European bridging organizations in global innovation hubs towards the ultimate technology diplomacy

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About the Authors

Pawe Pietrasieski, Ph.D. Associate Professor, SGH Warsaw School of Economics Collaborator, Ozmen Center for Entrepreneurship, UNR College of Business

Katarzyna RokoszPh.D. Candidate of the Collegium of Management and Finance, SGH Warsaw School of Economics

introduction

In a globalized world, many companies, including major technology companies, face global competition from the outset. While larger and more enterprising companies often develop their global market presence on their own, newer and smaller companies often benefit from the assistance offered by different types of government organizations, mainly in global innovation ecosystems. Following the location choices of the Bridge Organizations, 20 ecosystems were identified in which support for the internationalization of technological companies appears to be the most intense. Through the desk research, more than 300 government organizations were identified that support the international expansion of technology companies, sponsored by European countries (EU 27 + Norway, Switzerland and the United Kingdom).

Governments and policymakers globally seek new sources of growth, often turning to technology, innovation and entrepreneurship as perhaps the most promising avenues for economic growth and competitiveness. Startups, scaleups, or high-growth businesses are often evoked as new businesses that are more likely to generate substantial productivity, innovation, and employment gains for the economy. In the era of globalization, many companies face the global market very soon after their foundation. Unlike traditional firms, which are likely to follow a staged process of internationalization – traditionally depicted in the Uppsala model of internationalization – new firms often embark on global market conquest from the earliest stages of their development. Nicknamed “born global” or “new international ventures,” these companies often offer technology-based solutions targeting a global niche. Prioritizing early internationalization is often a prerequisite for success as competition for technology solutions is increasingly global.

In addition to the traditional forms of support for a more gradual expansion into foreign markets – financing for participation in trade fairs and trade missions, partner search, legal advice, etc., more and more countries offer dedicated “soft landing” services for companies aiming at global technology hubs in their internationalization strategy. The support offered to these companies includes help in accessing the knowledge, network and capital of selected technology hubs, through a series of tools – starting from the simple advice of a commercial consultant, through dedicated training and study visits in the global hub, to dedicated accelerator programs and bootcamps at headquarters. But the most sophisticated form of support has been termed the “Bridge Organization”. Bitka and Pietrasieski define bridge organizations as “government and quasi-government agencies that support the expansion of high-tech enterprises.” Due to the relative novelty of the concept, the performance of bridging organizations has not yet been fully evaluated, but they offer a very promising avenue for future internationalization support. Their definition is quite broad and covers a broad spectrum of organizations present in technology hubs such as:

focusing specifically on supporting technology businesses (as opposed to the entire exporting population), being active in more than one technology hub and offering their support on a permanent basis.

Bridge organizations in Silicon Valley and around the world

A number of bridging organizations have been identified as particularly important, based on a few criteria: long-term presence (5+ years) in Silicon Valley, an explicit focus on technology companies, and embedment within a network of such organizations at the outside of Silicon Valley. Based on these criteria, Innovation Center Denmark, Team Finland, Czech Accelerator, Nordic Innovation, German Accelerator, Enterprise Ireland and Swissnex clearly stand out.

On the basis of the above selection, the desk research of the localization choices of these and of the “sister” rights within the global ecosystems (beyond Silicon Valley) was carried out. European cities were excluded, as the focus of this research was on overseas technological ecosystems. As a result, 20 cities/regions globally were identified, including 6 in the United States of America (Silicon Valley, New York, Boston, Austin, Houston and Seattle), 3 in China (Shanghai, Beijing, Hong Kong) , 3 in China (Shanghai, Beijing, Hong Kong), 3 in India (New Delhi, Mumbai, Bangalore), two in Brazil (Sao Paulo and Rio de Janeiro), plus individual cities by country – Seoul, Tel Aviv, Singapore , Dubai, Tokyo and Toronto. Each of these cities/regions was then scanned for the different forms of presence of their home country institutions, such as representations of export/investment agencies, government-supported grassroots networking organization and regional institutions (the analysis including EU countries + UK, Norway and Switzerland).

Following the European Bridge Organizations, 20 ecosystems were identified in which support for the internationalization of companies appeared to be the most intense. On the basis of some of the Bridge Organizations recognized as the most advanced, the survey was conducted in order to identify the global ecosystems selected by these organizations as their destination.

Conclusions

The participation of countries in helping firms expand into international markets varies considerably. Of the countries represented by more than 1 organization overseas, the majority were found to be larger Western European countries. In the framework of the desk research, some observations were made on the alternative strategies of smaller and less resource-rich countries. However, several countries do not offer dedicated support for internationalization of companies.

It has been shown that the most common way for governments is to set up diplomatic or non-profit entities tasked with supporting their companies in exporting to foreign markets. As governments have chosen to step forward for sophisticated forms of internationalization support, more resources are needed, including intangibles such as knowledge and related experience of global markets. Another stage in the learning curve of government support for international business expansion is the creation of a dedicated bridging organization which is – in most cases – an effect of advanced collaboration between government, academia and business organisations. And this is the most advanced trend in European countries’ economic diplomacies that we can observe right now.

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