How Technology Travels from Old to New Firms: The Role of Employees’ Entrepreneurship in Technology Ventures

A driving force in the creation of new firms resides in the developments of novel technology by members of current companies. When this happens, an employee gains the incentive to quit the parent company and start a new business venture (i.e. spin-out). Research on entrepreneurial employees and their spin-outs is fragmented and misleading. This chapter finds theoretical gaps and enlarges the understanding of the conditions that allow technological knowledge to give rise to entrepreneurial employees. The analysis of 23 entrepreneurs and 10 spin-out companies in the internet and bio-tech industries shows the pattern of creation of new technological enterprises. It recognizes the role of employees’ entrepreneurship in the formation of innovative ventures. Eventually, the new technology moves again when an existing company acquires the spin-out along with the entrepreneur. This research solves conflicting views in the literature and gives insights into how entrepreneurs actively transfer technologies from one company to another. Entrepreneurial employees create new ventures in a different industry, combine multiple experiences in mature businesses, and pursue acquisition. These conclusions push scholars and practitioners to look at employees’ accumulation of knowledge and business experience as a source of innovation.