology Transfer Service in ASP (1/4/2008). Enzo Moi, ASP CEO (2 total hours in two different in depth interviews). Fabrizio Rovatti, Innovation Factory (in-house legal entity responsible for technology venturing in ASP) Managing Director (1-hour interview). Francesco Menegoni, PhD, President and CEO of G&LIFE S.p.A. (1-hour interview). Martino Jerian, CEO and Founder of Amped Software - Forensic Video Analysis AMPED Srl (1-hour interview). Valentino Pediroda, Partner & Co-Founder of modefinance Srl (1-hour interview). The paragraph is the elaboration of two interviews with Enzo Moi, ASP CEO, and Fabrizio Rovatti, Innovation Factory Managing Director.

7 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 111 second phase, the model was transferred to some regions of Southern Italy like Basilicata, Calabria and Campania. The choice to focalize on the pre-incubation phase came slowly. Generally, incubators neglect this phase because it is too expensive and risky. In 2005, a call of the Italian Ministry of Economic Development came out in order to finance new innovative firms incubators and prioritize those established as a corporation. We thought of creating an ad hoc company. Even though the project was deemed eligible in the first round, it had not been financed yet. This delay gave us the opportunity to better reflect on the strategic management model that should have been pursued by IF. We chose to cover a segment of pre-incubation by selecting teams of researchers with good business ideas and working with these people until they had established a winning business model and a credible business plan. The project was financed by the Italian Ministry for Economic Development; it started in 2008 and ended in October We believe in the project and not only will we continue to co-finance it (the project was financed 2/3 by the Italian Ministry of Economic Development and 1/3 by ASP) but we are also looking for other non-institutional ways to finance it, as underlined by the ASP CEO during the interview. The IF Managing Director explained how the preliminary phase of engagement worked: we did not launch any call for preincubation. We set the dates of the meetings and carried out significant dissemination and promotion of the program in the North of Italy. We started with a true nursery activity: researchers came to us and engaged in discussion. The first two meetings for each business idea were held before the teams had entered the IF assistance program. Our questions were designed to destroy each business idea and try to reassemble it after the team re-elaboration. We asked questions that - if answered - would permit us to understand that the business idea was worth investing in. We have received and discussed about 220 business ideas in the course of these years, but we have brought only 45 before the technical committee. Mistakes were made during this development period due to inexperience: preincubation is an activity with few national and international references. As referred by the IF Managing Director during the interview, we were not sure at the time of which services could be useful for entrepreneurial teams and we started adventurously by structuring staff, skills and people who worked in closed connection with two pre-existing services in Area Science Park: technology transfer and coaching. For example, there is a Pat Lead office in the ASP technology transfer service. It offers patent analysis and is useful in evaluating patent opportunities for the new technologies developed by entrepreneurial teams. The same scouting operation was largely based on a historical project in ASP named Sister and aimed at making a census of university research findings. It was useful to identify research teams that were interested in exploring new business initiatives. The integration of ASP service lines, on one hand, and experimentation of new services, on the other hand, were the strategic leverages for TV in the IF during the first development period ( ). As pointed out by the ASP CEO during the interview, at that time we had difficulties because of the non-completion of the value chain in the technology

8 112 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING venturing service. When we pass from the pre-incubation to the incubation phase a problem is reaching agreements with institutional financers, coming from the financial and/or business world. They requested the assurance of adequate connections and involvement with the firms of the IF network rather than with the incubated single firm. We will not search for investors case-by-case, rather, we are more interested in the business idea so we need a group of differentiated and stable lenders. We have reached an agreement with the Italian Angels for Growth organization to finance technology venturing during the pre-incubation phase. IF is currently trying to propose agreements with venture capital funds, risk management or asset management companies. They are coordinating with other parks and incubators that are sufficiently robust and credible at regional and national levels to negotiate with this type of business financial actors. Such strong interest has been credited to the Crescitalia law, aimed at encouraging the investment of financial actors in start-up firms. The IF Managing Director told us: compared with an overall investment of 2.4 million financed by the Italian Ministry of Economic Development (about half is co-financed by ASP) we have already activated more than 2 million euro of venture capitalists funding in equity for only three of the seven companies that have already been founded. The fact that venture capitalists invest in incubated firms means that the program is actually stimulating private investments. In recent years the IF has selected about thirty teams (pre-incubation entrepreneurial teams); currently, fifteen are active and seven have founded a company and accessed the incubation phase. None of the founded companies has been unsuccessful. A dozen development teams haven t been admitted to continue the incubation process. 4.1 The pre-incubation phase In this phase, IF selects teams made up of people with skills, assets, patents, know-how, and business ideas that have market success potential. IF accompanied the teams throughout the early phase of the business idea exploration, creating the ideal conditions for the establishment of the company, and avoiding failure for other teams. As the IF Managing Director told us we are mainly searching for the entrepreneurial spirit. We should never replace teams that are aware of becoming entrepreneurs. If we realize that the team members are passive and just waiting for our input on what to do it is difficult for them to go any further. If the IF managers believe the business model of an entrepreneurial team is not implementable and profitable, or that certain project milestones have not been met, they will stop it before the firm s foundation. The stop may be temporary or definitive. As pointed out by the ASP CEO, when some team members are tired they want to go back to university for example; in this case we spend some time to verify if the temporary impossibility falls. In other cases weaknesses in the business model design may be identified: this can give rise to insights, or a real interruption of the project. We discuss these matters with the components of the project. Using

9 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 113 the words expressed by the IF Managing Director, the pre-selling test with potential customers during the pre-incubation phase is very important. Sometimes the test is a kind of co-development process and occurs very early in the preincubation phase to verify and clearly define the customer s need. Other times the entrepreneurial team has turned to us after the client s need had already been well defined. The pre-selling phase was aimed, in the latter case, at testing the pricing, product brand positioning and several other marketing management variables. IF accompanies the team in a project that not necessarily produces a business plan, and tests it in detail before it becomes formalized. When we find the first customer we found the company, as the IF Managing Director told us. IF brings all the economic support into the pre-incubation phase: entrepreneurial training, coaching, mentoring, continuous use of space and facilities that the entrepreneurial teams can access before becoming a firm. The duration of the pre-incubation phase is rarely more than 12 months but it can be up to 24 months or over. To date, the scouting effort of new business ideas is reduced as IF is well known in the North of Italy and there are spontaneous requests for pre-incubation. A technical committee evaluates each business idea and then makes proposals to the ASP Board of Directors in order to invest only in the most sustainable business ideas. The resources in the budget for each pre-incubated team can range from thirty to fifty thousand euro. The budget is never invested in cash but spent for services or used to pay for external collaborations to temporarily or permanently reinforce the team skills base. In fact, sometimes the team lacks skills that ASP would require a long time to develop internally, and so they are externally sourced. As the IF Managing Director asserted, the strategic analysis carried out during preincubation is just aimed at defining investment priorities and team gaps in terms of entrepreneurial skills. Sometimes, those gaps are related to technological skills such as, for example, when we should set up the industrial prototype of a product but the team members do not have any skills in prototyping. In this case, we select an outside vendor that manage the prototyping phase. Other times, the gap is related to managerial skills such as when for example, we need a market test of the solution. In the latter case, we turn to a consulting firm. Otherwise, the integration of managerial skills is needed. We could also decide to select a manager from outside with expertise in project management and integrate him or her within the team. IF refines the project by means of an agreement with the team members that in case of firm foundation, they will never acquire a stake over 20%. 4.2 The incubation phase A technology park is successful when the incubated firms are successful. The marketing of the parks and marketing services for incubated firms are strategic activities. During the incubation phase, IF provides services not only for the promotion and institutional networking of the incubated firms (i.e. organizing events, meeting, and so on), but most of the deals associated with the creation of the market for their businesses. IF also offers other kind of services to incubated firms,

10 114 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING including computer telephony networks and infrastructure (buildings, security, equipment, waste, etc.). The true incubation phase ideally ends after two years. Our approach is not to maximize the capital gain return, as venture capitalists or financial companies do; rather, we want to find a company that, once on the market, could be successful and lead to positive impact on the territory. Evidently, we do not mind capital gain because the funds are reinvested to finance new entrepreneurial teams, as underlined by the IF Managing Director. IF also uses external resources, even during the incubation phase. ASP is a multiindustries incubator; it integrates internal resources with external ones. In addition, they have a group of professionals or business owners who are r willing to join the entrepreneurial teams. Twice a year, we gather this group of mentors to which the teams illustrate all their projects and results in a one-to-one session. The teams benefit from the advice by improving their businesses because the mentors, who are generally entrepreneurs or mangers, have experience and knowledge related to the industry of the emerging technology-based venture, as the IF Managing Director told us. 4.3 The post incubation phase Over the last three years IF has created a small Campus in Gorizia (Italy) in place of a previous BIC (Business Innovation Center). It is 2,000 square meters large but it will become 3,000 in the short run. Nine, and soon to be fifteen, small and young firms that emerged with different mechanisms are located in these spaces. We have only selected industries. IF has not pre-incubated these firms. With our encouragement, these firms are creating a chain of small partnerships. The goal is to see if the model is exportable to Trieste where companies are smaller and collaboration is more difficult to achieve, the ASP CEO explained. The teams were already established, some with previous entrepreneurial experience. IF has attracted specific funds for projects that aim to study supply chain relationships in technology or business matters. No firms can take on the role of leader because the companies are the same size and have homogeneous skills and cultural levels. This aspect is unusual in other industrial areas where a leading company often operates as a facilitator. 5. The sample of technology ventures As previously mentioned, the empirical study of technology venturing at ASP-IF has been carried out by involving the CEOs of three incubated technology-based ventures. In the following section the incubation experience in ASP-IF of these startups and the main benefits deriving from their experiences will be described also through the authors interviews with the CEOs.

11 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 115 G&Life 4 G&Life s experience with IF started in 2008 when Paolo Gasparini, worldrenowned Full Professor of medical genetics at the University of Trieste, had the innovative idea to define a diet and a kind of lifestyle based not on people s food preferences, but also on genetic profile. The objective was to verify if there existed a diet that was also consistent with the genetic profile and lifestyle of each individual. I am a genetic engineer and, at that time, I was also a researcher at the Polytechnic University of Milan. Professor Gasparini called me - and together we better defined the idea and presented it to Innovation Factory. That was a fundamental step for the development of our entrepreneurial venturing. In IF the motto is from business green to business plan. Paolo Gasparini, a team of engineers, nutritionists, hygiene doctors, and myself. We all developed the prototype together. We entered the IF assistance program in November of We proceeded with the firm foundation in November of When the technical committee evaluated the idea it did not express a judgment of full eligibility. IF highlighted the need to integrate the team (made up of three people at the time) with human resources with expertise in process and service delivery. The team was integrated and the business idea presentation improved by better planning the market segmentation, design and management of the service and product positioning. This allowed us to grow and reformulate a business plan that was more oriented towards the creation of a company based on key resources and competencies that are recognized. ASP allowed the team to promote its activity on the international financial market. In 2008, the entrepreneurial team was selected for the Hit Competition, a program for innovative start-ups held in Barcelona, Spain. The G&Life team figured among the 25 selected to internationally present the idea to investors for financial support. G&Life started up in 2009 and launched two services: G -Diet, which is the ideal diet and lifestyle for everyone and a service for nutrition professionals to make genetic analyses in order to offer customized diet plans. In 2010, thanks to the Park and to the cluster of molecular biomedicine, Unicredit and Confindustria selected the entrepreneurial team among the 18 most promising Italian start-ups in the talenti di idee program. We received training which allowed us to grow further in terms of recognition and development of partnerships. Among the various partners we havemet, one of them suggested to develop of a product dedicated to pharmacies. In 2011, Paolo Gasparini won the Grande Ippocrate award promoted by Sanas Fiorentis as the best Italian researcher in his field of studies between genetics and diet (G&life), and was invited on Piero Angela s Super Quark show to talk about the diet. At the end of 2011 an investment fund (Aladin ventures) entered in the equity of the company and in December 2011 (starting in 2012) G&Life became a limited company. New services were developed, agreements with major shipping partners in ASP were reached, and the company participated in events for 4 This paragraph was elaborated by the personal interview to Francesco Menegoni, PhD, President and CEO of G&LIFE S.p.A.

12 116 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING new innovative start-ups in Istanbul. In 2013 G&Life was involved in the internationalization of the market for the most promising products as well as the Italian one, while continuing to be a services provider for companies. In terms of the main benefits, G&Life has derived from its incubation in ASP, the economic advantage has been considered a not secondary one, being the substrate on which the rest has been built. The equity stake that IF required was very small (a maximum of 20%). There are several other benefits. In the early phase we also benefited from the basic training program in marketing that was provided by the Polytechnic University of Milan through the MIB-School of Management. IF allowed us to discuss the idea with the so-called mentors, successful entrepreneurs from Friuli Venezia Giulia like Illy and Corvi Mora. We found one of them willing to give us advice. The team met dr. Corvi Mora, President of Actimex - a company that focuses on developing innovative nutraceutics who not only gave them a lot of good advice but also gave them the opportunity to access the pharmaceutical world. Every year an exhibition called Cosmofarma is held in Bologna and Dr. Corvi Mora hosted the G&Life team by offering them a place in Actimex s stand for the promotion of nutrigeneutics. Meeting people from the pharmaceutical world (companies and professionals) gave G&Life team valuable input to improve services and its business model. The mentoring service is ranked first in G&Life by allowing scientists to become entrepreneurs. IF allowed entrepreneurial team members to test the plastic box prototype on forty international subjects, giving them the opportunity to quickly figure out where the pitfalls were. It also allowed them to identify the priorities of the customer reporting process. Twenty customers were potential G&Life clients, while IF searched among its contacts for the twenty remaining subjects who could be interested in the G-Diet. Another good advantage in terms of benefits for being incubated in IF was related to investors. It was very important for the team to go to Barcelona in June to present the project to investors, raising the interest not only of national but also international actors who have continued to follow the G&Life project over the years. Furthermore, the public relations activities performed by ASP-IF on relevant stakeholders was very important. IF has permitted G&Life to benefit from its press office by presenting the business idea to journalists and including G&Life offices in the usual circle of journalists in ASP. For example, ASP organized a meeting with the journalists and presented all the active entrepreneurial teams, enabling the G&Life team to appear on newspapers. In sum, IF did not contribute to the scientific-technological competence of the G&Life team because it was our initial core competence. I would like to remind everyone that we were a biologist, an engineer with entrepreneurial experience, a medical geneticist with a PhD in engineering, a biomedical engineer with a PhD, and two nutritionists. From a managerial perspective, IF greatly stressed the importance of the development of the business plan and the definition of the business model. In my opinion, when you introduce a company to the market those are the

13 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 117 most important skills. There were meetings during every project phase: the assessment of managerial gaps, performance monitoring, skills development, and training courses were provided inside or outside the Park. We even had the opportunity to meet Dr Moore, who is the scientist in charge of transforming business ideas developed inside the MIT in start-ups at the Massachusetts Institute of Technology. Six months ago, there was a visit to the ASP from the Technology Park Director in Hong Kong. At the time, we are developing services for China. We see ourselves as part of a system, so when we meet investors or co-workers we do it at an IF site because we like to show where we were born. Even now, the President of the ASP included us in an innovative project on the lactose lactase enzyme. We have developed a collaboration aimed at exploring an international market that could open up the market of several countries. ASP has involved G&Life in business-to-business meetings (with companies and research institutions) and determined its participation in a European project with the University of Slovenia and twelve international partners (with a budget of 3 Million Euro). An opportunity for G&Life members is to interact with specialized interlocutors. G&Life is always very pleased to express its appreciation to IF which really helped in the past and will probably continue to help them in the future. Amped Software and Amped Srl 5 Amped srl developed a software for the analysis of images and videos for investigative and forensic purposes. Very often, these images must be analyzed and improved. We have created a kind of photoshop software for investigation. There is a technical and a legal acceptability of our work from a legal point of view. The project stems from my dissertation in The result has become a prototype of what is our main product. I was in contact with the management of the ASP as part of another project (Sister) when I was working at the University. They knew that I had this business idea. They contacted me and told me they were preparing for this IF initiativewhose contents were quite nebulous at the time. I prepared a very simple business plan. The technical committee positively evaluated the project and so it started. The first business plan has remained unchanged. My idea was preincubated by IF in We were the first entrepreneurial pre-incubated team in IF. I worked with IF from January 2007 to April 2008 when we created the company. The launch product of Amped Software was called Five and is a sort of photoshop program aimed to improve images of mobile phones and surveillance cameras for use in the judiciary sector. They mainly relate to the following customers: centralized investigation laboratorieslike the RIS in Parma; international correspondents; authorities and organizations responsible for the public security services; professionals providing services to judicial authorities. From the first day I worked with my clients. I have developed my thesis with the RIS in Parma, which proposed practical problems to solve, that were also related to 5 The paragraph was elaborated by the personal interview to Martino Jerian, CEO and Founder of Amped Software - Forensic Video Analysis AMPED Srl.

14 118 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING software. The RIS in Parma was a pilot customer. Recently, a video scanner has been added. It searches all the video files on a hard disk by saving them on a regular basis (one frame every minute). In the case of criminal investigations it can analyze the movies in a laptop without having to search each one manually. Customers are the same as their flagship product. Since last year we are also developing a new product aimed at analyzing images to determine their authenticity. We know very well that it is easy for anyone to change an image with photoshop. Therefore, during an investigation it is possible to understand whether a given image is authentic or has been manipulated in some way. Amped Srl is now well known in the market. In the medium term, it will remain in this market and try to develop products and services such as products for forensic customers and police forces aimed at analyzing videos and images. From a management point of view, the company is very small and takes advantage of collaboration. The main benefits for Amped Software deriving from its pre-incubation in ASP are the following: financial support that allowed the Amped team to involve two collaborators; the opportunity to use two offices; training offered through various seminars; discussion sections with the ASP s staff on managerial aspects like the type of channels to activate, how to define the pricing of services, and so on. The entrepreneurial team members get good reputation working in the park towards main institutional targets (police forces and government agencies). Other contributions of IF to the software development was indirect in the form offinancial resources that allowed the team to hire two software developers. We received offers by financial investors to purchase the IF shares in Amped Software. However, my strategy has been to grow slowly but independently. My father s company, which operates in a very different business acquired the equity share of ASP. Therefore, the company is now totally controlled by the family. modefinance 6 modefinance is a company specialized in the financial evaluation of companies (vendor rating), for both Italian and international firms. What distinguishes modefinance from Standard & Poor s, Moody s or Fiche is that it gives an assessment not only of the listed public companies but also of all companies, even very small ones. It offers services for any company that needs to understand the credit rating of its suppliers and/or customers. This implicates the certainty that suppliers will not fail and that customers will meet their payments. Four products are offered to the market: 1. Credit Report. An economic and financial credit rating report for companies wanting to very quickly control that the customer or the supplier is solvent/reliable; 2. Industry Report. modefinance has a database with more than 70 million companies in more than 200 countries and is therefore able to aggregate them and make comparisons at an industry or geographical level; 3. the creation of platforms at the client headquarter for the 6 This paragraph was elaborated by the personal interview to Valentino Pediroda, Partner & Co-Founder of modefinance Srl.

15 LUIGI CANTONE - NICOLA CIRILLO - PIERPAOLO TESTA 119 analysis of the customer risk. International companies need analytical models for the evaluation of customers/suppliers risks within their Information Systems that, in addition to the budget analysis, intersect other kind of variables. modefinance is able to manage this, especially for banks; 4. Speak Mobile Application Portal. It is a web portal, and an application for iphone and Android, comprising more than 20 million companies in Europe and offering on line services of risk assessment. The mission of modefinance is to provide transparency in the assessment of credit risk for firms and individual customers (professionals, investors, big clients and so on). Their customers are mainly industrial companies (70%) and banks (30%). modefinance can analyze clients and suppliers at an international level. For large enterprises it is very important to know the risk of conducting business with customers. There was a long and singular start-up process for modefinance. I am Lecturer at the University of Trieste. I was a mechanical engineer specializing in the design and numerical methods of fluid dynamics and I was attending a PhD in numerical methods. I had some friends who had a PhD in Finance and realized that what I was studying on numerical method could be of interest for them. They contacted their professors and applied for and won a MIUR-Ministry of University and Scientific Research Grant for a major national project of three years on the application of innovative numerical methods in finance. In the meantime Mattia Ciprian, who is also a mechanical engineer attending a doctorate in finance, was also graduating. Then we specialized together on the assessment of credit risk. Mattia was also included in the project. This project resulted in a company in which Mattia and I were the leaders of the numerical method (core competence). Whereas before we dealt only in banks (financial and economic credit risk assessment for banks) when we created our start-up (spin off), we decided to focus more internationally on the industrial segment. The same competence on numerical method in credit risk evaluating has been leveraged on a broader international market and a new segment (industrial firms and not only banks). I had University institutional relationships with ASP and IF managers at that time. We entered the pre-incubation phase in 2007 and incubated until September 2009, when we founded modefinance. In the beginning the technical committee verified if the team members really own the technological competence and understood whether there could be an attractive market for it. The pre-incubation in ASP has assured modefinance crucial benefits. Firstly, it acquired the necessary funds for the company start-up. Secondly, it worked in a physical site where other firm offices are localized, allowing team members to communicate with other companies within a 50 meters range. Thirdly, it provided leverage for networking the business incubator. Fourthly, it benefits from the initial economical contribution ( Euro), used to buy computers, purchase services, pay for the travel of team members, and to provide some remuneration. Fifthly, thanks to the presence of ASP in the Basilicata and Calabria regions, modefinance developed commercial relations in those territories.

16 120 THE ROLE OF INNOVATION INTERMEDIARIES IN TECHNOLOGY VENTURING 6. Discussion The findings of the empirical research involving ASP, IF and three technology ventures have made a valuable contribution to demonstrating the leading role of IIs for TV in the Italian context. In fact, the case study pointed out a peculiar approach in stimulating and promoting TV, innovative entrepreneurship, and the start-up of new technologybased companies during the incubation period. Firstly, the role of ASP and IF is recognizable as that of an enabler of innovation and innovative technology-based entrepreneurship, granting the future market sustainability of new technology-based firms. ASP and IF are not directly involved in developing the scientific and technology competencies underlying the business ideas characterizing new technology ventures. ASP and IF work indirectly in order to enable innovation, by enhancing the vision, market strategy, business model and managerial competencies of new TV firms. They provide an array of activities and initiatives during the phases of pre-incubation and incubation, that are aimed to stimulate the success, growth, adaptation, learning, competitiveness, entrepreneurial team building, network relationships, and broad fine-tuning of the innovative business idea. As discussed by the CEO of G&Life, Area Science Park and Innovation Factory didn t significantly contribute to the scientific and technological dimension of the business idea, but rather its development and experimentation. Our team was composed by a biologist, a Ph.D. in biomedical engineer, and two nutritionists. Therefore, the base of scientific knowledge was our pre-existing individual asset. These core scientific assets remain the same today. The pre and incubation phase has been fundamental in order to develop our competencies in arranging the business plan, defining the business model and controlling the outcomes of the activities. In our case, Area Science Park and Innovation Factory helped us develop the entrepreneurial team, with capabilities and skills that were useful for company s the start-up on the market. As reported by the CEO of Amped Software, the technological support for developing software has been only indirect, namely, through financial resources which allowed software developers or other specific external skills and capabilities to be hired. The role of Area Science Park in transferring knowledge and competence on the managerial aspects of the new company was more intense and direct. That was also very important for building and/or reinforcing our entrepreneurial team. Secondly, the findings of the case study highlighted that the role carried out by ASP and IF to enable innovation might be explained by the Innovator s DNA framework proposed by Dyer et al., (2009), andpreviously mentioned. In accordance with the findings that emerged from the empirical research, the role and the activities of ASP-IF for stimulating TV have the primary aim of crossfertilizing and integrating scientific knowledge and the related core technological capabilities of new venture entrepreneurs with other complementary competencies, in particular managerial competencies and the knowledge base. The latter are indispensable to reinforce the creativity and innovativeness of the business idea and