Venture Development in Under-developed Entrepreneurial Environments

In a working paper, “Policies and Structures for Spinning Off New Companies from Research and Development Organizations”, Roberts and Malone (March 1995) developed a matrix of high and low levels of support and high and low levels of selectivity and showed the likely implications and results of the support and selectivity policies in terms of the technology licensing office’s role in the spin-off process. The authors observed that only the low support/low selectivity and high support/high selectivity quadrants of the matrix appear to be rational and viable. (Please see the Support and Selectivity Policy matrix below).

Academic spin-off policies and types of entrepreneurial environments (Roberts & Malone, 1995)

Roberts and Malone also argue that low support-low selectivity policies are more fitted to entrepreneurially developed environments. In entrepreneurially developed contexts, such as Boston or Silicon Valley, a strong entrepreneurial community has the capability to select the best entrepreneurial projects and allocate resources to them.

In underdeveloped entrepreneurial contexts that lack a strong entrepreneurial community to provide market selection and resource allocation functions, their research favour adoption of high selectivity and high support policy that are aimed at developing ventures capable of pursuing opportunities with high growth potential. High support/high selectivity (a few well-supported ventures) relies on picking potential winners and supporting them so that they have every chance of success.

Source: Policies and Structures for Spinning Off New Companies from Research and Development Organizations by Edward Roberts and Denis Malone, March 1995

“Policies and Structures for Spinning Off New Companies from Research and Development Organizations: Edward Roberts and Denis Malone, March 1995, MIT Sloan School of Management and Industrial Research Limited, New Zealand.