recent research

In recent years, academic researchers have focused on trying to identify the characteristics that could make someone a potentially successful founder of a startup. However, there has been limited research on the characteristic of the individuals who join these founders as early employees to help them develop and commercialize innovative new products and services. These “joiners” are skilled laborers who want to work for tech startups, but don’t want to be founders – mostly because they are less interested in management and more interested in technical roles. Two studies have been released that look at the characteristics of joiners and the role they play in a startup’s success.

SBIR projects are less likely to fail if research teams are smaller, have more experience and include women investigators, according to a new working paper by Albert N. Link and Mike Wright. The authors also found that larger SBIR awards lower the chances that a project will be discontinued before completion. While the study focuses on projects supported through federal SBIR programs, the findings could have implications for other kinds of public R&D support.

As the federal and state governments look for methods to support the creation and retention of well-paying science and tech (S&T) and manufacturing jobs, two recent reports have found that R&D tax credits play a vital role in helping keep domestic R&D-intensive firms resilient from economic downtowns and competition from emerging economics. These studies confirm the importance of R&D-intensive firms, which have taken advantage of R&D tax credits, are more likely to report a higher percentage of corporate liquidity; are less likely to cut capital expenditures and employment; and, downsize considerably less than the average firm.

As competition increases within the venture capital industry to fund the next Google or Uber, the most highly desirable startups often have multiple investment offers and must decide upon the best. There are several factors that can affect evaluation of potential equity investors. For many startups, the decision may focus solely on the terms of the deal. However, there may be many more factors – outside of financial considerations – that impact the startup’s evaluation process.

The U.S.s entrepreneurial culture, long celebrated as a key element in the country’s economic success, is being threatened by several long-term trends, according to a paper from the Brookings Institution’s Robert Litan and Ian Hathaway. Over the past 30 years, U.S. business starts have slid downward, with many experts and policymakers offering their own explanations for the trend. Litan and Hathaway examine the data and note two possible causes: regional population decline and business consolidation. Though these trends seem unlikely to change in the near future, a new survey by the Kauffman Foundation suggests that underutilized abilities of women entrepreneurs could help boost business creation if properly supported.

In two recent academic journal articles from the United Kingdom (UK), the authors look at the characteristics that lead to successful entrepreneurs and startup firms. In both articles, the founders’ business experience – both corporate and entrepreneurial – was a strong indicator of startup success, sustainability, and job creation. Their findings indicate that national innovation policies and entrepreneurial programs in the UK should shift from focusing almost solely on faculty-led university spinoffs and millennials to a more inclusive approach that also supports mid-career professionals launching entrepreneurial ventures.

Over the past decade, two ideas have become more and more popular among innovation and economic development leaders. First, that maximizing collaboration between institutions, interest groups, stakeholders and communities is pivotal in building an innovation ecosystem that can succeed and grow over time. Second, that proximity matters, and by focusing on innovation networks at the regional or metro scale, rather than at the national or state level, initiatives can have a real, measurable economic impact. Though they seem complementary, these ideas are frequently in tension. The first suggests that increasing the number of partners leads to more successful initiatives. The second suggests that, at least in terms of geography, there should be some kind of limit on the scope of innovation initiatives in order to tailor them to the needs of a specific region.