Abstract
New firms are seen to play a key role in the innovation process, especially in certain key sectors of the economy. This study therefore examines the differences in the profiles of successful new firms in science-based industries and other industries. The firms that are examined are entrants who survey into their early teen years. The study examines numerous factors that are seen to influence the success of new businesses. These include the competitive environment, business strategies and the financial structure of the businesses.
Successful new firms in science-based industries are found to
differ
in a number of dimensions from new firms in other
industries. They are more likely to be exporters. They face greater
technological change and intense competition with
regards to the rate at which new products are being introduced. They
tend to put more emphasis on quality, the frequent
introduction of new products and the customization of products. They
make greater use of information technology. They
place more stress on new technology development, research and
development facilities and the use of intellectual
property. They are much more likely to innovate and they place more
importance on recruiting skilled labour and on
training. Finally, they are more likely to use non-traditional
financial measures to evaluate performance and they are less
likely to rely on secured credit for financing both their research
and development activity and their machinery and
equipment that are firms in other sectors.
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| 1999 | (PDF - 1959K) |