A E G I S A E G I S A E G I S A E G I S A E G I S A E G I S A E G I S A E G I S

Advancing Knowledge-Intensive
Entrepreneurship and Innovation for
Economic Growth and Social Well-being in
Europe

Ongoing project

SUMMARY
Objectives of
the research
This research project aims at studying the interactions between
knowledge, innovation, economic growth and social well-being
in Europe. It focuses on knowledge intensive entrepreneurship
(KIE) as a necessary mechanism and an agent of change
mediating between the creation of knowledge and innovation
and its transformation into economic activity and well-being.


Scientific approach /
methodology
A variety of different scientific approaches and research
methodologies will be used to study KIE and its related
strategies and policies.
An extensive field research and numerous case studies lie at
the heart of the empirical work examining in-depth different
aspects of KIE. All necessary analytical techniques will be used,
from qualitative techniques to modelling and sophisticated
statistical and econometric analysis, social network analysis and
advanced policy analysis.

New knowledge and/or
European added value
In addition to the traditional, person-centred view of
entrepreneurship AEGIS introduces: an organization-centred
and network-centred view, emphasis on the link between micro
and macro phenomena, concentration on both high and low-
tech sectors, analysis in the context of various socio-economic
models and systems of regional /national innovation in Europe,
comparison of European patterns with those of other economies
such as Russia, China and India, a systemic view of the
phenomenon and the relevant policy implications.













Key messages for
policy-makers,
businesses,
trade unions and
civil society actors
Knowledge intensive entrepreneurship is a multi-dimensional
and context dependent phenomenon which can emerge both in
high and low-tech sectors. Advancing KIE is an inherently
systemic policy issue. Policy instruments which affect KIE will
certainly reflect both the supply side related to S&T,
education, industry structure, risk finance, and the like and the
demand side lead markets, public procurement, etc. It must be
stressed that it is strongly expected that the relative effects of
both demand- and supply-side policy instruments will differ
across different socio-techno-economic environments
(sectoral/national/regional innovation systems).











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Objectives of
the research

(15 LINES)
The AEGIS project has three main objectives:

At the micro level, it examines the act of knowledge-
intensive entrepreneurship (KIE), its defining
characteristics, boundaries, scope and incentives in
various sectors (high and low tech and services). Apart
from the supply side, it focuses on the demand side and to
the social and cultural dimensions related to KIE
At the macro level it examines the link between KIE,
economic growth and social well-being. Emphasis is
placed on the way the socio-economic environment stokes
animal spirits and benefits from them in the context of
various shades of capitalism in Europe and elsewhere.
At the policy level it will try to translate its findings into
diagnostics tools for country or sector specific assessment
of KIE and provide operational policy recommendations,
by taking into account different national/regional and
sectoral systems of innovation within EU and some key
large fast growing countries (India, China and Russia).


Scientific approach /
Methodology
20 lines


A variety of disciplines and research methodologies is used
to analyze KIE and related strategies and policies:
economics, organization theory, strategic management,
finance, economic history, economic geography, sociology,
science and technology studies, policy studies. All
necessary analytical techniques will be used, from
qualitative techniques and case studies to modelling and
sophisticated statistical and econometric analysis, as well as
advanced policy analysis.

An extensive field research (AEGIS survey) and numerous
case studies (CS) lie at the heart of the empirical work
examining in-depth different aspects of KIE. The
questionnaire that has been developed aims at tracing KIE
and identifying the factors which enable and/or constrain the
development of KIE in different sectors. The AEGIS survey
will support the empirical investigation of KIE in an attempt
to identify motives, characteristics and patterns in the
creation and growth of new firms which are based on the
intensive use of knowledge. This survey could be considered
as a pilot exercise for the design of a new instrument aiming
at the monitoring and study of KIE in Europe on a regular
basis.










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New knowledge and
European added value
2-3 pages

The recent global financial crisis underlined the fact that
securing economic growth is not an easy task and requires
more targeted efforts. Structural weaknesses of the European
economy have been exposed and new challenges have
emerged at the policy level. In the context of the new Europe
2020 strategic policy plan, the notion of growth has been
complemented with the concepts of smartness, inclusion and
sustainability. These priorities indicate that achieving growth has
to take into consideration the need to further strengthen
knowledge and innovation, promote efficiency in using
resources and support social cohesion
In this respect, the interplay between science, technological
advance, industrial dynamics and international performance,
and the relationship with human resources, lie at the heart of
policy design. The strategic roles of entrepreneurship and
innovation systems are at the core of the S&T policy agenda. At
the same time, the role of new knowledge intensive firms in
industry start-up and rejuvenation, labour mobility, and
knowledge communication has never before been more critical
to understand the solution of the European Paradox. In adverse
times as today, the need not only for a large quantity of new
entrepreneurial ventures, but more specifically for the
identification and promotion of some special ventures that can
be sustainable in difficult times and under credit crunch
conditions and support growth and employment, is of paramount
importance.

These are the key issues that the AEGIS project studies.AEGIS
benefited from prior analyses such as KEINS that had already
pointed out at the naivete of many entrepreneurship studies that
promoted the simplistic view of the rugged individualist
entrepreneur who single-handedly build great companies. It thus
went a long way from the five common myths regarding
entrepreneurship in the United States as these myths were
captured by the National Commission on Entrepreneurship
(NCOE) (2001) and Blithe (2000): the risk-taking myth (Most
successful entrepreneurs take wild, uncalculated risks in starting
their companies); the high-tech invention myth (Most successful
entrepreneurs start their companies with a breakthrough
invention usually technological in nature); the expert myth
(Most successful entrepreneurs have strong track records and
years of experience in their industries); the strategic vision myth
(Most successful entrepreneurs have a well-considered
business plan and have researched and developed their ideas
before taking action); and the venture capital myth (Most
successful entrepreneurs start their companies with millions in
venture capital to develop their idea, buy supplies, and hire
employees). Instead, AEGIS took into consideration right from
the start NCOEs (2002) guidance that the issues ranking at the








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top of the agenda of new and growing businesses include
finding and retaining quality people, accessing capital, intensive
networking, and infrastructure and institutional support.
This is so because in most sectors entrepreneurs have become
knowledge operators, dedicated to the utilization of existing
knowledge, the integration of different knowledge assets, and
the creation of new knowledge. They are placed at the
intersection between science, technology and innovation, and
operate either through the foundation of new firms or the display
of entrepreneurial spirit by existing firms or the activity of single
individuals within no-profit organizations such as universities or
public laboratories.
For Europe the role of knowledge intensive entrepreneurship is
key for growth and social well being: Large investments in
knowledge generation (such as RTD) could not lead
automatically to economic growth because there may meet
barriers in converting research into commercialized knowledge.
Knowledge intensive entrepreneurship represents an effective
transformative mechanism that breaks these barriers and
converts new knowledge into economic activity.

KIE is region-specific. Contexts rich in knowledge may generate
more entrepreneurial opportunities. A host of other factors,
institutions, laws, traditions, and culture shape the amount of
region-specific entrepreneurship capital. Regions characterized
by a high degree of entrepreneurial capital exhibit high levels of
economic growth.

KIE is also highly sector specific. Its relevant features and
impact depends on the knowledge base of a sector, the main
public and private actors that characterize the sector and the
institutions. Knowledge intensive entrepreneurship is not
confined to high technology sectors. It has become relevant and
pervasive also in low-tech and traditional industries, and in
services, and in all these different contexts reveal specific
features compared to manufacturing.

KIE has several distinct national models, related to the different
national innovation systems. Transition and new European
Member Countries present particularities and often problems in
this respect, while the Unites States have a very vibrant
dynamics. Also new global actors such as China and India
present an increasing role of knowledge intensive
entrepreneurship.












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Key messages for
policy-makers,
businesses,
trade unions and
civil society actors
2 pages

Several policy conclusions and recommendations are at the base
of AEGIS. They add to the traditional policies that foster
entrepreneurship such as the creation of conditions favourable to
the entry of new firms, financial support and venture capital, the
support of the later stages of firms growth related to the
transformation and growth of those entrants that have been
successful.

AEGIS has gone beyond the individual-centric approach to
emphasize the major role of knowledge, innovation systems,
networks and institutions in fostering knowledge-intensive
entrepreneurship (KIE). Its main messages regarding knowledge-
intensive entrepreneurship include:

- Systems: KIE is an inherently systemic policy issue that must
be tackled from various angles simultaneously for long-term
results. Single policy fixes will work for a short while but will not
change attitudes for the long haul.

- Socio-Economic Incentives: The simplistic view of the rugged
individualist entrepreneur who takes uncalculated risks and
single-handedly builds great companies is far from reality.
Builders of KIE respond to economic and social incentives that
can be influenced to a significant extent by policy.

- Competence Building: The issue at hand the building of new
activities and new structures invariably depends on achieving
new combinations of capabilities and competence building.

- Knowledge Application: KIE is about the application of
knowledge to new activities. Policies need to focus on application
rather than on the creation of new knowledge.

Broad policy targets emerge from the above discussion. Policies
for the promotion of KIE should enable the creation and
commercialization of knowledge in various ways and forms: start-
ups of new and small independent firms, university spin-offs,
public laboratories and large established corporations, KIE within
larger corporations and technological diversification.


In order to act on KIE, various levels of intervention could be
envisaged: the individual, the firm, other organizations
(universities, banks/VCs), clusters and networks. Both supply-
side and demand-side factors are important to linking KIE to
regional growth and can be affected by policy. Regions need both
sets of factors to achieve high levels of economic growth. On the
supply side contexts rich in knowledge will tend to generate more
entrepreneurial activities (knowledge spillover theory of








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entrepreneurship) and on the demand side a lot of factors,
institutions, laws, traditions and culture shape the amount of
region-specific entrepreneurship capital.

These policies should be cognizant of the different context
conditions in which knowledge-intensive entrepreneurship takes
place. These include innovation system, sector and sectoral
clusters and geographical clusters. Given the multidimensionality
and context dependence of KIE, then, various policy instruments
can be used either singularly or jointly, from R&D support to seed
capital or venture capital, to training and human resource
formation, to regulation and standardization. Moreover,
combinations of central policy actors (ministries) and
decentralized policy actors (regions, municipalities, local
government) must be involved extensively.

Also specific policy recommendations can be also identified.
First of all, policies in favour of KIE should support the creation of
new knowledge and the building of knowledge infrastructure that
will enable the creation and commercialization of knowledge in
various ways and forms. This means the support of basic
research, allowing for the migration from science to commercial
sector and back, improvement of the quantity and quality of both
scientific and managerial education, fostering the governance of
higher education institutions to promote academic
entrepreneurship and improve the effectiveness of IPR retention
by universities. Second, because networks are key for the
creation and survival of KIE competencies and resources that
are likely to be widely distributed - policies should facilitate the
access to knowledge resources and stimulate interfaces with the
market. In addition, polcies should support not just individual
entrepreneurs but networks (implications for ETPs). Third,
policies must take into account the sectoral context of KIE.
Policies should take into account the sectoral context in which
knowledge intensive entrepreneurship takes place. In fact sectors
differ very much in terms of type of knowledge, actors involved in
innovation, networks and institutions, so that the conditions
affecting knowledge base entrepreneurship could be radically
different from sector to sector. Policy intervention is especially
important when knowledge-intensive entrepreneurs innovate in
new (emerging) technological areas that do not reinforce, but
rather overturn, incumbent firms asset values. Finally, the
importance of the institutional setting cannot be overemphasized.
This means that new member countries in particular need
support, that open standards may be important in complex
environments (decreasing uncertainties)











PROJECT IDENTITY


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Coordinator 1. PLANET S.A.
Consortium
2: Universit Commerciale "Luigi Bocconi"
3: National Technical University of Athens
4:Institute for Management of Innovation and Technology
5:Max Planck Gesellschaft zur Frderung der Wissenschaften e.v.
6:Lunds universitet
7:Universiteit Utrecht
8:Technische Universitt Dortmund
9:Universit De Strasbourg
10:University College London
11:Unidade de Estudos sobre Complexidade e Economia
12:Aalborg Universitet
14:University of Sussex
15: Magyar tudomanyos akademia kozgazdasagtudomanyi intezet
(Institute of Economics, Hungarian Academy of Sciences )
16: Centre for Economic Studies, o.p.s.
18: Finansovaya akademiya pri pravitelstve rossiyskoy federacii
(The Finance Academy under the Government of the Russian
Federation)
19:Zhejiang University
20:Centre for Development Studies
21:Centrum analiz spoleczno- ekonomicznych- fundacja naukowa
(Center for Social and Economic Research)
22:Universiteit Maastricht
23:Croatian Employers Association
Duration 1/1/2009 31/12/2011 (36 months)
Funding Scheme Large-scale integrating project
Budget EC contribution:3.300.000
Website http://www.aegis-fp7.eu/
Further reading Knowledge-Intensive Entrepreneurship and Innovation Systems:
Evidence from Europe, Edited by Franco Malerba, Routledge
Publishing,
Related websites
For more information Project website