Innovation and Entrepreneurship in small firms: The influence of entrepreneurial attitudes, external relationships and learning orientation Innovasjon og Entreprenørskap i små selskaper: påvirkning av entreprenørielle holdninger, eksterne relasjoner og læringsorientering Philosophiae Doctor (PhD) Thesis Erlend Nybakk Department of Economics and Resource Management Norwegian University of Life Sciences Ås 2009 Thesis number 2009: 07 ISSN 1503-1667 ISBN 978-82-575-0873-9 Preface and Acknowledgements I have submitted this thesis as partial fulfilment of the degree Philosophiae doctor (Ph.D.) at the Norwegian University of Life Sciences, Department of Economics and Resource Management. The work has been carried out at the Norwegian Forest and Landscape Institute and Oregon State University. The funding for the work has been provided by the Norwegian Forest and Landscape Institute and the Research Council of Norway. This thesis could not have been completed without support from several persons. I would like to thank my supervisors Professor Anders Lunnan and Professor Eric Hansen for their guidance, insight, feedback and encouragement throughout my Ph.D. studies. My colleague Dr Birger Vennesland was not officially a supervisor, but has given feedback and support all through my studies. Thank you for getting me started, sharing my interest and for all the discussions and enthusiasm. In my last paper I had the pleasure of working with Professor Jan Inge Jenssen at the University of Agder. Thank you for letting me join your project and for giving a new dimension to my thesis. I would like to thank the Norwegian Forest and Landscape Institute for giving me the opportunity to do this work and to all my colleagues for encouragement and support. Dr Jon Bingen Sande and Dr Silja Korhonen-Sande at the Norwegian School of Management have been important discussion partners and have given valuable feedback on my research design and writing. I had the pleasure of being a visiting researcher for one year at Oregon State University and was included in Eric’s Forest Business Solutions Team. Your help was a significant contribution to my thesis. Thank you Chris, Pablo, Rajat, John and Jochen for providing valuable feedback to my ideas, writing and for making my year in Corvallis so much more than work. And especially thanks to Dr Pablo Crespell for using his time to teach me Structural Equation Modeling, when he was busy finishing his own Ph.D. 2 Finally, I would like to thank my family: my parents, Marie and Rolf, and my sisters, Åslaug and Hilde, for their support throughout my life. Special thanks and gratitude to my wife Liv Mari and daughter Oda Marie for reminding me about what is important in life, for asking the relevant questions and for giving me the best support I could ever receive. 3 Summary In order to uphold economic growth and employment in the districts and nationally, one is dependent on small and competitive firms and sole owner enterprises. These represent the majority of firms and are a vital source for new creativity and development in both traditional and new sectors. How one should promote entrepreneurship and innovation among these companies has been a central theme in political debates. The foremost goal with this thesis is to advance knowledge about the factors that trigger creativity and innovation in small firms, with the main focus on firms that offer non-timber forest products and services (NTFP&S). Article I was based on a questionnaire for forest owners in Telemark, VestAgder and Aust-Agder (three counties in east Norway) and shows that the likelihood of starting up with NTFP&S is greater among forest owners that recognize opportunities and are risk takers. Articles II and III were based on a questionnaire for firms that work with nature-based tourism. The first of them builds on Article I and shows that forest owners that recognize opportunity and are risk takers have a greater likelihood of changing the way they supply their products and services. Article III shows the effect of external relationships on innovation and how innovation affects economic accomplishment. The relationships are also exemplified through a case study. Article IV was based on a study of a random selection of forest owners with more than 25 hectares of forest in southeast Norway. The study shows that external relationships and learning orientation have a positive effect on innovation and again on economic success among forest owners, related to NTFP&S. Article V was based on a questionnaire for small, knowledge-intensive firms and shows the impact of external relationships on product, process and market innovation. Each of the articles presents implications of the findings and suggestions for further research. 4 Sammendrag For å oppettholde økonomisk vekst og sysselsetning i distriktene og nasjonalt er man avhenging av små og konkurransedyktige selskaper og enkeltmannsforetak. De representerer det absolutte flertallet av bedriftene og er en viktig kilde til nyskaping og utvikling i både tradisjonelle og nye sektorer. Hvordan man skal promotere entreprenørskap og innovasjon blant disse selskapene har vært et sentralt tema i den politiske debatten. Det overordnede målet med avhandlingen er å frembringe kunnskap om faktorer som trigger nyskaping og innovasjon i småbedrifter, med et hovedfokus på foretak som tilbyr ”ikke-tømmerprodukter” og tjenester fra skogen (ITP&T). Artikkel I er basert på en spørreundersøkelse til skogeiere i Telemark og Agderfylkene og viser at sannsynligheten for å starte opp med ITP&T er større blant skogeiere som er risikovillige og mulighetssøkende. Artikkel II og III er basert på en spørreundersøkelse til selskaper som driver med natur-basert turisme. Den første av dem bygger videre på Artikkel I og viser at selskaper som er risikovillige og mulighetssøkende har en større sannsynlighet for å endre måten de leverer produktene og tjenestene sine på. Artikkel III viser betydningen av eksterne relasjoner på innovativitet og hvordan innovativitet påvirker økonomisk prestasjon. Sammenhengene eksemplifiseres også gjennom et casestudie. Artikkel IV er basert på en undersøkelse til et tilfeldig utvalg av skogeiere med mer en 250 mål skog i Sør- og Øst Norge. Undersøkelsen viser at eksterne relasjoner og læringsorientering har en positiv effekt på innovativitet og igjen på økonomisk prestasjon blant skogeiere, relatert til ITP&T. Artikkel V er basert på en spørreundersøkelse til små, kunnskapsintensive selskaper og viser betydningen av eksterne relasjoner på produkt-, prosess- og markedsinnovasjon. Hver av artiklene presenterer implikasjoner av funnene og forslag til videre forskning. 5 Content 1. Introduction............................................................................................................. 7 1.1. Research focus .................................................................................................. 7 1.2. Research context and gap in knowledge ........................................................... 8 1.2.1. Political issues related to the context ........................................................ 8 1.2.2. Non-Timber Forest Products and Services context ................................ 10 1.2.3. Small knowledge-intensive firms. .......................................................... 14 1.3. Outline of the thesis ........................................................................................ 16 2. Theoretical Insights and research questions ...................................................... 17 2.1. Defining innovation and entrepreneurship...................................................... 17 2.2. Different directions in the entrepreneurship and innovation literature........... 18 2.3. Research questions.......................................................................................... 25 2.4. Effect of entrepreneurial attitudes on start-ups, innovativeness and firm performance ........................................................................................................ 26 2.5. Effects of external relations on innovation and innovativeness...................... 29 2.6. Learning orientation and local entrepreneurial climate effects on innovativeness..................................................................................................... 33 2.7. Innovativeness effects on Economic Performance ......................................... 34 3. Introduction of the papers in the thesis .............................................................. 36 4. Data and method ................................................................................................... 39 4.1. Measurement................................................................................................... 40 4.2. Questionnaire development ............................................................................ 44 4.3. Sampling and Data Collection ........................................................................ 44 4.4. Non-response test............................................................................................ 45 4.5. Statistical Analysis.......................................................................................... 47 5. Results and discussion .......................................................................................... 48 5.1. Entrepreneurship, Entrepreneurial attitude and innovation ............................ 49 5.2. Antecedents to innovativeness........................................................................ 52 6. Implications ........................................................................................................... 56 6.1. Implications for policymakers and practice.................................................... 57 6.1.1. Entrepreneurship - start-ups - innovation ............................................... 57 6.1.2. Effect of external relations and learning orientations on innovation...... 58 6.1.3. Innovation - performance........................................................................ 60 6.2. Implications for theory and research............................................................... 60 7. Limitations and future research .......................................................................... 63 8. References.............................................................................................................. 68 6 1. Introduction 1.1. Research focus Rural communities in Norway have been under great economic stress in recent years. Due to increased urbanisation in many regions, there has been a negative impact on the vitality of rural areas. To maintain the vitality of these areas, governments have employed a variety of policies, some of which aim to facilitate innovation and entrepreneurship in small firms and among individuals. Small firms play a decisive role in prompting national and rural competitiveness and employment; they represent the great majority of firms and act as sources of renewal and development in both traditional and emerging business areas. How best to promote innovation and entrepreneurship has been an important topic in this debate in politics and in academia. The last few decades have seen a rapidly growing body of literature addressing innovation and entrepreneurship. The field, having struggled for academic legitimacy for many years, is today well established. However, relatively new directions in the literature continue to leave many gaps in research. One such gap is related to contexts that differ from the most studied industries. For example, Voss and Zomerdijk (2007) and Wisse et al. (2007) emphasise that the uncritical use of manufacturing-based frameworks may not be appropriate for the study of innovation in the service sector. The research problems in this thesis are related to different theoretical debates in the entrepreneurship literature. One part is related to the creation of organisations (e.g. Gartner, 1988) and opportunity recognition (e.g., Kirzner, 1999; Shane and Venkataraman, 2000). The other part is related to innovation and innovativeness (e.g., Grønhaug and Kaufmann, 1988; Tidd and Bessant, 2009; Lundvall, 1992). A large part 7 of the research involves testing of previously developed theories in a new context (‘non-timber forest product and services’ and ‘small knowledge-intensive firms’). 1.2. Research context and gap in knowledge 1.2.1. Political issues related to the context A main area of interest in this dissertation concerns alternative methods of using woodlands. In the past 20-30 years, there has been a comparative decrease in revenue from conventional land use in Norway for farming and forestry. This decrease has spurred an intensive attempt to foster growth and to institute additional work possibilities founded on the usage of non-timber aspects of the landowner’s forests. Another major point of interest in this dissertation is concerned with innovation in small businesses. Comments will be made on this later. In 1940, employment in the primary, secondary and tertiary industry was relatively equal in Norway. However, there have been sizeable structural changes since that time. For example, employment in the primary sector has dwindled significantly, and there has also been a reduction in the secondary area. Most of the new jobs that have been created are related to the service sector. Persons employed in agriculture and forestry has diminished from about 330,000 in 1940 to about 60,000 in 2007 (SSB, 2008). The conventional farm in Norway normally has an output that is 80% agricultural and 20% timber. Farm and forest owners own about 75% of the forest areas in Norway. Farm real estate is legally regulated, and few properties are sold to anyone outside family. There are almost no opportunities to increase the size of each property, and the state farm accounting survey shows that farm-sector revenue is declining compared with the rest of society (NILF, 2003). Simultaneously, the government has a policy of 8 maintaining the main features of the population pattern. The greater part of Norwegian farm households receive most of their income from means other than agriculture. Nevertheless, there is a limit to how long farmers are interested in using off-farm income for investment in their farm and its maintenance (Bjørkhaug, 2007). There is a great likelihood that they will leave farming and their farms if they cannot economically support themselves and their families. Forest and agricultural strategies in European countries and the European Union increasingly evaluate the role of forests and their multifunctional administration in rural development (Wisse et al., 2007). Consequently, it is essential that forestry and rural development investigations combine forestry sciences and regional development knowledge (Vennesland, 2004). Rural economic development policies of the 1970s and 1980s focused on how best to utilise forest (timber) resources as contributions to the industrial sector in Europe. As development in the industrial sector during the 1980s evened out or became negative, more localised strategies were introduced (Hyttinen et al., 2002). This allowed local communities to choose their own financial development policies, to create networks of small and medium-sized enterprises (SMEs), and to make use of local resources. Rural economic development research shifted during the 1990s from concentrating on economic development strategies to the strengthening of the development of entrepreneurs (Wisse et al., 2007). At the present time, this entrepreneurial focus has been further expanded into a focus on innovation. Because a great part of the Non-Timber Forest Products and Services (NTFP&S) represents a fairly new sector alongside traditional forestry, there is a necessity to promote innovation in this sphere. Because there is a political desire to have people continue to live in rural areas and on farms, the central topic has involved promotion of innovation 9 and entrepreneurship related to other activities than traditional timber and firewood production. Nonetheless, the empirical research in this area has been limited. 1.2.2. Non-Timber Forest Products and Services context As already mentioned, Non-Timber Forest Products and Services (NTFP&S) are the main interest in this thesis. The term NTFP&S is used to describe a broad spectrum of activities involving the commercial use of forestland and wilderness with the exception of timber and firewood sales. For example, NTFP&S refers to a different set of activities than the non-timber forest products commonly referred to in North America. In Norway, these uses include nature-based (eco) tourism and sales of fishing and hunting licenses. It is obvious that the most important activities related to NTFP&S are services regarding sales and that the most important of these services and associated products are related to fishing, hunting and tourism. There has been increased interest in service sector innovation among researchers and strategy setters. Although there have been several general contributions to the literature (e.g., Hjalager, 1994; 1997; 2002; Hallenga-Brink and Brezet, 2003; Ioannides and Petersen, 2003; Walder et al., 2006), the diversity across service industries makes it difficult to generalise (Fagerberg et al., 2005). There are many ways in which services differ from products (Miles, 2003). 1) most services are not easy to define and cannot be moved or warehoused, 2) services often interact with customer needs and can be customised to particular client requirements, 3) the service industry is diverse and the nature of the service can vary (Miles, 2003), and 4) a great deal of the service sector is very dependent on technology; connections to eco-tourism and small/micro companies, for example, are not apparent 10 (Hollenstein, 2003). One element of the literature on innovation in the service sector centres on tourism (e.g., Hallenga-Brink and Brezet, 2003). Hotels and other largerscale firms have been the focus of a great deal of tourism innovation and entrepreneurship research. In 2001, a substantial innovation and entrepreneurship study was performed in the Central European countries. The results showed that environmental and recreational services are normally incorporated into the product mix of forest holdings but that they nonetheless do not generally yield noteworthy profit to forest holdings (Rametsteiner et al., 2005; Rametsteiner and Weiss, 2006a, b; Weiss and Rametsteiner, 2005). An average of two percent of forest holding revenues are composed of recreational services; proceeds from nature conservation are insignificant (Rametsteiner et al., 2005). Single forest holdings, predominantly those nearer the larger urban areas, may supersede the returns from timber. Even though today, new services do not contribute greatly to the profit of landowners, they are still connected to a good share of innovation activity. Because recreation leads the field in service innovations, recreation services might become significantly more important in the future. These innovations are often not simply opportunity-driven but are devised in order to defend legal limitations because of the great public interest in the recreational use of forests (Rametsteiner et al., 2005). Forestry agencies have not put much effort into advocating the diversification of recreation products and services. Many forest owners and foresters have a very reticent feeling about recreational services in their woodlands and have a strong focus on timber production as their main business (Wisse et al., 2007). Foresters are accustomed to deflecting the demands of society for forest- 11 related services at the political level and do not view people seeking recreation/sport as prospective clients (Wisse et al., 2007). A factor of increasing importance in the promotion of tourism services is personal outlook. Increasingly, paying for a broader experience than simply that of a basic service/product (such as lodging and food) is what the customer desires. Tourism advertising involves the staging of a tourism product or destination (Wisse et al., 2007)). Pine and Gilmore (1999) noted this trend and along with it the dawn of a new economic era, which they referred to as the ‘experience economy’. They remarked that goods and services are no longer enough, and that experiences are the foundation for future economic growth. Subsequent to the marketing of commodities, goods and services, the future will belong to experiences and transformations. The authors argued that consumers no longer pay for the activity the supplier provides (in the service business) but for the emotions customers have as a result of hiring the service provider (experience business) or the personal transformation they experience (transformation business) (Pine and Gilmore, 1999). The creation of “meaningful experiences” for consumers should be the concern of innovation (Boswijk et al., 2005). “Experiential services” centre on the experiences of the clients during interaction with the service providers instead of only the advantages that follow from the products and services they receive (Voss and Zomerdijk, 2007). Product and process innovation occur along with incremental process innovations, and the creation of additional business models is particularly characteristic of experiential services. The uncritical use of manufacturing-based arrangements may be unsuitable for the study of innovation in the service sector (Voss and Zomerdijk, 2007). 12 Family-owned firms often vary from other private businesses in their objectives and business methods. The owners of small family enterprises do not act according to the normal processes of growth and profit capitalisation (Carlsen et al., 2001). They are more concerned with the desires and preferences of their families, and are frequently unwilling to expand or to move the business to a more ideal location (Vennesland 2005). Firms that offer eco-based services are generally found in sparsely populated rural regions. In these circumstances, the need to pool resources becomes important (Vennesland, 2004) for certain tasks such as marketing the area as a tourism destination (Ritchie and Crouch, 2005). Even though competition plays a vital part in sparking innovation, trust among businesses is also important. There is research showing that the tourism sector is dominated by micro and small businesses, mainly owned and operated by a single person or family (Hjalager, 2002). There can be both large and small firms linked to tourism, but nature-based tourism businesses pertaining to woodlands in Norway usually have fewer than five employees and can be defined as micro firms (Vennesland, 2005). These are comparatively small and can be considered lifestyle businesses, not growth businesses. An illustration of a micro-firm is a business that is an adjunct to the farm business. Thus, firms supplying a nature-based service or product are mainly situated in rural areas (Vennesland, 2004). Innovations in these firms are more prone to embrace familiar products and processes instead of involving newly created products, procedures, or services. Customarily, rural concerns have been researched within rural sociology (Flora et al., 2003) and to some extent within agricultural economics (Castle, 1998); a portion 13 of this literature has been used in the articles in this thesis. The main point here is that the entrepreneurship and innovation viewpoint can also contribute to the understanding of rural challenges. Additionally, there is the desire to introduce a new methodological perspective by using causal models and latent variables. Even though there has been a great deal of research on industries related to NTFP&S that are concerned with innovation and entrepreneurship, there is still a large gap. Several studies have described a difference related to creativity in this sector (Hjalager, 2002; Walder et al., 2006). The use of theories that have already been constructed for research design in industry and their transference to experiential tourism, for example, are not desirable (Voss and Zomerdijk, 2007). In addition, there are large differences in the service sector, and innovation research in one part of this area is not necessarily transferable to another (Hollenstein, 2003). For all intents and purposes, causal models with latent variables that influence innovation are absent. In order to achieve a certain validity and reliability in such studies, it is essential to develop measurement instruments that have been tested in similar contexts. One of the intended contributions of this thesis is the beginning of this kind of work, with the development of such models that can provide a foundation for further study. In addition, there is also the need to confirm theories that have been constructed for other sectors such as the production industry. 1.2.3. Small knowledge-intensive firms. In recent decades, we have seen a change from a trade-based financial system to a more knowledge-dependent one. A knowledge-dependent economy varies quite a bit from a trade-based economy (Houghton and Sheehan, 2000) because it is distinguished by adaptable, cooperating and networked organisations that make the most of knowledge in 14 order to innovate and continue to exist in a worldwide market (Acs and Preston, 1997; Houghton and Sheehan, 2000). Innovation is believed to be a crucial facilitator of financial growth (Simmie, 2002), and innovations can result in imitations that generate even newer innovations (Segerstrom, 1991), keeping up the tempo in the battle for survival. Relationships among organisations and their milieu provide businesses with ideas that can result in innovation and financially viable performance (Birley, 1985; Burt, 1992; Goes and Park, 1997; Granovetter, 1973; Hall, 1982; Jenssen, 1999; Minzberg, 1979; Tushman, 1977; Tushman and Scanlan, 1981). Peripheral relationships make sharing of information and other assets among firms possible (Ahuja, 2000; Aldrich, et al., 1986; Jenssen, 2001). Development of diverse capabilities can result in the loss of specialisation. Purchasing skills in the marketplace can produce high changeover expenditure. Therefore, the most advantageous solution can be collaboration among firms (Mitchell and Singh, 1996); in many instances it is the only solution (Ahuja, 2000). Furthermore, two or more cooperating businesses can invest more in innovation ventures due to economies of scale (Ahuja, 2000). “Small” and “knowledge-intensive” are examples of comparative terminology, and the formation of realistic definitions is not inconsequential. It is vital that the research answer questions germane to the Norwegian configuration of industry. Because there are many small firms in the knowledge-intensive sector in Norway, it is essential to obtain information on the growth of these companies. The challenges of knowledgeintensive businesses are affected by their size (Maureen and Taggart, 1998). In this regard, this thesis defines small knowledge-intensive (SKI) firms as firms with between 15 3 and 30 employees, with more than one-half of the staff having a higher education (university degree or better). SKI firms have commonly been thought of as the losers in comparison with large firms, in terms of both capital and innovative capacity (Acs and Audretsch, 2005). This viewpoint is shifting, as research shows that SKI firms create a great proportion of new jobs and that they are a factor in both innovation and technological transformation (Acs and Audretsch, 2005). Nowadays, SKI firms are thought of as key players in the improvement and revitalisation of the economy (Cosh, et al., 2005). In addition to introducing new products and services, these businesses also modify existing products and services to better fit consumer needs (OECD, 2000). A good deal of research on innovation in this perspective has already been accomplished (e.g., BarNir and Smith, 2002; Berry and Taggart, 1998; Birley et al., 1991; Gemünden et al., 1992; Mazzarol and Rebound, 2008; Pavia, 1990; Phillips, 1991; Verhees and Meulenberg, 2004). Nevertheless, there are still several missing links. For example, diverse networking, knowledge gathering and coalition pursuits (external networks) have been acknowledged as having a positive outcome in innovation, but how is this valid in knowledge-intensive firms? In addition, how does it relate to various types of innovation, e.g., product, process and market innovation? 1.3. Outline of the thesis This thesis includes five different papers. Before presenting the five papers, a short theoretical background for the seven main research questions will be presented. The presentation of the five papers will be followed by a summary of all study methods 16 including question development (measurement), sampling, non-response bias analyses and a short overview of the statistical analyses used. Finally, the results are presented and discussed, implications suggested and study limitations and future research outlined. The full versions of all five papers are attached as appendices. 2. Theoretical Insights and research questions This chapter briefly presents the theoretical background and aims to position the seven main research questions with respect to the previous literature and existing theory. 2.1. Defining innovation and entrepreneurship There are four key terms used in this thesis: 1) entrepreneurship, 2) entrepreneurs, 3) innovation and 4) innovativeness. Definition of any of these terms is not an easy task; one can find almost as many definitions as there are researchers in the field. The terms are also defined differently by the different areas or ‘camps’ in the innovation and entrepreneurship literature. The different studies in this thesis are positioned in different camps; however, some basic common definitions can be used as a starting point. First, Sharma and Chrisman’s (1999) definitions of entrepreneurship and entrepreneurs are used; entrepreneurship includes acts of organisational creation, renewal, or innovation that occur within or outside an existing organisation. Entrepreneurs are defined as individuals (or groups of individuals) who act independently or as part of a corporate system, who create new organisations, or who initiate renewal or innovation within an existing organisation. Josef Schumpeter (1934) is largely regarded as the first important source of modern innovation theory. In his economic analyses, Schumpeter focused on 17 the firm and the role of the entrepreneur in the economic process. In general, innovation denotes the successful introduction of novelties. The word “innovation” itself originates from the Latin word “innovare”, which can be translated as “renewal”. To be innovative thereby indicates the ability to create something new. It is normal to separate the act of innovation and the output of innovation. It is also normal to distinguish between inventions and innovations. An invention is the first occurrence of an idea for a new product or process, and innovation is the act of putting it into practice (Fagerberg et al., 2005). From an economic perspective, an invention must be advantageous, or at least thought to be advantageous, to be considered an innovation. Despite extensive study, there is no unified definition of “innovation” (Grønhaug and Kaufmann, 1988). Innovation is defined in this thesis as the act of carrying out ideas, while innovativeness is a characteristic of a firm that carries out ideas. As the definitions illustrate, the concepts of innovation and entrepreneurship partly overlap in the literature. The term “entrepreneurship” also has no unified definition (Wickham, 2004). The complexity of the term makes it flexible, thus a universal definition of the term should not be expected (Wickham, 2004). 2.2. Different directions in the entrepreneurship and innovation literature Entrepreneurship and innovation are contested terms (Gartner, 1988). In the last decades, there has been an inflation of the use of these terms, especially “Innovation” (Fagerberg et al., 2005). The meanings of these terms were frequently discussed in 18 conference presentations and journals in the 1970s. At the same time, the field of entrepreneurship struggled to gain academic legitimacy (Aldrich and Ruef, 2006). The different directions, camps and competing perspectives related to entrepreneurship are overlapping and are categorised and defined in different ways. Nevertheless, the four academic directions that are used in this thesis and include 1) innovation and innovativeness, 2) opportunity recognition, 3) creation of a new organisation and 4) the systems of innovation (SI) approach. Additionally, different debates are connected to the independent variables used in the present study, i.e., learning orientation, entrepreneurial climate and social network. Joseph Schumpeter is considered one of the most influential social scientists of the last century and has had a large impact on most research related to changes, renewal and innovations among persons, organisations and institutions (Fagerberg et al., 2005). Schumpeter (1934) discussed entrepreneurship theory in his work on economic development, where he viewed entrepreneurs as drivers of economic development in that they destroy the existing economy to create something new (i.e., by innovating). Before his work, innovation was a word with negative implications (Morck and Yeung, 2001). The first of the four academic directions, here called ‘Innovation and Innovativeness’, is perhaps more related to Schumpeter’s work than the others. Here, entrepreneurship should focus on innovation activity and the process by which innovations carry along new products and markets (Aldrich and Ruef, 2006). According to Schumpeter (1934), an entrepreneur is a person who carries out new combinations. Following this definition and view, managers who bring innovations into an established 19 firm will be considered entrepreneurial. These new combinations can take several forms: new goods or new quality of a product, new methods of production, new markets, new sources of supply or a new way of organisation. Following this definition, entrepreneurship is the process of carrying out new combinations (Sharma and Chrisman, 1999). An important topic among researchers studying innovation and innovativeness concerns effects on performance and can be traced back to Schumpeter (1934), who looked at economic development as a process of quantitative changes, driven by innovation (Fagerberg et al., 2005). Grønhaug and Kaufmann (1988) linked innovativeness to organisational performance and argued that firms must be innovative to gain a competitive edge in order to survive and grow. Other authors have also emphasised the importance of innovation (Deshpande et al., 1993, Han et al., 1998; Rogers, 2003; Knowles et al., 2007; Crespell and Hansen, 2008). However, still others have argued that failure is the most likely outcome of product innovations (Schilling and Hill, 1998; Cooper, 2001; Jenssen, 2003), and that the imitator and not the innovator may be left with the profit (Teece, 1986). Another important topic concerns the antecedents to innovation and innovativeness. To a large extent, research about innovation and innovativeness can be classified in accord to the level of the independent variable. Four levels can be distinguished: the individual level, the organisational level, the inter-organisational level and the societal level. On the individual level the importance of single persons or ‘innovation champions’ is emphasised (Schön, 1963). Jenssen (2004) defines a champion as a person willing to take risks by enthusiastically promoting the 20 development and/or implementation of an innovation inside a corporation through a resource acquisition process without regard to the resources currently controlled. The importance of champions on innovation has been studied extensively (e.g. Littler and Sweeting, 1985; Howell and Higgins, 1990; Beath, 1991; Beatty and Gordon, 1991). The second level is the organisational level, focusing on organisational culture and structure (Minzberg, 1979). Factors on the organisational level that are assumed to influence innovation might be categorised as: organisational structure and communication (e.g., De Brentani, 1989; Lievens and Moenaert, 2000), organisational culture (e.g., Bang, 1995), strategy (e.g., Ducker, 1993; Jenssen and Randøy, 2000; 2002 Tidd and Bessant, 2009); incentives (e.g., Beatty and Zajac, 1994), finances (e.g., Freel, 2000) and slack (e.g.Goes and Park, 1997; Jensen, 1993). On the third level, the focus is on relationships between organisations, and it is assumed that relationships between individuals in different companies and networks of individuals in different organisations stimulate innovation in organisations (e.g. Burt, 1992; 1997; Granovetter, 1973; Hall, 1982; Tushman, 1977; Tushman and Scanlan, 1981). On the societal level, studies on the effect of regional clusters are an important example (Porter, 1999). Porter (1990) argued that that the development of clusters is important for national competiveness. The second academic direction, here called “Opportunity Recognition”, argues that opportunity recognition forms the heart of entrepreneurship and entrepreneurial activities (Kirzner, 1973; 1999; Shane and Venkataraman, 2000; Venkataraman, 1997). Adding to Schumpeter’s definition, it is a process by which individuals pursue 21 opportunities without regard to resources they currently control (Stevenson and Jarillo, 1990). Entrepreneurship is defined as the study of how, by whom and with what effects opportunities to create future goods and services are discovered, evaluated and exploited (Venkataraman, 1997; Shane and Venkataraman, 2000). Given that both supply and demand exists, the opportunity for bringing them together has to be recognised before the mach-up can be implemented either through an existing company or a new company (Sarasvathy et al., 2003). The third direction focuses on and views entrepreneurship as the Creation of a New Organisation (Gartner, 1988). This focus marks a shift from what the entrepreneur is to what the entrepreneur does (Gartner, 1988). Although not intended as a definition, it has often been employed as such in the literature (Sharma and Chrisman, 1999). Gartner (1988) argues that entrepreneurship researchers should study the behaviour and activities of people who are creating or are trying to create businesses and not their psychological states and personality characteristics. This perspective further argues that entrepreneurs are people who create new social entities (Aldrich and Ruef, 2006). In summary, the two definitions of entrepreneurship by Schumpeter (1934) and Gartner (1988) contribute to research by covering different themes. Carrying out new combinations such as product innovation may or may not lead to the creation of a new organisation. The creation of a new organisation can also lead to new combinations, but many new organisations can make no claim to innovative activities (Sharma and Chrisman, 1999). 22 The fourth direction selected in this thesis is the Systems of Innovation (SI) approach. The SI approach to study innovation was introduced by Freeman (1987) and developed by Lundvall (1992) and Nelson (1993). An institutional view of innovation is reflected in the literature on systems of innovation. The institutions shape and are shaped by the actions of organisations and relationships among them (Edquist 1997). The main components of a system of innovation are actors, institutions, and their interactions. Actors are considered to be organisations, which are seen as formal structures with an explicit purpose that are consciously created (Edquist and Johnson, 1997). Interaction among actors and institutional settings is important for innovation activities. Companies do not normally innovate in isolation. Instead, innovations are seen as based on learning that is interactive among organisations in the SI approach (Edquist, 1997; 2001). There are many definitions of institutions in the literature. Scott (1995:33) defined an institution as: “…[institutions] consist of cognitive, normative, and regulative structures and activities that provide stability and meaning to social behaviour. Institutions are transported by various carriers – cultures, structures, and routines – and operate at multiple levels of jurisdiction.” According to North (1991), institutions are understood as a set of habits, routines, rules, laws or regulations that regulate the relations and interactions among individuals, groups and organisations. An institution connects to a practice, a relationship or an organisation that has been institutionalised within a society or culture. Private property rights and forest owner organisations are examples of institutions. An institution can also be connected to a place or an object, such as forest owners in rural districts, a library, or a university in Norway. 23 The main contributors to SI research (Freeman, 1987; Lundvall, 1992; Nelson, 1993) have focused on National Innovation Systems (NIS). Later innovation systems approaches have been further developed as Sectoral Innovation Systems (SIS) and Regional Innovation Systems (RIS). Sectoral Innovation Systems focus on various technology fields or product areas (e.g., Breschi and Malerba, 1997; Carlson 1995). In the debate concerning the nature of the innovation process at the local and regional level, the innovation model is called RIS. Most of the contributions on the nature of innovation in RIS refer to innovative dynamics based on technological change, organisational learning, path dependency, organisational selection, networks, institutions and governance. These became distinct elements of the new theories (Carlson and Jacobson, 1997). It is explicitly recognised by scholars that learning and technological change are rooted in the structure of the economy; they are characterised by regional specificities and include strong elements of path dependency (Rametsteiner and Weiss, 2006ab; Rametsteiner et al., 2005). However, other and different definitions of entrepreneurship can also be justified. For example, another group focused on high growth and high capitalisation, and called attention to this focus in entrepreneurship studies (Aldrich and Ruef, 2006). Provided an alternative to high-growth firms, more traditional firms or more lifestyle firms with lower growth will then exist. The most cited definition in this regard is given by Carland et al. (1984), who defined entrepreneurs according to their aims of profit and growth for their ventures and their use of strategic planning. The four different directions cover different fields but also strongly overlap, not only between the different directions, but also inside the same ‘camp’. Seeking one 24 universal definition would restrict the research on this topic. However, the different definitions and assumptions make it important to clearly define how the terms are used and understood in each study. The different research questions and how they are positioned in the innovation and entrepreneurship literature are presented in the following chapter. 2.3. Research questions Research questions, how they are positioned and how they are related to the five papers are presented in Table 1. The five papers are attached in this thesis and will be presented in Chapter 3. A good deal of research has been conducted on innovation and entrepreneurship in general, but there is still a lack of knowledge regarding how findings apply to landowners and regarding the utilisation of NTFP&S in rural areas. The overall objective of this thesis is to gain a better understanding of the role of some selected antecedents to renewal, or innovation and thus economic performance, in small and micro-firms, with a main focus on the NTFP&S sector. In addition to applying the research on NTFP&S, one of the studies concerned was applied to small knowledgeintensive firms. Little research regarding innovation in such firms in these regions has been done. This part of the study focuses on the effect that external relations (social networks) have on product, process and market innovation. 25 Table 1 shows the seven research questions, their theoretical position and the papers that include them. The papers are introduced in Chapter 3. Research question RQ#1. What influence do entrepreneurial attitudes have on the possibility of startups? RQ#2. What influence do entrepreneurial attitudes have on innovativeness and change in firms? Main theoretical position • Entrepreneurship: Creation of a New Organisation Paper Paper I • Entrepreneurship: Opportunity Recognition • Innovativeness and change Paper II RQ#3. What influence do entrepreneurial attitudes have on a change in economic performance? • Innovation and Innovativeness • Innovation System • Social networks Paper II RQ#4. What effect do external relations (social networks) have on innovation and innovativeness? • Innovation and Innovativeness • External relations /Social networks Paper III, IV and V RQ#5. What effect does learning orientation have on innovativeness? RQ#6. What effect does local entrepreneurial climate have on innovativeness? RQ#7. What effect does innovativeness have on economic performance? • • • • Innovation and Innovativeness Learning orientation Innovation and Innovativeness Entrepreneurial climate Paper IV Paper IV • Innovation and Innovativeness Paper III, IV The main research questions will be presented in the following chapter. All of the research questions are connected to a specific context. Some of the papers in this thesis address similar research questions applied to different contexts. However, in the following chapter, the research questions are addressed without mentioning the specific context and papers. The different papers and their context will be presented first in Chapter 3 2.4. Effect of entrepreneurial attitudes on start-ups, innovativeness and firm performance Gartner (1988) viewed entrepreneurship as the creation of an organisation and belongs to a tradition that is referred to as the ‘Creation of a New Organisation’. His focus marked a shift from what the entrepreneur is to what the entrepreneur does (Gartner, 1988). An entrepreneurial attitude can be defined in different ways but has 26 frequently been linked to two indicators (Brouwer, 2002) also used in this thesis: Risk Aversion and Opportunity Recognition. Risk takers are more likely to initiate a new activity (Knight, 1921), and risk attitude affects the selection of individuals for entrepreneurial positions (Cramer et al., 2002). Opportunity recognition is linked to Schumpeter (1934) who argues that some people are able to see and realise business opportunities whereas others are not. This leads to the following research question: RQ#1. What influence do entrepreneurial attitudes have on the possibility of startups? Entrepreneurship includes not only the acts of organisational creation as described above but also innovations that occur within or outside of an existing organisation (Sharma and Chrisman, 1999). This implies that the field of entrepreneurship can also be applied to existing firms. According to Schumpeter (1934), an entrepreneur is a person who carries out new combinations. These new combinations can take several forms: new products or product quality, new processes, new markets or new ways of organising the firm. Following this definition, entrepreneurship is the process of carrying out new combinations (Sharma and Chrisman, 1999). Stevenson and Jarillo (1990) also follow Schumpeter’s definition but additionally maintain that it is a process by which individuals pursue opportunities without regard to resources they currently control. This definition of entrepreneurship is frequently used among modern scholars (Kubeczko and Rametsteiner, 2002). While Schumpeter writes about the disruptive nature of technologies, destroying the pre-existing state of equilibrium with new innovations, Kirzner’s (1973; 1999) entrepreneur spontaneously discovers and utilises undiscovered opportunities and disequilibrium in the market. 27 An entrepreneurial organisation has a higher level of innovation compared to an average firm (Jennings and Lumpkin, 1989), and corporate entrepreneurship is the sum of an enterprise’s innovation, renewal, and venturing efforts (Zahra, 1995). These observations suggest the following research question: RQ#2. What influence do entrepreneurial attitudes have on innovativeness and change in firms? There have been many studies on how an entrepreneurial orientation affects performance (Wiklund and Shepherd, 2005). Some empirical studies find that those enterprises that have adopted an entrepreneurial orientation have exhibited superior performance (e.g., Wiklund, 1999; Zahra, 1991). However, researchers who have found this link between entrepreneurial orientation and performance also note the paucity of empirical documentation. Other researchers have not found a significant relationship (Wiklund and Shepherd, 2005), indicating that the relationship is inconsistent. A shorter product life cycle is a general tendency in today’s business environment (Hamel, 2000), which makes existing operations more uncertain and causes businesses to seek new opportunities (Wiklund and Shepherd, 2005). Consequently, operations can benefit from being entrepreneurially oriented by taking risks, being innovative, and changing products, processes, markets and organisations (Wiklund and Shepherd, 2005). Ireland et al. (2003:965) state: “Exploring entrepreneurial opportunities contributes to the firm’s efforts to form sustainable competitive advantage and create wealth.” Entrepreneurship can also provide an added benefit by preserving the existing enterprise rather than improving its profitability (Zahra, 1993). Motivations for entrepreneurship can also be other non-financial outcomes, such as increasing 28 employment and task involvement (Zahra, 1993). Nevertheless, the relationship between entrepreneurial attitude and performance has been empirically demonstrated in past research, suggesting the following research question: RQ#3. What influence do entrepreneurial attitudes have on economic performance? 2.5. Effects of external relations on innovation and innovativeness External relations can be defined as all kinds of formal and informal relations developed for the purposes of exchanging and sharing human capital, finances, knowledge and physical goods, and all kinds of joint ventures undertaken in order to gain competitive advantage, reduce risks and/or achieve economic success. Social theory and network analysis have emphasised the importance of networking among heterogeneous groups (Powell and Grodal, 2005) and that there are advantages in having large and diverse social circles (Granovetter, 1973; Burt, 1992; Foss, 1994; Jenssen, 1999). A strong social network may also influence growth (Zhao and Aram, 1995). A social network has been defined as a specific set of linkages among a defined set of persons that provides entrepreneurs with social capital (Coleman, 1988) or as qualities that can exist between people that increase the return of human capital such as intelligence, education, and work experience (Burt, 1997). Interactions must last for a meaningful time period for them to be considered as part of a social network (Jenssen, 1999; Foss and Grønhaug, 2005). 29 Previous scholars have also emphasised the importance of the number of ties (e.g., Ahuja, 2000). Ties make knowledge sharing possible (Granovetter, 1973; Ahuja, 2000; Jenssen, 2001), allowing acquisition of the necessary complementary knowledge (Arora and Gambardella, 1990; Ahuja, 2000) and cooperation to implement larger projects, which again can generate more knowledge (Ahuja, 2000). In the rapidly changing knowledge economy, firms have found it necessary to undertake alliances with other firms and thereby to involve themselves in external relations (Houghton and Sheehan, 2000). Relationship configurations are numerous and may vary according to the aim of the collaboration (Koza, 2000). External knowledge is believed by several researchers to be beneficial for both the rate of innovation (Levinthal and Cohen, 1990) and firm performance (Stuart, 2000). This is supported by Lundvall (1992), who claims that both joint entrepreneurship and interactive learning are of great importance to innovation. Participation in a regional environment with interactive networks can give firms access to a value greater than what each firm can possess by itself (Collinson, 2000); this might strengthen their activities and their capacity for renewal. An external relation can be classified as horizontal or vertical, depending on its participants. Horizontal relations indicate collaboration with competitors and consortia in order to gain complementary knowledge about a market or technology, while vertical relations indicate cooperation with customers or suppliers, mainly to achieve cost reduction (Tidd and Izumimoto, 2002). However, it is also possible to achieve collaboration with a more neutral entity, such as a public university or research institution. (Houghton and Sheehan, 2000). 30 Other researchers focus more on the strategic nature of external relations. Gulati et al. (2000) belong to this group, defining strategic networks as “stable interorganisational ties, which are strategically important to participating firms. They may take the form of strategic alliances, joint ventures, long-term buyer-supplier partnerships, and other ties.” According to Pittaway and Robertson (2004), several studies indicate that participation in networks in general, particularly in networks with diverse partners, positively affects innovation. Thus, the management of such network relations is of great importance to innovation. Several researchers noted that most innovations are the result of cooperation among many entities that exchange information and resources to make the innovation happen (Becker and Dietz, 2004; Houghton and Sheehan, 2000). The main reasons for participating in such external relations are related to expected beneficial outcomes (Stuart, 2000) and access to complementary technology, processes and products (Acs and Preston, 1997). However, cooperation is not limited to the exchange of physical assets, but may well include the exchange of practical knowledge related to such issues as obtaining external financial aid, acquisition of premises, office equipment and other materials, obtaining information about both market opportunities and limitations that might possibly affect the firm, and determining whom to approach for crucial expertise (Collinson, 2000). There are also other potential benefits that motivate cooperation. External relations may be a way of gaining access to new markets, increasing power in the market, altering competition, sharing research and expenses, and reducing risks (Koza, 2000). External relations affect innovation by providing firms with access to assets they 31 could hardly have achieved single-handedly and by adding valuable knowledge (Houghton and Sheehan, 2000). Innovativeness is also affected by the way in which inter-organisational relations allow the diffusion of new ideas and information (Aiken and Hage, 1971). Relationships can comprise both a formal and an informal exchange of knowledge. Regarding informal relations, Konstadakopulos (2004) noted that valuable ideas can be exchanged during leisure activities such as social events and gatherings. This is also supported by Collinson (2000), who recognised that informal channels of information and knowledge are extremely influential in the Scottish multimedia industry. Although there are potential benefits to be gained from external relations, cooperation is challenging, and it is important to choose external partners strategically. The Systems of Innovation (SI) approach (Freeman, 1987; Lundvall, 1992; Nelson, 1993) has clear similarities with the social network literature. The interaction among actors is important for innovation activities. Additionally, SI focuses on the importance of institutional settings as a factor affecting innovation. Firms do not normally innovate in isolation; instead, innovations are seen as based on learning that is interactive among organisations in the SI approach (Edquist 1997; 2001). Social network theory, innovation theory and the system of innovation approach support the following research question: RQ#4. What effect do external relations (social networks) have on innovation and innovativeness? 32 2.6. Learning orientation and local entrepreneurial climate effects on innovativeness Recent innovation work emphasises the role of learning, or a learning orientation, as an antecedent to an innovative culture (Hult et al., 2004, Hurley and Hult, 1998). Proactive learning allows a firm to be more innovative, e.g., by identifying new market opportunities and having the knowledge and expertise to exploit those opportunities. Calantone et al. (2002) studied the relationships among learning orientation, firm innovativeness, and firm performance using a broad array of US industries. Learning orientation was defined as a set of activities that created and used knowledge to enhance competitive advantage. Most research in this area has utilised measures of learning orientation that are specific to the context of larger firms. The literature contains no guidance regarding the measurement of the phenomenon in small or micro-firms. The Systems of Innovation literature has also emphasised the importance of social interaction and learning in innovation (e.g., Lundvall and Johnsen, 1994; Isaksen, 1999; Edquist, 2005). The basic idea in the literature is that innovations come from the interaction and knowledge flow among different actors (Edquist, 1997; 2001). This knowledge is tacit and can therefore be difficult to transfer over longer distances. This suggests the following research question: RQ#5. What effect does learning orientation have on innovativeness? The literature has emphasised the importance of localisation for entrepreneurs and firms. Porter (1990; 1999) argued that firms may gain competitive advantage through highly localised processes such as economic structures, values, cultures, institutions, and histories. This view has also been supported by regional innovation 33 systems and “learning economy” literature (Edquist, 2005). Positioned in a “learning economy”, the focus has been to increase the innovation capacity of small and mediumsized firms (SMEs) by identifying how the climate fosters innovation (Storper, 1995). Various terms have been used to describe this socio-cultural impact on local regions. Lordkipanidze et al. (2005) studied sustainable tourism firms, finding that poor entrepreneurial culture and climate impede economic development. Entrepreneurial climate can be defined as the set of local cultural factors, social factors, and traditions that influence the entrepreneur’s innovativeness. A positive entrepreneurial climate gives a local community positive spillover effects resulting from entrepreneurial activities plus social and cultural capital that are important for innovativeness. Rametsteiner et al. (2005), who studied factors fostering innovation among forest owners in central European countries, used the term “entrepreneurial milieu” for the same concept. RQ#6. What effect does local entrepreneurial climate have on innovativeness? 2.7. Innovativeness effects on Economic Performance Innovation is a risky activity, and there are no guarantees of success or economic victory. This has been confirmed by Schilling and Hill (1998), Cooper (2001) and Jenssen (2003), who claim that failure is the most likely outcome of product innovation. It may also be the case that the imitator, and not the innovator, is left with the profit (Teece, 1986). However, other studies maintain that innovative businesses are more successful than others (Knowles et al., 2007; Wheelwright and Clark, 1992). 34 The link between innovation and performance has been a central issue in the literature. This can be traced back to Schumpeter (1934) who looked at economic development as a process of quantitative changes, driven by innovation (Fagerberg et al., 2005). Other literature has also emphasised the importance of innovation (Deshpande et al., 1993). Possible profits make firms willing to undertake the risks connected to innovation, and sometimes, firms choose to cooperate in order to cope with the challenges of innovation. Recent research applied to the forest products industry in the United States has shown a positive relationship between innovativeness and performance (Knowles et al., 2007; Crespell and Hansen, 2008; Crespell, 2007). Grønhaug and Kaufmann (1988) link innovativeness to organisational performance and argue that firms must be innovative to gain a competitive edge in order to survive and grow. The diffusion literature has documented the importance of innovation in organisations (Rogers, 2003). Other literature has also shown a link between innovativeness and performance (Han et al., 1998). RQ#7. What effect does innovativeness have on economic performance? 35 3. Introduction of the papers in the thesis The present thesis is based on the following papers, which will be referred to by their Roman numerals: I. Lunnan A., Nybakk E. and Vennesland B. 2006. Entrepreneurial attitudes and probability for start-ups—an investigation of Norwegian non-industrial private forest owners. Forest Policy and Economics. 8 (2006) 683– 690. II. Nybakk, E. and Hansen E. 2008. Entrepreneurial attitude, innovation and performance among Norwegian nature-based tourism firms. Forest Policy and Economics, 10(7-8), 473-479. III. Nybakk E., Vennesland B., Hansen E. and Lunnan A. 2008. Networking, Innovation and Performance in Norwegian Nature-Based Tourism. Journal of Forest Products Business Research, 5(article no 4): 26. IV. Nybakk E., Crespell P., Hansen E. and Lunnan A. 2009. Antecedents to Forest Owner Innovativeness: - An investigation of the non-timber forest products and services sector. Forest Ecology and Management, 257, 608-618 V. Jenssen, J.I. and Nybakk, E. 2009. Inter-organizational innovation promoters in small and knowledge intensive firms. International Journal of Innovation Management 13: 441-466. The different theoretical perspectives, some selected references and research questions are presented in Table 2. Paper I investigates the probability of founding a start-up based on whether the forest owner has an entrepreneurial attitude. Paper II investigates whether entrepreneurial attitude impacts the possibility of being innovative 36 and having an increased net income. Both studies are positioned in the entrepreneurship literature, but Paper I looks at the possibility for start-ups and Paper II looks at innovation and change in net income in already existing firms (nature-based tourism). Paper III looks at the social interaction effect on innovativeness and, again, the effect of innovativeness on economic performance among nature-based companies. This paper is positioned within the innovation, network and innovation system literature. In addition, Paper III illustrates this through a case study. Paper IV investigates the impact of social networks (external relations), entrepreneurial climate and learning orientation on innovativeness and economic performance in the context of forest owners. Paper V investigates different external relations that affect product, process and market innovation in the context of small and knowledge-intensive firms. Papers IV and V are also positioned in the innovation literature. 37 Table 2. Theoretical perspectives, context and research questions. Theoretical key words Entrepreneurship theory; Creation of a new organisation, risk aversion and opportunity recognition Entrepreneurship theory, opportunity recognition and innovation Context Active Forest owners (forest owners association members) Research question/Hypotheses Forest owners’ entrepreneurial attitudes generate a higher probability of starting up new activities. Nature-based tourism microfirms Paper III Innovation, Innovativeness, Social Network and Innovation System Nature-based tourism micro-firms Paper VI Innovation, Innovativeness, Social Network and Innovation System, learning orientation Forest owners with more than 25 hectares forest land Paper V Innovation, innovativeness and external relations (social external networks) Small and knowledgeintensive firms Nature-based tourism micro firms with an entrepreneurial attitude: 1) will be more innovative 2) are likely to have had increased net income during the last three years. Among nature-based tourism firms: 1) The greater the extent of social interactions, the greater the degree of innovativeness 2) The higher the degree of innovativeness, the greater the economic performance. Among forest owners: 1) The higher the level of entrepreneurial climate in the local community, the greater the degree of innovativeness 2) The greater the extent of local social networking, the greater the degree of innovativeness 3) The higher the level of learning orientation, the greater the degree of innovativeness 4) The higher the degree of innovativeness, the greater the economic performance 5) Property size moderates the effect of innovativeness on performance, with large owners benefiting the most from being innovative. 1) Market participation in development positively affects innovation in SKI firms. 2) Supplier participation in innovation has a positive effect on innovation in SKI firms. 3) Market co-operation has a positive effect on innovation in SKI firms. 4) Top management interaction with other firms has a positive impact on innovation in SKI firms. 5) Top management interaction with external R&D has a positive impact on innovation in SKI firms. 6) Participation in courses, conferences and business-specific networks has a positive impact on innovation in SKI firms. 7) Co-operation in order to gain access to technology has a positive impact on innovation in SKI firms. 8) Environmental scanning positively affects innovation. Paper I Paper II 38 4. Data and method Data were collected through four surveys and some qualitative personal interviews. Measurement, questionnaire development, sampling and data collection, analyses on non-response bias and the statistical analyses used are presented in this chapter. First, some issues related to the philosophical approach and overall research design are addressed. Easterby-Smith et al. (2008) emphasised positivism and social constructionism as the two main contrasting views in social science research. In positivist studies, the observation must be independent, the explanations must demonstrate causality and the research progresses through hypotheses and deductions. However, in social constructionism, the observer is a part of what is being observed, the explanations aim to increase the general understanding of the situation and the research progresses through gathering of rich data from which ideas are induced. Furthermore, concepts need to be operationalised and further measured and the units of analyses reduced to their simplest terms in positivism, while in social constructionism, the concepts should incorporate stakeholder perspectives, and the unit of analysis may include greater complexity. Positivism typically includes high numbers of observations and statistical analyses, while social constructionism generalises through theoretical abstractions and analysis of few cases (Easterby-Smith et al., 2008). Looking at the two contrasting perspectives, this thesis is clearly positioned closer to the positivism side. The research designs through the different studies in this thesis should ideally be as objective and value-free as possible; it is based on hypotheses and tested surveys and analysed through statistical tools. However, there are many 39 subjective elements such as the choice of model and constructs. The use of latent variables measuring constructs such as attitudes makes the research approach closer to the constructionist side. It can be argued that a latent variable is a construction of the human mind, that its existence thus needs to be ascribed as independent of measurement, and that it therefore could be positioned as constructionism (Borsboom et al., 2003). However, positivism may be called an old-fashioned position in social science; realism is a more suitable position that is nearer to this thesis. There are many different forms of realism, but some basic theses are reiterated (Borsboom et al., 2003). There is realism about theories; theories are either true or false. Another general view is that some theoretical entities exist. Finally, realism is often associated with causality. It can be consequently argued that the ingredients of realism compose the simple key to the success of science: learning about entities in society through causal interaction, and thereby bringing the theories closer to the truth (Borsboom et al., 2003). This thesis consists of different studies positioned in the entrepreneurship and innovation literature and contributes to the field and literature by applying theories to small firms, with a special attention on non-wood forest products and services firms. 4.1. Measurement When testing causal models with latent variables, the use of multiple items based on previous studies is recommended (Churchill, 1979). Nevertheless, when building knowledge in new areas, it can be necessary to start with basic measurements and build from there. Paper I was measured with single items, and Paper II was measured with partly single items and multiple item scales. Multiple-item scales were used in Papers 40 III, IV and V. Whenever possible, measurement scales from previous research, modified to the relevant setting, were used. Little research has been done in the context of NTFP&S, nature-based firms and self-employed forest owners running their own family firms. Most firm-level innovativeness research focuses on larger firms in well-known industrial sectors. There are major organisational differences between larger firms and those of interest in this industry. Examples include the number of employees, the scale of activities, and the levels of professional management. Substantial modification was therefore needed in the scales utilised. In the cases where pre-existing scales were not available, items were developed on the basis of the conceptual definitions of the constructs made by previous studies of forest owners. Start-ups in Paper I were evaluated by asking if they had started up a new business related to the farm. Entrepreneurial attitude was measured the same way in Paper I and Paper II to allow direct comparisons. Respondents were asked two single questions about (1) their willingness to take a high degree of risk when looking for opportunities, and (2) whether they were thinking about offering new services and products because they thought it could increase their income (Rametsteiner et al., 2005; Brouwer, 2002). In Paper II, Innovativeness was limited to process innovativeness including organisational innovativeness. Four questions were asked as a measure of innovativeness: 1) have there been significant changes during the last three years in the way products/services are supplied, 2) have there been changes during the last three years in the way products are marketed, 3) has the firm been reorganised during the last three years, and 4) has there been interaction with new collaborators during the last three years. 41 In Paper III, Networks were studied from the perspective of the System of Innovation. All items measured the level of interaction with institutions and actors, which are locally and nationally connected to innovations and changes in micro-firms. All items were developed specifically for this study, but all institutions and actors were identified based on previous literature (Isaksen, 1997; 1999; Asheim et al., 2003; Rametsteiner et al., 2005). Innovativeness was measured based on changes in the firm during the previous three years. Firms with more innovations were considered to be more innovative. The study followed Schumpeter (1950), who divides innovation into product, process, organisational, and market innovation. Performance was measured with three items: 1) growth in sales, 2) growth in net income and 3) growth in personyears. Growth is the most important aspect of performance in small firms (Wiklund, 1999). To make the questions as easy as possible to answer, respondents were asked if each item had: 1) increased, 2) stayed the same or 3) decreased. In Paper IV, a social network scale was used that consisted of three items that were adapted from Antia and Frazier (2001), in addition to three items that were developed specifically for this study. The scale was designed to measure only the local social network. Four items were used that were adapted from Evensen and Rødset (2002) and their study of Norwegian forest owners, in addition to two new items that were developed. Learning orientation was measured following five items from Calantone et al. (2002). The items were modified to fit the context of forest owners and to stand as one rather than two dimensions. An additional item was created specifically for this study. In this study, an incremental view of innovation was obtained from Calantone et al. (2002) and a six-item scale was drawn from Hurt et al. (1977), Hurt and Teigen (1977) and Hollenstein (1996). Performance was measured with two items that 42 were adapted from Olson et al. (2005) in addition to three that were created for this study. Property Size was measured by the number of hectares of forestland. In Paper V, measurement scales from previous research were used, based on Jenssen (2003 and 2004) as well as Jenssen and Randøy (2002 and 2006). Some new items were developed. The eight concepts used in the study and the number of items used are presented in Table 3. Table 3. Construct, number of items in each construct and scale used for measurement in thesis. Paper I Paper II Paper III Paper IV Paper V Variables Start-ups Risk taker Opportunity recognition Innovativeness Change in net income Risk taker Opportunity recognition Network Innovativeness Performance Social Network Entrepreneurial Climate Learning Orientation Innovativeness Economic Performance Property Size Product Innovation Process Innovation Market Innovation Market participates in product development Supplier participates in innovation Market co-operation Top management interaction with other firms Top management interaction with external RandD Participation in courses/business-specific networks Inter-firm co-operation for technology acquisition Systematic environmental scanning Items 1 item 1 item 1 item 4 items 1 item 1 item 1 item 7 items 4 items 3 items 6 items 6 items 6 items 6 items 6 items 1 item 4 items 2 items 2 items 2 items 2 items 3 items 2 items 2 items 3 items 3 items 3 items Scale Yes/No (1-6) (1-6) (1-6) (1-3) (1-6) (1-6) (1-6) (1-6) (1-3) (1-7) (1-7) (1-7) (1-7) (1-7) Cont* (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) (1-7) 43 4.2. Questionnaire development This thesis is based on analyses of data from four different questionnaires. The first questionnaire (Paper I) consisted of three major sections: Start-ups, Risk taker and Opportunity recognition. Papers II and III were based on Questionnaire 2. The part of the questionnaire designed for Paper II consisted of four major sections: Innovation, Change in net income, Risk taker and Opportunity recognition. The part of the questionnaire designed for Paper III consisted of three major sections: Network, Innovativeness and Performance. Paper III also had a qualitative component with personal interviews. The third questionnaire (Paper IV) consisted of three major sections: Social Network, Entrepreneurial Climate, Learning Orientation, Innovativeness, Forest Size and Performance. The fourth questionnaire (Paper V) consisted of eleven major sections (see Table 2). All four questionnaires had additional items related to descriptive information. All of them also had items designed for other purposes, which were not used in this thesis. All questionnaires were pre-tested. 4.3. Sampling and Data Collection In the first survey, 500 forest owners were randomly drawn from the member list of Agder-Telemark Forest Owners’ Association. In the second survey, 366 nature-based recreation services firms in Norway were surveyed. The firm name and contact information was collected from five forest owners’ associations. Additionally, all relevant firms were selected from the organisations Norwegian Rural Tourism and Food from the Farm. The sample frames provided a list of firms representing virtually all regions of the country. In the third survey, a complete, official list with the names and contact information of Norwegian forest owners constituted the sample frame. All forest owners located in southern, middle and eastern Norway with more than 25 hectares of 44 forest land were selected for an adjusted list, which came to a total of 24,897 forest owners. Following this, 2007 forest owners were randomly drawn from the adjusted list. Data from the fourth survey were gathered through a quantitative survey of a target group of small, knowledge-intensive firms situated in Norway. The respondents were selected by the Norwegian National Bureau of Statistics, and the selection of firms was based on two criteria: annual average R&D expenditure exceeding 50,000 NOK per employee, and a size ranging from 5-30 employees. Then, 445 firms and their managers were selected. Response rate, usable responses and a short description about the data collection are presented in Table 4. Table 4. Response rate, usable responses and description of the data collection for the four surveys in the thesis. P1 P2and3 Response rate 45% 55% Usable responses 223 178 P4 35% 683 P5 34% 151 Data collection Mail survey by post. One reminder by postcard. Letter explaining the objective and importance of the study was mailed and followed by an e-mail survey with two e-mail reminders. Mail survey by post following a modified Dillman (1978). Two reminders and one full package similar to the first wave. E-mail survey 4.4. Non-response test A concern in all survey research is that the respondents may be systematically different from those who did not complete the questionnaire. Only an extremely high response rate could limit this concern, and even with a high response, bias may still exist (Needham and Vaske, 2008). In the first three papers, non-response bias was tested using t-tests, where the earliest respondents were compared to the latest respondents with respect to a selection of variables. The results showed no significant differences 45 between early and late respondents, suggesting that non-response bias was not a concern in any of the three papers. In Paper IV, which utilized the randomly drawn address list, one survey item had information about the forest owner’s property size and the location of the property. There were no indications of bias related to number of respondents from different regions. Property size was analysed using t-tests where the respondents were compared to the complete sample list. No significant differences were found, indicating the nonresponse bias related to size was not a concern. Needham and Vaske (2008) suggested that a non-response check should involve contacting a sample of original non-respondents and asking questions from the questionnaire. A phone survey was conducted by calling 962 original non-respondents, resulting in 105 completed questionnaires. Of these people, 33 percent answered that they did not respond due to a lack of time, and 11 percent answered that they were not interested in this type of questionnaire. Differences in age and education between respondents from the survey and from the non-response survey were tested with a ttest/chi-square-test. The results showed that respondents had significantly higher education and were significantly younger than non-respondents. This finding indicates non–response bias and that the response rate among young and educated forest owners probably may be higher than average. The results of these various tests indicate possible non-response bias. One potential method for adjusting for this problem would be to weight the data. The response rate in the non-response test was only 11 percent, which could introduce additional non-response bias problems. Additionally, the original survey had a high response rate and number of respondents. It was therefore concluded that 46 weighting the data could do as much harm as good. The results of the study are therefore discussed in the context of potential non-response bias. 4.5. Statistical Analysis Multiple logistic regression with maximum likelihood estimates and model fit were used in Papers I and II. Logistic regression is one of the most frequently used methods in models where the dependent variable is dichotomous (Agresti, 1996). All the analyses using logistic regression were done using SAS version 9.1 (SAS, 2003). When dealing with dichotomous variables, here coded as one or zero, it is easy to calculate the logistic probabilities with results from the odds ratio (Hosmer and Lemeshow, 2000) and present them in a 2 x 2 table. Here, the logit difference is equal to β1 + β2 (Hosmer and Lemeshow, 2000). Latent variables represent the opposite of the observed variables (or constructs). They cannot be measured directly but are measured through other variables that can be measured. An example of a latent variable is a value or an attitude. By using a number of observed variables, it is possible to explain an underlying concept that is considered necessary for analysis. Latent variables should be measured with multiple item scales (Churchill, 1979). Reliability analysis allows the study of properties of measurement scales and the items that compose the scales (SPSS 13). In Paper V, the reliability of each latent variable was tested with a Cronbach’s alpha test. This is a test of internal consistency, based on the average inter-item correlation (SPSS 13). A Cronbach’s alpha value over the cut-off point of .7 indicates reliability in the scale. All items with a higher “alpha if deleted” than the “overall alpha” were deleted. The following step in the analyses was to calculate the mean of each construct. The new variables were used in hypothesis testing in a regular OLS regression (Hair et al., 2006). 47 Papers III and IV were tested with structural equation modelling (SEM). SEM is a statistical technique for testing and estimating causal relationships using a combination of statistical data and qualitative causal assumptions. It takes a confirmatory approach to analysing the bearing of a structural theory on some phenomenon (Byrne, 2006). There are two important aspects in such modelling: 1) the causal processes studied are represented by a series of structural equations, and 2) these structural relations can be modelled pictorially to enable a clearer conceptualisation of the theory under study (Byrne, 2006). SEM is a two-step analysis, featuring a measurement model and a structural model. The measurement model is a model specifying the indicators for each construct; this enables an assessment of construct validity (Hair et al., 2006). The structural model is a set of one or more dependent relationships linking the hypothesised model’s constructs (Hair et al., 2006). Paper III was analysed using LISREL and Paper IV was tested using EQS. 5. Results and discussion A summary of results for all hypotheses tested in the five papers is presented in Table 5. The results are presented and briefly discussed in the following text. 48 Table 5. Hypotheses, significant levels and comments in the thesis. Hypotheses Opportunity recognition Æ Start-ups Risk aversion Æ Start-ups Sign 9** 9** II Opportunity recognition Æ Innovation Risk aversion Æ Innovation Opportunity recognition Æ Performance Risk aversion Æ Performance 9** 9*** χ 9* III External Networks Æ Innovativeness Innovativeness Æ Performance External Networks Æ Innovativeness Learning orientation Æ Innovativeness Entrepreneurial ClimateÆ Innovativeness Innovativeness Æ Performance Moderation effect: Property size Market participates in product developmentÆ Innovation1 Supplier participates in innovationÆ Innovation1 Market co-operationÆ Innovation1 Top management interaction with other firmsÆ Innovation1 Top management interaction with external RandDÆ Innovation1 Participation in courses/business specific networksÆ Innovation1 9*** 9*** 9*** 9*** χ 9*** 9** χ χ 9994 94 94 994 Inter-firm co-operation for technology acquisitionÆ Innovation1 Systematic environmental scanningÆ Innovation 1 χ 994 I IV V Comments 1 RTandPO=.45 ,RAandPO=.24 , RTandNO=.23 , RAandNO=.10 2 RTandPO=.53 ,RAandPO=.32 , RTandNO=.32 , RAandNO=.17 3 RTandPO=.58 ,RAandPO=.37 , RTandNO=..49 , RAandNO=.30 H1: β = .46, R2 = .07 H2: β = .50, R2 = .17 H1: β = .32, R2 = .32 H2: β = .37, R2 = .32 H3: Not sign H4: β = .31, R2 = .09 H5: x2 = 4.1 H1: Non-sign results H2: Non-sign results H3: All three models sign H4: Market innovation sign H5: Product innovation sign H6: Process and market innovation sign H7: Non-sign results H8: Prod and Process innovation sign Significance level; *: p<0.10; ** = p< 0.05; *** = p< 0.01; χ = not significant at the 10-percent level. 1 Possibility for start-ups: ( RT=risk taker, RA= risk averse, NO= negative opportunity recognition, PO=positive opportunity recognition) 2 Possibility for being innovative: 3 Possibility for increased net income: 4 Three models tested with 1) Product, 2) Process and 3) Market Innovation as dependent variables. 5.1. Entrepreneurship, Entrepreneurial attitude and innovation Entrepreneurial attitudes have an effect on the probability of founding start-ups In Paper I, it was hypothesised that forest owners with entrepreneurial attitudes would be more likely to start up some new activity. The analyses and results supported this hypothesis. Opportunity recognition and risk aversion were significant, indicating that more entrepreneurial forest owners show a higher probability of founding a start-up. Calculation of logistic probabilities with the results from the odds ratio showed that for a forest owner who had a (1) positive opportunity recognition and was a (2) risk taker, the probability of starting something new was 45%. If the forest owner was risk-averse 49 and not able to recognise opportunities, the probability of starting something new was only 10%. The results suggest that forest owners with an entrepreneurial attitude are more likely to start up new activities related to their forest. This general idea is also supported in research outside of nature-based tourism (e.g., Schumpeter, 1934; Knight, 1921; Brouwer, 2002). There is a general agreement in the entrepreneurship literature that entrepreneurship can be learned to a large degree (e.g., Spinelli and Timmons, 2003). Non-longitudinal data were collected in this study; however, as supported by previous literature, this finding can indicate that forest owners searching for new opportunities will learn and increase their possibility of success. The respondents (forest owners) also emphasised the importance of learning more about the market and marketing by running the business. Narver and Slater (1990) have found a positive relationship between market orientation and business probability of founding start-ups. Entrepreneurial attitudes have an influence on innovativeness and change in firms Paper I also indicated that services were among the most important activities for the farmers outside of traditional farming and forestry sales. In Paper II, the target population included Norwegian nature-based tourism firms (start-ups). It was hypothesised that firms with managers with an entrepreneurial attitude would be more innovative. The analyses and results supported this hypothesis. Both variables (Opportunity Recognition and Risk Taker) showed significant effects. Nature-based tourism micro firms in this study that had an entrepreneurial attitude were more innovative. The possibility of being innovative was greater when the firms’ owners were risk takers and when they had positive opportunity recognition. The results indicated a positive connection between entrepreneurial attitude and innovation in nature-based, tourism micro-firms. This result indicated that more risk-seeking firms were more likely to change the way in which products/services are supplied, the way in which they 50 market their products and services, and the way in which they organise the firm and find collaborators. This result is consistent with Schumpeter’s (1934) work and other studies (e.g., Knight, 1921). The Opportunity recognition variable was significant among the innovation variables. This is consistent with the basic ideas from Schumpeter (1934). Respondents who were labelled as positive-opportunity-recognition firm managers had a significantly higher possibility of being categorised as being more innovative. Entrepreneurial attitudes have an influence on change in economic performance In Paper II, it was also hypothesised that firms with managers with an entrepreneurial attitude would be more likely to have had increased net income over the past three years. The analyses and results gave no clear support to this hypothesis. Nevertheless, the results showed weak support for the second hypothesis: nature-based tourism micro firms with an entrepreneurial attitude are more likely to have had increased net income over the past three years. This is supported by previous findings that suggest that firms with an entrepreneurial attitude are also more likely to perform better (Wiklund, 1999; Wiklund and Shepherd, 2005; Zahra, 1991). Wiklund (1999) investigated entrepreneurial orientation, extensive innovation, proactiveness and risk-taking in small Swedish firms. The results indicated a positive relationship between entrepreneurial orientation and performance. This study also finds a positive connection between entrepreneurial attitude and performance in micro-scale, nature-based tourism firms in Norway. Firms exhibiting positive opportunity recognition that are also risk takers have a higher probability of having had increased net income during the last three years. Despite some indication of a relationship between entrepreneurial attitude and performance, the 51 significance level was too low to make any strong statements. The “opportunity recognition” variable was especially weak. There could be different reasons for this. First of all, the link between entrepreneurial attitude and performance is not necessarily consistently positive. Entrepreneurial activity can influence different dimensions of performance differently and at different points in time (Zahra, 1993). The timing of financial payoff from entrepreneurial ventures can also be different in micro-scaled firms than in larger firms. Descriptive data in this study showed that the firms were often related to forest land and farms. The business can support the activity of a farmer or a forest owner when the aim of the activity is to maintain the farm and the forest land rather than to maximise earnings. Entrepreneurial activities can also pay off primarily by preserving the existence of the firm, rather than by improving its revenue generation (Zahra, 1993). 5.2. Antecedents to innovativeness External relations (social networks) have an effect on innovation and innovativeness Scholars have emphasised that there are advantages to having large and diverse social circles (Granovetter, 1973; Burt, 1992; Foss, 1994; Jenssen, 1999). Firms do not normally innovate in isolation. Instead, innovation is seen as based on learning that is interactive among actors in the System of Innovation approach (Edquist, 1997; 2001). Papers III, IV and V address this issue as applied to small and micro-firms. All three studies support the idea that external relations had a positive impact on innovation. Paper III had two objectives: 1) to determine whether networking was positively related to innovativeness and whether innovativeness was positively related to performance in the nature-based tourism industry in Norway, and 2) to develop an in-depth understanding of how different actors trigger a member of the industry to change, 52 create, or otherwise innovate. In the quantitative part of the study, it was conceptualised that networks have a positive impact on innovations; this hypothesis was supported. External relations (social networks) were one among several antecedents to innovativeness in a survey targeting forest owners. It was conceptualised that external relations would have a positive impact on innovativeness. The findings suggested that external relations have a positive effect on Innovativeness. Paper V examined the relationship between external relations and innovation in small and knowledge-intensive Norwegian firms. The results indicate that external relations are beneficial for innovation. The analysis shows that it is necessary to treat innovation as a multifaceted concept. The independent variables related differently to product innovation, process innovation, and market innovation. The results indicate that market participation in product development has a positive impact on product, process and market innovation. The results also show that the interaction of Top Management with other firms had a positive effect on market innovation, and that the interaction of Top Management with external R&D had a positive effect on product innovation. This finding probably indicates that access to R&D resources is vital for product development in the context of knowledge-intensive products. The results also show that participation in courses and business-specific networks positively influences process and market innovation and that systematic environmental scanning positively influences product innovation. The qualitative part of Paper III illustrates how institutions trigger a member of the industry (the case firm) to change, create, or otherwise innovate. Besides the actors, the customers, neighbours, and other local and international firms have an influence on the innovation process. The case firm obtained its inspiration to create something new 53 from many different actors, but none was indispensable. The overall impression from the case example was that interaction with external actors has a limited effect on innovation and creation in the firm. The interviews show how the interactive innovation model could work in real life; they illustrate the interdependence among actors involved in the model. It is important, however, to recognise that the interactions did not take place solely between the main firm and others. There were interactions found between actors in most directions. This illustrates the interdependence among actors involved in the system. The manager of the firm emphasised internal factors as the most important with respect to creativity and innovation. This was also supported by the quantitative study, where the network was found to have a small but significant effect on innovation. One reason for this could be the small size of the firms in the industry. The literature shows that external relations are important for the innovation process (Asheim et al., 2003). Various types of actors are also involved in the innovation process, and they interact in innovation systems (Lundvall, 1992; Edquist, 1997). Customers, suppliers, competitors, and R&D organisations are examples of important actors. Small firms face innovation barriers, have a low capacity and tendency for networking, and are not interested in or able to carry the overhead cost related to, for example, conducting research projects (Asheim et al., 2003). This was also consistent with the findings in this study where local politicians, extension services, and national public support institutions had limited influence on the innovation process. The findings also indicated that the respondent firms networked more with neighbours, other small firms, and customers that were equal in size and nature. 54 The effect of learning orientation and local entrepreneurial climate on innovativeness In Paper IV, it was also hypothesised that entrepreneurial climate and learning orientation would have a positive impact on innovativeness. No evidence was found of the impact of Entrepreneurial Climate on innovativeness in the model. The literature has suggested that a positive entrepreneurial climate facilitates innovativeness among forest owners (Rametsteiner et al., 2005). When other actors in the local community are entrepreneurial and utilise NTFP&S in a new, innovative way, this should have a positive effect on innovativeness among others. It is possible that more innovative forest owners are more critical of a lack of a positive entrepreneurial climate. Thus, they might experience frustrations from what they perceive to be a poor entrepreneurial climate. This would then be a question of measurement. Learning orientation was positively related to innovativeness. A forest owner committed to learning seeks a better understanding of the environment, resources, markets, customers and suppliers. This finding suggests that innovation itself is a process of learning that fosters implementation of new ideas, new products, and new ways of running the business. This is consistent with both the organisational management literature (e.g., Calantone et al., 2002) and the Systems of Innovation literature (e.g., Lundvall, 1992; Isaksen, 1999). Organisational management literature emphasises that a positive learning orientation also reflects an acknowledgement of and preference for assimilating new ideas (Hurley and Hult, 1998; Calantone et al., 2002). The effect of innovativeness on economic performance The relationship between innovation and performance has been well documented in the previous literature. However, there is a lack of knowledge on the relationship between the antecedents of innovation, innovation itself, and economic performance in small and 55 micro-scaled firms. Papers III and IV address this issue. In Paper III, innovativeness was found to be positively related to performance among nature-based tourism firms. In Paper IV, a conceptualised model with different antecedents of innovativeness, and performance was tested. Consistent with the earlier literature, innovativeness was positively related to performance. Despite a clearly significant relationship, the findings also suggest that a great deal of economic performance cannot be attributed to this relationship (low r2). Many other factors beyond innovativeness affect the performance of the forest owner’s operations. In addition, being highly innovative carries risk and added costs that can potentially negatively affect performance. The effect of innovativeness on performance may have a time delay. Investments in innovations may require cash outlays that can negatively impact short-term profitability. Time is required to implement innovations, learn about markets, etc., before profits are generated. Nevertheless, the relationship was significant, and the finding emphasised the importance of innovativeness for performance and potential economic growth. Additionally, Property Size was proposed as a moderating factor enhancing the impact of Innovativeness on Performance for larger landowners. The test revealed a significant difference between groups for the relationship between innovativeness and performance, supporting the existence of the moderator effect. This suggests that owners of large properties benefit more from being innovative. 6. Implications 56 6.1. Implications for policymakers and practice 6.1.1. Entrepreneurship - start-ups - innovation The results emphasize two main elements of entrepreneurial attitude: the ability to recognise business opportunities and the ability to take a calculated risk. It was found that there was a significantly higher probability of the commencement of new activities among respondents with entrepreneurial attitudes in the study population of Norwegian non-industrial private forest owners. Results of a study on nature-based firms indicated that respondents that exhibit a stronger entrepreneurial attitude appear more likely to innovate and tend to have higher income growth. This suggests that government policy has a role in increasing entrepreneurship in the NTFP&S sector. How these can be implemented to adjust or even create new policy tools related to rural development policy in Norway is a more complex issue. Policies that limit risk can serve to promote more start-ups and make existing firms more entrepreneurial and more innovative. This should, in turn, result in better performance and enhanced rural vitality. As there is a clear drive to maintain rural populations in Norway, rural and regional policy should be directed towards maintaining these small operations and helping them thrive. Because the traditional forest industry has not followed general economic development, the diversification of rural economies is critical. Innovation and entrepreneurship are the ingredients of rural vitality. Another central theme concerns the question of whether opportunity recognition and ability to take calculated risk are innate or if they can be learned. There is a large body of literature indicating that most entrepreneurship capacities can be learned (see discussion in Timmons and Spinelli, 2003) and that in fact all entrepreneurship education builds on this result. The results from this thesis indicate that policies that 57 make people more entrepreneurial in the next round will lead to more start-ups. This result supports government spending on entrepreneurship policy. Such findings also have two implications for managers in existing NTFP&S firms. First, according to the empirical results of this study, an entrepreneurial attitude has a positive effect on innovativeness in these firms. Earlier research has found that innovativeness gives small firms a competitive advantage, for example by differentiating their firm from competitors (e.g., Wiklund and Shepherd, 2005). Second, an entrepreneurial attitude contributes to improved performance (growth in net income), implying that managers can gain from increasing the entrepreneurial climate of their operations. Proactively pursuing new ideas and regular experimentation should benefit these small firms. 6.1.2. Effect of external relations and learning orientations on innovation Results applied to forest owners, nature-based firms and small knowledge-intensive firms showed a positive relationship between external relations and innovation and innovativeness. This is consistent with different traditions in management and economics literature (e.g., Granovetter, 1973; Burt, 1992; Foss, 1994; Jenssen 1999). Small firms innovate not alone, but in cooperation with others. Networking can contribute to innovative capacity and innovativeness among small firms by giving them novel ideas and access to resources as well as by transferring knowledge. Accordingly, small firms that invest in networking with local actors will obtain an advantage by gaining new ideas, concentrating on core expertise and finding new and better ways to run their businesses. By developing new policy instruments to promote networking and 58 clustering in rural regions, policymakers can help to develop innovativeness among forest owners. The results also suggest that forest owners committed to learning seek a better understanding of their environment, resources, markets, customers and suppliers. This finding suggests that innovation itself is a process of learning that fosters the implementation of new ideas, new products, and new ways of running the business. This is consistent with both organisational management literature (e.g., Calantone et al., 2002) and Systems of Innovation literature (e.g., Lundvall, 1992; Isaksen, 1999). Accordingly, forest owners will benefit from being committed to learning. Forest owners’ associations and politicians can facilitate innovation by supporting learningrelated activities and a learning climate in rural areas. This can be done by organising courses and conferences where forest owners can learn and develop skills as well as share existing knowledge. This is crucial for product and services development and improvement of existing products. Gielen et al. (2003) studied agricultural entrepreneurs in the Netherlands and emphasised the importance of new inputs from weak, unknown networks for farmers to be continuously innovative. Meetings, conferences and courses are important to help forest owners to establish such networks. Another issue is that learning about innovation largely consists of ‘learning by doing’. This thesis has found that innovation cannot be treated as one concept and that the separation made in Jenssen and Randøy (2002; 2006) between product, process and market innovation seems to be reasonable. This is of practical managerial interest because it indicates that different actions are necessary in order to stimulate different kinds of innovation. 59 6.1.3. Innovation - performance Consistent with previous literature, these results have shown a link between innovativeness and economic performance. This emphasises the importance of being innovative and creative for managers in small firms, who do not have the resources to invest in RandD. Additionally, for NTFP&S firms, contact with research institutes and universities is almost totally absent. Investing time and commitment in new ideas, concentrating on core expertise, and finding new and better ways to run their firms would therefore be important to obtain an advantage. It is important to create an innovative climate in the firm and to allow employees to interact with various actors. 6.2. Implications for theory and research The largest part of this thesis has dealt with innovation theory. The theoretical perspective and empirical analyses have contributed to innovation theory by collecting evidence related to how different external relations affect product, process and market innovation. The different innovation studies that are a part of this thesis were applied to the case of NTFP&S companies or small knowledge-intensive firms. However, this does not mean that the findings are not applicable to a wider range of small firms. The findings have shown that innovation cannot be treated as one concept. The separation made in Jenssen and Randøy (2002; 2006) between product, process and market innovation seems to be fruitful. Knowles et al. (2007) divided innovation into three groups: process, product and business system innovation. They used the three groups as a composite variable, measuring the same phenomena. Crespell and Hansen (2008) used a similar technique of measuring innovativeness, using innovativeness as one construct with composite variables and investigating the antecedents. The findings in this thesis 60 show that product, process and market innovation can be looked at as three different constructs, and that each of them can have different antecedents. This is of theoretical interest because it clearly shows that the term “innovation” includes different aspects that must be understood and studied separately. The findings also showed, as expected, that external relationships are of importance to innovation. Market participation in product development has a positive impact on product innovation, process innovation and market innovation; these findings support earlier findings from Goes and Park (1997). Jenssen and Randøy (2002;2006) found that top management has an important role in innovations, and BarNir and Smith (2002) found that small firms’ networks are critical in their external relations. This thesis has found that the interaction of top management with other firms is positively related to market innovation and that interaction with external R&D is positively related to product innovation. Research has shown that cooperation among firms improves their innovative performance and competitiveness by combining resources and processes of interactive learning (Asheim et al., 2003; Jenssen and Randøy, 2002; 2006). This thesis has found that participation in courses and business specific networks is positively related to process and market innovation. Further, systematic environmental scanning has been found to be positively related to product innovation and process innovation. Previous findings have emphasised the need for market knowledge in innovation (Auster and Choo, 1994). A significant amount of research has been done on innovativeness among general tourism companies (e.g., Hjalager, 1994; 1997; 2002; Hallenga-Brink and Brezet, 2003; Ioannides and Petersen, 2003). However, little research has investigated 61 the antecedents to landowner innovativeness and whether innovativeness positively impacts economic performance in this setting. Research has shown that innovativeness theory is not necessary transferable from one context to another (Hollenstein, 2003). This thesis has shown that social networking and a learning orientation positively impact innovativeness but that entrepreneurial climate does not. Innovativeness was found to positively impact economic performance. This is the first conceptual causal model using latent variables to try to understand the antecedents to innovativeness in the context of Norwegian forestland owners and their involvement in non-timber forest products and services. Several studies have been conducted based on the institutional view of innovation with a focus on institutions that are important for stimulating innovations related to nature-based tourism and to the forest sector in general (see Hansen et al., 2006 for an overview). Cross-country studies have been made with case studies from several countries (e.g., Wisse et al., 2007). However, there have not been many qualitative studies that have examined the effect of networks on innovativeness and, again, performance, where networks involve the degree to which companies interact with different institutions and actors. This thesis has found a positive connection between networking and innovativeness and between innovativeness and performance, supporting that previous findings in the general literature (see e.g. Isaksen, 1997) are also applicable in the context of nature-based tourism. This thesis contributes to the opportunity-based view on entrepreneurship by applying it to nature-based tourism. The findings in the thesis support the existence of three aspects of entrepreneurship in nature-based tourism enterprises in Norway: 62 opportunity recognition, risk taking, and innovativeness. However, opportunity recognition was found to have only a weak connection with innovativeness and should be further investigated. Risk taking and innovativeness have been two of three central dimensions of entrepreneurship research (Miller, 1983). The third dimension used to characterise and test entrepreneurship according to Miller (1983) was proactiveness. Additionally, this thesis contributes to the entrepreneurship literature by showing that entrepreneurial attitudes have a positive affect on the probability for start-ups among non-industrial forest owners. Entrepreneurial attitude was defined as the ability to recognise business opportunities and the ability to take a calculated risk. This reinforced the previous view on more general industries, e.g. Cramer et al. (2002). 7. Limitations and future research A relatively low R2 in the models with innovation and innovativeness as dependent variables indicates that important independent variables are missing. There are undoubtedly other important antecedents to innovativeness that have not been addressed in this study. Future studies should identify and address these issues by seeking a more complex model. This is important for improving knowledge regarding who can trigger innovation and entrepreneurship among small and micro- firms. This study clearly shows that external relations and networks have a positive influence on innovation in small and micro-firms. It also addresses these issues using both the social network approach and the innovation systems approach. Network theory normally distinguishes between strong and weak ties, where the strength of the relationship depends on factors such as trust, friendship, level of interaction, and the duration of the relationship (Granovetter, 1973). A person has a strong tie to someone 63 with whom regular interactions occur, and a weak tie to an acquaintance with whom interactions are rare. The literature has emphasised the importance of both strong and weak ties in innovations (Powell and Grodal, 2005). Strong ties are important for social support, while weak ties provide much of the novel information. Weak ties have a longer reach but lack depth. It can be argued that strong ties only circulate old ideas and have limited importance for innovativeness. On the other hand, it is important, especially for individual entrepreneurs without the support of an organisation, to have a trusted and supporting social network. Foss and Grønhaug (2005) also emphasise that external relations can have an effect such that the network influences the firm just as much as the firm can influence actors in the network. More in-depth studies should look into these issues connected to smaller firms, e.g., in nature-based tourism. One of the important issues concerns which different factors moderate the effect between number of ties and innovations. Examples of moderating effects include redundancy, variation of knowledge, variation in geographic location, position in the network and firm age. This could also be linked to an innovation system approach where the institution’s role is examined to determine what affects the link between ties and innovations. This study emphasised the importance of relations but did not look at their antecedents. These antecedents can be important for managers as they seek to change their organisations and create more valuable external relations. Gaining a better overall picture and in-depth information about the antecedents will also be important for policymakers by directly addressing the issue of how politicians can exert influence through policy instruments. Future research could identify the antecedents, seek a more in-depth understanding of external relations, and construct a comprehensive framework of both antecedents and consequences. This would allow researchers to provide more practical advice to managers. 64 A complete list of nature-based firms does not exist. There was no complete list of nature-based tourism micro firms in Norway. All forest owners’ associations were contacted to obtain as complete a sample as possible. Two forest owners’ associations did not have a list, and one did not want to release its list. To generate a more representative sample, all relevant respondents from a list of members of the Norwegian Rural Tourism and Food from the Farm were contacted. These organisations have long lists of businesses involved in rural tourism and traditional food products. Descriptive information was used to look for bias in the sample, and none was found. Still, there is no guarantee that the sample is representative. A new study should obtain a better overview of the full population of firms to secure representativeness. Non-response bias may be present in the study. A concern in all survey research is that the respondents may be systematically different from those who did not complete the questionnaire. The data collection design in one paper did not allow a test for nonresponse bias. Three papers tested non-response bias only by comparing early and late respondents. Paper IV had a careful investigation of non-response bias; it appears that younger and more educated forest owners with higher economic performance related to NTFP&S were more likely to respond. A potential reason for this could be that these people were more interested in these topics. This suggests that our findings may be more representative of this group of forest owners. To reduce this problem in further studies, the response rate should be increased among older and less educated owners. The first two papers used single items to measure latent variables. To increase validity and reliability, multi-item scales should always be used. Study findings 65 supported the existence of three aspects of entrepreneurship in nature-based tourism firms in Norway: opportunity recognition, risk-taking, and innovativeness. However, opportunity recognition was found to have only a weak connection with innovativeness and should be further investigated. Risk-taking, innovativeness and proactiveness have been three central dimensions of entrepreneurship research (Miller, 1983). The most common operationalisation of entrepreneurial orientation is that developed by Covin and Slevin (1991). To gain a deeper understanding of entrepreneurship in micro-firms, Covin and Slevin’s (1989) model, which includes innovation, proactiveness and risktaking, should be adapted and tested. Further research should develop measurement scales to measure innovativeness that are better suited to micro-scaled, nature-based tourism firms. Most measurement schemes (multiple item scales) are developed for larger industries and are therefore not suitable for the smallest firms. Measuring performance in micro-scaled firms (e.g., nature-based tourism) is a challenge. According to Dess et al. (2003), a set of multiple measures of economic outcomes such as profitability and sales growth should be used. The nature-based tourism firms investigated in this study are small or micro-scale. Collecting data to measure performance as typically carried out for larger firms is problematic. Many of the respondents will, for example, not have separate financial statements for their business, and a detailed questionnaire could drastically reduce the response rate. There has been no consensus regarding how to measure small-firm performance, and research has focused on easy-to-gather variables (Wiklund, 1999). Therefore, researchers make a case for using growth as the most important performance measure for small firms 66 (Wiklund, 1999). This can be seen as support for using change in net income as an indicator of performance in this study. Only cross-sectional studies were performed, and no longitudinal data were collected, which prevents conclusions regarding causality. Nevertheless, the study results were supported by theory, which may indicate causality. A similar study should be repeated after several years to see if the findings are constant over time. In some of the papers, only firms still in business were surveyed. No firms that had gone out of business were included in the sample, and findings in this study can thus only be generalised for surviving firms. It is logical that risk-taking firms may have a higher chance of failure. The effect of innovativeness on performance is also likely to have a time lag. To gain a better understanding of this topic, longitudinal data should be collected. Together with multiple case studies, causal relationships could then be identified. Studies on innovation and innovativeness among small or micro-scale, agricultural low-technology firms have found that network has a significant impact on innovation and on performance. A cross-sector study could have given more information about how small low- and high-technology firms differ with respect to innovation and different antecedents of innovativeness. 67 8. References Acs, Z., Audretsch, D. (1988). Innovation and firm size in manufacturing. Technological Review, 7, 197-210. Acs, Z., Preston, L. (1997). Small and medium-sized enterprises, Technology and Globalization: Introduction to a Special Issue on Small and medium-Sized Enterprises in the Global Economy. Small Business economics, 9, 1-6. Agresti, A. (1996). An Introduction to Categorical Analysis. John Wiley and Sons, Inc. Ahuja, G., (2000). Collaboration networks, structural holes, and innovation: a longitudinal study. Administrative Science Quarterly 45 (3), 425–452. Aiken, M., Hage, J. (1971). The organization and innovation. Sociology, 5, 63-82. Aldrich, H., Ruef, M. (2006). Organizations Evolving, 2d ed. London: Sage. Aldrich, H., Rosen, B., Woodward, W. (1986). A social role perspective of entrepreneurship: Preliminary findings from an empirical study. Chapel Hill: Department of Sociology, University of North Carolina at Chapel Hill. Antia, K.D., Frazier, G.L. (2001). The severity of contract enforcement in interfirm channel relationships. Journal of Marketing 65, 67–81. Arora, A., Gambardella, A. (1990). Complementary and external linkages: the strategies of large firms in biotechnology. Journal of Industrial Economics 38, 361– 379. Asheim, B., Isaksen A., Nauwelaers, C., Tötdling, F. (2003). Regional innovation policy for small-medium enterprises, Cheltenham, UK and Lyme, US: Edward Elgar. 240 p. 68 Auster, E., Choo, C.W. (1994). How senior managers acquire and use information in environmental scanning. Information Processing and Management, 30(5), 607– 618. Bang, H. (1995). Organisasjonskultur [Organisational culture]. Oslo, Norway: Tano. BarNir, A., and Smith, K. A. (2002 ). Interfirm alliances in the small business: The role of social networks. Journal of Small Business Management 40(3), 219-232. Beath, C. M. (1991). Supporting the Information Technology Champion. MIS Quarterly, 15(3), 355-372. Beatty, C. A., Gordon, J. (1991). Preaching the Gospel: The Evangelist of New Technology. California Management Review, 33(3), 73-94. Beatty, R. P., Zajac, E. J. (1994). Managerial incentives, monitoring, and risk bearing: A study of executive compensation, ownership, and board structure in initial public offerings. Administrative Science Quarterly, 34, 205-214. Becker, W., Dietz, J. (2004). R D Cooperation and Innovation Activities of Firms evidence for the German Manufacturing Industry-. Research Policy, 1-29. Berry, M. M. J., Taggart, J. H. (1998). Combining technology and corporate strategy in small high tech firms. Research Policy, 26, 883-895. Birley, S. (1985). The role of networks in the entrepreneurial process. Journal of Business Venturing, 1, 107-117. Birley, S., Cromie, S., Myers, A. (1991). Entrepreneurial networks: Their emergence in Ireland and overseas. International Small Business Journal, 9(4), 56-74. Bjørkhaug H (2007): Agricultural Restructuring and Family Farming in Norway – Strategies for sustainable practices. PhD Dissertation. Trondheim: NTNU, 2007:187. 69 Borsboom, D., Mellenbergh, G. J., Van Heerden, J. (2003). The theoretical status of latent variables. Psychological Review, 110, 203–219. Boswijk A., Thijssen, J.P.T., Peelen, E. (2005): A new perspective on the experience economy: meaningful experiences. Pearson Education, Amsterdam. Breschi S, Malerba F (1997) Sectoral systems of innovation. In: Edquist C (ed) Systems of innovation - technologies, institutions and organisations. Cassell Academic, London Brouwer, M.T. (2002). Weber, Schumpeter and Knight on entrepreneurship and economic development. Journal of Evolutionary Economics 12, 83–105. Burt, R.S. (1992). Structural holes. In: The Social Structure of Competition, Massachusetts and London Harvard University Press, Cambridge. Burt, R.S. (1997). The contingent value of social capital. Administrative Science Quarterly 42, 42–48. Byrne, B.M. (2006). Structural Equation Modeling with EQS, 2nd ed. Lawrence Erlbaum Associates, Manwah, NJ, 440 pp. Calantone, R.J., Cavusgil, S.T., Zhao, Y. (2002). Learning orientation, firm innovation capability, and firm performance. Industrial Marketing Management 31, 515524. Carland, J. W., Hoy, F., Boulton, W. R., Carland, J. C. (1984), "Differentiating Entrepreneurs from Small Business Owners: A Conceptualization", Academy of Management Review, 9(3), pp 354-359. Carlsen, J., Getz, D., Ali-Knight, J., 2001. Environmental Attitudes and Practise of Family Businesses in the Rural Tourism and Hospitality Sectors. Journal of Sustainable Tourism 9:281-297. 70 Carlsson, B., Ed. 1995. Technological systems and economic performance: The case of factory automation. Dordrecht:Kluwer. 494 pp. Carlsson, B., Jacobsson, S. 1997. Diversity creation and technological systems: A technology policy perspective. In: Systems of Innovation: Technologies, institutions and organizations, C. Edquist, Ed. Pinter/Cassell Academic, London and Washington. pp. 266-297. Castle, E. N. (1998). A conceptual framework for the study of rural places. American Journal of Agricultural Economics 80(3):621-31. Churchill, G.A. Jr. (1979). A paradigm for developing better measures of marketing constructs. Journal of Marketing Research. 16(1): 64-73. Coleman, A.C. (1988). Social capital in the creation of human capital. American Journal of Sociology 94 (Suppl.), 95–120. Collinson, S. (2000). Knowledge networks for innovation in small Scottish software firms. Entrepreneurship and Regional Development, 12, 217-244. Cooper, R. G. (2001). Winning at New Products, Accelerating the Process from Idea to Launch. Cambridge, Massachusetts: Perseus Publishing. Cosh, A., Fu, X., Huges, A. (2005). Management Characteristics, Collaboration and Innovation Efficiency: Evidence from UK Survey Data. Cambridge: University of Cambridge. Covin, J.G., Slevin, D.P. (1991). A conceptual model of entrepreneurship as firm behavior. Entrepreneurship Theory and Practice 16 (1), 7–25. Cramer, J.S., Hartog, J., Jonker, N., Van Praag, C.M. (2002). Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism. Journal of Economic Behaviour and Organisation 48 (1), 29–36. 71 Crespell, P. (2007). Organizational Climate and Innovativeness in the Forest Products Industry. PhD Dissertation. Oregon State Univ., Dept. of Wood Science Engineering, Corvallis, OR. 189 p. Crespell, P., Hansen, E. (2008). Work climate, innovativeness, and firm performance: in search of a conceptual framework. Canadian Journal of Forest Research 38(7), 1703–1715. De Brentani, U. (1989). Success and failure in new industrial services. Journal of Product Innovation Management, 6, 239-258. Deshpande, R., Farley, J.U., Webster, F.E. (1993). Corporate culture, customer orientation, and innovativeness in Japanese firms: a quadrad analysis. Journal of Marketing 57 (January), 23–27. Dess, Gregory G., Ireland, R., Duane, Zahra, Shaker, A., Floyd, Steven W., Janney, Jay J.,Lane, Peter J. (2003). Emerging issues in corporate entrepreneurship. Journal of Management 29 (3), 351–379. Drucker, P. F. (1993). Innovation and Entrepreneurship: Practice and Prinsiples. In (pp. 149-157): Harper Business. Easterby-Smith, M., Thorpe, R., Lowe, A. 2008 Management research: an introduction.(3rd ed.) London: Saga. Edquist, C. (1997). Systems of Innovation: Technologies, institutions and organizations, C. Edquist, Ed. Pinter/Cassell Academic, London and Washington. 456 p. Edquist, C. (2001). The system of innovation approach and innovation policy – An account of the state of the art. Lead paper at the Nelson Winter Conference DRUID, Aalborg, June 12–15, 2001. Draft version of paper downloaded from www.druid.dk/conferences/nw/ on Oct. 2, 2003. 24 p. 72 Edquist, C. (2005). Systems of innovation – perspectives and challenges. In: Fagerberg, J., R.R. Nelson, and D.C. Mowery. (2005). The Oxford Handbook of Innovation. Oxford Univ. Press, Oxford, UK. P 181 – 208. Edquist, C., Johnson, B. (1997). Institutions and organizations in systems of innovation. In: Systems of Innovation: Technologies, institutions and organizations, C. Edquist, Ed. Pinter/Cassell Academic, London and Washington. pp. 41-63. Evensen, M.B., Rødset, S., (2002): Entreprenørskap i skogbruket– En undersøkelse om skogeieres holdninger til og erfaringer med omstilling i skogbruket.Q M. Sc. Thesis. Department of Economics and Resource Management, Agricultural University of Norway. Fagerberg, J. (2005). Innovation: A guide to the Literature. In: Fagerberg, J., R.R. Nelson, and D.C. Mowery. (2005). The Oxford Handbook of Innovation. Oxford Univ. Press, Oxford, UK. P 1-27. Fagerberg, J., R.R. Nelson, D.C. Mowery. (2005). The Oxford Handbook of Innovation. Oxford Univ. Press, Oxford, UK. Flora, C., Flora, J., Fey, S. (2004). Rural Communities: Legacy and Change. 2th ed. Boulder: Westview Press. Foss, L. (1994). Entrepreneurship: the impact of human capital, a social network and business resources on start-up. PhD Dissertation. Norwegian School of Economics and Business. Bergen, Norway. 298 pp. Foss, L., Grønhaug, K., (2005). Nettverk: Å styre og bli styrt [Network: to influence and to be influenced ]. In: Foss, L., and Nordhaug, O., (2005). Bedriftstvikling I teori g praksis [Business development in theory and practice]. Forlag 1, Oslo. P 6791. Freel, M. S. (2000). Barriers to Product Innovation in Small Manufacturing Firms. International Small Business Journal, 18(2), 60-81. 73 Freeman, C. (1987). Technology policy and economic performance: Lessons from Japan. Pinter, London, England. 155 p. Gartner, W.B. (1988). “Who is an entrepreneur?” is the wrong question. American Journal of Small Business, 12 (4), 11–32. Gemünden, H. G., Heydebreck, P., Herden, R. (1992). Technological interweavement: A means of achieving innovation success. R&D Management, 22(4), 359-376. Gielen, P.M., Hoeve, A., Niewenhuis, L.F.M., 2003. Learning entrepreneurs: learning and innovation in small companies. European Educational Research Journal, 2 (1). Goes, J. B., Park, S. H. (1997). Interorganizational links and innovation: The case of hospital services. Academy of Management Journal, 40(3), 673-697. Granovetter, M., (1973). The strength of weak ties. American Journal of Sociology 78, 1360–1380. Grønhaug, K., G. Kaufman. (1988). Innovation: A Cross-Disciplinary Perspective. Norwegian Univ. Press. 530 p. Gulati, R., Nohira, N., Zaheer, A. (2000). Strategic networks. Strategic management journal, 20(3), 203-215. Hair, J.F, Black, B, Babin, B., Anderson, R.E., Tatham, R.L. (2006). Multivariate Data Analysis (6th Edition). London: Prentice-Hall. Hall, R. H. (1982). Organizations and Process. Englewood Cliffs: Prentice Hall Inc. Hallenga-Brink, S.C., J.C. Brezet. (2003). The sustainable innovation design diamond for micro-sized enterprises in tourism. Journal of Cleaner Production. 13(2): 141-149. Hamel, G. (2000). Leading the Revolution. HBS Press, Boston, Massachusetts. 74 Han, J.K., Kim, N., Srivastava, R.K. (1998). Market orientation and organizational performance: Is innovation a missing link? Journal of Marketing. 62(4): 30-44. Hansen, E., S. Korhonen, E. Rametsteiner, S. Shook. 2006. Current state-of-knowledge: Innovation research in the global forest sector. Journal of Forest Products Business Research. 3(4): 27. Hjalager, A-M. 1994. Dynamic innovation in the tourist industry. Progress in Tourism Recreation and Hospitality Management. 6(1994): 197-224. Hjalager, A-M. 1997. Innovation patterns in sustainable tourism: An analytical typology. Tourism Management. 18(1):35–41. Hjalager, A-M. (2002). Repairing innovation defectiveness in tourism. Tourism Management. 23: 465-474. Hollenstein, H.A. (1996). Composite indicator of a firm’s innovativeness. An empirical analysis based on survey data for Swiss manufacturing. Research Policy 25 (4), 633–645. Hollenstein, H. (2003). Innovation modes in the Swiss service sector: A cluster analysis based on firm-level data. Research Policy. 32(2003): 845-863. Hosmer, D.W., Lemeshow, S. (2000). Applied Logistic Regression, 2nd ed. Wiley,NewYork. Houghton, J., Sheehan, P. (2000). A Primer on the Knowledge economy: Centre for strategic economic Studies, Victoria University, Australia. Howell, J. M., Higgins, C. A. (1990). Champions of Technological Innovation. Administrative Science Quarterly, 35(2), 317-341. 75 Hult, G.T., Hurley, R.F., Knight, G.A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management 33 (2004), 429–438. Hurley, R.F. Hult, G.T.M. (1998). Innovation, market orientation, and organizational learning: an integration and empirical examination. Journal of Marketing 62, 42– 54. Hurt, T.H., Joseph, K., Cook, C.D. (1977). Scales for the measurement of innovativeness. Human Communication Research 4 (1), 58–65. Hurt, T.H., Teigen, C.W. (1977). The development of a measure of perceived organizational innovativeness. Communication Yearbook 1 (1), 377–385. Hyttinen, P., Niskanen, A., Ottitsch, A., Tykkyläinen, M., Väyrynen, J., 2002. Forest related perspectives for regional development in Europe. European Forest Institute, Joensuu. Research report 13. Ioannides, D., Petersen, T., 2003. Tourism ‘non-entrepreneurship’ in peripheral destinations: a case study of small and medium tourism enterprises on Bornholm, Denmark. Tourism Geographies 5 (4), 408–435. Ireland, R.D., Hitt, M.A., Simon, D.G. (2003). A model of strategic entrepreneurship: the construct and its dimensions. Journal of Management 29 (6), 963–989. Isaksen, A. (1997). Innovasjoner, næringsutvikling og regionalpolitikk [Innovations, industrial development and regional politicy]. Høyskoleforlaget, Kristiansand. In Norwegian. 280 p. Isaksen, A. (1999). Regionale innovasjonssystemer [Regional Innovation Systems]. Step Report 02 1999, Oslo. In Norwegian. 304 p. 76 Jennings, D.F., Lumpkin, J.R. (1989). Functioning modeling corporate entrepreneurship: an empirical integrative analysis. Journal of Management 15 (3), 485–502. Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance, 48, 831-880. Jenssen, J.I. (1999). Entrepreneurial networks—a study of the impact of social networks and resource access on the start-up of organizations. PhD Dissertation. Norwegian School of Economics and Business. Bergen, Norway, 220 pp. Jenssen, J. I. (2001). Social networks, resources, and entrepreneurship. The International Journal of Entrepreneurship and Innovation, 2(2). Jenssen, J. I. (2003). Innovation, capabilities, and competitive advantage in Norwegian shipping. Maritime Policy Management, 30(2), 93-106. Jenssen, J. I. (2004). How do corporate champions promote innovations? A literature review. International Journal of Innovation Management, 8(1), 63-86. Jenssen, J. I., Randøy, T. (2002). Factors that promote innovation in shipping companies. Maritime Policy and Management, 29(2). Jenssen, J. I., Randøy, T. (2006). The performance effect of innovation in shipping companies. MARIT. POL. MGMT, 33(4), 327-343. Kirzner, I. M. (1973). Competition and Entrepreneurship. Chicago: University of Chicago Press. Kirzner, I. M. (1999). Creativity and/or Alertness: A Reconsideration of the Schumpeterian Entrepreneur. Review of Austrian Economics, 11: 5–17. Knight, F. H. (1921) Risk, Uncertainty, and Profit. Library of Economics and Liberty. 4 February 2009. <http://www.econlib.org/library/Knight/knRUP11.html>. 77 Knowles, C., Hansen, E., Shook, S. (2007). Measuring innovativeness in the North American softwood sawmilling industry using three methods. Canadian Journal of Forest Research, 38(2), 363-375. Konstadakopulos, D. (2004). Innovation in the Global Knowledge Economy. Bristol: Intellect Books. Koza, M. L., A. (2000). Managing Partnerships and Strategic Alliances: Raising the Odds for Success. European Management Journal, 18(2), 146-151. Kubeczko, K., Rametsteiner, E. (2002). Innovation and entrepreneurship — a new topic for forest related research? Discussion Paper P/2002-1, Institute of Forest Sector Policy and Economics, BOKU Vienna. Levinthal, D. A., Cohen, W. M. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation Administrative Science Quarterly, 35, 128-152. Lievens, A., Moenaert, R. K. (2000). Project team communication in financial service innovation. Journal of Management Studies, 37(5), 733-767. Littler, D. A., Sweeting, R. C. (1985). Radical Innovation in the Mature Company. European Journal of Marketing, 19(4), 33-53. Lordkipanidze, M., Brezet, H., Backman, M. (2005). The entrepreneurship factor in sustainable tourismdevelopment. Journal of Cleaner Production 13 (8), 787–798. Lundvall B-Å, Ed. (1992). National Systems of Innovation – Towards a theory of innovation and interactive learning. Pinter Publishers, London. 342 p. Lundvall, B.-Å., Johnson, B., (1994). The learning economy. Journal of Industry Studies 1, 23–42. Mazzarol, T., Reboud, S. (2008). The role of complementary actors in the development of innovation in small firms. International Journal of Innovation Management, 12(2), 223-253. 78 Miles, I. 2003. Innovation in Services. TEARI working paper No. 16. TEARI project, University of Oslo. Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science 29 (7), 770–791. Minzberg, H. (1979). The Structure of Organizations. Englewood Cliffs, NJ: PrenticeHall. Mitchell, W., Singh, K. (1996). Survival of businesses using collaborative relationships to commercialilize complex goods. Strategic Management Journal, 17, 169-195. Morck, R., Yeung, B. (2001). The economic determinants of innovation. Industry Canada Research Publications Program, vol. 25. (January). Narver, J.C., Slater, S.F. (1990). The effect of marketing orientation on business profitability. Journal of Marketing 54 (1990): 20:35. Needham MD, Vaske JJ (2008) Survey implementation, sampling, and weighting data. In ‘Survey Research and Analysis: Applications in Parks, Recreation, and Human Dimensions’. (Ed. JJ Vaske) (Venture Publishing: State College, PA) Nelson, R.R. (1993). National Innovation Systems: A Comparative Study. Oxford Univ. Press. 541 p. North, D.C. 1991. Institutions. Journal of Economic Perspectives. 5(1): 97-112. Maureen, M. J. B., Taggart, J. H. (1998). Combining technology and corporate strategy in small high tech firms. Research Policy, 26, 883-895. OECD (2000). Enhancing the competitiveness of SMEs through innovation. Paper presented at the Conference for Ministers responsible for SMEs and Industry Ministers. 79 Olson, E.M., Slater, S.F., Hult, G.T.M. (2005). The performance implications of fit among business strategy, marketing organization structure, and strategic behavior. Journal of Marketing 69 (3), 49–65. Pavia, T. M. (1990). Product growth strategies in young high-technology firms. Journal of Product Innovation Management, 7(4), 297-309. Phillips, B. D. (1991). The increasing role of small firms in high technology sector: Evidence from the 1980s. Business Economics, 26(1), 40-47. Pine B.J., Gilmore J.H. (1999): The experience economy: work is theatre and every business a stage. Harvard Business School Press, Boston. Pittaway, L., Robertson, M. (2004). Business-to -Business Networking and its Impact on Innovation: Exploring the UK Evidence (No. 2004/032). Lancaster: Lancaster University Management School. Document Number) 32 Porter, M.E. (1990). The competitive advantage of nations. Harvard Business Review (March–April), 73–93. Porter, M.E. (1999). Clusters and the new economics of competition. Harvard Business Review, 76(6), 77-90. Powell, W.W., Grodal, S. (2005). Network of innovators. In: Fagerberg, J., R.R. Nelson, and D.C. Mowery. (2005). The Oxford Handbook of Innovation. Oxford Univ. Press, Oxford, UK. p 57-85. Rametsteiner, E., Weiss, G., Kubeczko, K. (2005). Innovation and entrepreneurship in forestry in central Europe. EFI Research Report 19, European Forest Institute, Joensuu, Finland. 250 p. Rametsteiner, E., Weiss, G., (2006a). Innovation and innovation policy in forestry: linking innovation process with systems models. Forest Policy and Economics Volume 8, Issue 7, October 2006, Pages 691-703. 80 Rametsteiner, E., Weiss, G., (2006b). Assessing policies from a systems perspective – experiences with applied innovation systems analysis and implications for policy evaluation. Forest Policy and Economics volume 8, issue 5, 564-576. Ritchie, B.J.R., Crouch, G.I. (2005): The Competitive Destination - A sustainable tourism perspective, CABI Publishing, Wallingford UK, Cambridge USA. Rogers, E.M. (2003). Diffusion of Innovations, 5th ed. Free Press, NY, NY. 550 p. Sarasvathy, S., Dew, N., Velamuri, R., Venkataraman, S. (2003). Three views of entrepreneurial opportunity. In A. Z.J., Audretsch, D. B. (Eds.), Handbook of Entrepreneurship Research. Dordrecht, NL: Kluwer. SAS, Version 9.1. SAS Institute Inc., Cary, NC. Schilling, M. A., Hill, C. W. L. (1998). Managing the new product development process: Strategic imperatives. Academy of Management Executive, 12(3), 6782. Schumpeter, J.A. (1934). The Theory of Economic Development, translated by R. Opie from the 2nd German ed. [1926]. Harvard Univ. Press, Cambridge. 255 p. Schumpeter, J.A. (1950). Capitalism, Socialism and Democracy, 3rd ed. Harper and Row, NY, NY. 381 p. Schön, D. A. (1963). Champions of radical new inventions. Harward Business Review, 41(March-April), 77-86. Scott, W.R. (1995). Institutions and Organizations. Sage Publications, Thousand Oaks, CA. 178 p. Segerstrom, PS (1991). Innovation, imitation, and economic growth. Journal of Political Economy, 99(4), 807. 81 Sharma, P., Chrisman, J.J., (1999). Toward a reconciliation of the definitional issues in the field of corporate entrepreneurship. Entrepreneurship: Theory Practice 23, 11–27. Shane, S., Venkataraman, S. (2000). The Promise of Entrepreneurship as the Filed of Research. Academy of Management Review, 25, 1 (January), p 217-226 Simmie, J (2002). Knowledge spillovers and reasons for the concentration of innovative SMEs. Urban Studies, 39(5/6), 885–902. Spinelli, S., Timmons, J. (2003). New venture creation: entrepreneurship for the 21st Century with Power Web and New Business Mentor CD. McGraw Hill, Irwin. 700 pp. SSB, 2008. Statistisk årbok [Statistics Norway - Statistical annual]. www.ssb.no Stevenson, H.H., Jarillo, J.C. (1990). A paradigm of entrepreneurship: entrepreneurial management. Strategic Management Journal 11, 17–27. Storper, M. (1995). The resurgence of regional economies, ten years later: the region as a nexus of untraded interdependencies. European Urban and Regional Studies 2 (3), 191–221. Stuart, T. E. (2000). Interorganizational alliances and the performance of firms: A study of growth and innovation rates in a high-technology industry. Strategic management Journal, 21, 791-811. Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15, 285305. Tidd, J., Izumimoto, Y. (2002). Knowledge exchange and learning through international joint ventures: an Anglo-Japanese experience. Technovation, 22, 137-145. 82 Tidd, J and Bessant, J. (2009). Managing Innovation: Integrating Technological, Market and Organizational Change. John Wiley and Sons Ltd. Chichester, West Sussex: Wiley Tushman, M. L. (1977). Special boundary roles in the innovation process. Administrative Science Quarterly, 22, 587-605. Tushman, M. L., and Scanlan, T. J. (1981). Boundary Spanning Individuals: The Role in Information Transfer and their Antecedents. Cybernetics and Systems, An International Journal, 22, 109-123. Venkataraman, S. (1997). The Distinctive Domain of Entrepreneurship Research: An Editor's Perspective. Advances in Entrepreneurship. J. Katz and R. Brockhaus. Greenwich, JAI Press. 3: 119-138. Vennesland, B. (2004). Social capital and networks in forest-based rural economic development. Scandinavian Journal of Forest Research. 19(5): 82-89. Vennesland, B. (2005). Measuring rural economic development in Norway using data envelopment analysis. Forest Policy and Economics. 7(1): 109-119. Verhees, F. J. H. M., Meulenberg, M. T. G. (2004). Market orientation, innovativeness, product Innovation, and performance in small firms. Journal of Small Business Management, 42(2), 134-154. Voss C, Zomerdijk L (2007): Innovation in experiential services—an empirical view. In: DTI (eds) Innovation in services. DTI, London, pp 97–134 Walder, B., Weiermair, K., Sncho Perez, A., Eds. (2006). Innovation and Product Development in Tourism. Erich Schmidt Verlag. 170 p. Weiss, G., Rametsteiner, E. (2005). The Role of Innovation Systems in Non-Timber Forest Products and Services Development in Central Europe. Economic Studies XIV(1): 23-36. 83 Weiss, G., Martin, S., Matilainen, A., Vennesland, B., Nastase, C., Nybakk, E., Bouriaud, L., (2007). Innovation processes in forest-related recreation services: the role of public and private resources in different institutional backgrounds. Small-scale Forestry 6, 423–442. Wheelwright, S. C., Clark, K. B., (1992). Revolutionizing product development. Quantum leaps in speed, efficiency, and quality. New York: Free Press. Wickham, P.A. (2004). Strategic entrepreneurship. 3th ed. Pearson Education, Great Britain. 622 p. Wiklund, J., (1999). The sustainability of the entrepreneurial orientation–performance relationship. Entrepreneurship Theor. Pract. 24 (1), 37–48. Wiklund, J., Shepherd, D., (2005). Entrepreneurial orientation and small business performance: a configurational approach. Journal of Business Venturing 20 (1),71–91. Zahra, S. (1991). Predictors and financial outcomes of corporate entrepreneurship: an explorative study. Journal of Business Venturing 6 (4), 259–285. Zahra, S.A. (1993). A conceptual model of entrepreneurship as firm behaviour: a critique and extension. Entrepreneurship: Theory Practice 16, 5–21. Zahra, S., (1995). Corporate entrepreneurship and financial performance: the case of management leveraged buyouts. Journal of Business Venturing 10 (3), 225–247. Zhao, L., Aram, J.D. (1995). Networking and growth of young technology-intensive ventures in China. Journal of Business Venturing 10 (5), 349–370. 84 Paper I Reprinted with permission from Elsvier LTD Forest Policy and Economics 8 (2006) 683 – 690 www.elsevier.com/locate/forpol Entrepreneurial attitudes and probability for start-ups—an investigation of Norwegian non-industrial private forest owners Anders Lunnan a,*, Erlend Nybakk b, Birger Vennesland b a Norwegian Forest Research Institute, Høgskoleveien 8, 1430 Aas, Norway, and Department of Economics and Resource Management, Agricultural University of Norway, P.O. Box 5033, 1432 Aas, Norway b Norwegian Forest Research Institute, Høgskoleveien 8, 1430 Aas, Norway Abstract Agricultural policy has in the last 50 years taken much of the risk and the initiative away from Norwegian farm forest owners. Subsidies in agriculture have guaranteed an acceptable income and there has been neither need nor incentives for starting up new activities at the farms. This situation is now gradually changing. The income both from agriculture and forestry is decreasing and farm forest owners have either to move, to find job opportunities outside the farm or to start up new activity at the farm using the farm’s resources. Entrepreneurship theory is used to study the question why some farm forest owners choose to start up some new activity based on the forest resources they have. We identify two main elements of entrepreneurship; the ability to recognise business opportunities and the ability to take calculated risk. In a survey to 500 forest owners in southern Norway (response rate 45%), we included questions about opportunity recognition and risk aversion. From the answers, we were able to split the forest owners in two groups, those with entrepreneurial attitudes and those without. Using logistic regression we found a significantly higher probability for start-up of new activities in the group with entrepreneurial attitudes. This result has very interesting policy implications. Many studies show that entrepreneurial attitudes to a large degree can be learnt. The first way of learning about entrepreneurship is through the education system and through courses and training of forest owners. The other way is dlearning by doingT, which is most probably the most efficient way to learn about entrepreneurship. Public policy should stimulate more owners to ddoT, by that they will dlearnT and that will again lead to more entrepreneurial activities at the holdings. D 2005 Elsevier B.V. All rights reserved. Keywords: Start-ups; Entrepreneurship; Risk taker; Opportunity recognition 1. Introduction * Corresponding author. Tel.: +47 64 94 89 35; fax: +47 64 94 31 80. E-mail address: [email protected] (A. Lunnan). 1389-9341/$ - see front matter D 2005 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2005.06.016 In 1940 the employment in the primary, secondary and tertiary sectors was about the same in Norway. Fig. 1 shows that since that time there have been large structural changes. The employment in the primary Paper 2 Reprinted with permission from Elsvier LTD Forest Policy and Economics 10 (2008) 473–479 Contents lists available at ScienceDirect Forest Policy and Economics j o u r n a l h o m e p a g e : w w w. e l s e v i e r. c o m / l o c a t e / f o r p o l Entrepreneurial attitude, innovation and performance among Norwegian nature-based tourism enterprises Erlend Nybakk a,b,⁎, Eric Hansen c a b c Norwegian Forest and Landscape Institute, Postboks 115, N-1431 Ås, Norway Department of Economics and Resource Management, Norwegian University of Life Sciences, N-1432, Ås, Norway Department of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA A R T I C L E I N F O Article history: Received 26 March 2007 Received in revised form 23 January 2008 Accepted 10 April 2008 Keywords: Entrepreneurship Entrepreneurial attitude Risk taker Opportunity recognition Innovation Performance Nature-based tourism A B S T R A C T Entrepreneurship and innovativeness have seen considerable attention in the literature. However, little research has focused on micro-scaled enterprises, especially in the context of nature-based tourism. This work investigates how entrepreneurial attitude influences innovativeness and performance in Norwegian nature-based tourism enterprises. Data collection consisted of an e-mail survey and resulted in 178 usable responses. Respondents that exhibit a stronger entrepreneurial attitude appear more likely to change the way they organize their enterprise and tend to have higher income growth. Results point to potential policy actions that could positively impact rural development as well as individual firm actions that may enhance performance. © 2008 Elsevier B.V. All rights reserved. 1. Introduction Historically, the forest sector has been an important industry for the Norwegian economy, particularly for rural areas. Increasing globalization and competition in the wood products industry and a simultaneous reduction in income from timber sales among forest landowners have created increasing debate regarding economic diversification and who might best commercialize non-wood forest products in Norway. Politicians agree on the desirability of maintaining rural populations and robust regions throughout Norway and promotion of innovation and entrepreneurship in traditional sectors like forestry and agriculture is seen as important for ensuring the economic health of rural areas. The study of firm-level entrepreneurship is a central issue in the entrepreneurship literature (Zahra, 1993). Current research identifies two different views of entrepreneurship (Sharma and Chrisman, 1999) where one group of scholars focuses on the outcome of entrepreneurship (Sharma and Chrisman, 1999), such as creation of value and another larger group focuses on the characteristics of entrepreneurship (Sharma and Chrisman, 1999), in other words, innovativeness. Both groups agree that opportunity recognition is at the center of ⁎ Corresponding author. Norwegian Forest and Landscape Institute, Postboks 115, N1431 Ås, Norway. Tel.: +47 64 94 90 99; fax: +47 64 94 80 01. E-mail address: [email protected] (E. Nybakk). 1389-9341/$ – see front matter © 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2008.04.004 entrepreneurship (Ireland et al., 2003). Researchers in the second group offer two accepted and frequently used definitions: 1) Schumpeter (1934) defines entrepreneurship as the process of carrying out new combinations, and 2) Gartner (1988) defines it as the creation of new organizations. Innovation in the service sector has been a topic of growing interest among researchers and policy makers (e.g. Hjalager, 1994, 1997, 2002; Ioannides and Petersen, 2003; Hallenga-Brink and Brezet, 2003). In this study, nature-based tourism enterprises in Norway are investigated. Lunnan et al. (2006) identify two main elements of entrepreneurship among non-industrial private forest owners related to non-timber activities: the ability to recognize business opportunities and the ability to take calculated risks. Further, they examine how entrepreneurial attitudes affect the possibility for business startups. Rather than investigating entrepreneurship related to start-ups, this study focuses on existing enterprises. The first objective is to develop an understanding of how entrepreneurial attitudes influence innovativeness and change in Norwegian nature-based service enterprises. Favorable market position (Porter, 1985) and possession of valuable, rare, imperfectly imitable, and non-substitutable resources distinctive to the enterprise (Barney, 1991) have frequently been described as sources of competitive advantage. Drawing from Schumpeter (1934), later research highlights the value of creativity and innovation for opportunity and advantage-seeking behaviors Paper 3 Reprinted with permission from Journal of Forest Products Business Research Paper 4 Reprinted with permission from Elsvier LTD Forest Ecology and Management 257 (2009) 608–618 Contents lists available at ScienceDirect Forest Ecology and Management journal homepage: www.elsevier.com/locate/foreco Antecedents to forest owner innovativeness: An investigation of the non-timber forest products and services sector Erlend Nybakk a,b,*, Pablo Crespell c, Eric Hansen d, Anders Lunnan a,b a Norwegian Forest and Landscape Institute, Postboks 115, N-1431 Ås, Norway Department of Economics and Resource Management, Norwegian University of Life Sciences, N-1432 Ås, Norway FP Innovations Forintek, 2665 East Mall, Vancouver, BC, Canada V6T 1W5 d Department of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA b c A R T I C L E I N F O A B S T R A C T Article history: Received 22 January 2008 Received in revised form 22 September 2008 Accepted 23 September 2008 Increased urbanization in many societies is having a negative impact on vitality of rural areas. To maintain the vitality of these areas governments have employed a variety of policies, some of which are designed to facilitate innovation and enhance landowner innovativeness. However, little research has investigated the antecedents to landowner innovativeness and whether innovativeness positively impacts economic performance in this setting. The present study investigates these issues in the context of Norwegian forestland owners and their involvement in non-timber forest products and services (a form of ecosystem services). The authors present a conceptual model hypothesizing that social networking, entrepreneurial climate, and a learning orientation each have a direct, positive impact on landowner innovativeness and innovativeness has a direct, positive impact on economic performance. Property size is included as a moderating variable. Data were collected via a mail survey and a total of 683 useable responses were received reaching an adjusted response rate of 35%. Results show that social networking and a learning orientation positively impact innovativeness, but that entrepreneurial climate does not. Innovativeness was found to positively impact economic performance. The authors outline implications of the findings that may be used by policy makers, landowners and research. ß 2008 Elsevier B.V. All rights reserved. Keywords: Innovativeness Entrepreneurial climate Social network Learning Economic performance Forest owners 1. Introduction Agriculture and forestry in Norway are crucial land uses that serve as a platform for economic diversification, but recent decades have seen a relative decline in income from these traditional industries (Vennesland, 2004). This decline has led to an increased effort to stimulate growth and create other job opportunities based on landowners’ utilization of non-timber aspects of their forestland. In Norway, non-timber forest products and services (NTFP&S) refer to a different suite of activities than the non-timber forest products commonly referred to in, e.g. North America. The term is similar to what Lunnan et al. (2006) call alternative income activities. Examples of these uses in Norway are nature-based (eco) tourism and sales of fishing and hunting licenses. We use the NTFP&S to describe a broad suite of activities involving commercial utilization of forestland and wilderness except for the sale of timber and firewood. We realize that this definition goes beyond * Corresponding author at: Norwegian Forest and Landscape Institute, Postboks 115, N-1431 Ås, Norway. Tel.: +47 41 42 08 09; fax: +47 64 94 80 01. E-mail address: [email protected] (E. Nybakk). 0378-1127/$ – see front matter ß 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.foreco.2008.09.040 what is traditionally considered non-timber forest products. However, because we have not found a perfect term for the concepts used in this study, we continue to use NTFP&S, stressing that our use is broader than the traditional ‘‘non-timber forest products’’. Because of the economic decline in traditional sectors, alternative income streams have become increasingly important. In theory, enhancing innovativeness of forest owners can increase alternative incomes and positively impact rural development in Norway. As a result, policies have been implemented to increase innovation by promoting social networks, increasing knowledge and fostering an entrepreneurial climate among rural landowners in Norway (Amdam et al., 1995). The policies have also had a strong focus on improving environmental and social sustainability (Vennesland, 2004). Nybakk et al. (2008) found that the degree of social networking by various individuals and organizations had a positive effect on innovativeness among nature-based recreation tourism companies, more than half of which were forest owners. Rametsteiner et al. (2005) studied forest owners in Central Europe and found that the innovation process was affected by both personal and external factors and that co-operation with suppliers, customers and forest Paper 5 Reprinted with permission from the International Journal of Innovation Management International Journal of Innovation Management Vol. 13, No. 3 (Sept. 2009) pp. 441–466 © Imperial College Press INTER-ORGANIZATIONAL INNOVATION PROMOTERS IN SMALL, KNOWLEDGE-INTENSIVE FIRMS JAN INGE JENSSEN University of Agder and Agder Research, Servicebox 422 4604 Kristiansand, Norway [email protected] ERLEND NYBAKK Department of Economics and Resource Management, University of Life Sciences and Norwegian Forest and Landscape Institute, Norway [email protected] This paper examines the relationship between external relations and innovation in small, knowledge-intensive Norwegian firms. Our findings indicate that external relations are beneficial for innovation. The analysis shows that it is necessary to treat innovation as more than a concept. Our independent variables related differently to product innovation, process innovation, and market innovation. We found that market participation in product development has a positive impact on product, process and market innovation. We also found that top management interaction with other firms had a positive effect on market innovation and that top management interaction with external R&D had a positive effect on product innovation. This finding probably indicates that access to R&D resources is vital for product development in the context of knowledge-intensive products. The results also show that participation in conferences and courses positively influences process and market innovation and that systematic environmental scanning positively influences product innovation. Keywords: Innovation; innovation promoters; external relations; small, knowledge-intensive firms; Norway. Introduction In recent decades, we have seen a shift from an industry-based economy to a more knowledge-dependent one. A knowledge-dependent economy differs greatly from an industry-based economy (Houghton and Sheehan, 2000), as it is characterised by flexible, co-operating, networked organisations that exploit knowledge in order to innovate and survive in a global market (Acs and Preston, 1997; Houghton and 441 Erlend Nybakk Department of Economics and Resource Management Norwegian University of Life Sciences PO Box 5003 N-1432 Ås, Norway www.umb.no/ior Section for Forest Technology and Economics Norwegian Forest and Landscape Institute Postboks 115 N-1431 Ås www.skogoglandskap.no ISSN: 1503-1667 ISBN: 978-82-575-0873-9 Erlend grew up in Hallingdal (Norway) and attended Gol secondary school. In 1994/1995 he was an exchange student in Kingston, Jamaica. He earned a master's degree at the Department of Economics and Resource Management, Norwegian University of Life Sciences (UMB) in 2001. As a part of his Master’s, he spent half a year at the University of Natal, Pietermaritzburg, South-Africa in 2000, where he studied industrial economics. Erlend has been employed at the Norwegian Forest and Landscape Institute since 2001. As a part of his PhD he took classes at Oregon State University (USA), Norwegian School of Economics and Business Administration (NHH), Bodø Graduate School of Business, CERAM Sophia Antipolis - European School of Business (France), University of Helsinki (Finland) and UMB. In 2006/2007 he was a visiting researcher at Oregon State University for one year. This thesis consists of an introduction and five independent papers. The foremost goal with this thesis is to advance knowledge about the factors that trigger creativity and innovation in small firms, with the main focus on firms that offer non-timber forest products and services (NTFP&S). Article I was based on a questionnaire for forest owners and shows that the likelihood of starting up with NTFP&S is greater among forest owners that recognize opportunities and are risk takers. Articles II and III were based on a questionnaire for firms that work with nature-based tourism. The first of them builds on Article I and shows that forest owners that recognize opportunity and are risk takers have a greater likelihood of changing the way they supply their products and services. Article III shows the effect of external relationships on innovation and how innovation affects economic accomplishment. The relationships are also exemplified through a case study. Article IV was based on a study of a random selection of forest owners with more than 25 hectares of forest in southeast Norway. The study shows that external relationships and learning orientation have a positive effect on innovation and again on economic success among forest owners, related to NTFP&S. Article V was based on a questionnaire for small, knowledge-intensive firms and shows the impact of external relationships on product, process and market innovation. Each of the articles presents implications of the findings and suggestions for further research. Professor Anders Lunnan (UMB) and Professor Eric Hansen (OSU) were Erlend’s supervisors. E-mail: [email protected], Telephone: +47 41420809
© Copyright 2024 Paperzz