The Open Incubator Model

DOI: 10.1057/9781137492401.0001
Other Palgrave Pivot titles

Liz Montegary and Melissa Autumn White (editors): Mobile Desires: The Politics and
Erotics of Mobility Justice
Anna Larsson and Sanja Magdalenić: Sociology in Sweden: A History
Philip Whitehead: Reconceptualising the Moral Economy of Criminal Justice: A New
Perspective
Thomas Kaiserfeld: Beyond Innovation: Technology, Institution and Change as Categories
for Social Analysis
Dirk Jacob Wolfson: The Political Economy of Sustainable Development: Valuation,
Distribution, Governance
Twyla J. Hill: Family Caregiving in Aging Populations
Alexander M. Stoner and Andony Melathopoulos: Freedom in the Anthropocene:
Twentieth Century Helplessness in the Face of Climate Change
Christine J. Hong: Identity, Youth, and Gender in the Korean American Christian Church
Cenap Çakmak and Murat Ustaoğlu: Post-Conflict Syrian State and Nation Building:
Economic and Political Development
Richard J. Arend: Wicked Entrepreneurship: Defining the Basics of Entreponerology
Rubén Arcos and Randolph H. Pherson (editors): Intelligence Communication in the
Digital Era: Transforming Security, Defence and Business
Jane L. Chapman, Dan Ellin and Adam Sherif: Comics, the Holocaust and Hiroshima
AKM Ahsan Ullah, Mallik Akram Hossain and Kazi Maruful Islam: Migration and Worker
Fatalities Abroad
Debra Reddin van Tuyll, Nancy McKenzie Dupont and Joseph R. Hayden: Journalism in the
Fallen Confederacy
Michael Gardiner: Time, Action and the Scottish Independence Referendum
Tom Bristow: The Anthropocene Lyric: An Affective Geography of Poetry, Person, Place
Shepard Masocha: Asylum Seekers, Social Work and Racism
Michael Huxley: The Dancer’s World, 1920–1945: Modern Dancers and Their Practices
Reconsidered
Michael Longo and Philomena Murray: Europe’s Legitimacy Crisis: From Causes to
Solutions
Mark Lauchs, Andy Bain and Peter Bell: Outlaw Motorcycle Gangs: A Theoretical
Perspective
Majid Yar: Crime and the Imaginary of Disaster: Post-Apocalyptic Fictions and the Crisis
of Social Order
Sharon Hayes and Samantha Jeffries: Romantic Terrorism: An Auto-Ethnography of
Domestic Violence, Victimization and Survival
Gideon Maas and Paul Jones: Systemic Entrepreneurship: Contemporary Issues and Case
Studies
Surja Datta and Neil Oschlag-Michael: Understanding and Managing IT Outsourcing: A
Partnership Approach

DOI: 10.1057/9781137492401.0001
 The Open
Incubator Model:
Entrepreneurship,
Open Innovation, and
Economic Development
in the Periphery
Ilan Bijaoui
Lecturer, Bar-Ilan University, Israel

DOI: 10.1057/9781137492401.0001
the open incubator model
Copyright © Ilan Bijaoui, 2015.
Softcover reprint of the hardcover 1st edition 2015 978-1-137-49239-5
All rights reserved.
First published in 2015 by
PALGRAVE MACMILLAN®
in the United States—a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.

ISBN: 978-1-137-49240-1 PDF

ISBN: 978-1-349-57683-8

Library of Congress Cataloging-in-Publication Data is available from the

Library of Congress.
A catalogue record of the book is available from the British Library.
First edition: 2015
www.palgrave.com/pivot
DOI: 10.1057/9781137492401
 To Tamaroush, Naama and Ben,
the new generation

DOI: 10.1057/9781137492401.0001
 Contents
List of Illustrations vii
Preface ix

1 The Role of SMEs 1

2 Entrepreneurial Process 12
3 Business Model 34
4 Economic Development Models and
the Open Incubator 69
5 The Concept of Open Incubator
in the Periphery 80
Conclusion 112

References 114
Index 139

vi DOI: 10.1057/9781137492401.0001
 List of Illustrations
Figure

4.1 The Open Incubator 78

Tables

5.1 Regression with “to have an impact on

the development of the region” as the
dependent variable 104
5.2 Regression with “to build a farm” as
the dependent variable 105
5.3 Regression with “to work in a farm” as
the dependent variable 105
5.4 Regression with “Connector” as the
dependent variable in rural environment
(agriculture and tourism) 108
5.5 Regression with “Connector” as the
dependent variable in urban environment
(jewelry and furniture) 109
5.6 Regression with “Maven” as the
dependent variable in rural environment
(agriculture and tourism) 109
5.7 Regression with “Maven” as the
dependent variable in urban environment
(jewelry and furniture) 109

DOI: 10.1057/9781137492401.0002 vii

viii List of Illustrations

5.8 Regression with “Salesperson” as the

dependent variable in a rural environment
(agriculture and tourism) 110
5.9 Regression with “Salesperson” as the
dependent variable in an urban environment
(jewelry and furniture) 110

DOI: 10.1057/9781137492401.0002
 Preface
SMEs represent the main generator of economic growth
in developed and developing countries, especially in the
periphery. The support policy to their activities is still
based on a passive and conservative attitude of the local,
national, and international authorities. They provide loans,
consulting, and sometimes subsidies to each SME applying
for support. In our research we propose a dynamic SME
policy implemented along the value chain of each sector,
based on the few, able to generate an epidemic impact on
economic development. The open incubator creates the
context and the stick able to generate cooperation between
SMEs. Six case studies in the periphery, in the US, UK,
India, Italy, Benin, and Israel, illustrate this concept.

DOI: 10.1057/9781137492401.0003 ix
 1
The Role of SMEs
Abstract: We analyze the role of SMEs in different developed
and developing regions, their economic contribution, and their
entrepreneurship efficiency. We present educational programs
in entrepreneurship. We discuss entrepreneurship programs in
rural environments in the US and the EU.

Bijaoui, Ilan. T
The Open Incubator Model: Entrepreneurship,
Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0004.

DOI: 10.1057/9781137492401.0004 
 The Open Incubator Model

SMEs’ economic contribution

SME (firms with less than 250 employees) activities represent an

important part of the economy in a country. They provide products and
services, create employment, and support the activities of large firms as
suppliers and subcontractors.
Currently, there are 21 million SMEs in the EU non-financial business
sector, 18 million in the United States and 3.9 million in Japan (European
Commission, 2014a).
The levels of value added generated by SMEs are broadly similar in the
US and EU, exceeding 3 trillion euros.
SMEs in the US employ 48 million persons, in the EU 88 million, and
in Japan 33 million.
The EU and US have a similar size class distribution of SMEs, with
micro enterprises (less than 10 employees) being the most common. In
contrast, Japan tends to have relatively more small firms (10–50 employ-
ees). In all three economies, SMEs employ more than half of the persons
employed in the non-financial business sector, but there is significant
variation: in the US they account for 52% of total employment in that
sector, in the EU for 66%, and in Japan for 86%.
Micro firms account for the vast majority of businesses in the US, 95%
and in the EU 92.5%. In terms of value added, the share produced by large
companies (more than 300 employees) in the US is 56% and 42% the EU.
In terms of number of firms, the EU and the US followed a path of
mild increase between 2010 and 2011; the latest EU data show however
an inversion in this trend to levels barely above pre-crisis. Japan
followed a different trajectory, with a steady decrease in the number
of SMEs.
Greece, Bulgaria, the Czech Republic, Slovakia, and Hungary have the
highest “density” of SMEs, with 10 SMEs or more per million of value
added generated. Conversely, Germany, Luxembourg, Ireland, and the
United Kingdom have less than 5 SMEs per million of value added
produced in their respective business economies in terms of the value
generated by SMEs.
SMEs in Lithuania, Latvia, Malta, and Romania posted a positive and
strong performance in terms of number of firms, employment, and value
added, with gains higher than 3%.
SMEs in Germany, Estonia, Denmark, Austria, Luxembourg, and
Sweden also shared this positive trend but with smaller growth rates

DOI: 10.1057/9781137492401.0004
 The Role of SMEs 

(between 0.5% and 3%). SMEs in the Netherlands, Finland, Greece, and
Cyprus posted a negative performance in all three indicators.
SMEs in Belgium, Italy, Poland, Slovakia, France, Spain, and Slovenia
recorded declines in terms of number of SMEs or persons employed
ranging between –0.05% and –3%.

Entrepreneurship efficiency
The Global Entrepreneurship Index (GEI)
The Global Entrepreneurship Index (Ács, Szerb, and Autio, 2015)
provides a detailed look at the entrepreneurial ecosystems of nations by
combining individual data with institutional components.
The GEI is based on the “3As” of development: entrepreneurial atti-
tudes, aspirations, and activity.
Attitudes (ATT) refers to the opportunity perception start-up skills
risk acceptance, networking, and cultural support.
Ability (ABT) measures the opportunity start-up capabilities, tech-
nology absorption capacities, human capital value, and competition
strength.
Aspiration (ASP) refers to the distinctive, qualitative, strategy-related
nature of entrepreneurial activity: product innovation, process innova-
tion, high growth ambition, level of internationalization, and availability
of risk capital.
The United States maintained its number-one position on the 2015
GEI. The US is increasing its lead. Canada, Australia, and the UK
follow.
The strongest European nations in addition to the UK are Sweden,
Denmark, Switzerland, and Iceland. Singapore and Taiwan increased
their level of productive entrepreneurship. The biggest losers are Puerto
Rico, Indonesia, Mexico, and Peru but also Denmark, Finland, and the
Netherlands.
The US is first in the overall Index, and also in two of the three sub-
indexes (in attitudes and aspirations). Australia is 3rd in attitudes and
in abilities but 5th in aspirations. Generally, countries that rank at the
bottom in GEI also rank at the bottom of the three sub-indexes, US leads
the ATT, followed by Canada, Australia, Sweden, and Finland. African
and Asian countries are at the bottom.

DOI: 10.1057/9781137492401.0004
 The Open Incubator Model

Canada ranks number one on ABT index and has a very strong show-
ing in human capital and competition.
The US ranks second and is relatively weak in opportunity start-up
and technology absorption. Australia is stronger than the US in oppor-
tunity start-ups and technology absorption, but weaker in human capital
and very weak in competition. The UK ranks fourth, with a significantly
lower entrepreneurial abilities score than the US and Australia, but it is
relatively strong in competition, implying that fresh entrepreneurs are
mainly looking for market niches that do not have many competitors.
The large share of start-ups initiated in the medium- and high-technol-
ogy sectors is also a strong point of the UK.
The US leads in the ASP index. While showing weakness in inter-
nationalization, it is very strong in risk capital and process innovation.
Canada is second and Taiwan is third, with a strong showing in high
growth and product innovation, followed by Singapore, Australia,
Belgium, Israel, Denmark, the UAE, and Switzerland, which round out
the top ten. The Czech Republic is very strong in internationalization
but weak in risk capital.

Entrepreneurial characteristics—Global Entrepreneurship

Monitor (GEM)
Entrepreneurship is less considered as a good career in North America
(Amoros and Bosma, 2014) than in the EU. It’s the most considered as a
good career in Sub Saharan Africa (SSA).
The fear of failure is the highest in Asia , and the perception of oppor-
tunities the highest in SSA . The new business rate is the highest in SSA .
New business entrepreneurship rates are low in North Africa and
Middle East with 4.6%; medium in South America and the EU, respec-
tively 7.1% and 8%; high in Sub Saharan Africa, Asia, and the US, respec-
tively 15.5%, 12.4%, and 11.8%.

The GEM Entrepreneurial Framework Conditions (EFCs)

The GEM Entrepreneurial Framework Conditions define “the necessary
oxygen of resources, incentives, markets and supporting institutions to
the growth of new firms” (Bosma et al., 2008, p. 40).
EFC is based on finance, national policy, government programs,
education, R&D transfer, commercial infrastructure, internal market,
physical infrastructure, and cultural and social norms.

DOI: 10.1057/9781137492401.0004
 The Role of SMEs 

Each one of the parameters has been evaluated by 36 experts by using

a scale of 1–5, from weaker to stronger.
Asia has the best financial support infrastructure for entrepreneurs
(3), national policy (2.8) and regulation (2.6). Governmental programs
are stronger in the EU (2.8) and Asia (2.7).
Primary and secondary education is weaker in developing regions:
Middle East and North Africa (1.8), Latin America (2), and SSA coun-
tries (2.1).
R&D transfer is the lowest in SSA (2).
Commercial infrastructure is the strongest in the EU (3.2) and Asia
(3.1). The internal market is the weakest in Latin America in dynamic
(2.7) and openness (2.4). Physical infrastructure is the strongest in the
EU (4). Culture and social norms are the most positive in North America
(3.2) and Asia (3.2).

Education and entrepreneurship

In the US
A survey on the State of Entrepreneurship Education in the US
(Consortium for Entrepreneurship Education, Columbus, OH, 2012)
with the participation of the state directors of career and technical educa-
tion of 40 states showed that in 26 states there are standards that include
entrepreneurship competencies. In 29 states courses on entrepreneurship
are available in separate classes. In 36 states entrepreneurship education
is available in the colleges.

In the EU
Several EU countries have been introduced to promote entrepreneurship
education (EU, 2012).
The Flemish community of Belgium launched the Action Plan for
Entrepreneurship Education 2011–2014 at the end of 2011. The objec-
tive was to prepare students for self-employment as well as providing
teachers with the training needed to help them create positive attitudes
towards entrepreneurship and self-employment.
In Denmark, the strategy for education and training in entrepreneur-
ship launched in 2009 describes an active investment in entrepreneur-
ship training at educational institutions.

DOI: 10.1057/9781137492401.0004
 The Open Incubator Model

In Lithuania, two specific strategies “Economic Literacy and

Entrepreneurship Education” (2004, website http://www3.lrs.lt/pls/
inter3/dokpaieska.showdoc_l?p_id=235714&p_query=&p_tr2=) and the
“National Program of Youth Entrepreneurship Education and
Encouragement for 2008–2012,, web site http://www3.lrs.lt/pls/inter3/
dokpaieska.showdoc_l?p_id=318306&p_query=&p_tr2=”) aim to
strengthen the focus on entrepreneurship and financial management at
all school levels.
In the Netherlands, the Education and Entrepreneurship Action
Programme (Actieprogramma Onderwijs en Ondernemen, O&O,
2007) and the Education Networks Enterprise (Onderwijs Netwerk
Ondernemen, ONO, 2009), provide a specific subsidy scheme to help
educational institutions to integrate entrepreneurship education into
their policies, organization, and curricula. The objective is to have more
students demonstrating an entrepreneurial mindset and behavior and to
increase the number starting up their own business within a period of
five years following the completion of their education.
In the United Kingdom (Wales), the Youth Entrepreneurship Strategy
(YES) was launched in 2004 to provide a structure and focus for entre-
preneurship education in Wales. The initiative is ongoing and the current
Action Plan covers 2010–2015.
Norway’s first strategic plan for entrepreneurship in education and
training “See the Opportunities and Make them Work!” ran from 2004
to 2008. In September 2009, an Action Plan followed, Entrepreneurship
in Education and Training, from compulsory school to higher education
2009–2014. The main objective of the Action Plan is to strengthen the
quality and scope of entrepreneurship education and training at all levels
and in all areas of the education system.

Rural environment and entrepreneurship

Rural policy in the US

In 2003, on behalf of the W.K. Kellogg Foundation, the Corporation for
Enterprise Development (CFED) (Kellogg and CEFD, 2003) conducted
a study entitled “Mapping Rural Entrepreneurship,” which analyzed the
state of entrepreneurial activity in rural communities nationwide and
catalogued the infrastructure of support programs and policies in place
to assist rural entrepreneurs.

DOI: 10.1057/9781137492401.0004
 The Role of SMEs 

They found that a wide array of organizations, institutions, and agen-

cies across the country are pursuing initiatives that are meant to encour-
age greater entrepreneurship in rural America. However, many of these
efforts are not community driven, regionally oriented, or collaborative,
and they are often not focused on the needs of entrepreneurs themselves.
They concluded that a new framework was required to animate people
and institutions at all levels. Regional transformation required a “systems
approach” rather than an isolated, turf-driven, programmatic approach.
A review of entrepreneurship programs across rural America
concluded that there is “ample evidence of organizations, institutions,
and agencies pursuing all manner of programs and initiatives that are
meant to encourage greater entrepreneurship in rural America” (Dabson,
Dabson and Marcoux, 2003, p. 59). From all this experience, three policy
principles emerge that focus on regionalism, systems, and assets.
 Regionalism
The Sierra Business Council (2003) represents business, resident, and
government interests. Its role is to define a common economic develop-
ment strategy based on a nurturing environment for entrepreneurs.
The Central Appalachian Network (2005) develops strategies for
sustainable entrepreneurship, emerging clusters of entrepreneurial and
regional collaborations across public and private sectors and through the
efforts of regional catalysts and networks.
 System
Lichtenstein and Lyons (2001) were pioneers in advocating a systems
approach to entrepreneurship development based on tailoring services
that are both responsive to the various levels of skill, education, and
motivation to be found among entrepreneurs and aligned with the
capacities and resources of the service providers. A national competition
sponsored by the Kellogg Foundation in 2004 and designed by CFED
(Dabson, 2005) invested in a variety of approaches that would create or
enhance systems approaches to entrepreneurship development.
The desired programs were defined as a coordinated infrastructure
of public and private supports that facilitate entrepreneurship. These
systems should require providers to collaborate rather than operate
independently or in isolation.
The resulting Kellogg-funded project, Entrepreneurship Development
Systems in Rural Development (Dabson, 2005), looked for collaborative

DOI: 10.1057/9781137492401.0004
 The Open Incubator Model

efforts that would embrace entrepreneurship education, training and

technical assistance, capital access, networks, and entrepreneurial culture
in self-defined multicounty rural regions.
 Assets
Flora and Flora (2004) refer to seven types of capital: cultural, social,
human, political, natural, financial, and built capital, which they define
as a resource invested to create new resources, and which can be identi-
fied in rural communities. The policy challenge is determining which of
these disparate assets can be translated into entrepreneurial opportuni-
ties and what is the most effective means of doing so.
In addition, McGranahan and Wojan (2007) show that it is the higher
density rural areas that are the most attractive because high levels of
social interaction and a degree of diversity are still important.
The implication appears to be that only some well-endowed rural
regions will benefit from entrepreneurial activity leading to economic
growth and competitiveness.

Regional entrepreneurial drivers

Counties with higher levels of educational attainment, a larger foreign-
born community, and a greater concentration of creative activity
contained entrepreneurs that were able to generate large incomes and
value from entrepreneurial activity (Henderson, Low, and Weiler, 2007).
 Amenities
Natural amenities have a strong relationship to both entrepreneurial
breadth and depth. Regions with more topographical variation appear to
be places of high self-employment. This finding may result from people
wanting to live a certain lifestyle in scenic, mountainous locations; self-
employment may provide the best opportunities for them to live that
lifestyle. While entrepreneurs may be drawn to high amenity regions
for lifestyle opportunities, they have been able to create businesses that
produce high value added for their communities.
 Financial Capital
Access to financial capital also appears essential to regional entrepre-
neurial success. Average bank deposits per capita are positively associ-
ated with the value added entrepreneurial depth metric. Bank deposits
and high value entrepreneurship simultaneously contribute to each

DOI: 10.1057/9781137492401.0004
 The Role of SMEs 

other. Bank deposits allow entrepreneurs to grow and in turn generate

higher local bank deposits.
 Infrastructure
Entrepreneurship has a strong relationship with infrastructure, especially
in terms of interstate highway and high-speed broadband Internet access.
 Local Economy
By contrast, smaller and more remote local economies limit the abil-
ity of entrepreneurs to build economies of scale (Dabson, 2001). Lack
of economies of scale limits the local demand for products and makes
resource acquisition more difficult.
 Creativity
Richard Florida’s (2002) work has suggested that the most success-
ful regional economies are those which have a combination of assets
that attract creative talent, access to technology, and the tolerance of
the community to diversity and difference. He also argues that place
matters, and those places which offer a quality of life—both urban and
outdoors—sought by creative people will become the new centers of
economic competitiveness.

Rural policy in the EU Leader+ program

Leader+ is an EU initiative for assisting rural communities in improv-
ing the quality of life and economic prosperity of their local area, and
is co-financed by the Guidance Section of the European Agricultural
Guidance and Guarantee Fund (EAGGF) (EU, 2009). The Leader+
program ran within the Structural Fund period from 2000 to 2009.

Principles
 Area-based approach
The development policy is based on the area’s own particular situation,
strengths, and weaknesses. Each area is characterized by a sense of
common identity.
 Bottom-up approach
This aims to encourage participatoryy decision-making at the local level
for all development policy aspects. Its objective is the involvement of

DOI: 10.1057/9781137492401.0004
 The Open Incubator Model

local players, including the community as a whole; economic and social

interest groups; and representatives of public and private institutions.
 Partnership approach and the Local Action Group (LAG)
The LAG is a body of public and private actors, united in a partnership
that identifies a joint strategy and a local Action Plan for developing a
Leader+ area. Endowed with a team of practitioners, decision-making
powers, and a budget, the LAG represents a new model of organization.
There are 1,153 local action groups (LAGs).
 Innovation
Actions to promote local resources in new ways; actions that are of inter-
est to local development but not covered by other development policies;
actions providing new answers to the weaknesses and problems of rural
areas; or actions which create a new product, new process, new forms of
organization, or a new market.
 Integrated approach
Actions and projects links between economic, social, cultural, and envi-
ronmental actors and sectors
 Networking and cooperation between areas
The Leader+ network aims to limit the isolation of LAGs and to create a
source of information and analysis of the actions. To complement exist-
ing European and national networking, cooperation between areas can
be transnational but may equally take place between areas within the
same Member State.
 Local financing and management
The LAGs’ degree of autonomy varies considerably depending on the
Member State’s specific mode of organization and institutional context. Each
action or project is funded by both the Leader+ program and local partners.

Impact
The most positive impact of Leader+-type governance outlined by the EU
and participants to the Leader+ program are as follows (EU, 2008, p. 35):
 create and strengthen multi-sector partnerships and cooperation;
 social inclusion of various groups in the development process going
far beyond the traditional hierarchy of the society;

DOI: 10.1057/9781137492401.0004
 The Role of SMEs 

 strengthen local democratic processes based on the participation

of local actors in development, building civil society, participation,
and partnerships; and
 increase strategic management and administrative capacities of
rural actors for the improved governance of their territories.
But there not any evaluations about the economic impact of the program
in the different regions.

DOI: 10.1057/9781137492401.0004
 2
Entrepreneurial Process
Abstract: We present the entrepreneurial process behind
the creation and the evolution of a small business. It is
a cooperation in the entrepreneurial team between the
entrepreneur, the director, the inventor-researcher, and the
promoter. We differentiate between necessity and opportunity
entrepreneurship and go in depth in the analysis of
motivation, creativity, and opportunity concepts.

Bijaoui, Ilan. The Open Incubator Model: Entrepreneurship,

Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0005.

 DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

Individual versus team

Hatten and Ruhland (1995, p. 224) define an entrepreneur as “an individ-

ual who establishes and manages a business for the principal purposes of
profit and growth.”
McNeil, Fullerton, and Murphy (2004) found in their research that
the most important characteristics with regards to entrepreneurial
success are self-motivation, risk-taking readiness, common-sense, moral
and social values, competitiveness, persistence, responsibility, self-
confidence, acceptance of loneliness, and adaptability.
Can a business be initiated by one person with all the required capaci-
ties? We present herewith the concept of entrepreneurial team based on
internal and external forces and why it could be more efficient compared
to the lonely entrepreneur.
We propose to analyze the different types of entrepreneurship and
their impact on value creation. We discuss three main generators of
value creation, pull and push motivation, opportunity-discovery, and
creativity. All those processes will be integrated in the business model
innovation (BMI) analysis (see Chapter 3) related to open innovation
and Gladwell’s tipping point model (2000) in order to generate a viral
generator of growth based on SMEs supported by the open incubator.

The entrepreneurial team

Franco and Haase (2012) discuss the concept of collaborative perspective

in business alliances between entrepreneurs. Froehle and Roth (2007)
state that organizational resources comprise development championing,
employee motivation, internal communication, lines of responsibility,
managerial support, social networks, reward structure, and development
of team diversity. Franco and Haase conclude that the experience in
earlier entrepreneurial activities and the management and negotiation
of alliances in the past may impact on knowledge and future decision
taking (Eden and Ackermann, 2001; Hasty, Massey, and Brown, 2006).
Taking into account the various types of firm resources and capacities,
intra-entrepreneurship (entrepreneurial orientation), is a process through
which individuals in an organization follow up opportunities irrespective
of the resources they currently control. Brunaker and Kurvinen (2006)
relate entrepreneurial orientation to the opportunity for existing organi-
zations to be able to develop the way their business operates.
DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

Miller and Friesen (1983), Covin and Slevin (1991), and Kenney and
Mujtaba (2007) define proactiveness as another dimension of entrepre-
neurial orientation. It is the willingness to differentiate ideas from oppor-
tunities through researching and analyzing tendencies. This requires the
firm to be orientated towards the future. It is the attempt to lead rather
than follow the competition.
The collective business capacity is another important dimension of
entrepreneurial orientation. As Miles, Miles, and Snow (2006) show, in
the first phase of collaboration, the concept of collective business capac-
ity emerges. Timmons (1994) considers the value of the team inside the
firm to be extremely important in the early stages of new undertakings.
The fundamental component of collective business capacity involves
the whole team’s skill in dealing with opportunities which may arise.
Johannisson (2002) highlights that for better understanding of collective
entrepreneurial capacity, the whole organization must be recognized as
a collective image.
Johannisson (2002) and Kenney and Mujtaba (2007) see entrepre-
neurial orientation as a collective phenomenon resulting from collective
actions where, in a new undertaking, the entrepreneur is never alone.
Eisenhardt and Schoonhoven (1996) define the collective image as the
interaction between the team members. In small firms, the owner-
entrepreneur has to exert his or her influence by creating the conditions
that increase the collective spirit, making the firm more entrepreneurial
(Exton, 2008).
Timmons stated that “entrepreneurial team is a key ingredient in
the higher potential venture” (1999, p. 58). It is difficult for every entre-
preneur to have all required managerial knowledge. Individuals with
complementary backgrounds make effective teams for creating new
venture companies.
Entrepreneurship “is the ability to build a ‘founding team’ to comple-
ment your own skills and talent” (Timmons, 1989, p. 1).
Timmons defines four roles requiring different skills and talent, creativ-
ity and skills management, completing each other in the entrepreneurial
team: the manager, the entrepreneur, the promoter, and the inventor:
 The entrepreneur’s role requires both creative capabilities and
management skills in order to be able to propose to the manager
feasible ideas. S/he meets many people, specialists and customers,
in order to find good ideas and good ways to develop them. Most of
the time s/he is out of the firm, so s/he cannot be a good manager.

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

 The inventor is creative, but s/he has few management skills. S/

he can develop ideas and projects, but doesn’t have the skills to
transform them into a product sold in the market.
According to Kotter (1990), an entrepreneurial-based business takes
more risks than a management-based business, in order to reach more
ambitious objectives. Both types of businesses differ in agenda, human
network, execution process, and outcomes.
The agenda of a management-based business is planning and budget-
ing; the entrepreneurial business has a vision and a direction. The human
network of a management-based business is organizing and staffing; the
entrepreneurial business communicates and provides direction.
The execution process in a management-based business is focused on
controlling and monitoring; in the entrepreneurial business it is focused
on motivating and inspiring.
Roberts (1987) integrates both Timmons’ and Kotter’s models, and
proposes four roles executed by the human factor in order to increase
the chances of success of an innovative business:
 Idea-generating (Inventor-Innovator): gets satisfaction from
abstract thinking, has expertise in a specific field, enjoys doing
innovative work, is an individualist (works alone).
 Entrepreneurship/Championing (Practical thinker): has a wide
range of interests (technology, marketing, financing), yet is less
likely to contribute to basic knowledge; energetic, determined.
 Project Leading (Management): focuses decision-making, sensitive
to the needs of others, recognizes how to use the organizational
structure to get things done, interested in a range of disciplines and
in how they fit together (marketing, finance, and so forth).
Compared to Timmons’ and Kotter’s entrepreneurial structure, Roberts
adds one more important role needed for the success of a business:
 Sponsoring or Coaching (Supporter): experienced, a listener,
objective; senior figure who knows the organization’s ropes. This
sponsor can support the business financially, but also can open
other doors such as technological input or markets.
Each role can be fulfilled by internal staff or by external sources.
A research center could serve as an “inventor” as is NASA for many
American companies using its patents. A seed company such Limagrain

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

(seeds) could play the inventor’s role for watermelon growers by propos-
ing the birth of Ocelot, the mini watermelon, or tomato growers by
proposing the Gusto range for traditional tomato taste.
Local franchisers in international markets play the role of promoters
for many companies such as Coca Cola, Zara, or McDonald’s.
External entrepreneurs could propose new initiatives such as,
Tony Fadell has done with Apple about IPOD (innovate.umich.edu
website).

Types of entrepreneurs

Miner’s (1997, pp. 22–31) typology of entrepreneurs is related to the four

roles required in the entrepreneurial team:
 The Real Manager Type (manager): characterized by high
supervisory and communication skills, strong need for
advancement and self-actualization, positive attitude toward
authority, desire to exert power, personal decisiveness, desire to
perform routine managerial tasks.
 The Expert Idea Generator Type (inventor): innovative, problem-
solvers, highly intelligent, risk averse.
 The Empathic Super-salesperson Type (promoter): empathic
in cognitive style, forge strategic alliances easily, desire to help
others, value social process and have a strong need for harmonious
relationships, believe sales force is key to venture strategy.
 The Personal Achiever Type (entrepreneur): motivated for
self-achievement, concerned with achieving success more so
than failure and thus does not concentrate energy on warding off
adversity, much prefer situations in which they themselves can
influence and control the outcome.
In his “Whole Brain Model” Herrmann (1996) identifies four thinking
styles as different types of businesses. These thinking styles greatly influence
from which point of view a situation or problem is approached: the think-
ing style preference. The four thinking styles and their characteristics:
 Pioneer (entrepreneur): creative, intuitive, curious, sees the
“whole”;
 Salesman (promoter): people person, social, lively, emotional, the
sensitive “me”;
DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

 Manager: orderly, formal, systematic, organizing, the conservative

“me”;
 Expert: logical reasoning, analyzing, critical, realistic, the rational
“me.”
The initiator can be a personal achiever or pioneer entrepreneurial type:
 Steve Jobs was a personal achiever or pioneer entrepreneurial who
believed that a market for personal computer exists. He proposed
to Steve Wozniak, an expert-inventor type to join Apple. He was
efficient as a promoter but not as a manager.
 Mark Zuckerberg in the Facebook initiative had a similar role
as Steve Jobs, Dustin Moskovitz (programmer), and Andrew
McCollum (graphic artist) had the inventor’s role as Steve Wozniak.
Zuckerberg understood that he cannot be a business manager, so he
proposed the position to Eduardo Saverin, and not also a promoter,
so he took on Chris Hughes who served as spokesman for the
online social directory and networking site Facebook.
The initiator can be an experimented manager because s/he was in such
position in the past and s/he decided to open her/his own business.
 Howard Schultz worked three years (1975–1978) in sales and
marketing with Xerox Corporation. In 1979 he started his managerial
career as vice president and general manager of Hammarplast USA,
a Swedish drip coffee maker manufacturer, and in 1982 in Starbucks
as the director of marketing. In 1987 he started his entrepreneurial
career with the acquisition of Starbucks in cooperation with other
partners retail unit: six stores along with a roasting plant and the
Starbucks brand name (news.starbucks website).
The initiator/s can be an inventor, developing a new idea:
 Gates and Allen started their cooperation as inventors by proposing
their capabilities to Micro Instrumentation and Telemetry
Systems (MITS), the creators of the new microcomputer. They
informed them that they were working on a BASIC interpreter
for the platform. Gates and Allen to work on the project at MITS.
In 1975 they created Microsoft and began marketing a BASIC
programming language interpreter. Gates’ role at Microsoft for
most of its history was primarily a management and executive role.
However, he was an active software developer in the early years,
particularly on the company’s programming language products.
DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

 Jeff Bezos (Amazon) worked at Wall Street in the computer science

field. Then he developed a network for international trade for a
company known as Fitel. He next worked at Bankers Trust, where
he became vice-president. Later on he also worked on Internet-
enabled business opportunities at D.E. Shaw & Co. Bezos founded
Amazon.com in 1994 after making a cross-country drive from New
York to Seattle, writing up the Amazon business plan on the way.
The initiator can be a promoter who decided to fulfill an unmet need:
 Marcel Bleustein-Blanchet founded Publicis in 1926. In 1935, he
purchased a radio station, which he renamed Radio Cité, and
introduced France’s first news broadcasts as well as its first radio
jingles. Mr. Bleustein-Blanchet also invented radio advertising in
France, helped create the first French opinion polls, and introduced
Édith Piaf to the French public. In 1957 he started a new business,
the first “Publicis Drugstore” on the ground level of Publicis
headquarters, 133 avenue des Champs Elysées. The “Drugstore” was
a huge success and immediately became the rendezvous point of
the cool Parisian youth.
A sponsor or an investor can be also the initiator or the owner of a new
or existing business, so s/he hires the relevant people in order to fulfill
the four different roles.
 As a sponsor, USAID supports the introduction of the orange-
fleshed sweet potato (OFSP) in Africa, under “Feed the Future,” the
US Government’s global hunger and food security initiative. OFSP,
rich in Vitamin A, has now been adopted by over 55,000 Ugandan
farming households, with up to 237,000 households expected to be
planting and eating it by 2018. In November 2013, the Government
of Uganda released two more varieties of this potato, bringing the
total number to six.
 As an investor, Berkshire Hathaway, chaired by Warren Buffett,
purchased an 80% stake in Iscar for US$ 4 billion (Jerusalem Post,
May 7, 2006). It was the first time in Berkshire’s history that it
acquired a company based outside of the United States. In 2008,
Mr. Buffett called the acquisition of Iscar a “dream deal” that
surpassed all his expectations. In May 2013 Buffett bought the rest
of Iscar for $2.05 billion. In 2012 stated that Iscar’s managers—Eitan
Wertheimer, Jacob Harpaz, and Danny Goldman—are brilliant
strategists and operators (TheMarker and Reuters, 2012).
DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

Necessity entrepreneurship—push motivation

Shapero (1975) provided in the push-theory of entrepreneurial activ-

ity, the foundation of the necessity entrepreneurship related to the
negative situational factors which can provide an impulse for becom-
ing self-employed. Gilad and Levine (1986) proposed the opposing
conceptual counterpart, describing individuals motivated by a pull-
motivation as being alert to attractive and potentially profitable business
opportunities.
According to Audretsch and Thurik (2000), an individual can create a
start-up either because s/he fears unemployment or because s/he discov-
ers an opportunity. This vision of business creation is presented by Bhola
et al. (2006) as one of two “types of dynamics”: either push or pull. Since
Reynolds et al. (2002), this dichotomy has given birth to the concept of
necessity entrepreneurship (push motivation) and opportunity entrepre-
neurship (pull motivation).
Haas (2013) differentiates between four types of necessity entre-
preneurs according to situational (personal) and environmental
situation.

Absolute necessity entrepreneurs

Absolute necessity entrepreneurs are individuals experiencing both
negative situational and environmental influences simultaneously.
Not only their individual life circumstances pose an immediate
burden on their forces, but additionally they are located in a poor
environmental circumstances which can be high unemployment and
crime rates, a nonfunctioning legal system, low capital availability,
or high taxation (Staw and Szwajkowski, 1975; Fuduric, 2008; Tang,
2008). As stressed by Kautonen and Palmroos (2010), necessity entre-
preneurship is generally associated with a single motivation: unem-
ployment. Nearly all the poorest interviewed by Olomi, Nilsson, and
Jaenssoon (2002) in their research appeared to be “trapped” by their
incapacity to find the time to earn sufficient surplus income to invest
in a new business.
The greater the poverty, the larger is the number of necessity business
(Reynolds et al., 2001). This reality is confirmed by Mitchell’s research
(2001) on entrepreneurship in South Africa. Some 38.7% of entrepre-
neurs open a business for purposes of survival and 20.2% because they
were unemployed and were not able to find a job.

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

Relative necessity entrepreneurs

The negative situational circumstances are decisive for the individual’s
decision to become self-employed by engaging in an entrepreneurial
activity. The positive environment provides a better and wider range of
possibilities to subsist. But it creates, compared to others having better
jobs, a strong frustration especially in the youngest population as it’s
happening in many developed countries from time to time such as
France in crisis and United States in growth in 2014.

Voluntary entrepreneurs in less developed environment

Unfavorable environmental circumstances provide to motivated entre-
preneurs limited business opportunities due to low purchasing power of
potential customers or high costs related to inefficient infrastructure in
transportation, energy, or telecommunication.

Voluntary entrepreneurs in developed environment

The choice between working as an employee and becoming self-employed
is made freely and independently.
This group includes the new generation running the family business,
or retired people such as former accounting managers, technicians, or
engineers who want to continue to work for different reasons.
Giacomin et al. (2011), in terms of necessity-opportunity motivations,
identify three kinds of necessity motivations: family influence, social
recognition, and unemployment.
Evolution from economic necessity appears to be rare. It is still
unknown when and how entrepreneurs decide to grow and what
triggers the desire to grow (Dunkelberg and Cooper, 1982; Kolvereid,
1992; Kolvereid and Bullvag, 1996; Kurantko, Hornsby, and Naffziger,
1997).
Orhan and Scott (2001) highlight the fact that push dynamics such as
boredom, frustration, and the absence of evolution prospects (the glass
ceiling phenomenon) in the professional life preceding entrepreneurship
are frequently present among female entrepreneurs and that, unlike their
male counterparts, push factors seem to predominate pull ones. Orhan
and Scott (2001) identify the necessity of a flexible job due to family
responsibilities as a push factor among women.

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

Haas (2013) found in his research that age has a negative impact on
necessity dynamics. Civil servants seem to search for some kind of social
recognition in starting their own business.
The “family influence” could also correspond to a combination of
necessity and opportunity elements. An individual who is already self-
employed will be positively influenced by the “family influence” dynam-
ics to start his or her business.
The only characteristic of opportunity dynamics for entrepreneurs
with a significant impact on the “desire for independence” is age. The
negative impact could be explained by the fact that often an older indi-
vidual has already gained some financial and social independence and,
were s/he to start a business, this aim will not be predominant.
Several countries have been found to entail more than 50% of “neces-
sity-driven entrepreneurial activity” in 2013: Bosnia and Herzegovina,
58.9% in 2012; Poland, 47.4% in 2012; Macedonia, 61% in 2012; Iran, 53%
in 2011) (Amoros and Bosma, 2014). High shares of necessity entrepre-
neurship can also be found in many OECD countries (e.g., the United
States, 21% in 2012; Germany, 22% in 2012; France, 18% in 2012) as well as
Russia (36% in 2012)(Amoros and Bosma, 2014).
Giacomin et al. (2011) examined common types of entrepreneurship
in 27 countries and found that the share of business opportunity entre-
preneurs among new businesses is largest in the Scandinavian countries
(Sweden, Norway, Denmark, and Iceland) and in Anglo-Saxon countries
(Britain, the US, and Ireland). Necessity entrepreneurship is more char-
acteristic of European Mediterranean and Eastern European countries.

Opportunity entrepreneurship—pull motivation

Opportunity entrepreneurship requires creative capabilities focused

on the relevant market opportunities. Efficient creativity meets
opportunity.

Creativity
The incubation period of creativity
Creativity is the result of an incubation process in which conscious and
unconscious are involved.

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

The main debate between different theories is about whether during an

incubation period unconscious processes contribute to creative thinking
(unconscious work theory), or whether it is merely conscious thought
that drives creativity (conscious work theory).
According to the unconscious work theory, incubation effects refer to
the idea that setting a problem a side for a while helps creative thought
and problem solving as unconscious processes are working on the prob-
lem while the individual is not consciously thinking about the problem
(Wallas, 1926; Hadamard, 1945; Kris, 1952; Rugg, 1963; Kubie, 1958). That
is, the unconscious actively thinks and contributes to solving a problem
(Koestler, 1964; Claxton, 1997).
In contrast, conscious work theories have ascribed incubation effects
on creative performance to relaxation (Helmholtz, 1896; Woodworth and
Schlosberg, 1954) and to the effects of facilitating cues from the environ-
ment (Yaniv and Meyer, 1987; Langley and Jones, 1988).
Dodds, Ward, and Smith (2003) conducted a review of experimen-
tal literature on incubation in problem solving and creativity, and
revealed that 29 out of 39 experiments have found a significant effect of
incubation.
According to Baird et al. (2012), one possible explanation may be that
mind wandering enhances creativity by increasing unconscious asso-
ciative processing, as predicted by the spreading-activation account of
incubation (Yaniv and Meyer, 1987; Dijksterhuis and Meurs, 2006).
A prominent finding is that sleep, and certain stages of sleep in particu-
lar, are important in memory processing, resulting in delayed learning
without the need for further practice or task engagement (Stickgold
et al., 2001).
A recent review on unconscious higher-order cognition conducted
by van Gaal, de Lange, and Cohen (2012) revealed strong evidence for
unconscious response inhibition, conflict resolution, and error detec-
tion. They concluded that people can unconsciously integrate multiple
pieces of information across space and time.
A person is not born creative. Creativity training can enhance every-
day creative performance (Scott, Leritz, and Mumford, 2004), and many
tactics have been identified to facilitate creative thinking skills, such as
set-shifting, questioning assumptions, and using analogies. By demon-
strating that unconscious processes can be important for creativity, the
current findings may encourage practitioners to use unconscious proc-
esses in order to enhance creative thinking. Sio and Ormerod’s (2009)

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

meta-analytic review revealed that the benefits of an incubation period

are greater when participants are occupied by an undemanding task
than when they engage in a demanding task or no task at all. Gilhooly,
Georgiou, and Devery (2013) found that spatial incubation benefited
verbal-rated creativity, and verbal incubation benefited spatial-rated
creativity but not vice versa. When stuck on a creative task, during
an incubation period one should do something undemanding that
is very different from the main task, before returning to it. According
to Woodman, Sawyer, and Griffin (1991), these schools fall into three
categories: personality, cognitive, and social psychological.

Personality-oriented school of creativity

Their concept of creativity draws on ideas formulated by Freud (1958),
who associated creativity with the individual’s need to maximize satis-
faction of desires while minimizing punishments and guilt.
Kris’ theory of creativity stressed the importance of the conscious at the
expense of the unconscious (Kris and Kurz, 1981). Alike his predecessors,
Kris believed that the source of creativity is located in the unconscious,
but that the conscious mind taps into this creative potential and gives it a
concrete expression. He equated creativity with regression at the service
of the ego (Busse and Mansfield, 1980; Woodman 1981; Heikkilä and
Heikkilä, 2001).
Kubie (1958) broadened Kris’ theory of creativity and contended that
the origin of creativity is the preconscious, falling between the conscious
and the unconscious. He regarded the preconscious as a system that
transmits ideas from unconscious deep structures to conscious thinking
processes
In its essence, the humanistic approach to creativity is based on work
by Rogers (1961), Maslow (1943), and Fromm (1947). Rogers placed
particular emphasis on freedom and safety as sources of creativity, mean-
ing that creativity cannot be forced or mandated (West, 1990). Maslow
links creativity with the voluntary self-fulfillment of a free individual
in a free environment. Woodman (1981) and Treffinger (1995) ranked
creativity at the top of the hierarchy of human needs.
The humanistic approach converges with the psychoanalytic view on
the point that creativity and innovation involve both primary (uncon-
scious) and secondary (conscious) processes.
In the humanistic view, creativity is a self-chosen, voluntary realiza-
tion of goals and objectives arising from an individual’s personality.

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

In behaviorist conceptualizations, creativity is the result of learning.

Behaviorists posit that creativity is based on cumulative, hierarchi-
cal knowledge that is processed in response to environmental stimuli
(Woodman, 1981).
While psychoanalysts analyzed primary and secondary processes,
humanist self-actualization processes, behaviorists learning processes,
and trait theorists life stories as processes, the cognitive school of crea-
tivity started exploring creative processing in the human mind.

Cognitive school
Focusing on process models of creativity (Pesut, 1990; Sapp, 1992; Mellou,
1996; Kirschenbaum, 1998), cognitivists look on creativity as a mental
process involving the generation of new ideas and concepts.
Associational thinking or pattern recognition and the desire to change
the status quo are two mental processes which could generate creative
ideas.
Associational thinking/pattern recognition
Steve Jobs (founder and CEO, Apple) appears to be strong at associa-
tional thinking and recognizes its importance to creativity. For example,
he connected calligraphy to computers, based on his college experience
as he expressed it (Stanford, 2005):
Reed College at that time offered perhaps the best calligraphy instruction
in the country. Throughout the campus every poster, every label on every
drawer, was beautifully hand calligraphed. Because I had dropped out and
didn’t have to take the normal classes, I decided to take a calligraphy class to
learn how to do this . . . . But 10 years later, when we were designing the first
Macintosh computer, it all came back to me. And we designed it all into the
Mac. It was the first computer with beautiful typography.

Desire to change the status quo

Jeff Bezos (Byers, 2007, p. 79) said that one of his goals in starting
Amazon.com was to “make history.” History started by the virtual book
shop (followed by electronic books via the Kindle) based on electronic
ink (eink.com website).
Steve Jobs (Apple) claimed that he “wants to put a ding in the universe”
(Dyer, Gregersen and Christensen, 2008, p. 329). Change in the universe
started with the personal computer, followed by the cellular phone and
iPad with multiple applications in numerous domains from traffic and
GPS to camera and medical uses.

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

Social psychological school

Creativity can be the product of environmental influences according the
social psychological school (Woodman and Schoenfeldt, 1989). Creativity
does not occur in a vacuum (Csikszentmihalyi, 1988) but has a domain
in which it takes place, as well as a symbolic field in which it belongs.
Currently, the most prominent representative of the social psychologi-
cal school of thought on creativity is Amabile (1988).
Amabile’s background is in motivational research, where empirical
evidence suggests that performance is not significantly improved though
external rewards only, but through an intrinsic interest in the task. It has
also been found that the quality of creative output increases as a function
of intrinsic motivation (Deci and Ryan, 1985).
Amabile has concluded that, while intrinsic motivation stimulates
creativity, external motivation may even serve as an impediment
(Hennessey and Amabile, 1988). When intrinsic motivation is replaced
with external motivation, the joy of doing something for its own sake is
substituted with an extrinsic motive, with a resulting decline in quality
and creativity.

Motivation level and creativity

McClelland (1971) focused on the motivational power of distinct levels
of personal and social actualization. The first level of motivation the
“need for achievement” related to the personal-oriented school, requires
personal responsibility, calculated risks, performance feedback, and
task accomplishment. Freedom and safety according to the human-
ist approach could be the sources of creativity. The creativity could be
also the result of knowledge or learning according to the behaviorist
approach.
The second level of motivation, the “need for affiliation,” belongs to
the socio-psychological school. The “approval” of the community is
required, and the intention is to conform to its “wishes and norms.”
The third level of motivation, the “need for power,” is personal and
socio-psychological oriented. It is personal oriented because behind it,
there is also a need for achievement. It is socio-psychological oriented
because the entrepreneur wants to exercise control and maintain leader-
follower relationships. Value can be created for the community such as
the development of a new drug for cancer, for both the community and
the entrepreneur such as the development of the cell phone by Motorola
and Nokia, for the entrepreneur only in order to be richer.

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

Opportunity
The issue of whether opportunities are discovered or created has inspired a
great deal of debate in the entrepreneurship literature (Alvarez and Barney,
2007; Alvarez, Barney, and Anderson, 2013; Sarasvathy et al., 2010).
Some researchers maintain that opportunities are created through
entrepreneurial action, with opportunities not existing a priori to such
action (Baker and Nelson, 2005; Garud and Karnøe, 2003; Sarasvathy
and Dew, 2011).
The realist school sees opportunities as out there waiting to be discov-
ered (Shane and Venkataraman, 2000; Venkataraman, 1997),
Kirzner (1973, 1997) maintains that some entrepreneurs are simply
more alert to opportunities than others, implying that anyone with a
goodly dose of alertness should be able to perceive any opportunity.
Shane’s (2003) concept of opportunity discovery corresponds to a
more restricted view. Some agents have a better view of the landscape
due to their relative position. Being at the top of a local peak may give
you a better view of the surrounding terrain than being in a valley or on
some other peak.
Experience, education and knowledge, personal ability, and social
background provide to each entrepreneur different capabilities to
discover opportunities (Shane, 2003).
According to the creation school, “the field of our science is human
action, not the psychological events which result in an action” (Mises,
1949, p. 11).
Klein (2008) has used Mises’ focus on action to question ongoing
debates in entrepreneurship on the nature of opportunity. For Klein,
entrepreneurship should be the study of entrepreneurial action rather
than the pursuit of opportunity.
The focus is on the entrepreneur as creator. For a Schumpeterian
economist, the entrepreneur is the agent that generates new products,
markets or processes.
The creation school is focused on the process by which novel ideas
can be generated (Sarasvathy, 2008). Creative solutions are the result of a
process of trial and error.
Some authors have attempted to bridge the divide between the two
schools by taking a contingency approach—entrepreneurs should be
discovery driven in some situations and effectual in others (Alvarez,
Barney and Anderson, 2013).

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

The concept of a fitness landscape was first introduced in theoretical

biology by Wright (1937) and subsequently applied in physics, computer
science, and business (Beinhocker, 1999). The height of a given point on
a fitness landscape represents the payoff to a given combination of finite
elements. Actors in the landscape are assumed to prefer higher payoffs
(or peaks) to lower payoffs (or valleys). It is possible to conceptualize the
market process as the search for higher peaks on a fitness landscape.
In the case of individual entrepreneurs the peaks represent higher
personal payoffs.
A fitness landscape is said to be rugged if it contains many peaks and
troughs a landscape is usually pictured in three dimensions for exposi-
tion (Rivkin, 2000; Rivkin and Siggelkow, 2003; Weinberger, 1991).
Time has been incorporated into complexity studies through the
notion of a “dancing” fitness landscape, where the actions of various
agents cause the landscape to endogenously change over time (Kauffman
and Johnsen, 1991). Changes in the landscape may also occur due to
exogenous forces or shocks.
This complicates the search process as the landscape may change over
time, and there is no guarantee that a perceived opportunity in one time
period will still exist at a later time. It also means that the requirements
for a successful combination will change over time.
Entrepreneurs are assumed to combine resources or factors of produc-
tion to form new combinations, some of which will be successful.
We are not only talking about the physical proximity of one factor to
another but also the way that each factor can be deployed over time or
used to yield different services (Lewin and Phelan, 2000). Lewin and
Phelan took the example of an airliner which might be more valuable
if allocated to hauling passengers on a New York–Boston route from
Monday to Friday but more profitable flying cargo from New York to Los
Angeles on a weekend. The number of ways that even a single airliner
can be deployed are enormous, let alone the possibilities with a fleet of
hundreds of planes. However, only a tiny set of all possible economic
projects will be viable and an even smaller set will be profitable.
If the landscape is visible to all agents then an opportunity is simply
the observation that there are higher positions to occupy on the land-
scape, and the best opportunity is the highest peak. This corresponds
well to the notion of opportunity recognition, the Kirznerian notion that
anyone that bothers to look can objectively recognize an opportunity
(Sarasvathy et al., 2010).

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

When Creativity meets Opportunity—

momentary perspectives
The Eureka “moment” is taken as a point in time when we experience
conscious mental awareness of what is going on, either within the mind,
or around us, and are aware and able to remember our thinking and
responses. Its meaning is related to the human experience and genera-
tion of meaning at a point in time (Rae, 2013).
Theories about the moment occur across numerous domains of
knowledge: philosophy, narrative, education, psychology, and neural
and cognitive sciences.
Philosophy provided early and illuminating insights into the “prob-
lem” of time and past, future and present moments. In business, a vision
presents a firm’s philosophy.
Narratives are central means of making sense of human experi-
ence within a schema or sequence of other moments. Narratives have
become widely established in entrepreneurship, often related to learn-
ing and the notion of “learning episodes” (Pitt, 1998; Rae and Carswell,
2000; Rae, 2005). Business planning, market analysis, risk evaluation,
monitoring, and control are few of the many narratives used by an
entrepreneur.
From an educational perspective, Maslow wrote of the “peak experi-
ence” as a revelatory moment of learning: “these moments were of pure,
positive happiness when all doubts, all fears, all inhibitions, all tensions,
all weaknesses were left behind” (Maslow, 1969, p. 9). Learning moments
in business refer to learning from external or internal knowledge, learn-
ing from specific experience.
From the psychological point of view, cognitive neuroscience has studied
episodic memory, showing connections between emotion and memory,
and positive autobiographical memories containing more sensory and
contextual information than negative memories (D’Argembeau, Comblain,
and Van der Linden, 2003).Recently, Beeman and Kounios (2009) explored
creative insights through monitoring brain activity, proposing that intui-
tion and anticipation assist in creative problem-solving in business also.
Three interconnected mental processes are critical in understanding
the moment: perception, generation of meaning, and acting.
Most perception takes place at an “unconscious” level, with selective
conscious attention, awareness, and memory of perception covering a
much more limited span than unconscious awareness.

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

Meaning is constantly being generated from the interconnections

between perceptions and memory, with decisions to act being formed
and executed.
Moments—acting in entrepreneurial life, resulting from both exter-
nally experienced events and from internal realizations.
Creativity—inspirational moment of association forming a new idea is
the result of the following consecutive and interactive stages (Rae, 2013):
innovation recognition, problem disadvantage, opportunity recognition,
encounter social interaction, insight knowledge, intuition, judgment
toward decision, and resolution.
A short session on “special moments” was included in the “Business
Inspiration” program for small business innovation leadership which
was run by Lincoln Business School in 2010 for 50 local businesses
aiming to recover from the recession. This made most participants
aware of the concept which formed part of their learning experience
and may have heightened their recollections of moments and the
researchers’ interest in the topic. The following extracts from evalu-
ation interviews are drawn from an independent evaluation (Rae et
al., 2012). Participants were asked if they could recall any “special
moments” from the program and, if so, what these were. The main
selected options were “knowing how to reach customers” and “becom-
ing more confident.”

Creativity and open innovation

Sustainable competitive advantage requires adapting the knowledge
capabilities of the firm over time in order to overcome changes in the
technological and market environments. Internal knowledge is no longer
the main basis for competitive advantage. External knowledge is required
to develop new competitive advantages. The growing mobility of highly
experienced and skilled employees and the wider diffusion of knowledge
have created new alternatives to the internal knowledge of the firms. In
this context, Kaufmann, Tsangari, and Vrontis (2012) suggested a model
that integrates micro and macro factors for generating innovation.
The resource-based view (RBV) of the firm (Barney, 1986, 1991)
explains the conditions under which companies can achieve a sustained
competitive advantage based on their bundles of resources and capabili-
ties, and internal source of knowledge. Resources are stocks of available
factors that are owned or controlled by the firm. Barreto (2010) reviewed

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

and analyzed the diverse research streams on static and dynamic capabili-
ties and suggested a new conceptualization of dynamic capability based
on external knowledge, as an aggregate multidimensional construct.
D’Aveni (1994) discussed the dynamic context of hypercompetitive
environments, and Bourgeois and Eisenhardt (1988) addressed the
dynamic context of high-velocity environments founded on environ-
mental shifts in the competitive, technological, social, and regulatory
domains. This interest is rooted in the longstanding importance attached
to the link between the strategic choices and environmental condi-
tions of firms (D’Aveni, 1994; Eisenhardt and Martin, 2000). Dynamic
capabilities are necessary, but not sufficient conditions for competitive
advantage argued Eisenhardt and Martin (2000). In their view, long-
term competitive advantage does not rely on dynamic capabilities but
on the resource configurations created by these capabilities and on using
dynamic capabilities sooner, more astutely, more fortuitously than the
competition. Teece, Pisano, and Shuen (1997) proposed the dynamic
capabilities framework for filling the gap between static and dynamic
contexts. They defined dynamic capabilities as “the firm’s ability to
integrate, build, and reconfigure internal and external competences to
address rapidly changing environments.” Their approach was based on
six main parameters: nature, role, context, creation and development,
outcome, and heterogeneity. The authors categorized nature as an “abil-
ity” or “capacity,” stressing the essential role of strategic management.
They specified the desired end (i.e., the role, context, creation and
development, outcome, and heterogeneity) of this special capability as
integrating or coordinating, building, and reconfiguring internal and
external competences. Dynamic capabilities are heterogeneous across
firms because they rely on the specific paths, unique asset positions, and
distinctive processes of the company.
Katila and Ahuja (2002) distinguished between two dimensions of
knowledge sources: search depth as the existing knowledge of the firm
and search scope as the exploration of new external knowledge. The
authors found a linear relationship between search scope and company
performance measured in the number of new products developed by the
company (Katila and Ahuja, 2002). Von Hippel (1988) discussed new
sources of innovation and indicated that they “demand new manage-
ment tools as well as new organization.” He concluded from the analysis
of case studies that innovation requires external sources of knowledge at
the market and technological levels.

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

The literature distinguishes between external continuous and discontinu-

ous (Miller, 1999) or disruptive knowledge (Christensen, 1999) as a source
of competitive advantage. Continuous knowledge refers to the improve-
ment of current technology and current market environment of the firm.
Discontinuous knowledge refers to new market and technology, beyond
the scope of the firm. Disruptive knowledge refers to new technological
knowledge expanding the current market to new low-end customers.
The choice of such innovation and its efficiency depend on “the ability
of a firm to build new technological competences and/or to identify and
build relations with new customers.” In the context of open innovation
Chesbrough (2003) and Chesbrough, Vanhaverbeke, and West (2006)
hold that the boundaries of the firm become permeable to continuous
and discontinuous knowledge from external sources.
Chesbrough (2003) defines open innovation as “the use of purposive
inflows and outflows of knowledge to accelerate internal innovation, and
expand the markets for external use of innovation, respectively.”
Open innovation combines internal and external knowledge into
architecture and systems. Companies have understood that they cannot
merely rely on in-house capabilities and resources in order to compete
(Bughin, Chui, and Johnson, 2008).
The open innovation approach is complementary to the collaboration
approaches (DeBresson and Amesse, 1991; Faems, Van Looy, and Debackere,
2005; Hagedoorn and Duysters, 2002; Küppers and Pyka, 2002), consist-
ent with Chesbrough’s argument (2003) that innovations are increasingly
a result of collaboration efforts with external sources of knowledge. Open
innovation, however, requires budgets and capabilities which are often not
at the disposal of small and medium enterprises (SMEs).

Innovative ability of the entrepreneur

What contributes to an innovative entrepreneur’s ability to recognize
an innovative new business idea, and do innovative entrepreneurs
differ from typical executives on any particular behavioral dimensions?
Innovative entrepreneurs were more likely to exhibit behavioral patterns
that involved the following behavior (Dyer, Gregersen and Christensen,
2008):
 Questioning, or their propensity to frequently ask questions,
particularly those that challenge the status quo and ask what if about
the future:

DOI: 10.1057/9781137492401.0005
 The Open Incubator Model

Pierre Omidyar (eBay founder) also framed questioning as a

mechanism for generating counterintuitive responses: “When
addressing a new problem where there’s sort of conventional
wisdom or consensus around a particular thing, I will often test out
the opposite.” (Dyer, Gregersen, and Christensen, 2008, p. 324)
 Observing, or the extent to which they spend time intensely
observing the world around them, paying attention to everyday
experiences to find new ideas:
Howard Shultz kept his eyes and ears open to hit on the idea for
Starbucks by observing the characteristics of espresso bars in Italy.
During a trip to Milan, Italy, to attend an international housewares
trade show, Schultz decided to walk to the trade show, which was
15 minutes from his hotel. Just as he started off, he noticed a little
espresso bar. He ducked inside to look around. After drinking an
espresso, he continued on and a block later he saw another espresso
bar. This one was even more crowded. Schultz noticed that the
gray-haired man behind the counter greeted each customer by
name. He and his customers were laughing, talking, and enjoying
the moment. He could tell that the customers were regulars and
that the espresso bar offered comfort, community, and a sense of
extended family.
 Experimenting, or the frequency with which they experiment in
and explore the world with a hypothesis-testing mindset: visiting
new places, trying new things, seeking new information, and
experimenting to learn new things, as experimenters constantly
explore the world intellectually and experientially, holding
convictions at bay, testing hypotheses along the way.
Bezos (Amazon) explained, based on Dyer, Gregersen and
Christensen (2008), that “if you’re trying to build a better
customer-facing experience, you need to know what consumers
think about your invention and so the thing that we’ve tried to
do as a company, to keep Amazon innovative, is we’re constantly
trying to figure out what the lowest cost of experiments is. If we
can get processes decentralized to do a lot of experiments without
it being very costly, then you’ll get a lot more innovation.
 Idea networking, or the extent to which they actively find and
test ideas with a network of individuals who are diverse in both

DOI: 10.1057/9781137492401.0005
 Entrepreneurial Process 

background and perspective. Moreover, the innovative entrepreneur

would often refer to one or more of these behavior patterns as
an important habit or technique that was used to increase the
probability of generating an innovative idea.
Ingvar Kamprad (founder IKEA) regularly met with teenagers,
even in his 70s and 80s, to get different perspectives on potential
innovation at IKEA. Innovative entrepreneurs (IEs) seem to realize
that ideas and ways of viewing the world are more similar within
social groups (e.g., within the same family, business function,
organization, industry.) than they are across groups. So they make
a conscious effort to bridge a structural hole to talk to people
from different social networks—essentially building a bridge from
their network into a network of people that differs in background,
education, experience, etc. (Burt, 1992; Rodan and Galunic, 2004).
The two cognitive patterns were associational thinking (or pattern
recognition) and a desire to change the status quo.

DOI: 10.1057/9781137492401.0005
 3
Business Model
Abstract: We discuss the concept of Business Model (BM);
the value creation, delivery, and capture dimensions; and
stakeholders’ expectations. We illustrate it with IKEA,
Starbucks, and Zara. We present and analyze the concept
Business Model Innovation (BMI) in the context of SMEs and
use the Tipping Point Model and conscious capitalism in order
to propose improvement of BMI for SMEs.

Bijaoui, Ilan. T
The Open Incubator Model: Entrepreneurship,
Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0006.

 DOI: 10.1057/9781137492401.0006
 Business Model 

Value dimension

Osterwalder and Pigneur (2010, p. 14) define BM as “the rationale of how

an organization creates, delivers, and captures value.”
The business model (BM) links between three dimensions: value
creation, value delivery, and value capture generated for stakeholders,
customers, and community (EU, 2014b).
Business strategy constructs the road designed by the BM, and its role
is to determine the process of creating and sharing value. Brandenburger
and Stuart (1996) define value creation as the buyers’ willingness to pay
minus the organization’s suppliers’ opportunity costs. Those opportunity
costs are value creation for the organization’s needs (Chesbrough and
Rosenbloom, 2002) and the suppliers’ needs.
The value model is not limited to economic revenues only, but includes
other types: personal, social, environmental, or health-related return
(Yunus et al., 2010).
Value delivery refers to the way value creation is transferred. Amazon
improves value delivery by transferring e-books through the Internet at
a lower transportation cost, quicker, and at a lower price.
The value capture or value appropriation has been depicted as the
outcome of bargaining between the clients, the firm, and the firm’s
suppliers (Brandenburger and Stuart, 1996) of which results the sharing
of revenue-return generation.
BM has to create value to all stakeholders, customers, owners, employ-
ees, and suppliers. Without value creation to customers we will not be
able to create value to the other stakeholders. The expected value created
for each stakeholder has to be planned in parallel, because we need the
participation of all of them in order to succeed. If one will not be satis-
fied the chain could be broken.
At the strategic level, BM covers overall direction in the firm’s market
positioning, interactions across organizational boundaries, and growth
opportunities (Morris, Schindehutte, and Allen, 2005).
At the operational level, BM refers to the design of key interdepend-
ent systems that create and sustain a competitive business (Mayo and
Brown, 1999).

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Stakeholders dimension
Owners
The owners invest in a business because they expect an economic, social,
and professional return. Economic return depends on the contribution
of each one of the owners and its evaluation by the others. How much
is the intellectual property in the form of patent or prototype evaluated
by the owner, an inventor, the owner, a venture capital company? How
much risk are the owners ready to take? How much financial return is
expected and when? When to sell shares or to go public? Personal and
professional returns of the owner/inventor, the passive or active inves-
tors are numerous and could raise conflict of interest.
The value to owners is in general transferred progressively according
to results over time. It could be dividend, bonus, shares, or higher sala-
ries, or all of them.

Employees
The employees receive a salary for their work and could expect other
economic, personal, and professional returns according to their relative
importance and their contribution to the organization over time. Each
leadership style provides its own way to transfer responsibilities and to
share value with employees (Hersey and Blanchard, 1982).
Style 1, “Directive”: autocratic leadership with few supports, expects
the fulfillment of the planned tasks according to his or her own requests
and decision about the value transferred to the employees. The employ-
ees have to adapt their expectation to those of the organization.
Style 2, “Coaching”: autocratic leadership with wide support, improves
the capacities of the employees and expects more efficiency, and is ready
to transfer greater value to the employees according to the results.
Style 3, “Supporting”: democratic leadership with wide support,
transfers responsibilities and gives the opportunity to the employees to
improve their contribution to the firm and the value they will receive.
Style 4, “Delegating”: leadership transfers all the responsibilities (lais-
sez faire) and provides to the employees a kind of partnership in which
they create their own value and participate in the decision how to share
it between shareholders and other stakeholders.
A part of the value to the employees is transferred immediately by
the salary. In different periods, end of the year or other opportunities

DOI: 10.1057/9781137492401.0006
 Business Model 

additional value could be transferred in different ways, such as training,

conferences, or rewards by bonuses or options.

Suppliers
The suppliers are partners in the value generation process along the
whole value chain, human resources management (consulting and train-
ing), R&D, procurement, inbound and out bound logistics, sales, and
after sale service.
Beyond the fees they receive for their products and services, they
expect that their participation to the value creation process will be
rewarded by additional values for their own business depending on their
contribution. A provider of raw material or equipment or subcontracting
services will appreciate positive professional evaluation and involvement
in common projects. Microsoft was a subcontractor of IBM, but the
main value transferred did not come from the fees related to the contract
on the windows operating system but because of the value provided to
IBM and its customers by Office and other software developed based on
Windows.
Gorilla Glass, developed by Corning for iPhone screen protection,
is now in its fourth generation expressing years of value transfer which
could be stopped by a $578 million investment of Apple in GT advanced
technologies for the development of the sapphire based future screens
(pcmag website).

Customers
Teece (2010) raised the point of who is paying for the product, the person
consuming it or someone else? Three different values are provided to the
“customer,” one to the consumer, the second to the user, and the third to
the buyer (Bijaoui, 2012).
The consumer value is provided to the direct beneficiary of the prod-
uct or the service. The consumer consumes a vegetable soup value as
s/he “consumes,” just as s/he consumes the fresh air transferred by the
air conditioning unit or the enjoyment or knowledge from a book s/he
purchases.
The user value is provided to the person in charge of the required
previous process, preparing the product to be consumed.
The preparing process of the vegetable soup, turn on process of the air
conditioning unit, and purchasing process of a book can be easy or not.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

The preparation of vegetables soup could be simplified (user value) by a

readymade instant vegetable soup to which I have only to pour boiled
hot water. Turning on of the air conditioning unit could be easier with
a multi-function wireless remote control or maybe with a wireless voice
operating system.
The buyer is in charge of the value-price decision. How much s/he
is ready to pay for vegetable soup, an air conditioning unit, or a book?
S/He can decide to buy vegetables and prepare soup instead of buying
instant vegetable soup, preferring a lower price and lower use value or
the contrary. The customer can prefer to buy a regular book and wait
for two weeks in order to receive it. In such a way s/he will not pay for
the e-reader: lower price, lower user value. S/He can buy a simple air
conditioning unit that s/he can use manually.
If we take the case of milk powder box for baby, consumer value is first
for the baby: is it tasty for him? The Pediatrician represents the consumer
and defines the required nutritive value. The parents are the users because
they prepare the milk bottle and the buyer because they pay for it. If we
propose to improve the user value by instant milk powder in cold water,
the parents will have to decide if they pay as a buyer a higher price for
the user value of the instant powder or they prefer a lower price, higher
buyer value, without the instant user value.
In the case of a manufacturer of a medical scanner the customer’s
value is more complex to determine. S/He needs to evaluate consumer
value to the patient with the doctor representing him, the user value
with the technician operating the system and the buyer value-price with
the management of the hospital, which decides about the required value
price.
The car per hour market emphasizes the interest of the customer to be
a consumer and not to be the user. S/He prefers to pay the consumption
of transportation service per hour and not to be the user who has to pay
for maintenance of the car.
Many services on the Internet are free of charge for the consum-
ers such as Facebook or GSP service. The buyer is not the consumer.
Someone else pays for it: the advertising company. The provider of the
service is the user.
The value/price to the customer can be transferred immediately or
progressively depending on the capability of the customers to afford it
or to appreciate it. More numerous could be the customers if the value/
price is transferred progressively over time.

DOI: 10.1057/9781137492401.0006
 Business Model 

A producer of software could have a wider market if customers could

pay for the use of the software from a “cloud” service.
Herewith we illustrate BM dimensions as presented above on specific
firms.

IKEA BM dimension

Owners
Ingmar Kampar started IKEA in order to make money as an interme-
diary between producers of furniture and customers. Kamprad is the
chairman of the Stichting INGKA Foundation, the parent of all IKEA
stores, the world wealthiest charity institution. The intended purpose
is that of a tax shelter for IKEA group. Today the foundation is called
Intergo and is in the tax shelter country of Lichtenstein. Kamprad moved
to Switzerland for more than 40 years to avoid the taxes in Sweden. He
planned to return in July 2013 to Sweden, but still in January 2015 he was
in Switzerland.

Customers
IKEA’s vision is to create “a better everyday life for the many people.” The
value provided is clearly defined as improving daily life.
The evolutionary process of customers range is due to the evolution of
the economic and social status of the first customers, young people and
couples. They get married, have children, and have higher salary. IKEA
added two higher levels of value-price-products and also furniture for
children rooms.

Value content
Value content has been provided by “a wide range of home furnishing,”
“items of good design and function, excellent quality and durability at
a low price,” assembled by the customer. “It is all about finding simple
solutions and saving on every method, process or approach adopted—
but not on ideas” (Ikea website a).
Value content is also in the modular concept. A modular sofa is one
that you can create with your own combination of parts, so you get
exactly what you want. Then you can adapt or add on to what you have if
your needs change. Modular kitchens make getting a new kitchen quick

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

and easy because the cabinets come with doors, drawers, and shelves
included. You just choose the handles or knobs you prefer and add
worktops, a sink, a tap, and appliances to complete the kitchen.

Value delivery
The self-service delivery process is planned and executed in such a way
that every potential bottleneck is prevented. The shops are outside the
city but very close to it with enough parking because they are in devel-
oped countries where customers are coming by car. Flat packaging is
easily transported in cars.
In China, however, most customers use public transportation. So the
company set up its outlets on the outskirts of cities which are connected
by rail and metro networks (businesstoday website).

Value capture
Value capture differs according to the consumer culture. Assembly is a
hobby value in the US, but in Israel it is not. Low price and functionality
are a value for all.
American customers’ needs are different than Europeans. Beds were
not long enough and did not fit American sheet sizes, bedroom ward-
robes not deep enough, kitchen cabinets did not fit US-size appliances.
Sofas were too hard and not big enough for American comfort, and
curtains were too short. Kitchenware was too small for American serving
sizes. Glasses and plates were too small. American customers are used to
drinking one liter per serving and big size pizza in the plate (Bloomberg,
2005; Hill and Jones, 2005; Moon, 2004).
In China, IKEA customizes showrooms according to Chinese living
patterns and standards. For example, many Chinese people live in
small apartments with balconies; therefore, IKEA has added model sets
and special balcony sections in the stores to show how to furnish your
balcony (Johannson and Thelander, 2009).
Consumer, user, and buyer: the buyer value-price is the first value
provided by IKEA, low cost-affordable price. The prosumer (producer-
professional consumer) concept of doing your furniture by yourself
contributes to buyer value price and to the user value for those who see
self-assembly as a hobby value. The user considers his or her participation
as a creative process. It is a product that s/he constructed with her/his own
hands.

DOI: 10.1057/9781137492401.0006
 Business Model 

The buyer is not the consumer for products in the nursery. Each prod-
uct has to receive the approval of the consumer, the child, and his or her
parents. In the kitchen furniture, the user value (ease of use, efficiency) is
important. In other products such as sofas, curtains, carpets, and tables,
a wide range of different consumer values (taste) is proposed.

Suppliers
IKEA has numerous suppliers providing final products or participating
in different stages of production. IKEA manages a knowledge network
between suppliers in order to improve value generation for both sides
and for the customers.
Swedwood, IKEA Industry is the world’s largest producer of wooden
furniture and is an integrated part of IKEA Group. IKEA Industry has
44 production units in 11 countries with about 19,000 co-workers (swed-
wood website).
IKEA has more than one thousand suppliers in 55 countries (IKEA
website b). Top five purchasing countries are China, Poland, Italy,
Germany and Sweden.

Community
The latest sustainability report from IKEA has shown that the retailer is
close to meeting its target of all its home furnishing products being either
renewable, recyclable, or recycled (Ikea website c). By 2015, the company
aims to meet this target, but in 2013 it showed it was close, revealing that
98% of its products met these criteria.
IKEA’s range of products and solutions for a more sustainable life at
home enable customers to use energy more efficiently, produce renew-
able energy, reduce waste, recycle more, and save, reuse, or purify water.
In FY13, IKEA GreenTech invested in DyeCoo Textile Systems, a Dutch
company that has developed the first commercially available waterless
dyeing technology. The textile industry uses large amounts of water and
chemicals to dye fabrics, which can lead to pollution and contribute
to water scarcity. DyeCoo’s technology avoids using the large amounts
of water and chemicals needed for traditional dyeing, by instead uses
carbon dioxide (CO2), which is recycled in the process.
The IKEA Group of Sweden has a commitment to the Business Call
to Action (BCtA) and reinforced its goal to use only cotton produced

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

entirely in line with the Better Cotton Initiative (BCI) in all IKEA prod-
ucts by end of 2015 (greenretaildecisions.com website).
IKEA’s goal is to ensure that consumers do not pay a premium for
cotton products that are more sustainably farmed than conventional
cotton—using less water and fewer chemicals and pesticides. Cotton
is the second most important raw material for the company after
wood, making it a clear strategic priority. In 2012, IKEA used 160,000
tons of cotton in its products, with the majority coming from India
and Pakistan where its work related to the BCtA commitments are
focused.
Below three examples of green products are described (greendiary.
com website):
 A designer of IKEA furniture, Jonas Kamprad, has made use of
rattan, a natural and renewable fiber used extensively to make
furniture and baskets, to make this designer chair called the Hultö
chair.
 IKEA has designed green alternative lighting systems called
SUNNAN LED desk lamps.
 IKEA 365+ RISP duvet cover and pillowcase is not made of pure
cotton it is created using 50% cotton and 50% lyocell. Lyocell is a
fiber that originates from wood pulp and makes use of plenty of
water and energy for being produced.

Starbucks BM dimension
Owners
Howard Schultz invested in Starbucks, a manufacturer of coffee
products, with other partners as a good business but not only to make
money.
He offered comprehensive health coverage for eligible full- and part-
time workers, among the first in the retail industry (news.starbucks.com
website (2)).
Schultz was named Fortune’s 2011 Businessperson of the Year for
delivering record financial returns for the company while leading an
effort to spur job creation in the US. He has also been honored with
the Distinguished Leadership Award from Northwestern University’s

DOI: 10.1057/9781137492401.0006
 Business Model 

Kellogg School of Management, Horatio Alger Award for those who

have overcome adversity to achieve success, and the Rev. Theodore M.
Hesburgh Award for Business Ethics given by Notre Dame University’s
Mendoza College of Business.

Customers
Value content
Starbucks brought to the US a new way to bring people together in order
to meet and socialize. “A place for conversation and a sense of commu-
nity. A third place between work and home” (http://www.starbucks.com/
about-us/company-information, our heritage).
Like home: breakfast, coffee break, lunch with a range of hot drinks
and coffee, juices, salads, sandwiches, cakes, omelets and hot dishes.
Like work: quiet locations for meetings, for working with a computer,
or for speaking via Skype or cell phone.

Value delivery
The self-service delivery process is planned and executed in such a way
that every potential bottleneck is prevented, such as payment, name
registration and voice announcement. The locations of the shops are
in central locations in the city, shopping malls, universities, train and
bus stations, and locations of entertainment services like theaters and
cinemas.

Value capture
Value capture was adapted first to “wealthy, educated, coffee drinker who
preferred quality and customer service over a discounted price.”
The young public, teenagers, and students followed with their expecta-
tions, sitting in on high chairs and listening to music or using cell phone
applications. Starbucks understood also the take away opportunity
market and developed relevant products and packaging for it. User and
consumer values are provided in the same package. Drinks and foods are
presented in disposable cups or plates, ensuring cold or hot conservation
according to the consumed product.
The consumer is also the buyer. The four senses, smell, vision, touch,
taste, and the fifth one, aesthetic, provide value to the consumer at the
critical buying moment. The consumers buy not only in order to fulfill a
basic need but also to feel the aesthetic value of the product.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Employees
Starbucks provides a “great work environment and treat[s] [its employ-
ees] with respect and dignity.” (http://www.starbucks.com/about-us/
company-information).
In 1991, Starbucks introduced Bean Stock which turned eligible
Starbucks employees into partners by providing the opportunity to share
in the financial success of the company through Starbucks stock (news.
starbucks website 2).In 2010, Bean Stock was redesigned to reward
partners with restricted stock units. An RSU gives partners the right to
receive shares of Starbucks stock after a specified period of time (also
known as vesting). When the RSU grant vests, partners receive actual
shares of Starbucks stock.
In fiscal 2013, partners enjoyed over $234 million in pre-tax gains
from Bean Stock, with more than 125,000 eligible Starbucks store and
non-executive partners in 21 markets eligible for the most recent grant
in November 2013. Since the program’s inception, partners have received
more than $1 billion thanks to Bean Stock.
In 2013 Starbucks also invested $250 million in healthcare benefits for
eligible full- and part-timers, shared $234 million in pre-tax stock gains
with partners, and matched $50 million in 401(k) contributions.

Suppliers and community

Starbucks buys raw materials according to the Coffee and Farmer Equity
(CAFE) Practices which ensures coffee quality while promoting social,
economic, and environmental standards (Starbucks, 2013). CAFE prac-
tices have created significant social and economic impacts for more than
one million workers and environmental improvements on the thousands
of participating farms.
Starbucks agronomists collaborate directly with coffee farmers and
suppliers in each of the growing countries: Rwanda, Tanzania, Ethiopia,
China and Latin America to encourage responsible growing practices
and improve the quality and size of their harvests. Starbucks supports
African farmers with farmer support centers in Kigali, Rwanda; Mbeya,
Tanzania; and Addis Ababa, Ethiopia. Starbucks opened in 2013 its first
Asia-based farmer support center in Yunnan Province, China. In Latin
America, Starbucks serves farmers through our support centers in San
José, Costa Rica, and Manizales, Colombia, as well as a satellite office in
Guatemala City.

DOI: 10.1057/9781137492401.0006
 Business Model 

Zara BM dimension

Walking home from his school, he and his mother stopped at a local
store, where he stood by as his mother pleaded for credit. “He heard
someone say, ‘Señora, I cannot give this to you. You have to pay for it.’ ”
Amancio Ortega was13 years old. He left the school and started to work
(management.fortune.cnn.com website).
Galicia in Spain had few job opportunities in the 1950s; thousands of
men worked at sea, leaving their women to struggle alone back home.
Ortega began organizing thousands of women into sewing coopera-
tives. He oversaw a thriving production of quilted bathrobes for his first
company.

Owners and Suppliers

Amancio Ortega, the Spanish founder of clothing conglomerate Inditex
SA, which includes the Zara fashion chain, was ranked fourth at $60.8
billion after Bill Gates, Mexico’s telecommunications magnate Carlos
Slim Helu, and Warren Buffet by Forbes magazine’s annual 2014 (forbes.
com website 2).
Amancio Ortega has the majority of the shares with €46 billions
(elpais website). The other owners with, 0.5% to 2% are the main
shareholders of Ferrovial, Mercadona supermarket chain chief, Sandra
Ortega, daughter of Amancio Ortega, the owner of Mango clothing
chain, the chairman of construction firm OHL, Banco Santander chair-
woman, the main shareholder in BBVA bank, The Duchess of Alba,
the owners of Corporación Gestamp y Gonvarri (elpais website).
Inditex’s supply chain (including Zara) in 2013 was made up of 1,592
suppliers in 46 countries (inditex website). Zara contributes 2/3 of the
total turnover.
Inditex has 13 textile manufacturing subsidiaries located in Spain and
11 logistics subsidiaries (Vincent, Kantor and Geller, 2013).
Inditex’s commitment to ensuring the proximity of suppliers is
reflected in the fact that 51% of production has its origins in suppliers
located near Inditex’s headquarters in Spain.
Zara does not produce its own fabrics, and it outsources low value-
added, labor intensive parts of production such as sewing. The majority
of fabric dyeing is outsourced to partly owned subsidiaries in Northern
Spain, and Inditex has a 50% stake in high value-added production firms,

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

giving them considerable price bargaining power. About 50% of Inditex’s

suppliers are located in Spain, Portugal, and Morocco, about 35% in
Asia, while the rest are spread throughout Europe. Asian manufactur-
ers largely supply simple, standardized orders such as t-shirts and jeans
since these products don’t require particularly fast lead times. Due to
its higher offering of sewing intensive tailored clothing, Massimo Dutti
sources the majority of products from proximity markets and Europe.

Customers
By 16, Ortega had concluded that the real money could be made giving
customers exactly what they wanted, quickly, rather than buying up
inventory in the hopes it would sell. To do that, he needed to figure out
what people were looking for, then make it.

Value creation and value content

Fashion was exclusively for wealthy people. Zara decided to democratize
it and provide “the latest fashion in medium quality at affordable prices”
and “good design and good quality at good prices” (Lopez, 2009).
Seeking to provide quick response to customers’ changing demands,
Zara invented the “fast fashion” concept: every two weeks, new products
are on the shelves.
The following story illustrates Ortega’s philosophy:
The motorbike roared up to the traffic light in La Coruña in northern Spain
and stopped alongside a black Town Car. From inside, the passenger glanced
out his window and saw the young biker leaning over the handlebars, jean
jacket decorated with appliquéd patches, a throwback to the 1970s. The man
in the car, decades older than the biker, zoomed in on the jacket. The old
man grabbed his cell phone and, as the story goes, called an aide in his office.
His eyes still fixed on the biker, the man described the jacket’s stitching, its
shape and color, and signed off with a single instruction: “¡Hácedla!”” Make it.
The light turned green, the biker pulled away; unbeknown to him, he and his
jacket had just played a walk-on role in one of the greatest retail stories of our
time. Fortune (January 8, 2013)

Zara started with fashion clothes for women at home and extended it to
women outside, men, and children. In 2008 Zara introduced fashion for
home design with “Zara home”: fashion for curtains, towels, bed covers,
and bed sheets.

DOI: 10.1057/9781137492401.0006
 Business Model 

Value delivery
Shops are in central locations, shopping malls inside the city and main
streets. The shelves are ordered according to customers segments:
women, men, and children. Every two weeks new items appear in the
shops and deliver to the customers new opportunities to fashion their
personality.
From 2010 Zara started to sell products from its website. Today
customers in 21 countries can order items via the Internet.

Value capture
Designs, colors, and styles are evaluated in different ways by customers.
Some prefer classic style, others sportive or romantic style. Zara has
defined basic styles: “Woman,” “Man,” “Kids” classic-modern, “Joven”
sportive style, and TRF “Romantic”.
The consumer is also the buyer. The vision, touch senses values and
the taste-aesthetic value are important for the consumer at the buying
moment. According to these values, the consumer will buy the planned
product only (perhaps not) or more.

Employees
Ortega has never had an office. He sits at a desk at the end of Zara
Woman’s open workspace. Ortega is involved in anything, but he shares
with the employees the decision process .The employees and directors
are involved in the decision process and receive beyond good work and
salary conditions, professional value.
Amancio Ortega was very close to the workers, get them involved
in the whole decision making process and maintained entrepreneurial
spirit and self – criticism as Zara business culture.

Business Model Innovation

Business model innovation (BMI) can be classified into three groups
(European Commission, 2014b, p. 10; Giesen et al., 2007):
 industry model innovation, which consists of innovating the
industry value chain by moving into new industries, redefining
existing industries, or creating entirely new ones;

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

 revenue model innovation, which represents innovation in the way

revenues are generated, for example through re-configuration of
the product-service value mix or new pricing models; and
 enterprise model innovation, changing the role a firm plays in the
value chain, which can involve changes in the extended enterprise
and networks with employees, suppliers, customers, and others,
including capability/asset configurations.
BMI designs the no token road improving the value generation process
over time (Gambardella and McGahan, 2010). BMI supports companies
in exploiting new opportunities in three different ways (Johnson, 2010):
by supporting the development of new value propositions for existing
customers, by tackling new customer segments, or by entering new
industries.
Bucherer, Eisert, and Gassmann (2012) suggest a distinction between
a situation in which a company is forced to innovate its business model
in reaction to “threat” and a situation where it innovates to capture an
opportunity. In their study they defined four degrees of innovativeness:
incremental innovation, industry breakthrough, market breakthrough,
and radical innovation.
Zott and Amit (2010) discuss innovation in the content-activities, the
structure-links between activities and governance-management of the BM.
Teece (2010) concentrates innovation in the BM on the creation of a
value proposition for each customer’s segment, setting up the apparatus
to deliver that value, and then figuring out various “isolating mecha-
nisms” that can be used to prevent imitation by competitors.
The value of a product can be specific, dynamic, or viral.
An end product has a determined value/price decided by both
producer and customer. A refrigerator or a washing machine has a
determined value/price which is approved by both sides.
Some products have a dynamic value price growing with new features
or applications such as the cell phone or the computer. The value/price
can grow over time. We define those products as “platform” products.
Value created by a component is as large as the number of products
which will use it. A new microprocessor from Intel will create value to a
product using it as illustrated by the logo “Intel Inside.” Value creation of
a component has a viral impact on many products.
Herewith we illustrate by selected companies, BMI in end products or
services, platform products, and components.

DOI: 10.1057/9781137492401.0006
 Business Model 

BMI of end products/services

Amazon
Jeff Bezos incorporated the company as Cadabra on July 5, 1994, and the
site went online as Amazon.com in 1995 (amazon website).
Value delivery
Amazon creates value by its virtual shop and online sales of books,
DVDs, music CDs, software, baby products, consumer electronics and
many other products.
In November 2007, Amazon launched Amazon Kindle, an e-book
reader which downloads digital books over “Whispernet,” via Sprint’s
EV-DO wireless network. This innovation improved the value delivery
of its BM.
Amazon improved the value delivery and its content by introducing a
software application allowing Kindle books to be read on an iPhone or
iPod Touch. Amazon soon followed with an application called “Kindle
for PCs” that can be run on a Windows PC.
Breakthrough innovation in value delivery was announced on
December 1, 2013, that Amazon Prime Air was a possible future delivery
service expected to be in development for several more years. In concept,
the process would use drones to deliver small packages (less than five
pounds) within 30 minutes by flying short distances (10–20 km) from
local Amazon Fulfillment Centers.
Value creation
In 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon
EC2), a virtual site farm, creating a new value and improving users’ value
delivery to run applications ranging from running simulations to web
hosting. In 2008, Amazon improved the service by adding Elastic Block
Store (EBS), offering persistent and offering static IP addresses designed
for dynamic cloud computing.
In August 2007, Amazon announced the creation of AmazonFresh, a
grocery service offering perishable and nonperishable foods. Customers
can have orders delivered to their homes at dawn or during a specified
daytime window.
In 2012, Amazon improved those values by launching Vine.com for
buying green products, including groceries, household items, and
apparel.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Kindle has created a new value in the publishing sector. Amazon

launched Kindle Direct Publishing, where authors and publishers
independently publish their books directly to Kindle and Kindle apps
worldwide.
In April 2014, Amazon announced its Amazon Fire TV set-top box
system, a device targeted to compete with such systems like Apple TV or
Google’s Chromecast device.

Dell
Value creation
Dell is focused on customized solutions based on partnership with a wide
range of components and devices suppliers. Value creation is adapted to
each customer, private, professional, or public.
Value delivery
Dell’s direct selling to customers is a critical element of Dell’s success.
Over time, Dell developed capabilities to decide which products to build
beside desktop and laptop computers, and which added printers, digital
projectors, and computer-related electronics are the most suitable.
Dell business models required supporting processes that were hard for
competitors to replicate.

Wal-Mart
Magretta (2002) points out that the business model of discount retail-
ing had been around long before Wal-Mart founder Sam Walton “put
good sized stores into little one-horse towns which everybody else was
ignoring.”
Once in place, the towns Wal-Mart had selected were too small to
support another similar sized store, creating a difficult to replicate first
mover advantage of staying small but powerful.
Wal-Mart promoted national brands at deep discounts, supported
by innovative and lean purchasing logistics and IT systems: these were
elements of its strategy that made its business model difficult to imitate.

Gillette
Gillette popularized what today is known as the Razor and Razor Blade
BM, which rests on “selling cheap razors to make customers buy its
rather expensive blades” (Zott and Amit, 2010, p. 218). This model is
now popular in other industries where products such as printers (and

DOI: 10.1057/9781137492401.0006
 Business Model 

cartridges) or game consoles (and software games) are brought to market

relying on a similar logic.

BMI and “platform” products

Google
First value creation
Google began in March 1996 as a research project related to an efficient
search engine in Internet by Larry Page and Sergey Brin, Ph.D. students
at Stanford University (google.com website). In 2000, Google began sell-
ing advertisements associated with search keywords. Other companies
existed before such as Yahoo, but they were not as efficient.
Google’s two-sided dynamic search engine developed with Adwords
in 2003 was an innovation in value creation. Google used Adwords to
provide an interface with advertisers whose choices directly influenced
the search experience of users on the other side of the platform. Google
was the first company to create the type of scalable dynamic two-sided
platform modeled by Rochet and Tirole (2003).
New value creations
One of the earlier companies that Google bought was Pyra Labs in 2003
(Rosenberg, 2009). The acquisition secured the company’s competitive
ability to use information gleaned from blog postings to improve the
speed and relevance of articles contained in a companion product to the
search engine Google News. They were the creators of Blogger, a weblog
publishing platform, first launched in 1999. This acquisition led to many
premium features becoming free, as new value content.
In 2004 Gmail, a free advertising-supported webmail service with
support for Email clients, was a new value creation and management.
Free is a value content. Over its history, the Gmail interface has become
integrated with many other products and services from the company,
with basic integration as part of a Google account and specific integra-
tion points with services such as Google+, Google Calendar, Google
Drive, Google Hangouts, and Google Buzz.
“Google Print” was introduced at the Frankfurt Book Fair in October
2004. Google’s Library Project (also now known as “Google Book
Search”), a value creation, was announced in 2004. In 2013 Google’s
database encompasses more than 30 million scanned books (nybooks.
com website).

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

In 2010 Google created in the US a new value and new value contents,
eBooks, the Google Editions.
Google Videos is a video search engine a new value creation based
on new way to share value, a free video-sharing website that allows
selected videos to be remotely embedded on other websites and
provided the necessary HTML code alongside the media, similar
to YouTube (google.com website). On 2006, Google bought former
competitor YouTube. Google Videos was shut down on August 20,
2012. The remaining Google Videos content was automatically moved
to YouTube.
Google Earth, a new value creation, is a virtual globe, map,
and geographical information program that was originally called
EarthViewer 3D, created by Keyhole, Inc., a Central Intelligence Agency
(CIA) funded company acquired by Google in 2004 (see In-Q-Tel). It
maps the Earth by the superimposition of images obtained from satel-
lite imagery, aerial photography, and geographic information system
(GIS) 3D globe.
Value contents are in a wide range of applications, from geological
purposes up to transportation and mapping application. In 2013, Google
announced a partnership with Kia Motors and Hyundai. The partnership
integrates Google Maps and Place into new car models to be released
later in 2013.
The Waze GPS navigation application program for smartphones
provides turn-by-turn information and user-submitted travel times and
route details, downloading location-dependent information over the
mobile telephone network. It was developed by the Israeli start-up Waze
Mobile, which was acquired by Google in 2013.

Apple-iPad
iPad is used as a platform for different private and professional
applications.
Entertainment value creation
The e-book application provides the possibility to read any book or
newspaper included in different e-libraries proposed by different opera-
tors such as Google or Amazon.
Entertainment applications include video and games but also partici-
pation in interactive games and competition.

DOI: 10.1057/9781137492401.0006
 Business Model 

Education applications
Touch screen technology has introduced a first generation of tools that
afford creative use such as applications for younger children (two years
old and older) to access and play productively with a sophisticated media
technology platform.
Children as young as two years old play and learn with touch screen
devices. Children’s initial reactions are characterized by fascination and
shaped by their developmental level, prior experience with technology,
and the design of the app interface and game/play. The world of apps
currently designed for children includes three general types: gaming
apps, creating apps, and e-books.
Legal professionals value creation
The iPad can replace all of the folders and boxes of paper with one small,
portable device. PDF files allow users to view and annotate documents.
The iPad can be used as a portable scanner (Readdle’s Scanner Pro). The
iPad’s camera can “scan” (take a picture) of a paper document on a desk
or table and convert the image to a PDF file.
AirPrint is an Apple technology that lets applications create full-
quality printed output using Apple’s driverless printing architecture.
Medical value creation
Medscape search functioning allows people to quickly look up a drug or
how to do a lumbar puncture with lightning speed.
The iPad has improved the physician workflow with a gamut of
reference applications, and it has enabled us to communicate better
with their patients. The Draw MD apps enable physicians to draw
out surgical procedures to their patients in a palatable manner. The
series contains nine apps currently, with seven specialties covered:
Cardiology, General Surgery, Orthopedic Surgery, OB/GYN, Urology,
ENT, and Anesthesia.
The iPad is used to take images in several common poses, and the
images are opened in the Penultimate application, which allows the
surgeon (or patient) to draw and make notes on the photograph. This is
useful for highlighting problem areas or discussing diagnosis and treat-
ment plans. The image with the drawings (and notes if desired) can be
saved, e-mailed, or texted, which allows the surgeon and patient to have
a copy.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Real estate value creation

NearBuy gives the ability to search for condos and houses by location,
using the iPad’s built-in locate-me technologies. The application displays
the results, gathered from a multitude of sources, on an easy to use and
quick-loading map.
AroundMe (Tweakersoft) tells the potential buyers about all the life-
style, interesting places around a neighborhood like hospitals, theaters,
hotels, supermarkets, taxis, parking, etc. The software shows a complete
list of all the businesses in the tapped category along with the distance
from where the customer is.
For many reasons, rental properties may be trending stronger, and
MyNewPlace shows rental pricing in the vicinity. There’s always a need
to share rental costs with clients if only to illustrate the investment
benefits of owning a home compared to financing the landlord’s real
estate dreams.
CalcsPro quickly and accurately performs standard loan calculations.

BMI and components

Plastic Logic
Plastic Logic withdrew from the e-reader market in 2012 in order to
concentrate its efforts in developing flexible plastic display (Plasticlogic
website).
The Papertab interface, presented in the 2013 Consumer Electronics
Show (CES), is a new component creating value in the e-reader market.
The customer can send a photo simply by tapping one Papertab showing
a draft email with another Papertab showing the photo.
The Papertab can file and display thousands of paper documents,
replacing the need for a computer monitor and stacks of papers or print-
outs, keeping track of their location relative to each other, and the user,
providing a “seamless experience” across all apps, as if they were physical
computer windows.
Papertab is also a component for electronic advertising panels.
Initial applications of Plastic Logic’s flexible plastic transistor technol-
ogy include flexible plastic displays of various sizes and in both color
and monochrome.
These ultra-thin, ultra-lightweight, and high-quality plastic displays
empower original equipment manufacturers (OEM) to revolution-
ize existing product designs and develop innovative new solutions.

DOI: 10.1057/9781137492401.0006
 Business Model 

Applications vary from printable and flexible image sensors to flexible

screens of mobile devices like smartphones and tablets to signage, wrist-
watches, and automotive applications.

Android
Android, Inc. was founded in Palo Alto, California in October 2003 by Andy
Rubin, Rich Miner, Nick Sears, and Chris White to develop smarter mobile
devices that are more aware of their owner’s location and preferences.
Google acquired Android Inc. on August 17, 2005; key employees of
Android Inc., including Rubin, Miner, and White, stayed at the company
after the acquisition (Elgin, 2005).
Android is a mobile operating system (OS) based on the Linux kernel,
and currently, Android is designed primarily for touch screen mobile
devices such as smartphones and tablet computers, with specialized user
interfaces for televisions (Android TV), cars (Android Auto), and wrist
watches (Android Wear). Android’s source code is released by Google
under open source licenses.
As a component, Android operating system created first for Google
value creation in the cell phone market.
In 2010, Google launched its Nexus series of devices—a line of smart-
phones and tablets running the Android operating system and built by
manufacturing partners. HTC collaborated with Google to release the
first Nexus smartphone, the Nexus One. Google has since updated the
series with newer devices, such as the Nexus 5 phone (made by LG) and
the Nexus 7 tablet (made by Asus). Google releases the Nexus phones
and tablets to act as their flagship Android devices, demonstrating
Android’s latest software and hardware features.
As a component, Android operating system creates value in smart-
phones, tablets, laptops, smart TVs (Android TV, Google TV) and
cameras (e.g., Galaxy Camera) (developer.android website). Android has
also applications on car CD and DVD players, portable media players,
(theregister.co.uk, /2012/08/08), landline, and video games (computer-
world.com website).
As of 2011, Android has the largest installed base of any mobile OS
and, as of 2013, Android devices also sell more than Windows, iOS, and
Mac OS devices combined (gartner.com website).
At Google I/O 2014, the company revealed that there were over 1
billion active monthly Android users (that have been active for 30 days),
up from 538 million in June 2013 (phonearena.com).

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Android’s share of the global smartphone shipment market—led by

Samsung products—was 81.3% (phonearena.com).

DuPont Kevlar
Kevlar (DuPont website) has a unique combination of high strength,
high modulus, toughness, and thermal stability. It was developed for
demanding industrial and advanced-technology applications.
Many types of Kevlar are produced to meet a broad range of value
content in different applications.
Military body armor and jackets and car body armor is a growing
application due to terrorism and conflicts in many regions such as Syria,
Iraq, Afghanistan, Israel, Cashmere, and Ukraine.
DuPont Kevlar brand polymer improves the safety, performance,
and durability of automotive components for a wide variety of vehicles.
Passenger cars and light trucks employ products made of Kevlar polymer
such as belts, brake pads, clutches, gaskets, hoses, and tires.
Kevlar is also used as a composite in aircraft cabins, flooring and inte-
riors, landing gear doors, wing boxes and control surfaces, aircraft tires,
and rotor blades.
Kevlar is used as a strength member in optical fiber cables. The optical
fibers in the cable have to be safeguarded against mechanical stresses to
ensure their optimal performance.

BMI of SMEs and the Tipping Point model

SMEs have limited financial and knowledge capabilities and cannot

adapt their BMI to evolution in technology, environmental changes,
or required improvements in the business value chain. They often are
caught in the “commodity trap” belonging to Chesbrough’s “Type 1”
group (Chesbrough, 2007). Few of them succeed in having “some differ-
entiation in their business model: to target a customer other than those
that buy simply upon price and availability” representing Chesbrough’s
Type 2 group. The ways to Type 3 through Type 6, targeting segments
simultaneously, getting access to external technologies, adjusting to
customers’ future requirements, or engaging in joint ventures, are not
feasible.
Cooperation between SMEs allows them to improve their BMI and
change the rules of the game (Kim and Mauborgne, 1999).

DOI: 10.1057/9781137492401.0006
 Business Model 

The main reasons motivating alliance formation between SMEs

are complementary technologies (Mariti and Smiley, 1983), reduction
and rationalization of R&D, and cost reduction (Neto, 2000), scale
economy, risk sharing (Bamford, Gomes-Casseres, and Robinson,
2003) and achieving a new positioning and new synergies (Harrigan,
1985).
The initiative of alliance formation can start by the most motivated
SMEs, able to achieve positive results and ready to transfer their knowl-
edge and experience to others.
Support to SMEs is provided to those which take the initiative to apply
for a grant, a loan, or a consulting service. Are those SMEs the most
valuable or the most influent? Maybe other SMEs with a bigger business
potential don’t apply for many reasons. We have to identify those which
could have a positive impact on others and generate viral economic
development.
The Tipping Point model proposes such an active process. Gladwell
(2000) argues that socio-economic phenomena can spread like an
epidemic if specific entrepreneurial forces and environmental condi-
tions are met: the entrepreneurial forces are defined by the law of small
numbers, and the environmental conditions by the stickiness factor and
the context.
Few people start an epidemic. Those few could be SMEs which have
the capacity to generate a viral process of development. In order to create
this contagious movement we have to know which profile is requested for
those few SMEs in order to generate such a process. Gladwell proposes,
according to the law of the few, three profiles, maven, connector, and
salespersons profiles.

The law of the few

There are exceptional people behind a few SMEs who are capable of
starting an epidemic. With an epidemic, a tiny group of the people/SMEs
do the work. The critical factor in epidemics is the nature of the SME
messengers. Some are connectors, others are mavens or salespersons.

Connectors
Connectors are defined as people (or entrepreneurs behind SMEs)
with well-developed networks of contacts relevant to global business
operations. What makes these connectors special is their ability to span

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

many different worlds, reflecting a wide range of networks developed

through different areas of their lives both personally and professionally.
The notion of connectors refers to social capital in the global context
(Kostova and Roth, 2003; Lengnick-Hall and Lengnick-Hall, 2006;
Taylor, 2007). Social capital is based on the importance of relation-
ships (both within and outside the organization) in helping to transmit
information to those who require it. Connectors request the ability to
source and disseminate important information. Being able to access the
extant knowledge from across the international operations provide the
firm with the opportunity of benefiting from competitive advantage over
local firms (Kogut and Zander, 1993).
Connectors can manage linkages between spatially dispersed opera-
tions. They can fill the structural holes between the different operations
and act as linking pins or coordination devices between people who
might otherwise remain to a large degree unconnected (Kostova and
Roth, 2003; Taylor, 2007).
Thus an individual’s web of contacts within and external to the firm
will be key in their successful performance
f in the global landscape.
Having a number of more superficial relationships or acquaintances
which s/he terms “weak ties” can be as, or even more, important than
well-developed or “strong ties” or friendships in terms of building social
capital (Granovetter, 1973). These weak ties provide access to different
social networks than friends.
Strong ties are more difficult to build in global organizations due to
the spatial spread of the firm and the relative lack of physical interac-
tions between individuals.
Connectors have connections in many circles. They are appreciated
and capable of understanding knowledge sufficiently to transfer it to
others. Herewith Gladwell’s description of a connector (Gladwell, 2000,
pp. 38–59):
 people with a special gift for bringing the world together;
 know lots of people;
 instinctive and natural gift for making social connections;
 “weak ties” are always more important than strong ties;
 the closer an idea or product comes to a connector, the more power
and opportunity it has as well; and
 word of mouth epidemics are the work of connectors.

DOI: 10.1057/9781137492401.0006
 Business Model 

Mavens
Maven SMEs are primarily characterized by their ability to accumulate
and impart knowledge. Their importance comes from their broad
professional awareness in their specialization, business or technology. In
business they are aware of business trends, whether that is with regard
to pricing, supply, or consumer demand. This knowledge spans beyond
simple accounting benefits, however, and may include innovative solu-
tions in a number of technical and financial areas. In technology, they
are currently updated by the relevant sources about the new develop-
ment, future trends, and potential impact on their activities.
Mavens tap into relevant information, they are willing and able to
share it with colleagues and other relevant stakeholders and indeed take
a degree of pleasure in sharing this information.
Mavens solve their own problems, and their own emotional needs, by
solving other people’s problems. They have knowledge and social skills.
They are both a teacher and a student. In the epidemic process, mavens
are data banks. They provide the message.
The mavens are in possession of knowledge and able to improve it
over time.
Herewith Gladwell’s (2000. Pp. 60–69) description of a maven:
 ones who accumulate knowledge,
 are not passive collectors of information,
 want to share their information with as many people as possible,
 not persuaders,
 have an emotional need to solve problems, and
 may be a teacher or a student.
Salesperson
Salespersons have “the skills to persuade us when we are unconvinced of
what we are hearing” (Gladwell, 2000, p. 70).
They give non-verbal clues that are more important than verbal clues.
“Interactional synchrony”: human interaction has a rhythmic, physical
dimension.
Salespersons have the ability to persuade others to implement
knowledge. A small group of mavens and connectors can affect a large
number of salesmen and through these salesmen generate a viral proc-
ess of economic development, as observed by Bonnet, Le Pape, and

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

Nelson (2011). Herewith Gladwell’s (2000, pp. 70–79) description of a

salesperson:
 The salesperson is one with the skills to persuade us when we are
unconvinced of what we are hearing.
 Little things make as much of a difference as big things.
 Non-verbal clues are as important or more important than verbal
clues.
 Persuasion often works in ways that we do not appreciate.
 The salesperson draw others into his/her rhythms by interactions.
The stickiness factor
In order to be capable of sparking epidemics, ideas have to be memora-
ble and move us into action. The elements that make an idea sticky are
those that create common interests between connectors, mavens, and
salesmen, ensuring and improving cooperation between them. The best
stick is sustainable growth over time.

The power of the context

Contextual changes that are capable of tipping an epidemic are very
different than we might ordinarily suspect. The impetus to engage in a
certain kind of behavior is not coming from a certain kind of person but
from a feature of the environment.
Small changes in context can be just as important in tipping epidemics.
“Broken Windows Theory” (Kelling and Coles, 1996): in a city,
relatively minor problems like graffiti, public disorder, and aggressive
panhandling are all the equivalent of broken windows, invitations
to more serious crimes (Rudy Giuliani’s belief). An epidemic can be
reversed/tipped by tinkering with the smallest details of the immediate
environment. The context is based the political, economic, social, and
technological environment (PEST) surrounding the SMEs.

Conscious capitalism and stickiness factor

The Tipping Point model requires a strong “stickiness” factor. Conscious
capitalism could be the cement of a networked cooperation between
SMEs.

DOI: 10.1057/9781137492401.0006
 Business Model 

Conscious capitalism is born in reaction to aggressive capitalism of

Multinational Companies focused on benefits for shareholders even if
children are exploited in Bangladesh in the textiles industry or in Africa
in the plantation of cocoa (Sisodia, 2011; Simpson, Fischer, and Rohde,
2013). Conscious capitalism is based on the original principles of capital-
ism, free market entrepreneurship, property rights, freedom to contract,
and the rule of law for the benefit all stakeholders (Mackey, 2011).
Social justice is woven into the very fiber of the business. The tenets
of stakeholder interdependence construct the backbone of the company
and allow it to engage in all other facets of business.
A conscious company is driven by the following four pillars:
 Higher Purpose: the business exists to serve a higher purpose
beyond making money. Deeper interest in value provided by
products challenge employees and customers. Businesses create a
social and emotional connection with stakeholders, thus resulting
in strong brand loyalty.
 Stakeholder Integration: the business operates in order to optimize
value for all stakeholders represented by the acronym SPICE:
Society, Partners, Investors, Customers, and Employees. The pie can
be extended and each stakeholder will benefit from it (Fox, 2011).
 Conscious Leadership: conscious leaders lead by mentoring,
motivating, developing, and inspiring people, not through
command-and-control or the use of “carrot and stick” incentives.
Action is the language of leaders.
 Conscious Culture: the business fosters a conscious culture,
captured in the acronym TACTILE: Trust, Authenticity, Caring,
Transparency, Integrity, Learning, and Empowerment. A conscious
culture aligns the interests of both employee and employer.
Corporate Social Responsibility (CSR) programs seek to benefit share-
holders, while conscious capitalism seeks to benefit all stakeholders,
including shareholders (Mackey, 2011).
CSR programs frequently have their own department to achieve their
purpose, and their positive actions usually take the form of donations to
educational programs, for example.
CSR is a program that companies can adopt without fully integrat-
ing it into their culture. Most CSR programs are a form of good public
relations practices, instead of a true business model. The donations

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

that CSR companies make no doubt benefit society. CSR programs

act somewhat as satellite programs; they are sometimes bred out of a
sense of responsibility and are frequently detached from the company’s
culture and roots.
Apple, eBay, Microsoft, Facebook, and H&M) are, according to
Simpson, Fischer and Rohde (2013), all gradually moving towards a more
conscious way of being, as are many other companies such as Wal-Mart,
McDonald’s, General Electric, and Procter & Gamble. The researchers
concluded that the companies’ stronger raw financial performance
numbers of the Compound Annual Growth Rate (CAGR) companies at
5.34% than the S&P 500 CAGR of 0.6% is the results of their conscious
capitalism.
Most of those companies have implemented fully or partially conscious
capitalism. Sometimes some principles have been defined as a part of
CSR.

Conscious capitalism in leading companies

Microsoft
Value sharing with shareholders and partners
Microsoft was founded in 1974 by Bill Gates and Paul Allen in
Albuquerque. Its current best-selling products are the Microsoft
Windows operating system and the Microsoft Office suite of productiv-
ity software.
In 1980, Microsoft formed a partnership with IBM that allowed them
to bundle Microsoft’s operating system with IBM computers, paying
Microsoft a royalty for every sale. When Microsoft launched several
versions of Microsoft Windows in the 1990s, they had captured over 90%
market share of the world’s personal computers.
Value sharing with customers
Microsoft transfer value to a wide range of customers using many appli-
cations developed over time. About 1.5 billion people use Windows every
day (Microsoft website). Outlook.com has over 400 million active users
and is the world’s fastest-growing email service.
Microsoft’s YouthSpark program has helped more than 103 million
young people since its creation in 2012.
Internet Explorer’s usage share was over 56% worldwide in July 2013
(Net Market Share).

DOI: 10.1057/9781137492401.0006
 Business Model 

Value sharing with employees

Microsoft is not among the first 100 best ranked companies on work
conditions.
Value sharing with suppliers
The close operation systems prevent wealth for many suppliers-partners
and also in consequence customers.
Value sharing with society
Bill Gates, the former president of Microsoft, has created the Gates
Foundation as a CSR program supporting research, social, and educa-
tional programs around the world in developing and developed coun-
tries. Microsoft is not sharing wealth will all stakeholders.

Apple
As an Apple executive said to the New York Times, “We sell iPhones in over
100 countries, we don’t have an obligation to solve America’s problems”
(nytimes website). But he was ready to discuss potential issues such as
the “social contract” with workers and the responsibility of a company to
protect and respect the workers and environment.
Sharing value with shareholders
Stephan Wozniak got the idea for the Apple 1 from a TV set and a
typewriter. “That made me think a computer should be laid out like a
typewriter with a video screen. I’d learned enough about circuitry in
high school electronics to know how to drive a TV and get it to draw”
(landsnail.com website).
Wozniak built Apple 1 with the intention that it would be easy to use,
useful for solving problems, and good for playing games. Steve Jobs
hooked up with him, suggesting they build a PC board, and together
they went into business.
In 1977 Jobs and Wozniak incorporated their new business as Apple
Computer. After Apple was founded, Steve Jobs saw his role as leading
the development effort to create new and improved PCs.
Employees and suppliers
Apple declares it has a conscious capitalism optic for its support to
suppliers by a wide range of training programs and for society.
But more than 90% of Apple’s products—including the iPhone,
iPad, and Mac computer—are assembled in China. Labor practices

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

and working and living conditions at factory-owned dorms came

under scrutiny after more than a dozen workers committed suicide
starting in 2010. The New York Times wrote an in-depth series about
working conditions at Apple’s partner sites, and Change.org last year
delivered a petition signed by hundreds of thousands of consumers
asking Apple to take a more forceful stance with suppliers in China
(Forbes.com (1)).
Society
Apple is ranked 6th in the Greenpeace index (Greenpeace website).
Apple’s CSR is quite limited.
But others speak about a lack of transparency. The company does not
release a sustainability report, as usual for multinationals does not reply
to the CDP surveys and, until recently, it also didn’t disclose the name
of its suppliers or allow a third party to audit the working conditions in
its supply chain. It’s time for Apple to stop being so hush-hush and start
being more open about the way it does business.

Google
Sharing value with shareholders
Google’s benefits are still growing quickly. The main sources are adver-
tising, $50 billion, and Google websites, $35 billion, in 2013 (Google
website). Google acquired 17 companies in 2013 and in 2014 20 compa-
nies by September.
Customers and partners
Google’s Android is an open system and expresses more the concept of
conscious capitalism for partners, suppliers, and customers.
Society
Google is committed active philanthropy addressing the global chal-
lenges of climate change, education, and poverty alleviation. Since 2007,
Google also jump-started a series of social initiatives in China.

Conscious capitalism and former SMEs

Some SMEs involved the shareholders and the other stakeholders in
the development of the business activities in different ways from the
beginning and implemented in their conception of conscious capitalism.

DOI: 10.1057/9781137492401.0006
 Business Model 

Today they are big, and it seems that their conception of conscious
capitalism has succeeded. Herewith we present the cases of Facebook,
SuperDerivatives and Waze.
Facebook
Value sharing with shareholders
Facebook was founded by Mark Zuckerberg with his college roommates
and fellow Harvard University students Eduardo Saverin (business
aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic
artist), and Chris Hughes (businessinsider.com website (1)).
The costs for the website operations for the facebook.com were paid
for by Mark Zuckerberg and Eduardo Saverin, who had taken equity
stakes in the company. The website also ran a few advertisements to meet
its operating costs.
Facebook remained a closed network until May 2007, when Zuckerberg
announced that Facebook was to become the “social operating system
for the Internet.”
Value sharing with employees
Facebook is the first US company regarding the best working conditions
according to Business Insider (businessinsider.com website (2)).
Teams are small and have a lot of autonomy. Autonomy and opportu-
nity for almost every employee is provided.
Value sharing with suppliers
May 2007: Facebook launches Platform, a system for letting outside
programmers develop tools for sharing photos, taking quizzes, and
playing games. The system gives rise to a Facebook economy and allows
companies such as game maker Zynga Inc. to thrive.
Developers quickly started to build applications for all the popular sites
and users started adding them in an effort streamline their virtual identi-
ties. Flickr, MySpace, iTunes, YouTube, del.ici.ous, and Digg had official
apps, and users started creating unofficial apps for these sites as well.
Value sharing with customers
Facebook has created a worldwide social network where each member
contributes with his or her own added value. Facebook supplies the
relevant tools for it.
Of one billion customers, some of them are also suppliers of products
or services. The value is shared between Facebook and customers.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

The website’s membership was initially limited by the founders to

Harvard students, by September 2006, to everyone of age 13 and older to
make a group with a valid email address.
November 2007: Facebook unveils its Beacon program, a feature that
broadcasts people’s activities on dozens of outside sites. Yet another
privacy backlash leads Facebook to give people more control over Beacon,
before the company ultimately scraps it as part of a legal settlement.
April 2008: Facebook introduces Chat.
January 2014: Facebook starts to roll out “trending topics,” showing
users the most popular topics at any given moment.
Sharing value with community
Deloitte’s (2012) research focused on the main EU countries and has
evaluated the direct, indirect, and induced effect of Facebook on the EU
economy. Direct impact refers to wages, taxes, and profits generated by
Facebook in 2011. Indirect impact refers to value created in associated
supply chain industries resulting from the supply of inputs to Facebook,
and induced impact refers to value created by sales in the whole economy
due to the use of Facebook.
Facebook is found to have a significant impact on boosting the
demand for technology through increasing sales of devices and broad-
band connections. The growing development of social activities between
users is defined as the platform effect.
SuperDerivatives
Founded in 2000 SuperDerivatives was the first company to deliver
professional financial systems entirely over the Internet (superderivatives
website). SuperDerivatives’ proprietary analytics and market data had
the firm widely recognized as the benchmark for option pricing where
a company will pay for commodities such as oil or wheat months before
they are refined or harvested. Other derivatives include even more
complicated contracts such as futures, forwards, and swaps.
US-based financial clearinghouse network Intercontinental Exchange
(ICE) announced in September 2014 that it was buying SuperDerivatives.
According to reports, ICE is acquiring SuperDerivatives for about $350
million. ICE owns and operates 23 marketplaces.
Value sharing with shareholders and employees
The major shareholders of SuperDerivatives are David Gershon; Lewis
Ranieri, and Scott Shay, who are American investors.

DOI: 10.1057/9781137492401.0006
 Business Model 

The shareholders and every employee in the company including the

cleaners have received options.
Value sharing with customers
Intercontinental Exchange, Inc. (ICE), the owner of the New York Stock
Exchange, is a US network of exchanges and clearing houses for financial
and commodity markets. ICE owns and operates 23 regulated exchanges
and marketplaces in United States, Europe, and Singapore.
SuperDerivatives counts among its clients some of the world’s largest
banks, including Deutsche Bank, Citigroup, Credit Suisse, and Barclays.
Waze
Waze is a community-driven application which gathers some comple-
mentary map data and other traffic information from users (waze.
com/about). Waze has created a culture of user engagement. Maps are
generated by using GPS to track “the movements of its nearly 50 million
users.” A third of Waze users share information about slowdowns, speed
traps and road closures, allowing Waze to update suggested routes in
real time most, dedicated fans can also edit the maps directly to improve
their accuracy.
Value sharing with shareholders
Google has acquired in 2013 the Israeli mapping service, Waze, for $1.3
billion.
Waze’s investors include Vertex, which is registered in the British
Virgin Islands; BlueRun Ventures is registered in the US; Magma is regis-
tered in the US; and Qualcomm Ventures is registered in the US; Kleiner
Perkins Caufield & Byers is registered in the US; Microsoft is registered
in Ireland; and Hong Kong tycoon Li Kashing, whose Horizons Ventures
has invested in Waze, registers his companies in the US and British
Virgin Islands.
When calculating the holdings of the founders and employees, Arie
Gillon, Uri Levine, Gili and Amir Shinar, and Ehud Shabtai, they own
slightly less than 20% of Waze’s shares, 1.3 x 20% = around US$ 260
million.
Value sharing with customers
Waze rewards users with points and badges and gives the top 500 map
editors direct access to Waze employees to close the gap between reality
and what Waze depicts.

DOI: 10.1057/9781137492401.0006
 The Open Incubator Model

In 2011 Waze Mobile updated the software to display real-time,

community-curated points of interest, including local events such as
street fairs and protests.
Waze launched an update to provide real-time fuel prices in 2012. As
with all Waze real-time updates, prices are submitted by users; however,
this feature is not available in all countries.
Waze offers value creation to resellers and advertisers a web interface
to advertise based on locations where a small icon will appear on a given
location for an interested “Wazer” to engage into the ads offered by them.
It also offers to TV news stations a web interface to broadcast current
traffic reports and alerts directly from the Waze application.
Value sharing with employees (haaretz website)
The 100 employees of the Israeli navigation app developer Waze stand
to receive a total of $120 million as a result of Google’s acquisition of the
company, making this the most lucrative exit ever for employees of an
Israeli start-up (Teig, 2013).

DOI: 10.1057/9781137492401.0006
 4
Economic Development Models
and the Open Incubator
Abstract: Several models have been used in order to support
growth of SMEs in the periphery and generate economic
development. We analyze herewith, the incubator, the
industrial district, and the cluster models and present the
Open Incubator model which could create the conditions in
order to generate viral economic development based on SMEs.

Bijaoui, Ilan. The Open Incubator Model: Entrepreneurship,

Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0007.

DOI: 10.1057/9781137492401.0007 
 The Open Incubator Model

Incubator model

The United States National Business Incubation Association (NBIA)

defines the business incubator as “a dynamic process of business enter-
prise development, providing under one roof shared office services, access
to equipment, flexible leases and expandable space” (NBIA website).
The main task of the business incubator is to create a positive context
by providing management and consulting services as well as relevant
material and financial resources.
In 1956, Massey-Fergusson, the largest industry in Batavia, New York,
United States, closed down, leaving vacant a complex of multi-story
buildings. The Mancuso family purchased it and decided to divide the
buildings and rent its units to individual businesses that they would
nurture by providing shared office services, assistance with raising funds,
and business consulting. Thus, the first business incubator was created,
Batavia Industrial Park (BIP). Each business was totally independent and
did not have any common interest or activity with the others.
The main objective was to improve the business activities of entrepre-
neurs and the Mancuso family.
June Lavelle, in her capacity as executive director of the Industrial
Council of Northwest Chicago, United States, developed the incubator
concept as a model for neighborhood revitalization programs in 1979.
In a vacant facility in northwest Chicago, the Fulton-Caroll Center for
Industry (FCCI) became the headquarters for the revitalization of an
abandoned industrial neighborhood. As a result of the work of FCCI’s
support team of successful business people, the surrounding neighbor-
hood’s commercial property vacancy rate has dropped sharply and real
estate values have risen. The main objective of FCCI incubator was to
foster local and regional development by creating job opportunities in
firms established by new entrepreneurs. Each entrepreneur was in that
case also totally independent and there was not any intention to develop
cooperation between them and generate any synergy (stickiness).
In 1980, Rensselaer Polytechnic Institute (RPI) was the first academic
institution to create a US incubator sponsored and operated by a univer-
sity. The core objective of this incubator was “the enrichment of the
academic environment by technology transfer and commercialization,
fostering regional economic development” (RPI website). At RPI, techno-
logical development is the resource used to foster regional development.
Rensselaer is now one of the largest United States technology-based
incubators, with a current supporting capacity of about 250 companies.
DOI: 10.1057/9781137492401.0007
 Economic Development Models and the Open Incubator 

The entrepreneurs in the incubator have their own business objectives,

and the selection process doesn’t take into account potential cooperation
between them (stickiness).
Regional or international networking could provide the incubator
model with stickiness fostering cooperation.
Ten incubators in Schleswig-Holstein in northern Germany networked
together with the goal of providing optimal benefit for the start-up and
growth of innovative companies, Employing common projects, comple-
mentary technological knowledge, and new markets.
Hightech Itzehoe (hightech-itzehoe.de website) is one of those
networks. Hightech Itzehoe is the local concentration of enterprises of a
value chain centered on micro technologies in Schleswig-Holstein. Next
to enterprises, the closely interconnected partners are research institutes,
universities, education networks, financing institutions, public authori-
ties, and a far-reaching portfolio of services for companies and start-ups
(hightech-itzehoe.de website).
These location benefits increase the value creation for the enterprises
and enforce competitive advantages. As motor of the region, the network
offers contacts, cooperation, and knowledge transfer.
Two main organizations initiated the development of incubators
in developing countries (Bijaoui, 2008), the United Nations Industrial
Development Organization (UNIDO) and the EU.
UNIDO adopted the concept of the incubator in order to “create a
favourable environment for entrepreneurship and the expansion of
SMEs” (UNIDO, 2002).
Van Dijk (1997 and 1999), in his research for UNIDO, interviewed
entrepreneurs from Burinabe, Burkina Faso, and found that most of
them were reluctant to work in groups. When asked if they would
like to enter joint projects, 50% refused to cooperate with other
entrepreneurs.
Since 2002, the EU has supported the creation of incubators in the
framework of the South African GODISA program (www.godisa.net
website). This program aims to support economic growth and creation
of long-term employment by enhancing technological innovation and
improving productivity and the international competitiveness SMEs.
The GODISA program comprises the Pilot Innovation Support Centre,
a Pilot Technology Demonstration Centre, and six technology-based
incubators, two of which are focused on a local specialization, the cut
flower and nutraceutical industry.

DOI: 10.1057/9781137492401.0007
 The Open Incubator Model

The Godisa case study has shown that incubators that operate in
conducive environments tend to be more successful than those that are
not in such a setting.
The highly conducive environments for business incubation are those
characterized by access to knowledge and financial supports but also to
networking (stickiness process) (Buys and Mbewana, 2007).

Industrial district model

Marshall’s Industrial District model (1891) is seen as a stable community,

which enables the evolution of a strong local cultural identity and shared
industrial expertise. What makes it special is the nature and quality of
the local labor market. Industrial districts stimulate innovation, support
business adaptability, and facilitate endogenous regional development
(Amin and Thrift, 1994). The establishment of industrial districts requires
mutual trust and an industrial atmosphere. The Industrial District is
driven by a strong local demand (Brusco, 1986).
The Industrial District model appeared in the 1970s in Italy: industrial
districts in the textiles industry in Carpi and Prato, the furniture industry
in Brianza and Cascina, and the footwear industry in Vigevano opened
new markets in Europe and Japan to Italian industry (Brusco, 1982).
Today, industrial districts producing textiles, ceramic tiles, and
machine tools are concentrated in Northern and Central Italy (Paniccia,
1998). Markusen (1996) emphasizes that the Italian variant of the
Marshall Industrial District model is mainly characterized by socio-
cultural features. Active trade associations provide shared infrastructure,
and firms consciously network with one another.
The Industrial District model requires flexible specialization, deepen-
ing division of labor between firms, and differentiation of enterprises
by process or products (Rabellotti,1995; Schmitz, 1995; Rabellotti and
Schmitz, 1999), inter-firm cooperation generated by institutional meaning
systems (Bellandi, 1996), geographic proximity facilitating information
externalities (Gamsey, 1998), and social embeddedness through collective
learning and resource-sharing (Dei Ottati, 1994; Harrison, 1992).
Industrial districts combine external codified knowledge with local
tacit knowledge (Morrison, Roberts, and Midgle, 2004). Their innovative
performance depends on the “translating” mechanism, which makes
scientific knowledge produced outside the local area accessible to its

DOI: 10.1057/9781137492401.0007
 Economic Development Models and the Open Incubator 

members (Becattini and Rullani, 1996). In order to achieve this, gatekeep-

ers of knowledge (Allen, 1977) are required. Regional authorities, institu-
tions (education, research), and professional associations play this role.
Morrison, Roberts, and Midgle (2004) analyzed the industrial district
situation in the sofa industry in Murge district, in Altamura, Santeramo,
and Matera, three small towns between the regions of Puglia and
Basilicata in southern Italy. This district’s chief features are closely related
to the story of its main firms and their founders: Messrs Natuzzi, Calia,
and Nicoletti. The number of employees grew from 938 in 1961 to 5,792 in
1996, and the number of firms from 50 to 121 (Viesti, 2000). It became the
main sofa producer region in Europe and world leader for leather sofas.
Morrison, Roberts, and Midgle (2004) reached the conclusion that
the large enterprises do not allow knowledge to circulate freely within
and between districts, and do not play the role of gatekeepers who
facilitate the transmission of information. Similar findings indicate that
privately appropriated knowledge is not transferred to other members
of the industrial district (Lissoni, 2001). Lissoni therefore proposed
public intervention supporting individual leaders, intended as engines
of growth for local systems, in order to counter the destructive aspect of
what he calls the leaders’ creative-destruction mechanism.
The industrial district model generates development in regions where
the industrial sector is based on a wide range of SMEs specializing in a
similar domain, and where gatekeepers facilitate the free flow of knowl-
edge from internal and external sources.
Brioschi, Brioschi, and Cainelli (2002) analyzed the situation of the
industrial districts in Italy and concluded that the model still operates
successfully, but mainly because of the “district groupification” process, a
form of stickiness factor.
In the Emilia Romagna industrial districts, 52.2% of the firms belong to
a group and a corresponding 89.9% of employees work in firms belong-
ing to a group (Brioshi, 2002). Thus, in its advanced stage the industrial
district becomes a cluster.

Cluster model

A cluster is defined as a “geographic concentration of competing,

complementary, or supporting firms that develop sale-purchase rela-
tionships, use the same pool of technologies, and share customers and

DOI: 10.1057/9781137492401.0007
 The Open Incubator Model

existing human resources pools” (Porter, 1990, p. 131), Firms in a cluster

develop competitive advantages based on human capital, the knowledge
generated in the environment, and local and international demand
(Porter, 1998). Rosenfeld (1996) emphasized the role of the cluster as a
generator of new resources (“specialized skills, new knowledge”) and
of new competitive businesses (“innovation competition”), as well as
“opportunities for cooperation.”

Arizona, US
Arizona was one of the first states to embrace cluster-based economic
development in the early 1990s. Cluster organizations in southern
Arizona (Catts and Kurtz, 2002) stimulated the level of business activ-
ity, deepened capacity and created a competitive and favorable business
environment in six clusters, around six “production specialization” axes:
Aerospace, Bioindustry, Environmental Technologies, Information
Technology and Teleservices, Optics and Plastics, and Advanced
Composite Materials.
In 2006, Tucson Regional Economic Opportunities (TREO, 2006)
released a study that established for the first time in Southern Arizona
baseline measurements for all six of the region’s technology sectors. The
results revealed that despite nearly a decade, the number of firms engag-
ing in collaboration and joint ventures was very low—ranging from 8 to
22% across the sectors. More than 50% of the industrial participants in the
project did not belong to any of the cluster organizations. Without direct
intervention and support to networking and cooperation the economic
forces in the cluster model cannot ensure cooperation between firms.

BioRegio, Germany
In the early 1990s it became obvious to German policy makers and to
the informed public that Germany was suffering from a late start in the
emerging biotech industry (Dohse, 2007). Hence the German govern-
ment considered it necessary to make a particular effort to strengthen
Germany’s position in this technology area which is seen as a key
technology and a key driver of economic growth in knowledge-based
economies.
The BioRegio contest was designed byy the federal government as a
competition at the regional level in which consortia formed from public
and private sector organizations which would develop a concept for biotech

DOI: 10.1057/9781137492401.0007
 Economic Development Models and the Open Incubator 

research and commercialization on a regional basis. The three regions

selected were Munich, Rhineland, and the Rhine–Neckar Triangle.
Despite its relatively small size, BioRegio had an important symbolic
and practical impact on the German biotech innovation system. “More
than any other federal initiative it has produced rapid, positive results
and galvanized entrepreneurship in respect of new firm formation, also
giving a significant boost to Germany’s lagging venture capital industry”
(Cooke, 2002, pp. 171).
The BioRegios formed on existing structures, and they compete with
each other for public funding, mobile inputs, ideas, and market shares.
The cooperation between firms was encouraged as a parameter that
could improve their chances to succeed in the proposed bids.

Cluster policy in Japan

Research in Japan has been concentrated traditionally in-house within
large keiretsu companies, and this research declined throughout the
slow-growth period (Edgington, 2008).Consequently, there is now
generally more dependence on university-based research. In addition,
regional development policies in Japan stress innovation and the creation
of strategic cluster programs involving networks linking local universi-
ties and researchers with local industry and local government support
for science and technology.
Japan has two focal national cluster programs: the Industrial Cluster
Project (ICP) by the Ministry of Economy, Trade, and Industry (METI)
since 2001 (Nishimura and Okamuro, 2011a, 2011b) and the Knowledge
Cluster Initiative (KCI) and the City Area Program by the Ministry of
Education, Culture, Sports, Science, and Technology (MEXT) since 2002.
The MEXT programs were reorganized and integrated into the Regional
Innovation Cluster Program in 2010 (Nishimura and Okamuro, 2011c).
MEXT is a system supporting technological innovation. The first step
is a bottom-up approach. MEXT selected 30 potential regions in which
core research institutes and industrial infrastructure for specific techno-
logical fields exist and invited local organizations to submit proposals
for a business plan of the industrial cluster including cooperative R&D
projects. Networking at this stage is encouraged.
The final selection procedure of KCI is characterized as a top-down
process to compete the selected project and institutions. At this second
stage competition limits networking.

DOI: 10.1057/9781137492401.0007
 The Open Incubator Model

The City Area Program is a minor version of KCI, with a smaller

cluster area and smaller budget. The selection procedure of the City Area
Program, at least in the first round, was characterized as a competitive
bottom-up process. KBIC, one of the most popular bio-clusters in Japan,
has received public support from both ICP and KCI (but mainly from
KCI).
Japanese practice has shown the importance of local leadership in
animating regional clusters and representing the collective interests of
local firms. Japan’s new approach to high technology emphasizes social
networks, consequently a “place to call home” (Edgington, 2008).
Leadership is an important quality that differentiated one region from
another.
In the case of METI’s industrial clusters, leadership was originally
provided by government officials, a prefectural governor, or a local busi-
ness person. Edgington (2008, p. 17) concluded that “civic entrepreneurs”
are vital to catalyzing development of new industries in local regions.
They help animate the local process of strategic visioning, galvanizing
socially organized activities to upgrade the innovative capabilities of
local firms, and represent the collective interests of their cluster and
industry when required.
During the three years up to fiscal year 2003 the program overall initi-
ated around 17,000 new businesses throughout Japan, and this number
was expected to reach around 40,000 by the end of fiscal year 2005. As
well, METI recorded 708 partnerships between researchers and private
companies and 145 cases of successful technologies transferred to local
industries. Presently, the efforts of METI’s Regional Bureaus together
with private-sector promotion organizations have built close cooperative
relations with about 800 regional SMEs in the 17 cluster projects (close
to 1% of the nation’s total) taking on the challenge of generating new
businesses, together with researchers from more than 290 universities.

Sialkot cluster in Pakistan

Kotli Loharan are two large villages of iron smiths (Lohars), northwest of
Sialkot (medpk.com website).
All kinds of metal articles for use and ornament are made, such as
shields and arms, betel-nut cutters, knives, boxes, plates, and inkstands.
The Lohars of these villages earned their living as armorers and shoe-
smiths for the army.

DOI: 10.1057/9781137492401.0007
 Economic Development Models and the Open Incubator 

They were in 1920 about 500 iron workers (Government of Punjab,

1920, p. 125) British doctors began to get their surgical instruments
repaired by the skilled workers of the region. These craftsmen eventually
began to successfully replicate the imported instruments (fpcci website).
Those doctors and iron workers were at the origin of the Sialkot cluster
specialized in surgical, dental, and veterinary instruments. Tailoring and
barber scissors and beauty salon instruments are also produced in that
region.
When Sialkot started exporting surgical instruments, the Metal
Industries Development Centre (MIDC) was established by the govern-
ment (1941) in order for improve the standard and support the local
firms. In 1958 the Surgical Instruments Manufacturers Association
of Pakistan (SIMAP) was established in order to protect and promote
surgical instruments manufacturing. SIMAP has 3500 members firms,
around 150,000 workers are engaged in manufacturing of Surgical
Instruments. The value of exports of surgical instruments for the finan-
cial year 2013–2014 is US$ 335.00 Million (SIMAP website).
This cluster was initiated by the iron workers and their customers, the
doctors. The regional and national authorities supported it.

Open Incubator model

The regular incubator supports only entrepreneurs who are asking for
and are ready to enter in the common location. The entrepreneurs stay
in their natural location and don’t need to be in a common location as
required by the classic incubator.
The entrepreneurs are selected according to their business potential,
their interest to cooperate with others, and their capacity to contribute to
viral economic development. They have to be a part of the few, mavens,
connectors, and salespersons, or have the potential to be one of them.
The Open Incubators support SMEs along the value chain of a sector
which is composed by the following primary and support activities:
 Primary activities:

Inbound: transportation services and warehousing of inputs

Operations: entrepreneurs in related industries and subcontractors
Outbound logistics: transportation and warehousing of end
products

DOI: 10.1057/9781137492401.0007
 The Open Incubator Model

Distribution channels: wholesalers and retailers

 Support activities
Procurement: sources of raw materials and equipment, supporting
industries
Technology development: research and technological transfer
centers
Human capital: human resources, education and training services,
knowledge transfer
Infrastructure: industrial parks, energy, communication, water and
other public services
As the industrial district, the Open Incubator establishes support infra-
structure in cooperation with the entrepreneurs such as technological
transfer centres, export companies or import of equipment (Timmons,
1999).
As a cluster the Open Incubator’s objective is to generate growth based
on cooperation–competition between related and supporting firms,
members of the Open Incubator. They are encouraged by the Open
Incubator to organize themselves in groups which can propose specific
activities fulfilling common interest such as common exports, develop-
ment, production, or purchasing.
Board

Public organizations and Professional National

regional authorities organizations and government
businesses

Management

Value chain

Groups of entrepreneurs

figure 4.1 The Open Incubator

DOI: 10.1057/9781137492401.0007
 Economic Development Models and the Open Incubator 

The Open Incubator is more than a consultant and less than a share-
holder. Its role is to create the conditions for a deeper and wider positive
cooperation–competition.
The Open Incubator model can be initiated by a public or private
organization of which the objective is to support and improve the
bottom-up process toward a cluster.
At the bottom, the entrepreneurs’ profile, analyzed according to
Timmons’ roles, (entrepreneur, manager, inventor, promote) McClelland’s
(1971) motivation levels (need for achievement, for affiliation, for power)
and Gladwell’s (2000) law of the few (mavens, connectors, salesmen),
will help to determine the required support to each entrepreneur and
its role in the sector and the region. The management of the Open
Incubator is in charge of creating the context and the “stick” by relevant
activities in cooperation with the entrepreneurs and the local authorities.
The board, composed by representatives of the sector, the region, and
the other stakeholders (education, finance, research, customers), decides
about the vision and the mission of the planned cluster.
The Open Incubator model is focused on the entrepreneurial level,
which is the main generator of development behind each one of the three
models, incubator, industrial district, and cluster. The Open Incubator
supports entrepreneurs in a determined sector and region along the
whole value chain.

DOI: 10.1057/9781137492401.0007
 5
The Concept of Open
Incubator in the Periphery
Abstract: Herewith we analyze the role played by motivated
mavens, connectors, and sales persons acting under the
umbrella of organizations acting in a similar way as an
open incubator does in order to generate viral economic
development. Silicon Valley in California, USA; Oxfordshire,
Oxford, UK; Tiruppur in India; Prato in Italy; Songhai in
Porto Novo, Benin; and the western Negev in Israel are the
cases analyzed in this chapter.

Bijaoui, Ilan. The Open Incubator Model: Entrepreneurship,

Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0008.

 DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

Silicon Valley, USA

Silicon Valley was in the periphery, in the undeveloped West Coast

of the United States, still the Far West. Stanford University tried to be
attractive for students and professors from the East. Herewith we present
the process which has generated Silicon Valley and mainly the catalyzers
and main actors.

The context and the stick

The goal of the Stanford Industrial Park—founded in 1953, by Fred
Terman, the provost of Stanford University—was to create a center
of high technology limited to companies that might be beneficial to
Stanford University.
In 1951 Varian Associates signed a lease, and in 1953 the company
moved into the first building in the park. Eastman Kodak was the second
tenant in 1952 (Morris and Penido, 2014; forum.stanford.edu website).
Among the different organizations that were instrumental in the
process of creating Silicon Valley the significant role was that of the
Stanford Research Institute (SRI) (the management and the stick).
Founded by a small group of business executives in conjunction with
Stanford University, Stanford Research Institute was created in 1946 as
a West Coast center of innovation to support economic development
in the region. The world’s first digital computer (ENIAC, weighing in at
30 tons) was introduced, and in what is now known as Silicon Valley a
three-bedroom home sold for $10,000 (netvalley.com website).
The starting period for the formation of Silicon Valley occurred
during the period of one of the peaks of the Cold War, when high-tech
enterprises benefited from the “windfall” of defense programs (netvalley.
com website).
The relocation of a major military contractor, Lockheed, into Stanford
Park in 1956 brought federal defense dollars to the area (Rogers and
Larsen, 1984) and semiconductors procurements by the defense agencies.
The law listed under California Code—section 16600, also known as
CAL. BPC. CODE § 16600, ratified in 1872—played a crucial role in the
development of the Silicon Valley. This law declares null and void any
contract between a business owner and employee if said contract in any
way restricted the employee’s freedom to change employers, even if that
meant joining the former employer’s competition.

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

In other words, any previously signed agreements—for example, an

employee contract signed upon hiring—that could in any way limit the
employee’s right to freely choose his or her place of work were deemed
unenforceable in this 1872 law. More specifically, those clauses that were
in conflict with this law were deemed unenforceable.
Shockley Semiconductor, which entered the Park in 1956, was the first
important case to pay the price resulting from this law when the employ-
ees quit and created their own company, Fairchild Semiconductors.

The law of the few

Shockley, the eight partners (maven), and Fairchild (connector)
William Bradford Shockley, Jr., was an American physicist and inventor.
Along with John Bardeen and Walter Houser Brattain, Shockley co-in-
vented the transistor, for which all three were awarded the 1956 Nobel
Prize in Physics (Shurkin, 2008; Morris and Penido, 2014).
Shockley formed his company in 1956 “from scratch” by hiring top
performers from various universities and this mutinous group of his
former students. Shockley was a successful maven, but because of his
domineering and paranoid character the eight co-founders, Julius Blank,
Victor Grinich, Jean Hoerni, Eugene Kleiner, Jay Last, Gordon Moore,
Robert Noyce, and Sheldon Roberts, resigned and launched Fairchild
Semiconductor with help from Arthur Rock (connector), a former bank
employee, and Sherman Fairchild of Fairchild Instruments and Camera
(FI&C) company (connector), who provided funding and also connec-
tions to early customers like IBM (connector).
In 1959 the co-founders signed a contract to supply components to
the new Minuteman missile program. In 1963 the company became the
number three player in its industry and opened its first overseas assem-
bly plant in Hong Kong.
Thus, over the course of just 20 years, a mere eight of Shockley’s former
employees gave forth 65 new enterprises. Herewith some cases (Morris
and Penido, 2014).
Robert Noyce and Jean Hoerni (two of the eight) also served on
the board of Applied Materials, an electronics equipment firm, and
mentored the company’s young entrepreneur. Jay Last in 1961 part-
nered with Hoerni and Kleiner, a third of the eight, to create Amelco,
a new business that produced specialized devices that Fairchild did
not sell.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

The eight co-founders also reinvested their capital into new start-ups.
In 1961, four of them gave Rock funding to start the Bay Area’s first
venture capital firm (promoter and connector), which went on to invest
in fifteen companies.
Another founder provided financing that helped a former employee to
launch AMD. When Moore and Noyce launched Intel in 1968, the other
six co-founders of Fairchild Semiconductor all helped to fund the new
business.
According to Hoefler’s analysis (1995), every local chip firm except for
two could be traced directly back to the eight co-founders.
After launching Intel, Noyce worked to support new entrepreneurs in
the Bay Area. When Steve Jobs was starting his career in the 1970s, he
often rode his motorcycle to Noyce’s house and spent hours listening to
the older entrepreneur’s advice.
Venture capitalist Don Valentine and a former Fairchild employee
named Mike Markkula also supported Jobs’ career by providing Apple
with its first two investments.
In 1972, Valentine launched Sequoia Capital (connectors and sales-
persons), which has become one of the most important venture capital
firms in the Bay Area. Its team has invested in Google and Cisco, as well
as several hundred other companies. While Valentine was launching
Sequoia, Kleiner co-founded another venture firm called Kleiner Perkins
that would also become very influential. Kleiner’s firm has invested in
companies such as Sun Microsystems, Symantec, and Intuit.
Jobs followed Noyce’s example of mentorship and quietly advised
younger entrepreneurs like Mark Zuckerberg. Valentine and Kleiner also
funded successful companies like Netscape and PayPal, which spawned a
new generation of investment firms like Andreessen Horowitz, Founder
Collective, and 500 Start-ups. The most famous were eBay, Twitter,
Yahoo!, Pixar, Instagram, YouTube, WhatsApp, Oracle, LinkedIn, Tesla
Motors, Electronic Arts, Nest, Yammer, Agilent Technologies, Juniper
Net-works, SanDisk, NetApp, Xilinx, Altera, Palantir, and Linear
Technology.

Oxfordshire, UK

Oxford University was in the 1960s far from being entrepreneurial. The
banks were largely unhelpful (Lawton Smith, 1990); local government

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

agencies were lacking in expertise. Local authorities were under-re-

sourced and unable to provide specialist advice. Oxfordshire County
Council’s low level of resources allocated to support economic develop-
ment per se was a legacy of Conservative Party control (Parkinson et al.,
2004). The government laboratories were still effectively university-type
research organizations, staffed by “risk-averse” scientists and engineers
(Lawton Smith, 1990).

The context and the stick

The late 1960s and 1970s saw great diversity in the sectors in which the
companies were formed, including studio recording equipment, Solid
State Logic (1969); computing, Research Machines (1974); and lasers,
Oxford Lasers (1977).
In 1996 a part of the UK Atomic Energy Authority (UKAEA)
laboratories at Harwell and at Culham was privatized, leading to
the formation of AEA Technology. The sites at Harwell in the Vale
of White Horse and Culham in South Oxfordshire District Council
(SODC) remained the property of the UKAEA and have since been
developed as a Science Centre (Culham) and a Technology Park
(Harwell). The local consequences of the national agenda of valori-
zation were, first, an increasing level of interest from the govern-
ment laboratories in local expertise in facilitating entrepreneurship
and innovation, particularly with regard to the development of
incubators.
As a consequence of these changes, the governance of the Oxfordshire
high-tech economy is now more orchestrated as public policy at
national, regional, and local levels. The establishment of the Regional
Development Agencies (RDAs) in 1999—which have responsibilities for
cluster development and are increasingly given a greater role in stimulat-
ing and supporting innovation-led growth—has focused the region on
innovation-led development.
Oxfordshire had the advantage of some of the most important
government laboratories in the country, UKAEA, the Central
Laboratory of the Research Councils (CCLRC), the Rutherford
Appleton Laboratory (RAL), the Medical Research Council, and
several others
These laboratories in total employ over 6,000 people and, over a
period of 50 years, have provided an important home for science and
invention. Audrey Wood (2001) highlights several of the Oxford

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

University–RAL links, and the development of the flagship company of

Oxford Instruments.
New networks have developed (the stick). These include the
Oxfordshire BioScience Network, launched in 1999 to improve
networking and support to Oxfordshire bioscience enterprise, and
“Venturefest”—“Oxford’s International Fair for Entrepreneurs”—held
annually since 1999. Each year “Venturefest” attracts in the region of
1,500 attendees to both the conference sessions and parallel exhibition.
Oxfordshire provided a contemporary example of what Richard
Florida (2002) calls the “geography of talent”—a rich mix of entrepre-
neurs, philanthropists, local policy makers, and professional services
coming together to provide leadership, vision, and examples of what can
be done (Lawton Smith et al., 2003).
In response to governmental priorities and the efforts of its key scien-
tists, important organizational and cultural changes occurred at Oxford
University and in Oxfordshire’s government laboratories.
In response to governmental priorities and the efforts of its key scien-
tists, important organizational and cultural changes occurred at Oxford
University and in Oxfordshire’s government laboratories.

The law of the few

Dr Martin Wood (maven) served as engineer in the Clarendon
Laboratory—Oxford University’s physics department, specialized in
very low temperature physics, requiring very strong and stable magnetic
fields. Martin’s role was to run its “powerful but ageing” engineering
facility and design equipment for research scientists. Martin saw an
opportunity to produce equipment for laboratories and decided to start
a commercial company.
Martin Wood founded Oxford Instruments (OI) in 1959 with Audrey,
his wife (director) who was in charge of finance, law, PR, and office
administration. Barrie Marson, (connector), hired in 1971, began delib-
erate diversification, taking OI into medical, electronic, and industrial-
analytical equipment. He took OI—between 1971 and 1982—from 100 to
1,300 employees; from a turnover of £500,000 to one of £100 million.
In the late 1970s the Woods moved to a company-wide employee share-
holding scheme which distributed to them a fixed share of each year’s
profit, satisfying a desire for participation throughout the company. The
outside shareholders accepted Martin’s conviction that OI could exploit
leading-edge research successfully.

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

OI developed Nuclear Magnetic Resonance (NMR) systems, and the

first Magnetic Resonance Imaging (MRI), leading to whole-body scan-
ners. NMR spectroscopy uses the ability of magnetic nuclei to behave
like microscopic magnets to obtain insights as a research tool, particu-
larly in biochemistry.
Nick Cross and Ian Laing (promoters, salesmen), business partners
and friends, met in 1965 when Oxford University undergraduates. By
1979, Laing was Managing Director of the English Property Company
(EPC), one of the UK’s largest developers, which had bought the Milton
Trading Estate, a near derelict former military depot, eight years earlier
to develop as a warehousing site. Milton English Property Company
(MEPC) acquired EPC in 1985 and, as Milton Park was less attractive
to investment institutions than the City of London office developments,
Laing and Cross realized that Milton Park’s unique location, close to the
largest concentration of research and development in Western Europe,
was its key asset. With this in mind they convinced Martin Wood,
founder of Oxford Instruments, and John Harwood, chief executive of
the Oxfordshire County Council, to cooperate.
By 1999, Cross and Laing had helped to establish Oxford Asymmetry
(now part of Evotec AG), Oxford Semiconductor, Oxagen, and Doctors.
net. Since then they have invested in and provided a great deal of
management time to a total of thirteen science-based businesses, all but
two of which have been based at Milton Park.
Other key entrepreneurs include Mike O’Regan, who along with Mike
Fischer founded Research Machines (RM plc), which is the UK’s lead-
ing supplier of information and communications technology to schools,
universities, and colleges; Paul Drayson, co-founder of Powderject who
went on to become Minister of State for Defence in the House of Lords;
Frank Williams, the driving force of the Formula 1Williams motor racing
team based at Grove in Oxfordshire (Henry et al., 1996); and Jan Hruska,
co-founder of Sophos, which offers computer antivirus protection to
university and business users.
The Oxford Trust in 1985 established by Martin Wood and his wife
Audrey (sbs and scienceoxford websites) in the absence of local policy
frameworks, has taken responsibility for encouraging the application of
science and technology (Wood, 2001) and engaging with firms in the
high-tech cluster and with research, business, and public-sector organi-
zations, speaking and acting on behalf of the high-tech sector locally and
nationally (the new context).

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

Science Oxford is the public face of The Oxford Trust, an educational

charity. It was established in 1985 by Sir Martin and Lady Wood, who
founded Oxford Instruments in 1959. In Magnetic Venture (2001) Audrey
Wood wrote about starting the Trust.
In 1995, Science Oxford established the Oxfordshire Investment
Opportunity Network (OION) and, through its subsidiary Oxford
Innovation Ltd, it provided an increasing range of commercial activities
including interim management, mentoring, advice and consultancy, serv-
ices, and premises. OION was one of the first business angel networks to
be set up in the UK, and it links prospective investors with entrepreneurs
seeking the early stage funding of between GBP 50,000 and GBP 1 million,
which is often needed prior to seeking more substantial venture capital
funding. OION has 80 investors and is now one of the most successful
networks in Europe. Oxford Innovation Ltd now manages ten business
incubation centers in the county, with over 200 start-up companies. In
2003, Gillian Pearson took over from Paul Bradstock, the founding Chief
Executive of the Trust, and in 2005 the Trust moved to a new and larger
home in the center of Oxford (Science Oxford).
An interesting feature of the Oxfordshire high-tech cluster is that the
overwhelming majority of the larger firms began as SMEs. These include
Oxford Instruments (which employs some 2,000 people worldwide, half
of whom are in Oxfordshire), Research Machines (1,000), and Bookham
Technology (450).
The merger of Milton Park-based Oxford Asymmetry International
(OAI) with Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX) in the
year 2000 created a world leader in the discovery and development of
novel small molecule drugs. OAI was then a chemistry-centric business
with aspirations to focus on drug discovery: Evotec supplied the needed
biological expertise. Evotec now focuses on a systematic, comprehen-
sive, and unbiased technology platform to drive drug discovery. The
first bioscience company on Milton Park, OAI moved into two starter
units in 1991. Within five years, it had expanded into two more buildings
containing a GMP-compliant pilot plant and development chemistry
facilities. Discovery chemistry remained in the starter units. Following
a successful London Stock Exchange listing in 1998 which raised £20
million, OAI took on another three buildings to house bespoke chemical
discovery and development facilities. By the mid-2000s, now merged
with Evotec, the company was one of the major scientific tenants on
the Park, employing nearly 400 people. Although headcount dipped

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

consequent to the sale of the development business to Aptuit in 2007,

Evotec has become the largest employer of chemists in the UK. Evotec
now employs around 250 people, the majority medicinal chemists, at
Milton Park. This equates to nearly 40% of the group’s global workforce.
Evotec is a provider of innovation efficiency to the drug discovery
market, sharing its drug discovery expertise through over 96 alliances to
date, and working in partnership with 18 of the world’s top 20 pharma-
ceutical companies.

Tiruppur, India

Tiruppur is in the middle of Tamil Nadu’s cotton belt in southern India

(Albu, 1998; Cawthorne, 1995).
The local ethnic population, the Gounders, are known for their
progressive approach towards agriculture, their affinity to improved
technology, changing crop patterns according to market demand, and
taking pride in toiling in the field along with hired labor with whom
they maintain some familial relation.

The context and the stick

Chari (2000) has highlighted the importance of the Gounder commu-
nity network in terms of source of and access to finance in Tiruppur
industrial development. They are mavens and inventors, entrepreneurs
and managers, and good connectors and promoters and salesmen.
Almost 80% of Tiruppur’s exporters come from this traditionally
agricultural community. The farmers spent 12–14 hours on the farm as a
matter of routine, and they brought this ethic to the factory.
Community connections help, especially in instances of new venture
and capital/finance requirements. If someone bags an order s/he can’t
execute, s/he passes it on to a fellow community member. Trust and hard
work have helped this agricultural community’s first-generation entre-
preneurs to build companies worth several hundred cores.
According to Tiruppur Exporters Association (TEA) there are 1,500
knitting units, 700 units related to dyeing and bleaching, 500 units
involved in fabric printing, 300 units involved in compacting and calen-
daring; 2,500 units assembling the final product (these are the exporters);
around 250 units linked to embroidery activities; and another 500 units
deal in other accessories (TEA, 2011).

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

The Tiruppur knitwear cluster exported $2.5 billion in 2010 corre-

sponding to 66% of its total value and over 40% of India’s total knitwear
exports (TEA, 2011).
The growth of the cluster is the result of high level of cooperation
between Gounders former farmers and the government’s intervention in
promoting exports by providing cheap credits from public-sector banks
for technology and infrastructural development.
TEA, in cooperation with the Textiles Committee and the Apparel
Export Promotion Council (AEPC), acts as the board and the manage-
ment of the open incubator. The association participates in a number
of negotiating activities such as settlement of wages and bonuses, labor
dispute conciliation, training for workers, merchandise personnel, and
also arbitration councils to resolve all kinds of trade-related disputes.
TEA is the key actor in negotiating with the government to start new
industrial sites such as the Tiruppur Export Knitwear Complex and Netaji
Apparel Park in New Tiruppur, Inland Container Depot, a dry port, and
a Trade Fair Complex. TEA also has started a fashion designing course
in collaboration with the National Institute of Fashion Technology.
The Textiles Committee is the other important governmental organi-
zation that plays a nodal role in promoting smaller firms. One of the
innovative plans of the Textiles Committee in collaboration with the
Tiruppur Industry Federation is the portal for subcontracting exchange
through virtual integration that would provide updated information
about what and how much of the jobs are offered to be outsourced, and
subcontracting units may bid prices accordingly to receive the orders.
TEA hosts the “India Knit Fair” to attract worldwide buyers to the
cluster, created a joint venture (JV) with St. John Freight Systems Ltd to
create a distribution center in Europe, and collaborated with Microsoft
to create a local “Intranet” called e-readiness to facilitate collaboration
between SMEs within the cluster (TEA, 2011).
The Apparel Export Promotion Council (AEPC) acts both in a regu-
latory as well as a promotional role in the local knitwear industry. The
AEPC was set up in 1978 by the union government to stimulate export
growth and act as an advisor to buyers, exporters, and government. It
had in the mid-1980s over 6,000 members who were all exporters and
had set up regional offices in various locations, including Tiruppur, to
provide support at the doorstep.
AEPC has a dual role: to administer the export of garments via the
management of a quota system and to deal with the implications of

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

bilateral trade agreements in force with importing countries and secondly

to promote the export of Indian garments. The AEPC also sponsors
buyer/seller meetings, organizes trade delegations and individual sales
tours and sets up market survey teams. The council collects trade data,
both locally and from abroad, and is particularly active in seeking out
markets in countries where India’s exports are not quota bound (such as
Eastern Europe, Latin America, and East Asia).
There are over 23 Trade and Industry Associations, 16 educational
institutions, and 38 banks supporting the cluster TEA.
There are also various government-backed institutions set up to
improve access to finance for firms in the cluster, such as the National
Small Industries Corporation (NSIC) and the Small Industries
Development Bank of India (SIDBI) (Rangarajan, 2005).

The law of the few

Knitting to this city was brought in 1937 by the entrepreneur Gulam
Kadar, who established “Baby Knitting Industries” in the Kaderpet area
of Tiruppur (Rangarajan, 2005, p. 9). It was followed by the establishment
of a second knitting unit by the woman entrepreneur, Mrs Chellammal,
in the name of Chellammal Knitting.
Before knitting the agricultural laborers were already exposed to
the hand-woven textiles because of the Khadi movement started by
Mahatma Gandhi. That also helped them to get into to the knitting
process of textiles. Started in the 1930s as undergarment suppliers to
the domestic market, the number of knitting units reached around 450
in 1960.
White vests from Tiruppur benefited from the popular belief that
the purity of the local water supply yielded the whitest vests in India
(Erkman and Ramaswamy, 2003). Banian (or jatti) is the local name for
the white vests used mostly by men in India.
Tiruppur’s direct exports to Italy started in 1978 with connectors from
Bombay who organized for Anthony Verona, a garment importer from
Italy who came to Tiruppur in 1978 to buy white T-shirts.
The exporting unit is the parent firm that organizes the whole produc-
tion process based on SMEs, besides doing final stages such as cutting,
stitching, finishing, and packaging. The participation of the exporting
firm in the production process is not in any case fixed in advance.
There are also large exporting units having their own knitting and
processing units, but such integrated units are few in number.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

Fifty-four percent of firms are export-oriented micro/small enterprises

with less than $2M in turnover. In 2009, there were only 20 firms out of
the 2,500 manufacturers with a turnover of more than $25 million; high
turnover enables firms to extract economies of scale to reduce product
price (Apex Cluster Development Services, 2009). Value-added based
on low labor cost gradually declines.
There are 16 institutions producing educated human capital via both
part-time and full-time courses relating to the knitwear cluster (TEA,
2011). For instance, the NIFT-TEA Knitwear Fashion Institute produces
200 graduates per year and offers courses in knitting, fashion-designing,
merchandizing, apparel manufacturing, and management (TEA, 2011).
Eighty percent of these graduates are said to remain in Tiruppur post-
graduation (Porter, 2011, p. 21).
Entrepreneurial and technical skills are important factors leading to
the success of this industry in Tiruppur. To absorb these qualities, an
innovative approach has been taken by one of the institutions, Kumaran
Kalvi Kazhagam, which runs Vivekananda Vidyalaya (vivekanandavi-
dyalaya.in website). This school gives exposure to the school children
about the various aspects of textile industries and the need for more
entrepreneurs in this industry from the six standards of the school. In
fact, such a creative initiative can sensitize the young brains about the
industry.
Most indicators demonstrate growth in the cluster. Firstly, the number
of manufacturing units has grown at a rate of 3% annually since 1995 to
reach 6,250 units in 2010. Exports have been growing rapidly at a 15%
CAGR since 1990 to reach $2.5 billion in 2010, while domestic demand
has been stagnant at about $900 million (Porter, 2011).

Prato, Italy

Prato thrived after the Second World War, supplying carded wool for
the manufacture of winter apparel, relying on reclaimed wool. Prato
producers sought to imitate British fabric and their output was sold, by
British manufacturers, as “Made in England” (Owen and Jones, 2003).
It then faced a crisis when the modern ready-to-wear market developed
in the 1970s involving the use of lighter-weight fabrics. Prato switched
from wool to wool mixes, cotton, and silk, producing summer as well as

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

winter fabrics. Employment declined from 60,000 to 45,000 in the 1980s

(Jaikumar and Upton, 1993).
In the year 2000 about 10,000 firms and a total population of about
280,000 people stayed in the region (Owen and Jones, 2003). Total
employment was about 48,500, compared to 50,333 workers registered
in 1991.
On the economic level, the main drivers of change were the fall in
demand, China’s entry into the WTO in 2001, the end of the Multifiber
Agreement in 2005, and the fall of the US dollar against the euro and of
other connected currencies, especially the Chinese renminbi.

The context and the stick

The local professional organizations tried to confront the difficult
economic situation by improving the context and supporting coopera-
tion between firms (stick).
The Consortium for the Promotion of Yarns started to act like an open
incubator by initiating participation to trade fairs, promotion events,
and workshops on international markets as well as by cooperating with
other organizations in training, financing, and exporting.
The consortium was involved in the activities of Polimoda, the school
for young designers and stylists in Florence, and started cooperation
with the Fashion Institute of Technology in New York and Osaka Fashion
Bunka College.
The local Textile Technical Institute Buzzi, established in 1886, still
had a high reputation for training generation after generation of highly
specialized textile technicians.
Milan Polytechnic together with the Group of Young Entrepreneurs
of Unione Industriale di Prato offered a Master’s degree in Innovation
and Strategy dedicated to management in the textile and clothing
sector.
At the University of Florence a Master’s degree in Textile Technology
and Management was organized in collaboration with Unione Industriale
di Prato.
Confidi Imprese Toscane (a non-profit cooperative society based on
mutualistic principles) provides collective guarantees aimed at facilitat-
ing access to credit, at the best possible conditions, for local SMEs. It
works by stipulating conventions with banks and leasing companies for
short- and medium-term credit.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

Texma Prato was established in 1978 as the first consortium for

export promotion in Prato (time.dufe.edu.cn website). The founding
firms agreed that their common objective was to nurture export activ-
ity through cooperation and direct participation in the management of
market contacts and Prato’s image.
Texma Prato has played a crucial role in establishing inter-firm
collaboration among SMEs.
Pratotrade is a consortium of companies of the Prato textile district
established in 1979 by Prato’s Association of Industrialists (pratoexpo.
com website).
It consists of 50 manufacturing companies specializing in men’s,
women’s, and children’s apparel fabrics and selected by stylistic and
product quality criteria. Pratotrade is committed to the promotion and
marketing of its members’ textile products by providing technical, logis-
tic, and organizational assistance. It also coordinates the promotional
efforts of member companies on foreign markets by taking part in trade
fairs in Italy and abroad.
Pratotrade fosters and supports the members’ international competi-
tiveness by commissioning studies and research on foreign markets,
taking care of the organization and setting up of trade shows in Italy
and abroad and coordinating the participation of member companies in
textile fairs and events.

The law of the few

Menichetti family–entrepreneurs and connectors, small is better
The Menichetti family broke its mill into eight separate companies, one
a realty company that leased space and services to the rest. As much as
50% of the stock in these companies, financed through profits, was trans-
ferred to employees. To ensure competitiveness, Menichetti insisted that
each company find 50% of existing business outside the original business.
At the same time, he established a New York-based marketing company
to create new designs and match product with the best producer. This
company was to provide no more than 30% of the business of any
company in the Menichetti fold.
Within three years, all units of the disintegrated Menichetti mill were
running at 90% capacity. Product variety had increased ten-fold, average
in-process inventory had been reduced from 4 months to 15 days, and
attrition had reduced the labor force by a third while production had risen

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

by 25% (largely due to the satellite firms investing in new technology). By

1980, all but one of the Prato mills had undergone similar disintegration,
turning a sluggish, threatened industry into a thriving community of
innovative, flexible companies, each a world-class competitor (Jaikumar
and Upton, 1993).

Lucchesi family—entrepreneur and salesperson, focus on tradition

In 1897 Guido Lucchesi produced and exported fabrics all around the
world. The following generations kept the textiles tradition alive (yarn.it
website). In 1962 Industria Italiana Filati Spa was established. It produces
for the most famous Italian and international brands and groups.
Knitting industrial yarn was produced in Italy, in the district of Prato.
In 2003, the “Industria Filati Buzau SA” was established in Romania in
order to diminish the cost of the fabrics. It is a large full-process factory
that produces sewing yarns for European and international markets.

Faliero Sarti Family—promoter and salesperson, focused on brand

From 1949, Faliero Sarti’s ideas were in step with the rising needs of the
fashion industry: to manufacture articles with selected high quality raw
materials, to carefully treat fabrics during processing, to introduce the first
processing of knitted fabrics and Jersey to Prato, and to timely respond to
the demand for quality for an increasingly selected market (falierosarti.
com website). Taking advantage of the design skills of the niece of the
founder (all in the family), in the late 1990s Faliero Sarti company initi-
ated its own branded collection of accessories—scarves and shawls. The
success of the collections convinced the family to open branded outlets in
some fashionable Italian resorts such as Cortina d’Ampezzo in the Alps
and Porto Rotondo in Sardinia, Firenze, and Milan.
Faliero Sarti soon became a reference point in the industry and gained
credit as a very prominent supplier for many leading stylists and well-
known international manufacturers due to Sarti’s innovative textile
designs. Among the prestigious fashion houses, which still constitute
more than 90% of the Lanificio Faliero Sarti’s production, include Armani
and Donna Karan, Jean Paul Gauthier and Hiroko Koshino

The “Impannatori”—promoter and salesperson focused on promotion

The Prato system depends upon entrepreneurs known as “impannatori”
who coordinate the chain of production, from design, ordering of raw
materials, work specification to the weaver, finishing and checking,
and final delivery to the customer, arranging finance for independent
DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

subcontracting firms (Jaikumar and Upton, 1993). Some impannatori

are purely entrepreneurs with no physical assets; others undertake some
activities in-house—hybrids of the pure impannatori and a vertically
integrated firm.
The key to the success of the Prato system lays in the role of the
impannatori. These agents provide central brokerage for the firms in the
network, of which there are now between 15 and 20 thousand employing
some 70,000 people.
By 1990, there were approximately 600 impannatori active in the Prato
area. The impannatori have become the market makers of the Prato
system, matching supply within the Prato area with demand, from Italy
and from abroad. According to Becattini (1990, pp. 42–43), the impan-
natori are “pure entrepreneurs” whose major function is to translate
the capabilities of the district into products that can be sold on world
markets. The impannatori coordinate activities within the region and
with the outside world, obtaining information on improved machinery,
new processes, and markets wherever it is available. As a result, the Prato
system has been able to keep abreast of the most modem technology
as it competes on the basis of quality, design, reliability, continuity of
supplies, and punctual delivery (Mazzonis, 1985, p. 5).
Effective management of this complex information set, coupled
with trustworthiness and honesty, are the hallmarks of the successful
impannatori. Many specifications are based on a tacit understanding of
industry standards. The complexity of the capacity assignment problem
is rendered manageable by the autonomy of the various actors in the
system, who are able to concentrate on being effective in their specialties
while contributing to the performance of the network as a whole.

Biancalani family—entrepreneur -inventor and maven,

process innovation
The AIRO® machine developed by Biancalani is for washing, drying, and
softening any kind of fabric in rope form. Since its first introduction in
1985 it has been the standard for textile finishing. AIRO® is synonymous
to soft touch, volume, and drape of the fabric.
AIRO® breaks the fiber in order to impart a softer feel to it, using the
washed silk concept, involving violent finishing processes and repeated
washing.
AIRO® is designed to perfectly process natural fibers (cotton, linen,
ramie, jute, silk, wool, and blends), artificial fibers (viscose, cupro,

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

polynosic, polyammide, Tencel, Lyocell, and Modal), or synthetic fibers

(PES, nylon, acrylic, PP, PU, and PVC) in all types of construction such
as woven, knitted, flock, and non-woven, with different applications:
apparel, upholstery, or technical textiles.
AIRO® contributed to further expand the presence of Biancalani in
the textile market, particularly in the areas of home and technical textile
(terry towel, curtain fabrics, bed linen, upholstery, man-made leather,
non-woven, work wear, and uniforms).

Egisto Lenzi—entrepreneur-inventor and maven, from

traditional to technical textiles
Born in 1898, Lenzi started his business activities as a trader of raw
materials. In 1936 he established his manufacturing company special-
ized in traditional textiles, jacquard, and technical printing processes on
non-textile materials.
Ten years ago Lenzi Egisto SPA shifted its production to technical
textiles. In a few years the company was able to patent several products
and processes. Today they have a strong market position in protective
apparels and medical fabrics; in particular fabrics for hospitalization and
for skin disease (psoriasis) (time.dufe.edu.cn website)

Bruzzi family—entrepreneur-inventor and maven (Enrico) and

promoter salesperson (Piero), card clothing
Bruzzi’s company tradition dates back to 1889 when Enrico Bruzzi
began a business to supply textile accessories in Prato, Italy. Under the
leadership of its founder Enrico and his son Mario Bruzzi, the company
started activity in the card clothing sector and machinery (bruzzi
website).
Piero Bruzzi entered the company in the late 1960s, engineering a
unique type of fancy fillet in Prato for regenerated fibers still in wide use
today. With Piero as head of sales, the company introduced to the market
flexible fillets for sliver knitting machines, allowing the production of a
wide diversity of articles and products. Over 3,000 different flexible vari-
ations and countless profiles for specific metallic applications have been
developed. The introduction of a full range of equipment for customers
involved in short staple processing is another innovation. This includes
machines for card roller maintenance, cotton grinding machines, flat
surface grinding and flat clipping, as well as motor-driven rollers for
grinding, stripping, and polishing.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

Becagli family—entrepreneur-inventor and maven, eco and sport

technical fabric
Lanificio Becagli Srl is a privately owned industrial company. For more
than 65 years, it has specialized in the design, manufacture, and distri-
bution of innovative textiles for both the active sport and the fashion
sectors (lanificiobecagli website).
Initially relying on the technical experience of its founder Piero
Becagli, the company consolidated its high-end positioning in research
and development; along an endless creative attitude, the company devel-
oped several different complete lines of products, such as eco-furs (a
product ideated by Piero Becagli himself in the 1950s and now utilized
worldwide) and fleece (engineered with a no-pilling finishing).
The sport performance ranges are supplied under two proprietary brands
such as “B3” and “Calamai technical fabrics.” The B3 Teragon Recycled is an
eco-friendly and recycled fleece manufactured from recycled polyethylene
terephthalate (PET) bottles and post-industrial fiber waste yarns. This soft
and stretchy fleece offers all classic characteristics such as warmth, insula-
tion, and breathability. With the blend of jersey in the material, the charac-
teristics of a warp knit as well as using a three-yarn construction, the result
is a material with an outstanding hand feeling and comfort, being durable
and pilling resistant and providing an outstanding breathability as well as
wind resistance. The material is also non-allergenic to the skin.

Banci family—entrepreneur-inventor and maven,

activewear fabrics
Pontetorto has been producing quality fabrics through high levels of
expertise and innovation for over half a century (pontetorto website).
Since 1952, when it was founded, the mill has been perceived as a
leader both locally and in the fashion industry where it has earned great
visibility and standing. This was achieved through a strategy that has
always blended traditional and advanced fabrics as a result of an R&D
activity where the research for newness was considered the key for
growth. In 1984, at a time when product diversification was not regarded
as the correct product organization to implement, Pontetorto was the
first mill in Europe to develop a range of Pile fleece fabrics for activewear.
As a matter of fact Tecnopile®, the Pontetorto registered trademark for
activewear fabrics that helped establish the company reputation world-
wide, was the result of ongoing testing and development of brand-new
materials and processes.

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

The Banci family, with the second generation at the helm, is pursu-
ing the same strategy of investment and excellence: constant translation
of the latest fashion trends for the Fashion division and technological
innovation and experimentation for the Sportsystem division.

Chinese pronto moda—entrepreneurs and salespersons, focused on

popular fashion
In 1989, a small number of Chinese from Wenzhou in Zhejiang Province
arrived in the traditional Tuscan textile town of Prato (Fladrich, 2008).
Benton and Pieke (1998) refer to this recent wave of Chinese outmi-
gration as “leave Chinese fever” or chuguo re, which has in recent years
attracted a growing body of scholarship and coverage in the local
media of the host countries (Ceccagno, 2003; Ehlers, 2006; Giese, 2003;
Goldsmith, 2007; Pieke et al., 2004).
The Italian–Chinese Treaty of 1985 promoted bilateral economic
cooperation by permitting the Chinese to set up enterprises and employ
a co-ethnic workforce if they had regular residence permits (Carchedi
and Ferri, 1998).
At that time, the local textile industry, mainly manufacturing heavy
woolen fabric, was in severe decline, and many Italian textile workers
had been laid off. Several small Italian textile firms were thus pleased
when the Chinese showed interest in purchasing their machinery.
Most Chinese in Prato come from Wenzhou in Zhejiang Province,
south of Shanghai. Because of its proximity to Taiwan, Wenzhou was
cut off from the rest of China until 1990. In the 1980s, when trade was
still frowned upon in China, the people of Wenzhou borrowed money at
high interest rates and smuggled their family members overseas (Ehlers,
2006).
The Chinese invented the pronto moda as a cheap and low-quality
production of up-to-date garment collections offering great versatility
and fast delivery. Every week new models are introduced, quickly follow-
ing the latest fashion trends.
Starting from 38 immigrants in 1989 (Ceccagno, 2003), a strong flow
of Chinese immigrants settled in the Prato area, a current estimated
population of 10,000 in 2006 (Ceccagno, 2009) and between 16,000 to
50,000 today (Kwong and Sanderson, 2014).
Currently, there are about 4,000 Chinese-owned registered firms
which deliver “pronto moda” apparels to European customers in the
low-end segments.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

The Chinese firms, once settled in a non-primary industry (knitwear),

facilitated the development of a new mode of production, the “ready-
to-wear,” virtually absent in Prato before their arrival, and after they
promoted the development of a whole new industry, clothing, ignored
by local entrepreneurs specialized in fabrics (Dei Ottati, 2014; Johanson,
Smyth, and French, 2009).
The two populations registered opposite trends, the population of
Italian firms steadily decreased from the 1990s from more than 7,500 to
less than 3,000 firms, while the population of Chinese firms increased
with a remarkable growth from about 1,000 firms in 1999 to nearly 4,000
in late 2011.
In 2011 there were almost 400 importers and exporters that connected
the Chinese firms in Prato to the Chinese global value chain, benefiting
from the low cost of raw materials imported from China (from the same
ethnic community), and from the access to European distribution chan-
nels for finished products.

The new Chinese generation—salesperson focused on high quality

(Lazzereti, 2014)
Giupel
When Xu Qiu Lin came to Prato 16 years ago he worked as a leather
cutter for Benetton (Lazzereti, 2014). Today, after having recognized that
there is no real future in cheap goods, he emphasizes quality. Competitive
pressure has become too strong since trade barriers for textile imports
were reduced and China began flooding the market. He created his
company, Giupel Ltd, in 1992, producing high-quality, “Made in Italy”
leather and down jackets, and promoted his own brand under the name
Xu Qiu Lin. In 2004, he signed a fellow immigrant, from Argentina,
as his label’s spokesman: Gabriel Batistuta, a former star forward for
Florence’s Fiorentina Football Club.
In 2005, Giupel SPA Co., Ltd established in China Zhejiang Qiuli
Garments Co., Ltd (zjjxql.en.gongchang website).The company
is located in Tongxiang, Zhejiang, Haining. The company mainly
produces and sells leather, fur and fur products, and knitting apparel.
Products are mainly sold in Asia, Europe, and the domestic market. All
product designs are derived from the headquarters of the Italian Giupel
company.
Today Guipel has developed four new brands: Nomade’s L&,
GI-SEVEN, SIMPLY VEE, and G.BATISTUTA, and a menswear brand

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

G.B., which has flagship stores and exclusive shops in major European
cities (sourcejuice.com website).
DM Fashion Co., Koralline brand
Koralline is a fashion brand for young women which originated in 2005
from an idea of a group of entrepreneurs who had decided to under-
take a new fashion project (koralline website). Today this brand is sold
in more than 1,200 stores in Italy and Europe from its base within the
textile district of Prato.
The leader, Zhan Xiao Meng from Zhejiang, was 20 years old when he
established the company and created the brand. The spokesman is the
famous Italian television presenter, film star Julia Bentley.
The range of products is informal-casual made up mostly of knitwear,
t-shirts, denim and jackets; daily-formal; and elegant-evening style.
Italian and Chinese clusters and regional development
Technological and business innovation initiatives of family entrepre-
neurship was at the origin of the textiles cluster along the whole value
chain of the sector from specialized subcontracting, production of
machinery, development of improved textiles for professional (medical,
sports) applications, pronto moda (low cost), up to textiles for top-level
fashion (Armani, Jean Paul Gauthier).
Networking in manufacturing and marketing succeeded to open the
Prato textiles industry to globalization.
During the first Chinese generation competition was mainly inside the
two clusters and not between the two clusters. In the Italian cluster firms
had created a situation of coo-petition (cooperation-competition). This
type of competition is based on cooperation between different grouping
of firms according to the specialization of the firm, the orders provided
by the impannatoris, and the networking to which each firm belongs.
The competitive advantage was based on high quality and product value
(brand, material, technologies). In the Chinese cluster, firms competed
and struggled by copying each other. Little information exists about
the organization of clans and coo-petition. The competitive advantage
was low-cost products based on textiles and manpower imported from
China and the “Made in Italy” brand.
With the second Chinese-Italian generation starts competition
between firms belonging to both clusters. The Chinese origin firms use
both competitive advantages, low cost based on production in China
and high quality differentiation based on top designers, branding, and

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

use of professional promoters. Italian professionals work with Chinese

companies, and the Chinese new generation is more knowledgeable and
Italian “cultural” minded. The networking, which exists between Italian
firms regulating coo-petition, doesn’t include the Chinese firms. Most
of them are not registered in any Italian or international organizations.
One Chinese firm only is registered in the Italian Industrial Association.
Even if the Chinese firms pay few taxes and encourage black labor and
grey economy, they contribute to the Prato economy in different ways
by salaries and purchasing of materials, machinery, subcontracting, and
commodities. The main question is which incentives could bring Chinese
firms to join the formal economy and cooperate with Italian firms? The
“Italianization” process of the Chinese community could renew the
technological and business process of the 1990s based on the growing
Chinese market and the will of Chinese homeland firms to globalize.
The formalization of Chinese immigrants and businesses, a positive
business environment (context) encouraging common networking,
and partnership between the Italian and Chinese communities could
contribute to the textiles sector at Prato in the global economy.

Songhai, Benin

The majority of small businesses in developing countries have been

established by people who cannot find jobs otherwise (Rosa et al., 2002).
The businesses are necessity driven and the entrepreneurs generally
want to earn enough to make a living (Frese and De Kruif, 2000; Olomi,
Nilsson, and Jaenssoon, 2002; Rutashobya, 1995; Toroka and Wenga,
1997). The greater the poverty, the larger is the number of necessity
businesses (Reynolds et al., 2001). This reality is confirmed by Mitchell’s
research (2001) on entrepreneurship in South Africa. The research found
that 38.7% of entrepreneurs open a business for purposes of survival and
20.2% because they were unemployed and were not able to find a job. As
stressed by Kautonen and Palmroos (2010), necessity entrepreneurship
is generally associated with a single motivation: unemployment.
Nearly all the poorest interviewed by Olomi, Nilsson, and Jaenssoon
(2002) in their research appeared to be “trapped” by their incapacity to
find the time to earn sufficient surplus income to invest in a new business.
Evolution from economic necessity appears to be rare. It is still unknown
when and how entrepreneurs decide to grow and what triggers the desire

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

to grow (Dunkelberg and Cooper, 1982; Kolvereid, 1992; Kolvereid and

Bullvag, 1996; Kuratko, Hornsby, and Naffziger, 1997).
Benin is one of the poorest countries in the world, and its situation
has not improved over time. In 2013 its GDP per capita was USD 805
compared with USD 690 in 2008 (World Bank, 2013). Some 44.1% of
the population is under 14 years old (Nationmaster, 2013). The biggest
increase in the number of the poor between 2006 and 2009 occurred in
the agriculture, livestock, and fisheries sectors (IMF, 2011).

The context and the stick

In 1985, Dr Godfrey N’Zamujo, a Dominican priest from Nigeria, took

the initiative to found the Songhai Center in Porto Novo, Benin, in order
to train young potential agricultural entrepreneurs.
Songhai has created inside the center area a new context totally differ-
ent from that which exists in the main street outside.
Inside there are not any cigarettes thrown on the way, every morn-
ing a new working cloth is provided to each student, and clean water is
provided by filters produced in the center. Meals, morning, afternoon,
and evening, are currently served by and to the students. Each student
receives a per diem for his current expenditures. The stick is developed
by encouraging the students to work together on common projects.
Songhai offers services and support to former trainees as well as local
entrepreneurs. It gains credibility by paying its salaries and bills by revenues
coming from its own production. Songhai centers breed fishes, poultry,
cows, sheep, goats, and pigs. They produce rice, cassava, soya, fruits and
vegetables, agricultural and food processing equipment such as post-harvest
systems, grain separators, solar ovens, pasteurization systems, filter systems
for drinking water, and water recycling systems for agriculture.
Around 200 students attend 18-month training programs at sites in
Porto Novo, Savalou, Parakou, and Kinwédji. The first nine months are
dedicated to general core courses (mathematics, economy, biology) and
training in various specializations. Each student selects a specializa-
tion in which he/she works during the last nine months and prepares a
personal project.
In 2010, we trained Songhai trainers and managers, and we had the
opportunity to interview the trainees and evaluate their capacities to
generate a viral economic development.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

The law of the few

Our intention was to analyze the profile of the participants in the
Songhai program in order to determine their motivation level and
their capacity to be mavens, connectors, or salespersons. The level of
motivation has been defined according to the role they expected to
fulfill in their professional life after the training program. Herewith the
proposed roles:
 To work in a farm: need for achievement motivation level
 To build a farm: need for affiliation motivation level
 To have an impact on economic development: need for power
motivation level
The trainees expressed their will to be a maven, connector, or salesperson
according to their interest to work in:
 Research: maven
 Management and sales: connectors
 Sales: salesperson
If they expressed their interest for production only they don’t intend to
be a part of the few.

The sample
The sample includes most of the participants in the 18-month program
in Porto Novo (N = 53).
Of the participants, 11% were under 20 years old, 58% between 21 and
25 years old, and 31% over 25 years old.
Parents’ employment is: 49% in agriculture, 22% in public services,
and 29% in trade.
Education level: 13% secondary school and 14% primary school, 73%
with a baccalaureate.
Of the participants, 13% were interested by production only. They
represent the current necessity entrepreneur with a little understanding
in business.
Some 82% were interested by production and one of the other possi-
bilities. They represent potential business-oriented entrepreneurs.
Some 58% were interested by research. Those potential entrepreneurs
could be specialized farmers beyond the necessity level.

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

Some 37% were interested by management and 41% by sales. Those

students are the most business minded.
Some 23% intended to work in a farm, 24% to work in the family farm,
65% to create their own farm, and 50% to have an impact on economic
development.

Hypotheses
Trainees with the highest level of motivation have to be a part of the few
if we want to have a potential of viral development.
So we expect:
H1: Positive correlation between “to have an impact on the development of
the region” (need for power) and research, management, or sales.

Trainees who want to create a farm (need of affiliation) are also expected
to be a part of the few:
H2: Positive correlation between “to create a farm” and research, manage-
ment, or sales.

Trainees who have the lowest level of motivation, to work in a farm

(need for achievement), will be interested by production only because
they don’t belong to the few.
H3: Positive correlation between “to work in a farm” and production only.

Results
The dependent variable “to have an impact on the development of the
region” correlates negatively with management but is positively corre-
lated with sales (Table 5.1). So we don’t have connectors highly motivated,
but we have salespersons highly motivated. H1 is therefore supported for
salespersons.

table 5.1 Regression with “to have an impact on the

development of the region” as dependent variable
R Square: . B Std. Error T Sig.

(Constant) 2.754 0.471 5.852 0.000

Management –0.468 0.167 –2.799 0.008
Promotion and sales 0.354 0.163 2.175 0.035

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

table 5.2 Regression with “to build a farm” as

dependent variable
R Square: . B Std. Error T Sig.
(Constant) –1.056 1.764 –0.598 0.553
Management 0.297 0.143 2.070 0.044
Production 0.414 0.170 2.442 0.019

table 5.3 Regression with “to work in a farm” as dependent variable

R Square: . B Std. Error T Sig.

(Constant) –0.111 0.669 –0.166 0.869

Promotion and sales 0.400 0.111 3.603 0.001
Production 0.115 0.143 0.806 0.424

The parameter expressing the intention to “build a farm” correlates

positively with an interest in production and management activities
(Table 5.2). This correlation expresses the presence of potential highly
motivated connectors with a great interest for production. H2 is there-
fore supported for connectors.
The dependent variable “work on a farm” is positively correlated with
production but not significant. H3 is rejected (Table 5.3).
The dependent variable “work in a farm” correlates positively with
sales and not as expected to production. So even trainees with the
lowest level of motivation are potential a part of the few. H3 is not
supported.

Discussion
The new context and stick provided by the Songhai center is based on an
improved way of life, good work conditions, professional support, and
the mode of cooperation between trainees as detailed in the presentation
of the context and the stick above. This new context and stick improve
the confidence of the trainees on their capability to promote a business
based on agriculture.
Most of them are potential connectors or salespersons and are able to
generate viral economic growth around them.
The missing few are the mavens. The program does not include subjects
related to research, and trainees are not in contact with research cent-
ers. They are mainly trained for production purposes with a business
orientation.

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

Conclusion
Trainees in Songhai are mainly potential business entrepreneurs, inter-
ested in developing not only their own business but also interested to
have a positive impact on their close personal environment (need for
affiliation) and the wider regional environment (need for power).
The existing potential connectors and salespersons have no contact with
the real business environment during their training period. This kind of
experience is required in order to be in the future more efficient as connec-
tors and salespersons. The missing potential mavens have to be trained in
cooperation with the local agricultural research centers which have the
pragmatic experience of adapting technologies to the local environment.

The Western Negev, Israel

The Western Negev in the south of Israel is a deserting region. Even
though the main economic sector is agriculture which benefits from hot
weather and the possibility to produce out of season products for the
local and the European markets.
The agricultural production in the Negev is focused on orchards
(dates, citrus, apples, avocados, olives), wine grapes, jojoba, vegetable
and fruit under protected micro-environment greenhouses (tomatoes,
peppers, melons, strawberries, ornamentals), open field crops (potato,
onions, carrots), organic agriculture, cattle, poultry, and fishery in ponds.
Irrigation with brackish (saline) water is used on varieties of olives,
pomegranates, jojoba, rootstocks for wine grapes, tomatoes, peppers,
fresh herbs, and ornamental flowers (Export Institute, 2012).
The related industries are mainly specialized in irrigation systems,
seeds, greenhouses, fertilizers, and fruit juice production.
High local labor cost, limited number of foreign workers allowed to
come to Israel, low governmental support (with the exception of R&D
centers), hard financial conditions, low prices due to a cartel of big retailers
and traders, the collapse of the main cooperatives and agricultural organi-
zations, and the bankruptcy of the main export company in 2011, Agrexco,
left the growers in a difficult economic situation (Bijaoui and Regev, 2013).
Tourism is mainly in the short flowering season, March–May. The
concept of tourism in the desert did not succeed.
In the small towns of this region, Netivot, Shderot, and Ofakim, we
found two business sectors which could grow and create jobs: furniture

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

and jewelry. The furniture sector is mainly a family business mainly

specialized in kitchen furniture and doors. There is not any support from
governmental or regional organizations.
In the jewelry sector the collapse of the cutting diamond industry
due to low cost manpower in India brought many businesses to close
or to open shops selling jewelry. The only support is provided by Sapir
Academic College, with periodic training programs.
In our research we tried to understand if, in agriculture and tourism
in the rural environment and in jewelry and furniture in the urban envi-
ronment, the law of the few could be implemented and what has to be
done by the open incubator in order to improve the capacities of the few
by a better context and stick.

The sample
In the agriculture sector we have selected randomly 56 growers represent-
ing 11% of the population. In tourism we have selected a sample of 60
businesses, representing 35% of the business population specialized in
guest houses, agro-tourism, attractions, restaurants, and catering. In
jewelry 28 businesses represent 70% of the population. In furniture, 45
businesses represent 45% of the population. The total sample is of 185
businesses.

The parameters
The motivation level has been defined by McClelland (1971) according to
the following parameters in each level of motivation:
 Low level of motivation “need for achievement”: To expand the
business using the personal experience and financial capabilities
 Medium level of motivation, “need for affiliation”: To improve the
social status and be appreciated
 High level of motivation, “need for power”: To lead
Each level of motivation had to be appreciated by each entrepreneur on a
scale of 1 = not relevant to 5 = very relevant.
The level of personal and business capabilities of the entrepreneurs has
been determined according to the evaluation of the following parameters
by the entrepreneurs:
Readiness to take risks, plan, cooperate, and solve problems; ability to
convince, transfer responsibility, understand customer needs, socialize,
and innovate; openness to new horizons; readiness to invest in marketing

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

and sales, in training, in management, in export, and in new common

ventures with other firms.
Each parameter was evaluated by the entrepreneurs on a scale from
1 = not relevant to 5 = strongly relevant.
The capability to act as a maven, a connector, or a salesperson has been
defined according to Gladwell’s (2000) profile with following parameters
for each one:
 Connector: brings people together, has a wide range of contacts,
participates in events, consults, likes challenges, curious, ready to
cooperate, likes to socialize.
 Maven: finishes the job, plans, solves problems, has a different view.
 Salesperson: is able to convince and is close to customers.

Hypotheses
We checked the following hypotheses:
H1: Connectors are highly motivated and have a strong business and personal
profile.
H2: Mavens are highly motivated, have a strong business and personal
profile, and are ready to cooperate with others.
H3: Salespersons are highly motivated, with a strong business profile, and
are ready to cooperate with others.

Results
Connectors’ attitude in the rural environment (agriculture and tourism),
as the dependent variable is strongly (R² = 0.522) characterized by the
“need for affiliation” medium level of motivation, by the readiness to find
new markets. They are seeking to develop new markets. At the personal
level they are ready to seek for new markets and to take risks.
H1 is confirmed.

table 5.4 Regression with “Connector” as the dependent

variable in a rural environment (agriculture and tourism)
R Square = . B Std. Error T Sig.
(Constant) 16.375 1.314 12.461 0.000
Need for affiliation 1.480 0.263 5.631 0.000
New markets 1.107 0.303 3.653 0.000
Take risks 1.430 0.329 4.352 0.000

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

In the urban environment (jewelry and furniture), connectors are

strongly (R² = 0.513) characterized by the need for power, the highest
level of motivation, and by their readiness to take risks but also are able
to convince and understand customers’ needs. H1 is confirmed.

table 5.5 Regression with “Connector” as the dependent

variable in an urban environment (jewelry and furniture)
R Square: . B Std. Error T Sig.
(Constant) 13.769 2.138 6.440 0.000
Take risks 1.001 0.460 2.176 0.033
Need for power 1.173 0.373 3.142 0.002
Able to convince 1.432 0.598 2.395 0.019
Understand customers’ needs 1.128 0.398 2.833 0.006

The mavens in the rural environment (agriculture and tourism) are

motivated, at the medium “need for affiliation” level. They have a good
level of business knowhow. But they are not ready to create new ventures
with other firms (negative correlation).
H2 is not confirmed.

table 5.6 Regression with “Maven” as the dependent variable

in a rural environment (agriculture and tourism)
R Square = . B Std. Error T Sig.

(Constant) 12.554 0.802 15.651 0.000

Need for affiliation 0.296 0.122 2.428 0.017
New ventures with others firms –1.588 0.464 –3.422 0.001
Business knowhow 0.912 0.171 5.321 0.000

In the urban environment (jewelry and furniture), mavens don’t have

any significant level of motivation. But they have a good business know-
how, and they are ready to transfer responsibility and enter new markets.
H2 is not confirmed.

table 5.7 Regression with “Maven” as the dependent variable

in an urban environment (jewelry and furniture)
R Square: . B Std. Error T Sig.
(Constant) 8.791 1.815 4.843 0.000
Transfer responsibility 0.778 0.357 2.181 0.033
New markets 0.436 0.182 2.391 0.020
Business knowhow 1.589 0.232 6.834 0.000

DOI: 10.1057/9781137492401.0008
 The Open Incubator Model

Salespersons in a rural environment (agriculture and tourism) are at

the lowest motivation level of “need for achievement.” But they are ready
to take risks. They are also connectors.
H3 is not confirmed.

table 5.8 Regression with “Salesperson” as the dependent

variable in a rural environment (agriculture and tourism)
R Square = . B Std. Error T Sig.

(Constant) –0.698 1.060 –0.658 0.512

Need for achievement 0.531 0.177 3.001 0.003
Take risks 0.596 0.133 4.478 0.000
Connector 0.100 0.028 3.579 0.001

In the urban environment (jewelry and furniture), salespersons are

also at the lowest motivation level of “need for achievement.” They have
not any significantly positive business and personal characteristics.
H3 is not confirmed.

table 5.9 Regression with “Salesperson” as the dependent

variable in an urban environment (jewelry and furniture)
R Square: . B Std. Error T Sig.

(Constant) –0.980 1.440 –0.680 0.499

Take risks 0.094 0.170 0.556 0.580
Need for achievement 0.565 0.275 2.052 0.044
Connector 0.175 0.036 4.899 0.000

Discussion
The results of the analysis present positive aspects, which have to be
strengthened, and a problematic one we have to confront. Connectors
and mavens are not motivated enough in order to lead viral economic
growth. Mavens in agriculture and tourism are not even ready to coop-
erate with others. Mavens and salespersons are ready to take risks, but
they have a weak personal and business profile. Salespersons are weakly
motivated.
The “context” and the “stick” are quite inexistent. The role of the open
incubator is, in cooperation with the local authorities, to generate it
by relevant activities able to generate cooperation between firms using
common business opportunities, improve the motivation level, and
strengthen their business and personal profile.

DOI: 10.1057/9781137492401.0008
 The Concept of Open Incubator in the Periphery 

The context refers to a positive environment with good transport

adapted to agriculture and tourism, relevant financial services, taking in
account the required running funds and the revenues changing accord-
ing to the seasons.
The “stick” between entrepreneurs could be generated by initiating
professional and business events and by proposing common projects
between entrepreneurs based on business opportunities proposed by the
open incubator.

Conclusion

Each connector, maven or salesperson acts and reacts according to his or

her own capabilities, experience, and objectives. S/He knows very little
about the whole value chain of the sector to which s/he belongs. Only
a structure such as the open incubator is able to implement a continu-
ous process of evaluation over time at the level of the entrepreneurs, the
sectors, and the market.
The evaluation process includes the analysis of strengths and weak-
nesses of the entrepreneurs, the activation of each one according to his
or her capability as a connector, a maven, or a salesperson.
The statistical analysis proved that potential mavens, connectors,
and salespersons exist in the four sectors. But they require the relevant
support in order to improve their level of motivation to the “need for
power” level and their interest to cooperate with other businesses. The
open incubator has to take the initiative to seek for business opportuni-
ties in order to encourage business cooperation fulfilling the interest of
each one, and the interest of the whole sector and of the region.
The questionnaire we prepared for our research can be used in other
regions and economic sectors in order to be able to generate viral
economic development.

DOI: 10.1057/9781137492401.0008
 Conclusion

Bijaoui, Ilan. T
The Open Incubator Model: Entrepreneurship,
Open Innovation, and Economic Development in the
Periphery. New York: Palgrave Macmillan, 2015.
doi: 10.1057/9781137492401.0009.

 DOI: 10.1057/9781137492401.0009

 Conclusion 

SMEs in developed and developing countries regions are the main

generator of growth. Their economic contribution depends on the
efficiency of the entrepreneurial process. Is it based mainly on necessity
entrepreneurship or on motivated creative entrepreneurship?
We discussed the concept of Business Innovation Model (BMI), the
value creation, delivery and capture dimensions, stakeholders expecta-
tions and used the Tipping Point Model and conscious capitalism model,
in order to propose improvement of BMI for SMEs.
Several models support growth of SMEs. The incubator, the industrial
district and the cluster models are integrated progressively in the Open
Incubator model in order to create the conditions for a viral economic
development based on SMEs.
Silicon Valley in California USA, Oxfordshire, Oxford UK, Tirupur in
India and Prato in Italy have implemented such kind of model. Songhai
in Porto Novo, Benin and the western Negev in Israel, have the relevant
conditions in order to generate growth based on the open incubator
model.
Entrepreneurship can create value for few or for many. The open incu-
bator model proposes to generate viral economic development based the
few who are able to create value for themselves, for others and for the
region.

DOI: 10.1057/9781137492401.0009
 References
Ács, W.J., Szerb, L., Autio, E. (2015). Global
Entrepreneurship Index 2015. University of Sussex,
School of Business, Management and Economics.
Actieprogramma Onderwijs en Ondernemen,
(O&O) (2007). Holland. Education and
Entrepreneurship Action Programme http://www.
ondernemendonderwijs.be/
Action Plan for Entrepreneurship Education 2011–2014
http://www.ond.vlaanderen.be/dbo/en/projecten/
projecten_ssee.htm
Albu, M. (1998). Technological Learning and Innovation
in Industrial Clusters In the South Working Paper Series
No 7 Science Policy Research Unit(SPRU).
Allen, T.J. (1977). Managing the Flow of Technology:
Technology Transfer and the Dissemination of Technological
Information within the R&D Organization. MIT Press.
Alvarez, S.A., and Barney, J.B. (2007). Discovery and
Creation: Alternative Theories of Entrepreneurial
Action. Strategic Entrepreneurship Journal, 1(1–2), 11–26.
Alvarez, S.A., and Barney, J.B. (2013). Epistemology,
Opportunities, and Entrepreneurship. Academy of
Management Review, 38(1), 154–157.
Alvarez, S.A., Barney, J.B., and Anderson, P. (2013).
Forming and Exploiting Opportunities. The
Implications of Discovery and Creation Processes
for Entrepreneurial and Organizational Research.
Organization Science, 24(1), 301–317.
Amabile, T.M. (1996). Creativity in Context: Update to the
Social Psychology of Creativity. Westview Press: Boulder,
CO. and London Business School, U.K.
 DOI: 10.1057/9781137492401.0010
 References 

Amin A., and Thrift N. (1994). Living in the Global. In Globalization,

Institutions, and Regional Development in Europe. Amin, A. and Thrift,
N (Ed.), Oxford University Press, pp. 1–22.
Amoros J.E., and Bosma N. (2014). Global Entrepreneurship Monitor
Report 2013. Global Entrepreneurship Research Association, http://
www.gemconsortium.org/docs/3106/gem-2013-global-report
Apex Cluster Development Services. (2009). Diagnostic Study: Tirupur
Knitwear and Apparel Cluster. Report prepared for the Small
Industries Development Bank of India (SIDBI).
Audretsch, D., and Thurik, R. (2000). Capitalism and Democracy in the
21st Century: From the Managed to the Entrepreneurial Economy.
Journal of Evolutionary Economics, 10(1), 17–34.
Baird, B., Smallwood, J., Mrazek, M.D., Kam, J.W., Franklin,
M.S., and Schooler, J.W. (2012). Inspired by Distraction Mind
Wandering Facilitates Creative Incubation. Psychological Science, 23,
1117–1122.
Bajarin T. (December 15, 2014). Glass vs. Sapphire: Which Is Best for
Smartphone Screens? PCmag. pcmag.com/article2/0,2817,2473339,00.
asp?obref=obinsite
Baker, T., and Nelson, R.E. (2005). Creating Something from Nothing:
Resource Construction through Entrepreneurial Bricolage.
Administrative Science Quarterly, 50(3), 329–366.
Bamford, J., Gomes-Casseres, B., and Robinson, M. (2003). Mastering
Alliance Strategy: A Comprehensive Guide to Design, Management and
Organization. Jossey-Bass and Management Series, New York.
Barney, J.B. (1986). Strategic Factor Markets: Expectations, Luck, and
Business Strategy. Management Science, 32, 1231–1241.
Barney, J.B. (1991). Firm Resources and Sustained Competitive
Advantage. Journal of Management, 17, 99–120.
Barreto, L. (2010). Dynamic Capabilities: A Review of Past Research and
an Agenda for the Future. Journal of Management, 36(1), 256–280.
Baumol, W.J., Litan, R.E., and Schramm, C.J. (2007) Good Capitalism,
Bad Capitalism, and the Economics of Growth and Prosperity. Yale
University Press New Haven and London.
Baumol, William, J., and Litan, Robert, E. and Schramm, Carl, J. (2007).
Good Capitalism, Bad Capitalism, and the Economics of Growth
and Prosperity. Available at SSRN: http://ssrn.com/abstract=985843
orhttp://dx.doi.org/10.2139/ssrn.985843
Becattini, G., and Rullani, E. (1996). Local Systems and Global
Connections: The Role of Knowledge. In Local and Regional Response to
DOI: 10.1057/9781137492401.0010
 References

Global Pressures: The Case of Italy and Its Industrial Districts. Cossentino,
I. Pyke, F. and Sengenberger, W. (Ed.), Geneva: ILO. 159–174.
Becattini, G. (1990). The Marshallian Industrial District as a Socio-
Economic Notion. In Industrial Districts and Inter-Firm Co-operation
in Italy. Frank Pyke, Giacomo Becattini, and Werner Sengenberger
(Ed.), Geneva: International Institute for Labour Studies.
Beeman, M., and Kounios, J. (2009). The Aha! Moment, the Cognitive
Neuroscience of Insight. Current Directions in Psychological Science,
18(4), 210–216.
Beinhocker, E.D. (1999). Robust Adaptive Strategies. Sloan Management
Review Spring, 95–106.
Bellandi, M. (1996). On Entrepreneurship, Region and the Constitution
of Scale and Scope Economies. European Planning Studies, 4, 421–438.
Benton, G., and Pieke, F. (1998). The Chinese in Europe. New York:
Macmillan, St.Martin’s Press.
Bhola, R.R., Verheul, I., Thurik, A.R., and Grilo, I. (2006). Explaining
Engagement Levels of Opportunity and Necessity Entrepreneurs. (Scales
paper H200610). Zoetermeer: EIM Business and Policy Research.
Bijaoui (2008). The Open Incubator Model: The Case of Cote d’Ivoire.
West Africa Review, 1525–4488(12–13).
Bijaoui, I. (2012). Marketing Management, Innovation and
Entrepreneurship. Tsameret edition (Hebrew).
Bijaoui, D., and Regev, D. (2013).Open Incubator a Model for Economic
Development Based on Local Entrepreneurship in the Western Negev.
Ministry of Economy, Small and Medium Enterprises Agency (in
Hebrew).
Bijaoui I., and Regev D. (2015). Entrepreneurship and Viral
Development in Rural Western Negev in Israel. Journal of Research in
Marketing and Entrepreneurship JRME.
Business week online (November 14, 2005). IKEA: How the Swedish
Retailer Became a Global Cult brand, 32–36. http://www.bloomberg.
com/bw/magazine/content/05_46/mz_bw_thisweek.htm
Bonnet, J., Le Pape, N., and Nelson, T. (2011). Firm Start-up Strategies
and Performance in France: Survival and Growth, in Submission to
JEMS. Journal of Economics and Management Strategy, 5, 5–24.
Bourgeois, L.J., and Eisenhardt, K.M. (1988). Strategic Decision
Processes in High Velocity Environments: Four Cases in the
Microcomputer Industry. Management Science, 34(7), 816–835.

DOI: 10.1057/9781137492401.0010
 References 

Bosma, N., Acs, Z., Autio, E., Coduras, A., and Levie, J. (2008). Global
Entrepreneurship Monitor 2008 Executive Report. London: Global
Entrepreneurship Research Association.
Brandenburger, A., and Stuart, H. (1996). Value-Based Business
Strategy. Journal of Economics and Management Strategy, 5, 5–24.
Brioschi, F., Brioschi, M.S., and Cainelli, G. (2002). From the Industrial
District to the District Group.An insight into the Evolution of Local
Capitalism in Italy. Regional Studies, 36(9), 1037–1052.
Brunaker, S., and Kurvinen, J. (2006). Intrapreneurship, Local Initiatives
in Organizational Change processes. Leadership and Organization
Development Journal, 27(1–2), 118–132.
Brusco, S. (1982). The Emilian Model: Productive Decentralization and
Social Integration. Cambridge Journal of Economics, 6, 166–184.
Brusco, S. (1986). Small Firms and Industrial Districts: The Experience
of Italy. In New Firms and Regional Development in Europe D. Keeble
and E. Wever (Eds), Croom Helm, London. 184–192.
Bucherer E., Eisert, U., and Gassmann, O. (2012).Towards Systematic
Business Model Innovation: Lessons from Product Innovation
Management. Creativity and Innovation Management, 21(2).
Bughin, J.R., Chui, M., and Johnson, B. (June 2008).The Next Step in
Open Innovation. McKinsey Quarterly, 1–8.
Burt, R.S. (1992). Structural Holes: The Social Structure of Competition.
Harvard UniversityPress, Cambridge, MA.
Busse, T., and Mansfield, R. (1980). Theories of the Creative Process: A
Review and a Perspective. Journal of Creative Behavior, 14(2), 91–103.
Buys, A.J., and Mbewana, P.N. (September/October 2007). Key Success
Factors for Business Incubation in South Africa, the Godisa Case
Study. South African Journal of Science, 103.
Byers, A. (2007). Jeff Bezos the founder of Amazon.com. The Rosen
Publishing Books, New York.
Carchedi, F., and Ferri, M. (1998). The Chinese Presence in Italy:
Dimensions and Structural Characteristics. In The Chinese in Europe
G. Benton and F.N. Pieke (Eds.), Macmillan, Basingstoke. 261–277.
Carlson N. (March 5, 2010). At Last – The Full Story Of How Facebook
Was Founded. Business Insider. http://www.businessinsider.com/
how-facebook-was-founded-2010-3?op=1#ixzz3fTkDt0FL
Catts, B.C., and Kurtz, D. (2002). Industry Clusters in Southern Arizona.
2000 Status Report. Industry Cluster Development Program.

DOI: 10.1057/9781137492401.0010
 References

Cawthorne, P. (1995). Of Networks and Markets: The Rise and Rise of

a South Indian Town. The Example of Tiruppur’s Cotton Knitting
Industry. World Development, 23(1), 43–56.
Ceccagno, A. (2003). New Chinese Migrants in Italy. International
Migration, 41 (3), 187–210.
Ceccagno, A. (2009). Chinese Migrants as Apparel Manufacturers in an
Era of Perishable Global Fashion: New Fashion Scenarios in Prato. In
Living Outside the Walls: The Chinese in Prato, Johanson, G., Smyth,
R., and French, R., (Eds.), Cambridge, Cambridge Scholars Press,
42–74.
Central Appalachian Network. (2005). Strategies for Sustainable
Entrepreneurship.
Chesbrough, H., and Rosenbloom, R.S. (2002). The Role of the Business
Model in Capturing Value from Innovation: Evidence from Xerox
Corporation’s Technology Spin-off Companies. Industrial and
Corporate Change, 11(3), 529–555.
Chesbrough, H. (2003). Open Innovation: The New Imperative for Creating
and Profiting from Technology. Harvard Business School Press:
Harvard, MA.
Chesbrough, H., Vanhaverbeke, W., and West, J. (2006). Open Innovation:
Researching a New Paradigm. Oxford University Press: Oxford.
Chesbrough, (2007). Business Model Innovation: It’s Not Just about
Technology Anymore. Strategy an Leadership, 35(6) 12–17, Q Emerald
Group Publishing Limited.
Christensen, C.M. (1999). Innovation and the General Manager. Irwin
McGraw-Hill Harvard Business School, Boston MA.
Chu V., Girdhar A., and Sood R. (July 21, 2013). Couching Tiger Tames
the Dragon. Business Today. businesstoday.intoday.in/story/how-ikea-
adapted-its-strategies-to-expand-in-china/1/196322.html
Claxton,G. (1997). HareBrain, Tortoise Mind: How Intelligence Increases
When You Think Less. NewYork, NY: Harper Collins.
Cooke, P. (2002). Knowledge Economies. Clusters, Learning and Cooperative
Advantage. London and New York: Routledge.
Covin, J., and Slevin, D. (1991). A Conceptual Model of
Entrepreneurship Firm Behaviour. Entrepreneurship: Theory and
Practice, 16(1), 7–25.
Csikszentmihalyi, M. (1988). Motivation and Creativity: Toward a
Synthesis of Structural and Energistic Approaches to Cognition. New
Ideas in Psychology, 6(2), 159–76.

DOI: 10.1057/9781137492401.0010
 References 

D’Argembeau, A., Comblain, C., and Van der Linden, M. (2003).

Phenomenal Characteristics of Autobiographical Memories for Positive,
Negative and Neutral Events. Applied Cognitive Psychology, 17, 281–294.
D’Aveni, R.A. (1994). Hypercompetition: Managing the Dynamics of
Strategic Maneuvering. Free Press: New York.
Dabson B. (2009) Policy Principles Entrepreneurship as Rural
Economic Development Policy: A Changing Paradigm. In
Entrepreneurship and Local Economicv Development. Norman Walzer
(Ed.), Lexington books, a division of Rowan and Littlefield Publishers
inc. Lanham, Boulder, New York, Toronto, Plymouth, UK, 21–38.
Dabson, B. ( 2005). Fostering Entrepreneurship Development Systems in
Rural America: First Review of the Results of the Request for Proposals.
CFED/RUPRI Report to the W. K. Kellogg Foundation. www.
energizinentrepreneurs.orgg (February 20, 2007).
Dabson, B. (2001). Supporting Rural Entrepreneurship. Exploring Policy
Options for a New Rural America.Conference Proceedings. Center for the
Study of Rural America, Federal Reserve Bank of Kansas City, 35–48.
Dabson, B., and Marcoux, K. (2003). Entrepreneurial Arkansas: Connecting
the Dots. Little Rock, AR: Winthrop Rockefeller Foundation.
Dabson, B., Malkin, J., Matthews, A., Pate, K., and Stickle, S., (2003).
Mapping Rural Entrepreneurship. WK Kelogg foundation (Michigan)
and Corporation for Enterprise Development (Washington DC).
http://www.energizingentrepreneurs.org/file_download/inline/
b6dba3f4-689a-4fc1-8c66-024ba4e2e54e
Darton R. (April 25, 2013). The National Digital Public Library Is
Launched! The NewYork Review of Books. nybooks.com/articles/
archives/2013/apr/25/national-digital-public-library-launched/?page=2
DeBresson, C., and Amesse, F. (1991). Networks of Innovators: A Review
and Introduction to the Issue. Research Policy, 20(3), 363–379.
Deci, E.L., and Ryan, R.M. (1985). Intrinsic Motivation and Self-
Determination in Human Behavior. New York: Plenum.
Dei Ottati, G. (1994). Trust, Interlinking Transactions and Credit in the
Industrial District Cambridge Journal of Economics, 18, 529–546.
Dei Ottati, G. (2014). A Transnational Fast Fashion Industrial District:
An Analysis of the Chinese Businesses in Prato. Cambridge Journal of
Economics, Advance Access online published May 8.
Delgado, C. (November 4, 2014). Clothing Magnate and Infrastructure
Boss Top Spain’s 2014 Rich List. El Pais. elpais.com/elpais/2014/11/04/
inenglish/1415110225_093068.html

DOI: 10.1057/9781137492401.0010
 References

Deloitte (2012). Measuring Facebook Economic Impact in Europe Deloitte,

January http://www2.deloitte.com/content/dam/Deloitte/uk/
Documents/technology-media-telecommunications/deloitte-uk-
global-economic-impact-of-facebook.pdf
Demetrius Klitou Editors: Hesham Zakai, David Vidal, Laurent
Probst, Alexander Schiersch, Anselm Mattes. http://ec.europa.eu/
enterprise/policies/sme/facts-figures-analysis/performance-review/
files/supporting-documents/2014/annual-report-smes-2014_en.pdf
Dijksterhuis, A., and Meurs, T. (2006). Where Creativity Resides: The
Generative Power of Unconscious Thought. Conscious Cognitive, 15,
135–146.
Dodds, R.D., Ward, T.B., and Smith, S.M. (2003). Incubation in Problem
Solving and Creativity. In The Creativity Research Handbook (Vol.3),
Runco, M.A. (Ed.), Cresskill, NJ: Hampton.
Dohse, D. (February 2007).Cluster-Based Technology Policy—The
German Experience. Industry and Innovation, 14(1), 69–94. https://
www.ifw-members.ifw-kiel.de/publications/cluster-based-
technology-policy-the-german-experience/I-I_paper2007.pdf
Duhigg C., and Bradsherjan K. (January 21, 2012). How the U.S. Lost
Out on iPhone Work. New York Times. nytimes.com/2012/01/22/
business/apple-america-and-a-squeezed-middle- class.
html?pagewanted=all&_r=0
Dunkelberg, W.C., and Cooper, A.C. (1982). Entrepreneurial Typologies.
In Frontiers of Entrepreneurship Research. Vesper, K.H. (Ed.), Wellesley,
MA: Babson College, 1–15.
Dyer, J.H., Gregersen, H.B., and Christensen, C. (2008). Entrepreneur
Behaviors, Opportunity Recognition and the Origins of Innovative
Ventures. Strategic Entrepreneurship Journal, 2(4), 317–338.
“Economic Literacy and Entrepreneurship Education” (2004) and
the “National Program of Youth Entrepreneurship Education and
Encouragement for 2008–2012” Lithuania. http://www3.lrs.lt/pls/
inter3/dokpaieska.showdoc_l?p_id=235714&p_query=&p_tr2=
Eden, C., and Ackermann, F. (2001). Group Decision and Negotiation in
Strategy Making. Group Decision Negotiation, 10(2), 119–140.
Edgington, D.W. (February 2008). Japanese Approaches to Technology
Clusters: Implications for British Columbia. Canadian Asian
Commentary. http://www.asiapacific.ca/sites/default/files/archived_
pdf/commentary/cac48.pdf
Education, Audiovisual and Culture Executive Agency Eurydice and
Policy Support (EACEAPS). (March 2012). Entrepreneurship Education
DOI: 10.1057/9781137492401.0010
 References 

at School in Europe: National Strategies, Curricula and Learning

Outcomes. Brussels Belgium http://www.indire.it/lucabas/lkmw_file/
eurydice///Entrepreneurship_education_EN.pdf.
Ehlers, F. (September 9, 2006). The New Wave of Globalization: Made
in Italy at Chinese Prices. Spiegel Online International. http://www.
spiegel.de/international/spiegel/the-new-wave-of-globalization-
made-in-italy-at-chinese-prices-a-435703.html
Eisenhardt, K.M., and Martin, J.A. (2000). Dynamic Capabilities: What
are They? Strategic Management Journal, 21(10/11), 1105–1121.
Eisenhardt, K., and Schoonhoven, C. (1996). Resource-Based View
of Strategic Alliance Formation: Strategic and Social Effects in
Entrepreneurial Firms. Organization Science, 7(2), 136–150.
Elgin B. (August 16, 2005). Google Buys Android for Its Mobile Arsenal.
Business Week. http://www.bloomberg.com/bw/stories/2005-08-16/
google-buys-android-for-its-mobile-arsenal
Erkman, S., and Ramaswamy, R. (2003). Case Study Of The Textile Industry
In Tirupur (chapter 5), Applied Industrial Ecology—A New Platform for
Planning Sustainable Societies (Focus on Developing Countries with
Case Studies from India), Aicra Publishers, Bengalore, India.
EU-European Communities, (2008). Leader + Magazine, Special Focus
on Leader Achievements: A Diversity of Territorial Experience. What is
the Added Value of Governance in Leader?? 11, 35. http://ec.europa.eu/
agriculture/rur/leaderplus/pdf/magazine/mag11_en.pdf
EU-European Communities, (2009). Leader + Best Practices, Editorial
board: European Observatory of Rural Areas. Person responsible at
law: John Lougheed, European Community. http://ec.europa.eu/
agriculture/rur/leaderplus/pdf/bestpractice/bp4_en.pdf
European Commission (2012). Entrepreneurship Educationat School
in Europe National Strategies, Curricula and Learning Outcomes.
Education, Audiovisual and Culture Executive Agency, Brussels.
European Commission, (2014a). Annual Report on European SMEs
2013/2014—A Partial and Fragile Recovery. Authors: Patrice Muller,
Dimitri Gagliardi, Cecilia Caliandro, Nuray Unlu Bohn. Final
Report—July 2014. SME Performance Review 2013/2014.
European Commission (2014b). The Need for Innovations in Business
Models evolutionary theory of the multinational corporation,. European
Commission DG Research and Innovation. Final Policy Brief
(Deliverable 5)Version 2.514 May 2014. http://ec.europa.eu/research/
innovation-union/pdf/expert-groups/ERIAB-BMI_PB_new_
business_models.pdf
DOI: 10.1057/9781137492401.0010
 References

Export Institute (2012). Israel’s Agriculture. http://www.moag.gov.il/agri/

files/Israel%27s_Agriculture_Booklet.pdf
Exton, R. (2008). The Entrepreneur: A New Breed of Health Service
Leader? Journal of Health Organization and Management, 22(3),
208–222.
Faems, D., Van Looy, B., and Debackere, K. (2005). Interorganizational
Collaboration and Innovation: Toward a Portfolio Approach. The
Journal of Product Innovation Management, 22(3), 238–250.
Fladrich, A.M. (July 2008). Early Insight into Chinese Entrepreneurship
in Prato, Italy. Presented to the 17 the Biennial Conference of the Asian
Studies Association of Australia in Melbourne, 1–3, Asia Institute,
Monash. University. http://artsonline.monash.edu.au/mai/
files/2012/07/anjafladrich.pdf
Flora, C.B., and Flora, J.A. (2004). Rural communities: Legacy and
change (2nd ed.). Boulder, CO: Westview Press.
Florida, R. (2002). The Rise of the Creative Class. New York: Basic Books.
Fortune (January 8, 2013) Meet Amancio Ortega: The Third-Richest
Man in the World, http://management.fortune.cnn.com/2013/01/08/
zara-amancio-ortega/
Fox, J. (2011). What Is It That Only I Can Do? Harvard Business Review,
89(1–2), 118–123.
Franco, M., and Hase, H. (2012). Interfirm Alliances: A Collaborative
Entrepreneurship Perspective 115–138. In Entrepreneurship-Creativity
and Innovative Business Models. Thierry Burger-Helmchen (Ed.),
InTech. Janeza Trdine 9, 51000 Rijeka, Croatia. Applied Management
and Entrepreneurship, 12(3), 73–88.
Frese, M., and De Kruif, M. (2000). Psychological Success Factors of
Entrepreneurship in Africa, a Selective Literature Review. In Success
and Failure of Microbusiness Owners in Africa: A Psychological Approach.
Frese, M. (Ed.), London, Quorum Books.
Freud, S. (1958). On Creativity and the Unconscious Papers on the
Psychology of Art, Literature, Love, Religion. Selected by B. Nelson.
Harper, New York, NY.
Froehle, M., and Roth, A.V.(2007). A Resource-Process Framework of
New Service Development. Production and Operations Management,
16(2), 169–188. http://dx.doi.org/10.1111/j.1937-5956.2007.tb00174.x
Fromm, E. (1947). Man for Himself: An Inquiry Into the Psychology of
Ethics. Rinehart, NY: Henry Holt.
Fuduric, N. (2008). Individuals and Opportunities: A Resource-Based and
Institutional View of Entrepreneurship. Aalborg University, PhD Thesis.
DOI: 10.1057/9781137492401.0010
 References 

Gambardella, A., and McGahan, A.M., (2010). Business-Model

Innovation: General Purpose Technologies and Their Implications
for Industry Structure Long Range Planningg 43, 262–271.
Gamsey, E. (1998). The Genesis of the High Technology Milieu: A Study
of Complexity. International Journal of Urban and Regional Research, 22,
361–377.
Garud, R., and Karnøe, P. (2003). Bricolage Versus Breakthrough:
Distributed and Embedded Agency in Technology Entrepreneurship.
Research Policy, 32(2), 277–300.
Giacomin, O., Janssen, F., Guyot, J.,0020and Lohest, O. (2011).
Opportunity and/or Necessity Entrepreneurship? The Impact of the
Socio-Economic Characteristics of Entrepreneurs in Germany. University
Library of Munich.
Giang, V., and Stanger M. (December 12, 2012). The 50 Best Companies
to Work for in 2013. Business Insider. http://www.businessinsider.
com/the-50-best-companies-to-work-for-in-glassdoor-2013-2012-
12?op=1#ixzz3fTlXD5xm
Giese, K. (2003). New Chinese Migration to Germany: Historical
Consistencies and New Patterns of Diversification within a
Globalized Migration Regime. International Migration, 41(3), 155–185.
Giesen, E., Berman, S.J., Bell, R., and Blitz, A. (2007). Three Ways to
Successfully Innovate Your Business Model. Strategy and Leadership,
35(6), 27–33.
Gilad, B., and Levine, P. (1986). A Behavioral Model of Entrepreneurial
Supply. Journal of Small Business Management, 4, 45–53.
Gilhooly, K.J., Georgiou, G., and Devery, U. (2013). Incubation and
Creativity: Do Something Different. Think Reason, 19, 137–149.
Gladwell, M. (2000). The Tipping Point, Little, Brown and Company,
Boston, New York, London.
The Global Entrepreneurship and Development Institute, Washington,
D.C., USA. http://thegedi.org/2015-global-entrepreneurship-index/
Goldsmith, R. (2007). Italy Struggles with Chinese Migrants. BBC News
(Cited January 17, 2008). Available from URL: http://news.bbc.co.uk/
go/pr/fr/-/2/hi/business/6926181.stm.
Government of Punjab (1920). Punjab District Gazetteers: Sialkot District,
Vol. XXIII-A, Reprinted by Sange-Meel Publications, Lahore, 1990.
Granovetter, M. (1973). The Strength of Weak Ties. American Journal of
Sociology, 78(6), 1360–1380.
Guglielmo, G. (December 12, 2013). Apple’s Supplier Labor Practices
in China Scrutinized After Foxconn, Pegatron Reviews. Forbes.
DOI: 10.1057/9781137492401.0010
 References

http://www.forbes.com/sites/connieguglielmo/2013/12/12/apples-
labor-practices-in-china-scrutinized-after-foxconn-pegatron-
reviewed/ (1)
Haas, M. (2013). Necessity Entrepreneurship: Individual, Environmental
and Public Policy-Related Factors Influencing the Process of Opportunity
Exploitation under Unfavorable Circumstances Thesis No 5830 (2013):
École polytechnique Fédérale de Lausanne présentée le 26 aout 2013
au Collège du Management de la Technologie Chaire Entrepreneuriat
et Commercialisation de Technologies Suisse.
Hadamard, J. (1945). Essay on The Psychology of Invention in the
Mathematical Field. Princeton, NJ: Princeton University Press.
Hagedoorn, J., and Duysters, G. (2002). Learning in Dynamic Inter-
Firm Networks—The Efficacy of Quasi-Redundant Contacts.
Organization Studies, 23(4), 525–548.
Harrigan, K. (1985). Strategies for Joint Ventures, Lexington Books,
Lexington, MA.
Harrison, B. (1992). Industrial districts: Old wine in new bottles?
Regional Studies, 26(5), 469–483.
Hart, E. (2013). Youth Entrepreneurship Strategy Action Plan
Update Report. The Youth Entrepreneurship Strategy (YES) Wales.
http://wales.gov.uk/about/cabinet/cabinetstatements/2013/
yesactionplan/?lang=en.
Hart, S. (1995). A Natural-Resource-Based View of the Firm. Academy of
Management Review, 20(4), 986–1014.
Hasty, B., Massey, A., and Brown, S. (2006). Role-Based Experiences,
Media Perceptions, and Knowledge Transfer Success in Virtual
Dyads. Group Decision Negotiation, 15(4), 367–3S7.
Hatten, T.S. and Ruhland, S.K. (1995). Student Attitude Towards
Entrepreneurship as Affected by Participation in an SBI Program.
Journal of Education for Business, 70(4), 224–228.
Heikkilä, J., and Heikkilä, K. (2001). Innovatiivisuutta etsimässä.
Irtiottoa kekinkertaisudesta. Jväskylä. Gummerus. 362 s.
Helmholtz, H. von. (1896). Vortraege UndReden. Brunswick:
FriedrichViewigund Sohn.
Henderson, J., Low, S.A., and Weiler, S. (2007). The Drivers of Regional
Entrepreneurship in Rural and Metro Areas. In Entrepreneurship
and Local Economic Development(chapter 5), Norman Walzer. (Ed.),
Lexington Books.
Hennessey, B.A., and Amabile, T.M. (1988). Reward, Intrinsic
Motivation, and Creativity. American Psychologist, 53(6), 674–675.
DOI: 10.1057/9781137492401.0010
 References 

Henry, N., Pinch, S., and Russell, S. (1996). In Pole Position? Untraded
Interdependencies, New Industrial Spaces and the British Motor
Sport Industry. Area, 28, 25–36.
Herrmann, N. (1996). The Whole Brain Business Book, McGraw-Hill, New
York.
Hersey, P., and Blanchard, K. (1982). Management of Organizational
Behavior: Utilizing Human Resources. Englewood Cliffs, NJ: Prentice-
Hall.
Hill, C.W.H., and Jones, G.R. (2005). Strategic Management Cases.
University of Washington Press: Washington, D.C. http://ec.europa.
eu/research/innovation-union/pdf/expert-groups/ERIAB-BMI_PB_
new_business_models.pdf
Hisrich, R., Langan-Fox, J., and Grant, S. (2007). Entrepreneurship
Research and Practice: A Call to Action for Psychology. American
Psychologist, 62(6), 575–589.
Hoefler, D. (1995). Silicon Valley Genealogy Chart, SEMI, Endeavor
Insight analysis.
IMF (2011). IMF Country Report No. 11/307IMF.
Jaikumar, R., and Upton, D.M. (1993). The Coordination of Global
Manufacturing. In Globalization, Technology and Competition: The
Fusion of Computers and Telecommunications, Stephen P. Bradley, Jerry
A. Hausman, and Richard L. Nolan (Ed.), Harvard Business School
Press, Boston, MA. http://www.people.hbs.edu/dupton/papers/
global/WorkingPaper.html.
Jerusalem Post (May 7, 2006). Buffett’s Vote of Confidence. Jerusalem Post.
http://www.jpost.com/Opinion/Editorials/Buffetts-vote-of-confidence
Johannisson, B. (2002). Entrepreneurship as a Collective Phenomenon,
Scandinavian Institute for Research in Entrepreneurship (SIRE),
Växjö University.
Johannson, U., and Thelander, A. (2009). A Standardized Approach to
the World? IKEA in China. International Journal of Quality and Service
Sciences, 1(5), 199–219.
Johanson, G., Smyth, R., and French, R. (2009). Living Outside the Walls:
The Chinese in Prato. Cambridge: Cambridge Scholars.
Johnson, M.W. (2010). Seizing the White Space Business Model
Innovation for Growth and Renewal. Harvard Business Press: Boston,
Massachussetts.
Katila, R., and Ahuja, G. (2002). Something Old, Something New:
A Longitudinal Study of Search Behavior and New Product
Introduction. Academic of Management Journal, 45(6), 1183–1194.
DOI: 10.1057/9781137492401.0010
 References

Kauffman, S.A., and Johnsen, S. (1991). Coevolution to the Edge of Chaos:

Coupled Fitness Landscapes, Poised States, and Co-Evolutionary
Avalanches. Journal of Theoretical Biology, 149(4), 467–505.
Kaufmann, H.R., Tsangari, H., and Vrontis, D. (2012). Innovativeness of
European SMEs: Mission Not Yet Accomplished. Economic Research,
25(2), 333–360.
Kautonen, T., and Palmroos, J. (2010). The Impact of a Necessity-Based
Startup on Subsequent Entrepreneurial Satisfaction. International
Entrepreneurship and Management Journal, 6(3), 285–300.
Kelling, G.L., and Coles C.M. (1996). Fixing Broken Windows: Restoring
Order and Reducing Crime in Our Communities. New York: Free
Press.
Kenney, M., and Mujtaba, B. (July 2007). Understanding Corporate
Entrepreneurshipand Development: A Practitioner View of
Organizational Intrapreneurship. Journal of Applied Management and
Entrepreneurship, 12(3).
Kim, W.C., and Mauborgne, R. (1999). Creating New Market Space.
Harvard Business Review, 77, 83–93.
Kirschenbaum, R.J. (1998). The Creativity Classification System: An
Assessment Theory. Roepler Review, 21(1), 20–26.
Kirzner, I.M. (1973). Competition and Entrepreneurship. Chicago:
University of Chicago Press.
Kirzner, I.M. (1997). Entrepreneurial Discovery and the Competitive
Market Process: An Austrian approach. Journal of Economic Literature,
35(1), 60–85.
Klein, Peter G. (2008). Opportunity Discovery, Entrepreneurial Action,
and Economic Organization. Strategic Entrepreneurship Journal, 2(3),
175–190.
Koestler, A. (1964). The Act of Creation. New York, NY: Penguin Books.
Kogut, B., and Zander, U. (1993). Knowledge of the Firm and the
Evolutionary Theory of the Multinational Corporation. Journal of
International Business Studies, 24(4), 625–646.
Kolvereid, L. (1992). Growth Aspirations Among Entrepreneurs. Journal
of Business Venturing, 7(3), 209–222.
Kolvereid, L., and Bullvag, E. (1996). Growth Intentions and Actual
Growth: The Impact of Entrepreneur Choice. Journal of Enterprising
Culture, 4(1), 1–17.
Kostova, T., and Roth, K. (2003). Social Capital in Multinational
Corporations and a Micro–Macro Model of its Formation. Academy
of Management Review, 28, 297–317.
DOI: 10.1057/9781137492401.0010
 References 

Kotter, J.P. (1990). A Force for Change: How Leadership Differs from
Management. New York: Free Press.
Kris, E. (1952). Psychoanalytic Explorations in Art. NewYork, NY:
International Universities Press.
Kris, E., and Kurz, O. (1981). Legend, Myth and Magic in the Image of
the Artists: A Historical Experiment. London: Yale University Press.
Kroll, L., and Dolan, K.A. (March 2, 2015). The Richest People on the
Planet 2015. Forbes. http://www.forbes.com/billionaires/(2)
Kubie, L. (1958). Neurotic Distortion of the Creative Process, Lawrence. KS:
University of Kansas Press.
Küppers, G. and Pyka, A. (2002). The Self-Organisation of Innovation
Networks: Introductrory Remarks. In Innovation Networks. Theory and
Practice. Pyka, A. and Küppers G. (Eds.), Edward Elgar: Cheltenham,
3–21.
Kuratko, D.I., Hornsby, J.S., and Naffziger, D.W., (January 1997). An
Examination of Owner’s Goals in Sustaining Entrepreneurship.
Journal of Small Business Management, 24–33.
Kwong, R., and Sanderson, R. (October 7, 2014 ).Chinese Translate
the European Work Ethic. Financial Times. http://www.
ft.com/intl/cms/s/0/1d5f3c78-4729-11e4-ba74-00144feab7de.
html#axzz3NeCd9rrO
Langley, P., and Jones, R. (1988). A Computational Model of Scientific
Insight. In The Nature of Creativity: Contemporary psychological
perspectives. Sternberg, R.J. (Ed.), Cambridge University Press. 177–201.
Langlois, R.N. (2013). The Austrian Theory of the Firm: Retrospect and
Prospect. Review of Austrian Economics, 26(3), 247–258.
Lawton Smith, H., Glasson, J., Simmie, J., Chadwick, A., and Clark, G.
(2003). Enterprising Oxford: The Growth of the Oxfordshire High-Tech
Economy. Oxford: Oxfordshire Economic Observatory.
Lawton Smith, H. (1990). The Location and Development of Advanced
Technology in Oxfordshire in the Context of the Research Environment.
Unpublished D.Phil Thesis, University of Oxford.
Lazzeretti, L. (2014). Cluster Evolution in Mature Industrial Clusters.
the Case of Prato. Marshallian Industrial District after the Entrance
of the Chinese Firms Populations (1945–2011). Paper to be presented
at the DRUID Society Conference 2014, CBS, Copenhagen, June 16–18.
DISEI Dipartimento Scienze dell’Economia e d’impresa. http://
druid8.sit.aau.dk/druid/acc_papers/xkll123i9ot5otcvb9dh8xv1ibiq.pdf
Lecuyer, C. (2000). Fairchild Semiconductor and Its Influence.
In The Silicon Valley Edge: A Habitat for Innovation and
DOI: 10.1057/9781137492401.0010
 References

Entrepreneurship Chong Moon Lee et al. (Ed.), Stanford: Stanford

University Press.
Lengnick-Hall, M.L., and Lengnick-Hall, C.A. (2006). International
Human Resource Management and Social Network/Social Capital
Theory. In Handbook of Research in International Human Resource
Management. Stahl, G.K., and Bjorkman, I. (Eds.), Cheltenham, UK:
Edward Elgar, 475–487.
Lewin, P., and Phelan, S.E. (2000). An Austrian Theory of the Firm. The
Review of Austrian Economics, 13(1), 59–79.
Lichtenstein, Gregg A., and Thomas S. Lyons. (February 15, 2001). The
Entrepreneurial Development System: Transforming Business Talent
and Community Economies. In Economic Development Quarterly,
3–30. http://hadjarian.com/esterategic/tarjomeh/sefidpor1.pdf
Lissoni, F. (2001). Knowledge Codification and the Geography of
Innovation: The Case of Brescia Mechanical Cluster. Research Policy,
30, 1479–1500.
Lopez C., and Fan, Y. (2009). Internationalisation of the Spanish Fashion Brand
ZARA. Journal of Fashion Marketing and Management, 13(2), 279–296
Mackey, J. (2011). What Conscious Capitalism Really Is. California
Management Review, 53(3), 83–90.
Magretta, J. (2002). Why Business Models Matter. Harvard Business
Review. May 2002 issue.
Mariti, P., and Smiley, R.H. (1983). Co-Operative Agreements and the
Organization of Industry. The Journal of Industrial Economics, 31(4),
437–450.
Marker, and Reuters (2012). Warren Buffett: Iscar “Continues to
Amaze.” Haaretz (February 26). http://www.haaretz.com/business/
warren-buffett-iscar-continues-to-amaze-1.414822.
Markusen, A. (1996). Sticky Places in Slippery Space: A Typology of
Industrial Districts. Economic Geography, 72, 293–31.
Marshall, A. (1891). Principle of Economics. London Mcmillan.
Maslow, A. (1943). A Theory of Human Motivation. Psychological Review,
50(4), 370–396.
Maslow, A. (1969). Religions, Values and Peak Experiences, Penguin Books.
New York. http://www.druglibrary.org/ schaffer/lsd/maslow.htm
Mayo, M.C., and Brown G.S. (1999). Building a Competitive Business
Model, Ivey Business Journal, 63(3), 18–23.
Mazzonis, D. (1985). A Project for Innovation in Prato. In documentation
on the Prato Case Study, by ENEA.

DOI: 10.1057/9781137492401.0010
 References 

McClelland, D.C. (1971). The Achievement Motive in Economic

Growth. In Entrepreneurship and Economic Development, Kilby, P.
(Ed.), New York: Free Press, 108–122.
McGranahan, D.A., and Wojan T.R. (2007). Recasting the Creative Class
to Examine Growth Processes in Rural and Urban Counties. Regional
Studies, 41(2), 197–216.
McNeil, S., Fullerton, D., and Murphy, L. (2004). Understanding
Entrepreneurs: An Examination of the Literature. Entrepreneurship
in Atlantic Canadian University. The Atlantic Canadian Universities
Entrepreneurship Consortium . Centre for Small Business and
Entrepreneurship Acadia University Wolfville, Nova Scotia. http://
www.entreoasis.com/resources/pdf/4091120042219.pdf
Mellou, E. (1996). Can Creativity be Nurtured in Young Children? Early
Child Development and Care, 119, 119–30.
Mitchell, B.C. (2001). Motivations among Entrepreneurs in Rural South
Africa, A Comparative Study. M.A. dissertation, Industrial Psychology,
University of South Africa.
Miles, R., Miles, G., and Snow, C. (2006). Collaborative
Entrepreneurship: A Business Model for Continuous Innovation.
Organizational Dynamics, 35(1), 1–11.
Miller William, L. (1999). 4TH Generation R&D. John Wiley and Sons,
New York.
Miller, D., and Friesen, P.H. (1983). Strategy-Making and Environment:
The Third Link. Strategic Management Journal, 4(3), 221–235.
Miner, John B. (1997). A Psychological Typology of Successful Entrepreneurs.
London: Quroum Books.
Mises, L. (1949). Human Action: A Deatise on Economics. 3rd Rev. Necessity
Entrepreneurship? The Impact of the Socio-Economic Characteristics of
Nexus, Edward Elgar Publishing.
Moon, Y. (2004). IKEA Invades America. Harvard Business School.
Harvard Business School Press. Boston.
Morris, R., and Penido, M. (2014). How did Silicon Valley became Silicon
Valley?? Endeavor Insight , Supported by Omidyar Network. http://
share.endeavor.org/pdf/HDSVBSV.pdf
Morris, M., Schindehutte, M., and Allen, J. (2005). The Entrepreneur’s
Business Model: Toward a Unified Perspective. Journal of Business
Research, 58(6), 726–735.
Morrison, P., Roberts, J., and Midgle, D. (2004). The Nature of Lead Users
and Measurement of Leading Edge Status. Research Policy, 33(2), 351–362.

DOI: 10.1057/9781137492401.0010
 References

National Program of Youth Entrepreneurship Education and

Encouragement for 2008–2012(2008). http://big5.mofcom.
gov.cn/gate/big5/policy.mofcom.gov.cn/english/flaw!fetch.
action?libcode=flaw&id=D24BE7EF-0B10-474F-967B-
9A1C3BFF5764&classcode=650
Neto, J.A. (2000). Redes de Cooperação Produtiva e Clusters
Regionais—Oportunidades para as Pequenas e Médias Empresas,
Atlas, São Paulo.
Nexus, Edward Elgar Publishing.
Niccolai, J. (August 12, 2010). Update: Oracle Sues Google Over Java Use in
Android. Computerworld. computerworld.com/article/2515001/mobile-
wireless/update--oracle-sues-google-over-java-use-in-android.html
Nishimura, J., Okamuro, H. (2011a). R&D Productivity and the
Organization of Cluster Policy: An Empirical Evaluation of the
Industrial Cluster Project in Japan. Journal of Technology Transfer, 36,
117–144.
Nishimura, J., Okamuro, H. (2011b). Subsidy and Networking: The
Effects of Direct and Indirect Support Programs of the Cluster Policy.
Research Policy, 40, 714–727.
Nishimura, J., and Okamuro, H. (2011c). Management of Cluster Policies:
Case Studies of Japanese, German, and French bio-clusters. Center
for Economic InstitutionsWorking Paper Series 2011–7. Institute of
Economic Research Hitotsubashi University Tokyo, Japan October
2011.
Olomi, D.R., Nilsson, P., Jaenssoon, J.E. (2002). Evolution of
Entrepreneurial Motivation: The Transition From Economic Necessity to
Entrepreneurship. Babson College May.
Onderwijs Netwerk Ondernemen, (ONO) (2009). Education Networks
Enterprise. http://www.rvo.nl/subsidies-regelingen/onderwijs-
netwerk-ondernemen.
Orhan, M., and Scott, D. (2001). Why Women Enter into
Entrepreneurship: An Explanatory Model. In Women in Management
Review, 16, 232–243.
Osterwalder, A., and Pigneur, Y. (2010). Business Model Generation: A
Handbook for Visionaries, Game Changers, and Challengers. Wiley,
Hoboken, NJ.
Owen, N., and Jones, A.C. (April 2003). A Comparative Study of the
British and Italian Textile and Clothing Industries .London College
Fashion. http://cep.lse.ac.uk/seminarpapers/20-10-03-OWE.pdf

DOI: 10.1057/9781137492401.0010
 References 

Paniccia, I. (1998). One, a Hundred, a Thousands of Industrial Districts:

Organizational Variety in Local Networks of Small and Medium
Sized Enterprises. Organization Studies, 19, 657–699.
Parkinson, M., Hutchins, M., Simmie, J., Glark, G., and Verdonk, H.
(2004). Urban Renaissance Characteristics of EU Non-Capital Cities.
ODPM: London.
Peña, M. (2005). Steve Jobs to 2005 Graduates: ‘Stay Hungry, Stay
Foolish’. Stanford Report, Stanford University, (June 12). http://news.
stanford.edu/news/2005/june15/grad-061505.html
Penrose. (1959). The Theory of the Growth of the Firm. New York: John Wiley
Pesut, D.J. (1990). Creative Thinking as a Self-Regulatory Metacognitive
Process—a Model for Education, Training and Further Research.
Journal of Creative Behavior, 24(2), 105–110.
Pieke, F., Nyíri, P., Thuno, M. and Ceccagno, A. (2004). Transnational
Chinese: Fujianese Migrants in Europe. Stanford: Stanford University
Press.
Pitt, M. (1998). A Tale of Two Gladiators: “Reading” Entrepreneurs as
Texts. Organization Studies, 19(3), 387–414.
Porter, M.E. (May 6, 2011). The Microeconomics of Competitiveness.
Tirupur Knitwear Cluster, Tamil, Nadu, India. Harvard University.
http://www.isc.hbs.edu/resources/courses/moc-course-at-harvard/
Documents/pdf/student-projects/India_%28Tirupur%29_
Knitwear_2011.pdf
Porter, M.E. (1990). The Competitive Advantage of Nations. New York: The
Free Press, 131–238.
Porter, M.E. (1998). Clusters and Competition: New Agendas for
Companies, Governments, and Institutions. In On Competition,
Porter M.E. (Ed.), Harvard: Business School Press, 197–299.
Portnova, B.A., and Safriel, U.N. (2004). Combating Desertification in
the Negev: Dryland Agriculture vs. Dryland Urbanization . Journal of
Arid Environments, 56, 659–680.
Rabellotti, R., and Schmitz, H. (April 1999). The Internal Heterogenity
of Industrial Districts in Italy, Brazil and Mexico. Regional Studies,
33(2), 99–128.
Rabellotti, R. (1995). Is there an Industrial District Model? Footwear
Districts in Italy and Mexico Compared. World Development, 23(1), 29–41.
Rae, D. (December 2013). The Contribution of Momentary Perspectives
to Entrepreneurial Learning and Creativity. Industry & Higher
Education, 27(6), 407–420.

DOI: 10.1057/9781137492401.0010
 References

Rae, D. (2005), Entrepreneurial Learning: A Narrative-Based

Conceptual Model. Journal of Small Business and Enterprise
Development, 12(3), 323–335.
Rae, D., and Carswell, M. (2000). Using a Life Story Approach in
Researching Entrepreneurial Learning: The Development of a
Conceptual Model and Its Implications in the Design of Learning
Experiences. Education and Training, g 42(4–5), 220–227.
Rae, D., Price, L., Bosworth, G., and Parkinson, P. (2012). Business
Inspiration: Small Business Leadership in Research, 14(3), 128–151.
Rangarajan, K. (2005). Case Study of Tirupur. Presented to UNIDO.
http://www.unido.org/fileadmin/import/41692_DynamicCity_doc_
CaseStudyTirupur_Rangarajan.pdf
Reynolds, P.D., Camp, S.M., Bygrave, W.D., Autio, E., and Hay, M.
(2001). The Global Entrepreneurship Monitor. Executive Report. London
Business School and Babson College.
Reynolds, P.D., Camp, S.M., Bygrave, W.D., Autio, E., and Hay, M.
(2002). GEM Global Entrepreneurship Report, 2001 Summary Report,
1–126. http://www.gemconsortium.org/report (2002).
Rivera J. and Van der Meulen R. (October 15, 2014) Gartner Says Sales
of Tablets Will Represent Less than 10 Percent of All Devices in 2014.
Gartner. http://www.gartner.com/newsroom/id/2875017
Rivkin, J.W. (2000). Imitation of Complex Strategies. Management
Science, 46(6), 824–844.
Rivkin, J.W., and Siggelkow, N. (2003). Balancing Search and Stability:
Interdependencies among Elements of Organizational Design.
Management Science, 49(3), 290–311.
Roberts, E.B. (1987). Generating Technological Innovation, Oxford
University Press, 25–46.
Rochet, J.-C., and Tirole, J. (2003). Platform Competition in
Two-Sided Markets. Journal of the European Economic Association, 1,
990–1029.
Rodan, and Galunic, C. (2004). More than Network Structure: How
Knowledge Heterogeneity Influences Managerial Performance and
Innovativeness. Strategic Management Journal, 25(6), 541–556.
Rogers, C. (1961). On Becoming a Person: A Therapist’s View of
Psychotherapy. London: Constable.
Rogers, E.M., and Larsen, J.K. (1984). Silicon Valley Fever. NY: Basic Books.
Rosa, P., Kodithuwakku, S.S., and Balunywa, W. (March 10, 2009).
Entrepreneurial Motivation in Developing Countries: What Does

DOI: 10.1057/9781137492401.0010
 References 

“Necessity” and “Opportunity” Entrepreneurship Really Mean?

Babson College. JEL Classifications: M13 Working Paper Series.
Rosenberg, S. (2009). Say Everything: How Blogging Began, What It’s
Becoming, and Why It Matters. New York: Crown. 101–130.
Rosenfeld, S. (1996). Bringing Business Clusters in to the Mainstream of
Economic Development, in European Planning Studies, 5(1), 3–23.
Rugg, H. (1963). Imagination. NewYork, NY: Harperand Row.
Rutashobya, L.K. (1995). Women Entrepreneurship in Tanzania: Entry and
Performance Barriers. A research report submitted to OSSREA, Addis
Ababa.
Sapp, D.D. (1992). The Point of Creative Frustration and the Creative
Process. A New look at an old model. Journal of Creative Behavior,
26(1), 21–28.
Sarasvathy, S.D., and Dew, N. (December 2011). Without Judgment: An
Empirically-Based Entrepreneurial Theory of the Firm. Review of
Austrian Economics.
Sarasvathy, S.D., Dew, N., Velamuri, S.R., and Venkataraman, S.
(2010). Three Views of Entrepreneurial Opportunity, Handbook of
Entrepreneurship Research, 77–96 (Springer).
Sarasvathy, S.D. (2008). Effectuation: Elements of Entrepreneurial Expertise.
Cheltenham, UK: Edward Elgar.
Schmitz, H. (1995). Collective Efficiency: Growth Path for Small-Scale
Industry. Journal of Development Studies, 31(4), 529–66.
Scott,G., Leritz, L.E., and Mumford, M.D. (2004).The Effectiveness of
Creativity Training: A Quantitative Review. Creativity Research Journal
16, 361–388.
Shane, S. (2003). A General Theory of Entrepreneurship: The Individual-
Opportunityy Nexus. Cheltenham, UK: Edward Elgar.
Shane, S., and Venkataraman, S. (2000). The Promise of
Entrepreneurship as a Field of Research. Academy of Management
Review, 25(1), 217–226.
Shapero, A. (November 1975). The Displaced, Uncomfortable
Entrepreneur. Psychology Today, 9, 83–88.
Shapero, A., and Sokol, L., (1982). The Social Dimensions of
Entrepreneurship. In The Encyclopedia of Entrepreneurship, Kent, C.
Sexton, D., and Vesper K.H. (Eds.), Englewood Cliffs, NJ: Prentice-
Hall, 72–90.
Sharad, C. (2000), The Agrarian Origins of the Knitwear Industrial
Cluster in Tirupur, India, World Development, 28(3), 579–599

DOI: 10.1057/9781137492401.0010
 References

Shurkin, J. (2008). The Broken Genius: The Rise and Fall of William Shockley
Creator of the Electronic Age. New York: Palgrave Macmillan, 95–106.
Sierra Business Council. (2003). Investing for Prosperity: Building
Successful Communities and Economies in the Sierra Nevada. Truckee,
CA: Sierra Business Council. http://sierrabusiness.org/
Simpson S., Fischer B.D., and Rohde, M. (2013). Conscious Capitalism
Philosophy Pay Off: A Qualitative and Financial Analysis of
Conscious Capitalism Corporations. Journal of Leadership,
Accountability and Ethics, 10(4).
Sio, U.N., and Ormerod, T.C. (2009). Does Incubation Enhance Problem
Solving? A Meta-Analytic Review. Psychological .Bull, 135, 94–120.
Sisodia, R.S. (2011). Conscious Capitalism: A Better Way to Win a
Response to James O’Toole and David Vogel’s, Two and Half Cheers
for Conscious Capitalism. California Management Review, 53(3),
Spring 2011 CMR Berkeley Edu.
Solomon, D. (June 12, 2009). Interview with Jeff Bezos. http://www.
nytimes.com/2009/12/06/magazine/06fob-q4-t.html?_r=0
Starbucks (2013). Starbucks Global Responsibility Report 2013. http://
globalassets.starbucks.com/assets/98e5a8e6c7b1435ab67f2368b1c7447
a.pdf
Staw, B.M., and Szwajkowski, E. (1975). The Scarcity—Munificence
Component of Organizational Environments and the Commission of
Illegal Acts Administrative Science Quarterly, 20, 345–354.
Stickgold, R., Hobson, J.A., Fosse, R., and Fosse, M. (2001).Sleep, Learning
and Dreams: Off-Line Memory Reprocessing. Science, 294, 1052–1057.
Tajnai, C.E., and Fred Terman. (May, 1985). The Father of Silicon Valley.
Stanford Computer Forum. Stanford University, California. forum.
stanford.edu/carolyn/terman
Taig A. (June 13, 2013). Waze Employees Clinch Most Lucrative Exit
in Israeli History. Haaretz. http://www.haaretz.com/business/.
premium-1.529478
Tang, J. (2008). Environmental Munificence for Entrepreneurs:
Entrepreneurial Alertness and Commitment. International Journal of
Entrepreneurial Behaviour and Research, 14(3), 128–151.
Taylor, S. (2007). Creating Social Capital in MNCs: The International
Human Resource Management Challenge. Human Resource
Management Journal, 17, 336–354.
Teece, D.J. (2010). Business Models, Business Strategy and Innovation.
Long range planning, 43(2), 172–194.

DOI: 10.1057/9781137492401.0010
 References 

Teece, D.J., Pisano, G., and Shuen, A. (1997). Dynamic Capabilities

and Strategic Management. Strategic Management Journal, 18,
509–533.
Timmons, J. (1994). New Venture Creation: Entrepreneurship for the 21st
Century, 4th Edition., Richard D. Irwin, Burr Ridge, IL.
Timmons, J.A. (1999). New Venture Creation, Irwin.
Timmons, J.A. (1989). The Entrepreneurial Mind, Andover, Mass. Brick
House Publishing.
Tirupur Exporters Association (TEA). (2011). Tirupur Cluster—A
Success Story. http://tiruppur.nic.in/textile.html
Toroka, E.B., and Wenga, F.P. (November 1997). Small Industries
Development Organization: Tanzania Experience with MSEs
Development. Paper presented at a Workshop on Micro and Small
Enterprise Research. Dar es Salaam.
Treffinger, D. (1995). Creative Problem Solving: Overview and
Educational Implications. Educational Psychology Review, 7(3),
301–312.
Tucson Regional Economic Opportunities (TREO), (2006). Tucson
Economic Blueprint: Strategic Analysis Report. Tucson Regional
Opportunities Analysis. http://pdfoiohr.org/k-839381.html
UNCTAD. (2011). Global Statistics. http://unstats.un.org/unsd/statcom/
brochures/UNSD_Brochure.pdf
United Nations Industrial Development Organization (UNIDO),
(2002). Business Incubators: The Concept, by M.P. vanDjik. University
of Oxford.
Van Dijk, Jan, A.G.M. (1997). Universal Service from the Perspective of
Consumers and Citizens. Report to the Information Society Forum,
Brussels: European.
Van Dijk, Jan, A.G.M. (1999) The Network Society, Social Aspects of New
Media. London, Thousand Oaks, New Delhi: Sage.
Van Gaal, S., de Lange, F.P., and Cohen, M.X. (2012). The Role of
Consciousness in Cognitive Control and Decision Making. Frontiers
in Human Neuroscience, 6(121).
Venkataraman, S. (1997). The Distinctive Domain of Entrepreneurship
Research: An Editor’s Perspective. In Advances in Entrepreneurship,
Firm Emergence, and Growth, Jerome Katz and Brockhaus, R. (Eds.),
Greenwich, CT: JAI Press, 3, 119–138.
Viesti, G. (2000). Come nascono i distretti industriali, Laterza, Roma-
Bari.

DOI: 10.1057/9781137492401.0010
 References

Vincent J., Kantor P., and Geller D. (2013). Inditex Strategy

Report. Bridges Consulting. https://www.academia.edu/7136360/
Business_report_FINAL
Von Hippel, J. (1988). The Sources of Innovation. New York: Oxford
University Press.
Wallas, G. (1926). The Art of Thought, Harcourt Brace, New York.
Walzer, N. (Ed.) (2007). Entrepreneurship and Local Economic Development.
Lexington books, a division of Rowan and Littlefield Publishers inc.
Lanham, Boulder, New York, Toronto, Plymouth, UK, 21–38.
Walzer, N. (Ed.) (2007). Local Economicv Development. Lexington
books, a division of Rowman and Littlefield Publishers, Inc.Lanham,
Boulder, New York, Toronto, Plymouth, UK, 81–102.
Walt V. (January 8, 2013). Meet Amancio Ortega: The third-richest man
in the world. Fortune. management.fortune.cnn.com/2013/01/08/
zara-amancio-ortega/
Weinberger, E.D. (1991). Local Properties of Kauffman’s Nk Model: A
Tunably Rugged Energy Landscape. Physical Review A, 44(10), 6399.
West, W.A. (1990). The Social Psychology of Innovation in Groups. In
Innovation and Creativity at Work, West M.A., and Farr J.L. (Eds.),
Chichester, UK: Wiley and Sons.
Wood A. (2001). Magnetic Venture, The Story of Oxford Instrument.
Oxford University Press.
Woodman, R. (1981). Creativity as a Construct in Personality Theory.
Journal of Creative Behavior, 15, 43–66.
Woodman, R.W., and Schoenfeldt, L.F. (1989). Individual Differences
in Creativity: An Interactionist Perspective. In Handbook of creativity,
Glover, J.A., Ronning, R.R., and Reynolds C.R. (Eds.), New York:
Plenum Press, 77–92.
Woodman, R., Sawyer J., and Griffin R. (1991). Toward a Theory of
Organizational Creativity. Academy of Management Review, 18(2),
293–321.
Woodworth, R.S., and Schlosberg, H. (1954). Experimental
Psychology(Revised edition). Oxford,UK: Holt.
World Bank Indicators, (2013). http://data.worldbank.org/indicator/
NY.GDP.PCAP.CD
Wright, S. (1937). The Distribution of Gene Frequencies in Populations.
Proceedings of the National Academy of Sciences of the United States of
America, 23(6), 307–320. http://www.ncbi.nlm.nih.gov/pmc/articles/
PMC1076930/

DOI: 10.1057/9781137492401.0010
 References 

Yaniv, I., and Meyer, D.E. (1987). Activation and Meta Cognition of
Inaccessible Stored Information: Potential Bases for Incubation
Effects in Problem Solving. Journal of Experimental Psychology.
Learning, Memory, and Cognition, 13, 187–205.
Yunus, M., Moingeon, B., and Lehmann-Ortega, L. (2010). Building
Social Business Models: Lessons from the Grameen Experience. Long
Range Planning,g 43(2–3), 308–325.
Zott, C., Amit, R., and Massa, L. (2011).The Business Model: Recent
Developments and Future Research. Journal of Management, 37(4),
1019–1042.

Website

bruzzicardclothing.com/www.bruzzicardclothing.com/History.html
developer.android.com/about/dashboards/index.html
dupont.com/products-and-services/fabrics-fibers-nonwovens/fibers/
brands/kevlar.html
Eink.com
falierosarti.com/en/woolen-mill/history.html
fpcci.com.pk/reports/Sialkot%20Regional%20Profile.pdf
glassdoor.com/Best-Places-to-Work-LST_KQ0,19.htm
godisa.net
greendiary.com/10-eco-friendly-products-ikea.html
greenpeace.org/international/en/campaigns/climate-change/cool-it/
Campaign-analysis/Guide-to-Greener-Electronics/
greenretaildecisions.com/news/2013/03/28/ikea-commits-to-better-
cotton-initiative-for-all-products-by-2015
hightech-itzehoe.de
hightech-itzehoe.de/The_Cluster.425.0.html?&L=2
hpalumni.org/hp_way.htm
ikea.com/ms/en_AU/about_ikea/the_ikea_way/our_business_idea/a_
better_everyday_ (a)
ikea.com/ms/en_GB/pdf/yearly_summary/sustainability_report_2013_
final.pdf (c)
ikea.com/ms/en_IE/about_ikea/facts_and_figures/index.html (b)
inditex.com/documents/10279/18789/Inditex_Group_Annual_
Report_2013.pdf/88b623b8-b6b0-4d38-b45e-45822932ff72
innovate.umich.edu/2012/09/tony-fadell-inventor-of-the-ipod/

DOI: 10.1057/9781137492401.0010
 References

koralline.it/brand/?lang=en Koralline is a fashion brand for young

landsnail.com/apple/local/woz_gig/woz.html
lanificiobecagli.com
medpk.com/index.php?topic=252.0
nationmaster.com
nbia.org
netvalley.com/frame-right-svhistory-1.htm
news.starbucks.com/2014annualmeeting/program-that-turned-
employees-into-partners (2)
news.starbucks.com/leadership/print/howard-schultz (1)
oxin-centres.co.uk/group_articles/6-oxford-set-to-create-new-
innovation-centre-on-30-million-science-centre-site
pontetorto.it/en/company-profile
pratoexpo.com/chisiamo_eng.php
Rpi.edu
sbs.ox.ac.uk/sites/default/files/Entrepreneurship_Centre/Docs/martin-
wood.pdf
scienceoxford.com/about-us/history
simap.org.pk/index.php
sourcejuice.com/1011774/2007/01/10/
starbucks.com/about-us/company-information
starbucks.com/about-us/our-heritage
superderivatives.com
swedwood.com
vivekanandavidyalaya.in/School/
yarn.it/uk/azienda.html
waze.com/about
web.archive.org/web/20061017210624/http://www.obits.com/
hewlettwilliam.html
web.archive.org/web/20070207145215/http://obits.com/packarddavid.
html
zjjxql.en.gongchang.com/

DOI: 10.1057/9781137492401.0010
 Index
ABT, 3, 4
Amazon, 18, 24, 33, 35, 49, 52
America, 4, 5, 7, 44, 63, 90
android, 55, 64
Apple, 16, 17, 24, 25, 37, 50, 52,
53, 61, 63, 64, 83
ASP, 3, 4
ATT, 3
Benin, ix, 80, 101, 102
Bezos, 18, 24, 33, 49
BM, 34, 35, 39, 42, 45, 48
BMI, 13, 34, 47, 48, 51, 54, 56
Business Model, 34, 47
California, 55, 81
Chesbrough, 31, 32, 35, 56
China, 40, 41, 44, 63, 64, 92,
98, 99, 100
Christensen, 25, 31, 32
cluster, 69, 73, 74, 75, 76, 77, 78,
79, 84, 86, 87, 89, 90, 91, 100
connector, 108, 109, 110, 111
conscious capitalism, 60, 62, 64
creativity, 12, 13, 14, 21, 22, 23,
24, 25
Dabson, 7, 9
developing countries, ix, 71, 101
E.U., 1, 2, 4, 5, 9
education, 5, 6, 53, 75, 103, 111
EFC, 4
entrepreneurial process, 12
DOI: 10.1057/9781137492401.0011
entrepreneurship, 1, 3, 4, 5, 6, 7,
8, 12, 13, 19, 20, 21, 26, 27, 28,
61, 71, 75, 84, 100, 101
Facebook, 17, 38, 61, 64, 65, 66
financing, 10, 15, 54, 71, 83, 92
Gates, 17, 45, 62, 63
GEI, 3
Germany, 2, 21, 41, 71, 74, 75
Giacomin, 20, 21
Gillette, 50
Gladwell, 13, 57, 58, 59, 79, 108
Google, 50, 51, 52, 55, 64, 67,
69, 83
IKEA, 33, 34, 39, 40, 41, 42
incubator, ix, 13, 69, 70, 71, 77,
78, 89, 80, 79, 92, 107, 110, 111
India, ix, 42, 80, 88, 89, 90, 107
Inditex, 45, 46,
Industrial District, 72
innovation, 10, 34, 47, 71, 75,
87, 92
Israel, ix, 4, 40, 56, 80, 106
Japan, 2, 72, 75, 76
Jobs, Steve, 17, 24, 25, 63, 83
Kamprad, 33, 42
law of the few, 57, 79, 82, 85, 90,
93, 103, 107
leadership, 42, 61, 76

 Index

Maven, 57, 95, 96, 97, 108, 109, 111 salesman, 16, 99, 108,
McClelland, 25, 107 110, 111
Microsoft, 17, 37, 54, 61, 62, 63, 69, 89 Schultz, 17, 32, 33, 42
motivation, 7, 12, 13, 19, 21, 25, 26, 79, Silicon Valley, 80, 81
101, 103, 104, 105, 107, 108, 109, 110, 111 SMEs, ix, 1, 2, 3, 13, 32, 34, 56,
57, 58, 60, 64, 69, 71, 73, 76, 77,
necessity, 12, 19, 20, 21, 101, 103, 105 87, 89, 90, 92, 93
Negev, 80, 106 Starbucks, 17, 32, 34, 42, 43, 44

open incubator, 69, 78, 79, 80, 111 Timmons, 14, 15, 79
open innovation, 13, 30, 31 Tipping Point, 34, 56, 57, 60
opportunity, 3, 4, 12, 13, 19, 20, 21, 26, Tirupur, 80, 88, 89, 90, 91
27, 28, 29, 35, 36, 43, 44, 48, 58, 65,
85, 102 U.S., 1, 2, 3, 4, 5, 18, 21, 42, 74,
Ortega, 45, 46, 47, 48 80, 81
Oxford, 80, 83, 84, 85, 86, 87 UNIDO, 71
Oxfordshire, 80, 83, 84, 85, 86, 87 United Kingdom, 2, 3, 6, 80, 86,
87, 88
Porto Novo, 80, 102, 103
Prato, 72, 80, 91, 92, 93, 94, 95, 96, 98, Wal-Mart, 50, 62
99, 100, 101 Waze, 52, 65, 68, 69
Pronto moda, 98 Wozniak, Steve, 17, 63

Roberts, 15, 82 Zara, 16, 34, 45, 46, 47

rural, 6, 7, 9 Zuckerberg, Mark, 65,
rural environment, 1, 107, 108, 109, 110 67, 83

DOI: 10.1057/9781137492401.0011