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User Innovation and Business Incubation

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  • Carolin Eckinger
  • M.W.J.L. Sanders

Abstract

This paper investigates user innovations in business incubation programs. User innovations are defined as innovations by users rather than suppliers of products, processes or services and have been identified as a potentially rich source of innovative ideas. Business incubators aim to help entrepreneurs find and develop ideas into viable businesses and have been shown to contribute to the success rate of start-ups. Current incubator acquisition strategies, however, are rather passive (founders need to apply) and selection into the incubation programs is geared towards attracting potentially profitable start-ups. User innovations often lack a dedicated founder team and the innovator typically has a lower ambition to build a venture and achieve profitability. In this paper we construct a measure based on existing literature to classify user innovations in a dataset of 296 start-ups that applied to one of two incubation programs between 2014 and 2017 in the Netherlands. Analysing this dataset, we found only 19 and find that incubator programs benefit user innovations as much as they do other ventures. Our data also suggests a negative self-selection bias of user innovations, shown by very few user innovations applying to incubation programs. At the same time only a few of the user innovations found have been selected for incubation, revealing an additional selection bias of incubator acquisition strategies towards user innovations

Suggested Citation

  • Carolin Eckinger & M.W.J.L. Sanders, 2019. "User Innovation and Business Incubation," Working Papers 19-16, Utrecht School of Economics.
    • Handle: RePEc:use:tkiwps:1916
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    References listed on IDEAS

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    1. Jeroen de Jong & Eric von Hippel, 2008. "User Innovation in SMEs: Incidence and Transfer to Producers," Scales Research Reports H200814, EIM Business and Policy Research.
    2. Joachim Henkel & Eric von Hippel, 2005. "Welfare Implications of User Innovation," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 73-87, January.
    3. Jacques Arlotto & Jean-Michel Sahut & Frédéric Teulon, 2011. "What is the Performance of Incubators? The Point of View of Coached Entrepreneurs," Post-Print hal-00771825, HAL.
    4. Christian Kraft, 2012. "User Experience Innovation," Springer Books, Springer, number 978-1-4302-4150-8, January.
    5. Alfonso Gambardella & Christina Raasch & Eric von Hippel, 2017. "The User Innovation Paradigm: Impacts on Markets and Welfare," Management Science, INFORMS, vol. 63(5), pages 1450-1468, May.
    6. Bradonjic, Philip & Franke, Nikolaus & Lüthje, Christian, 2019. "Decision-makers’ underestimation of user innovation," Research Policy, Elsevier, vol. 48(6), pages 1354-1361.
    7. Baldwin, Carliss & Hienerth, Christoph & von Hippel, Eric, 2006. "How user innovations become commercial products: A theoretical investigation and case study," Research Policy, Elsevier, vol. 35(9), pages 1291-1313, November.
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    12. James R. Brown, 2005. "Venture Capital and Firm Performance Over the Long-Run: Evidence from High-Tech IPOs in the United States," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 10(3), pages 1-33, Fall.
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    Keywords

    User Innovation; Business Incubation; Startups; Entrepreneurship;
    All these keywords.

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