Innovation and Entrepreneurship in small firms: The influence of entrepreneurial attitudes, external

relationships and learning orientation

Innovasjon og Entreprenørskap i små selskaper: påvirkning av entreprenørielle holdninger, eksterne relasjoner og læringsorientering

Philosophiae Doctor (PhD) Thesis

Erlend Nybakk

Department of Economics and Resource Management Norwegian University of Life Sciences

Ås 2009

   

Thesis number 2009: 07 ISSN 1503-1667

ISBN 978-82-575-0873-9

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Preface and Acknowledgements

I have submitted this thesis as partial fulfilment of the degree Philosophiae doctor

(Ph.D.) at the Norwegian University of Life Sciences, Department of Economics and

Resource Management. The work has been carried out at the Norwegian Forest and

Landscape Institute and Oregon State University. The funding for the work has been

provided by the Norwegian Forest and Landscape Institute and the Research Council of

Norway. This thesis could not have been completed without support from several

persons. I would like to thank my supervisors Professor Anders Lunnan and Professor

Eric Hansen for their guidance, insight, feedback and encouragement throughout my

Ph.D. studies. My colleague Dr Birger Vennesland was not officially a supervisor, but

has given feedback and support all through my studies. Thank you for getting me

started, sharing my interest and for all the discussions and enthusiasm.

In my last paper I had the pleasure of working with Professor Jan Inge Jenssen at

the University of Agder. Thank you for letting me join your project and for giving a new

dimension to my thesis. I would like to thank the Norwegian Forest and Landscape

Institute for giving me the opportunity to do this work and to all my colleagues for

encouragement and support. Dr Jon Bingen Sande and Dr Silja Korhonen-Sande at the

Norwegian School of Management have been important discussion partners and have

given valuable feedback on my research design and writing. I had the pleasure of being

a visiting researcher for one year at Oregon State University and was included in Eric’s

Forest Business Solutions Team. Your help was a significant contribution to my thesis.

Thank you Chris, Pablo, Rajat, John and Jochen for providing valuable feedback to my

ideas, writing and for making my year in Corvallis so much more than work. And

especially thanks to Dr Pablo Crespell for using his time to teach me Structural Equation

Modeling, when he was busy finishing his own Ph.D.

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Finally, I would like to thank my family: my parents, Marie and Rolf, and my

sisters, Åslaug and Hilde, for their support throughout my life. Special thanks and

gratitude to my wife Liv Mari and daughter Oda Marie for reminding me about what is

important in life, for asking the relevant questions and for giving me the best support I

could ever receive.

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Summary

In order to uphold economic growth and employment in the districts and nationally, one

is dependent on small and competitive firms and sole owner enterprises. These represent

the majority of firms and are a vital source for new creativity and development in both

traditional and new sectors. How one should promote entrepreneurship and innovation

among these companies has been a central theme in political debates. The foremost goal

with this thesis is to advance knowledge about the factors that trigger creativity and

innovation in small firms, with the main focus on firms that offer non-timber forest

products and services (NTFP&S).

Article I was based on a questionnaire for forest owners in Telemark, Vest-

Agder and Aust-Agder (three counties in east Norway) and shows that the likelihood of

starting up with NTFP&S is greater among forest owners that recognize opportunities

and are risk takers. Articles II and III were based on a questionnaire for firms that work

with nature-based tourism. The first of them builds on Article I and shows that forest

owners that recognize opportunity and are risk takers have a greater likelihood of

changing the way they supply their products and services. Article III shows the effect of

external relationships on innovation and how innovation affects economic

accomplishment. The relationships are also exemplified through a case study. Article IV

was based on a study of a random selection of forest owners with more than 25 hectares

of forest in southeast Norway. The study shows that external relationships and learning

orientation have a positive effect on innovation and again on economic success among

forest owners, related to NTFP&S. Article V was based on a questionnaire for small,

knowledge-intensive firms and shows the impact of external relationships on product,

process and market innovation. Each of the articles presents implications of the findings

and suggestions for further research.

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Sammendrag

For å oppettholde økonomisk vekst og sysselsetning i distriktene og nasjonalt er man

avhenging av små og konkurransedyktige selskaper og enkeltmannsforetak. De

representerer det absolutte flertallet av bedriftene og er en viktig kilde til nyskaping og

utvikling i både tradisjonelle og nye sektorer. Hvordan man skal promotere

entreprenørskap og innovasjon blant disse selskapene har vært et sentralt tema i den

politiske debatten. Det overordnede målet med avhandlingen er å frembringe kunnskap

om faktorer som trigger nyskaping og innovasjon i småbedrifter, med et hovedfokus på

foretak som tilbyr ”ikke-tømmerprodukter” og tjenester fra skogen (ITP&T). Artikkel I

er basert på en spørreundersøkelse til skogeiere i Telemark og Agderfylkene og viser at

sannsynligheten for å starte opp med ITP&T er større blant skogeiere som er

risikovillige og mulighetssøkende. Artikkel II og III er basert på en spørreundersøkelse

til selskaper som driver med natur-basert turisme. Den første av dem bygger videre på

Artikkel I og viser at selskaper som er risikovillige og mulighetssøkende har en større

sannsynlighet for å endre måten de leverer produktene og tjenestene sine på. Artikkel III

viser betydningen av eksterne relasjoner på innovativitet og hvordan innovativitet

påvirker økonomisk prestasjon. Sammenhengene eksemplifiseres også gjennom et case-

studie. Artikkel IV er basert på en undersøkelse til et tilfeldig utvalg av skogeiere med

mer en 250 mål skog i Sør- og Øst Norge. Undersøkelsen viser at eksterne relasjoner og

læringsorientering har en positiv effekt på innovativitet og igjen på økonomisk

prestasjon blant skogeiere, relatert til ITP&T. Artikkel V er basert på en

spørreundersøkelse til små, kunnskapsintensive selskaper og viser betydningen av

eksterne relasjoner på produkt-, prosess- og markedsinnovasjon. Hver av artiklene

presenterer implikasjoner av funnene og forslag til videre forskning.

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Content

1. Introduction............................................................................................................. 7 1.1. Research focus .................................................................................................. 7 1.2. Research context and gap in knowledge........................................................... 8

1.2.1. Political issues related to the context ........................................................ 8 1.2.2. Non-Timber Forest Products and Services context ................................ 10 1.2.3. Small knowledge-intensive firms. .......................................................... 14

1.3. Outline of the thesis ........................................................................................ 16 2. Theoretical Insights and research questions ...................................................... 17

2.1. Defining innovation and entrepreneurship...................................................... 17 2.2. Different directions in the entrepreneurship and innovation literature........... 18 2.3. Research questions.......................................................................................... 25 2.4. Effect of entrepreneurial attitudes on start-ups, innovativeness and firm

performance ........................................................................................................ 26 2.5. Effects of external relations on innovation and innovativeness...................... 29 2.6. Learning orientation and local entrepreneurial climate effects on

innovativeness..................................................................................................... 33 2.7. Innovativeness effects on Economic Performance ......................................... 34

3. Introduction of the papers in the thesis .............................................................. 36 4. Data and method ................................................................................................... 39

4.1. Measurement................................................................................................... 40 4.2. Questionnaire development ............................................................................ 44 4.3. Sampling and Data Collection ........................................................................ 44 4.4. Non-response test............................................................................................ 45 4.5. Statistical Analysis.......................................................................................... 47

5. Results and discussion .......................................................................................... 48 5.1. Entrepreneurship, Entrepreneurial attitude and innovation ............................ 49 5.2. Antecedents to innovativeness........................................................................ 52

6. Implications ........................................................................................................... 56 6.1. Implications for policymakers and practice.................................................... 57

6.1.1. Entrepreneurship - start-ups - innovation ............................................... 57 6.1.2. Effect of external relations and learning orientations on innovation...... 58 6.1.3. Innovation - performance........................................................................ 60

6.2. Implications for theory and research............................................................... 60 7. Limitations and future research .......................................................................... 63 8. References.............................................................................................................. 68

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1. Introduction

1.1. Research focus

Rural communities in Norway have been under great economic stress in recent

years. Due to increased urbanisation in many regions, there has been a negative impact

on the vitality of rural areas. To maintain the vitality of these areas, governments have

employed a variety of policies, some of which aim to facilitate innovation and

entrepreneurship in small firms and among individuals. Small firms play a decisive role

in prompting national and rural competitiveness and employment; they represent the

great majority of firms and act as sources of renewal and development in both

traditional and emerging business areas. How best to promote innovation and

entrepreneurship has been an important topic in this debate in politics and in academia.

The last few decades have seen a rapidly growing body of literature addressing

innovation and entrepreneurship. The field, having struggled for academic legitimacy

for many years, is today well established. However, relatively new directions in the

literature continue to leave many gaps in research. One such gap is related to contexts

that differ from the most studied industries. For example, Voss and Zomerdijk (2007)

and Wisse et al. (2007) emphasise that the uncritical use of manufacturing-based

frameworks may not be appropriate for the study of innovation in the service sector.

The research problems in this thesis are related to different theoretical debates in the

entrepreneurship literature. One part is related to the creation of organisations (e.g.

Gartner, 1988) and opportunity recognition (e.g., Kirzner, 1999; Shane and

Venkataraman, 2000). The other part is related to innovation and innovativeness (e.g.,

Grønhaug and Kaufmann, 1988; Tidd and Bessant, 2009; Lundvall, 1992). A large part

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of the research involves testing of previously developed theories in a new context

(‘non-timber forest product and services’ and ‘small knowledge-intensive firms’).

1.2. Research context and gap in knowledge

1.2.1. Political issues related to the context

A main area of interest in this dissertation concerns alternative methods of using

woodlands. In the past 20-30 years, there has been a comparative decrease in revenue

from conventional land use in Norway for farming and forestry. This decrease has

spurred an intensive attempt to foster growth and to institute additional work

possibilities founded on the usage of non-timber aspects of the landowner’s forests.

Another major point of interest in this dissertation is concerned with innovation in small

businesses. Comments will be made on this later.

In 1940, employment in the primary, secondary and tertiary industry was

relatively equal in Norway. However, there have been sizeable structural changes since

that time. For example, employment in the primary sector has dwindled significantly,

and there has also been a reduction in the secondary area. Most of the new jobs that

have been created are related to the service sector. Persons employed in agriculture and

forestry has diminished from about 330,000 in 1940 to about 60,000 in 2007 (SSB,

2008). The conventional farm in Norway normally has an output that is 80% agricultural

and 20% timber. Farm and forest owners own about 75% of the forest areas in Norway.

Farm real estate is legally regulated, and few properties are sold to anyone outside

family. There are almost no opportunities to increase the size of each property, and the

state farm accounting survey shows that farm-sector revenue is declining compared with

the rest of society (NILF, 2003). Simultaneously, the government has a policy of

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maintaining the main features of the population pattern. The greater part of Norwegian

farm households receive most of their income from means other than agriculture.

Nevertheless, there is a limit to how long farmers are interested in using off-farm

income for investment in their farm and its maintenance (Bjørkhaug, 2007). There is a

great likelihood that they will leave farming and their farms if they cannot economically

support themselves and their families.

Forest and agricultural strategies in European countries and the European Union

increasingly evaluate the role of forests and their multifunctional administration in rural

development (Wisse et al., 2007). Consequently, it is essential that forestry and rural

development investigations combine forestry sciences and regional development

knowledge (Vennesland, 2004). Rural economic development policies of the 1970s and

1980s focused on how best to utilise forest (timber) resources as contributions to the

industrial sector in Europe. As development in the industrial sector during the 1980s

evened out or became negative, more localised strategies were introduced (Hyttinen et

al., 2002). This allowed local communities to choose their own financial development

policies, to create networks of small and medium-sized enterprises (SMEs), and to make

use of local resources. Rural economic development research shifted during the 1990s

from concentrating on economic development strategies to the strengthening of the

development of entrepreneurs (Wisse et al., 2007). At the present time, this

entrepreneurial focus has been further expanded into a focus on innovation. Because a

great part of the Non-Timber Forest Products and Services (NTFP&S) represents a

fairly new sector alongside traditional forestry, there is a necessity to promote

innovation in this sphere. Because there is a political desire to have people continue to

live in rural areas and on farms, the central topic has involved promotion of innovation

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and entrepreneurship related to other activities than traditional timber and firewood

production. Nonetheless, the empirical research in this area has been limited.

1.2.2. Non-Timber Forest Products and Services context

As already mentioned, Non-Timber Forest Products and Services (NTFP&S) are

the main interest in this thesis. The term NTFP&S is used to describe a broad spectrum

of activities involving the commercial use of forestland and wilderness with the

exception of timber and firewood sales. For example, NTFP&S refers to a different set

of activities than the non-timber forest products commonly referred to in North

America. In Norway, these uses include nature-based (eco) tourism and sales of fishing

and hunting licenses.

It is obvious that the most important activities related to NTFP&S are services

regarding sales and that the most important of these services and associated products are

related to fishing, hunting and tourism. There has been increased interest in service

sector innovation among researchers and strategy setters. Although there have been

several general contributions to the literature (e.g., Hjalager, 1994; 1997; 2002;

Hallenga-Brink and Brezet, 2003; Ioannides and Petersen, 2003; Walder et al., 2006),

the diversity across service industries makes it difficult to generalise (Fagerberg et al.,

2005). There are many ways in which services differ from products (Miles, 2003). 1)

most services are not easy to define and cannot be moved or warehoused, 2) services

often interact with customer needs and can be customised to particular client

requirements, 3) the service industry is diverse and the nature of the service can vary

(Miles, 2003), and 4) a great deal of the service sector is very dependent on technology;

connections to eco-tourism and small/micro companies, for example, are not apparent

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(Hollenstein, 2003). One element of the literature on innovation in the service sector

centres on tourism (e.g., Hallenga-Brink and Brezet, 2003). Hotels and other larger-

scale firms have been the focus of a great deal of tourism innovation and

entrepreneurship research.

In 2001, a substantial innovation and entrepreneurship study was performed in

the Central European countries. The results showed that environmental and recreational

services are normally incorporated into the product mix of forest holdings but that they

nonetheless do not generally yield noteworthy profit to forest holdings (Rametsteiner et

al., 2005; Rametsteiner and Weiss, 2006a, b; Weiss and Rametsteiner, 2005). An

average of two percent of forest holding revenues are composed of recreational services;

proceeds from nature conservation are insignificant (Rametsteiner et al., 2005). Single

forest holdings, predominantly those nearer the larger urban areas, may supersede the

returns from timber. Even though today, new services do not contribute greatly to the

profit of landowners, they are still connected to a good share of innovation activity.

Because recreation leads the field in service innovations, recreation services might

become significantly more important in the future.

These innovations are often not simply opportunity-driven but are devised in

order to defend legal limitations because of the great public interest in the recreational

use of forests (Rametsteiner et al., 2005). Forestry agencies have not put much effort

into advocating the diversification of recreation products and services. Many forest

owners and foresters have a very reticent feeling about recreational services in their

woodlands and have a strong focus on timber production as their main business (Wisse

et al., 2007). Foresters are accustomed to deflecting the demands of society for forest-

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related services at the political level and do not view people seeking recreation/sport as

prospective clients (Wisse et al., 2007).

A factor of increasing importance in the promotion of tourism services is

personal outlook. Increasingly, paying for a broader experience than simply that of a

basic service/product (such as lodging and food) is what the customer desires. Tourism

advertising involves the staging of a tourism product or destination (Wisse et al., 2007)).

Pine and Gilmore (1999) noted this trend and along with it the dawn of a new economic

era, which they referred to as the ‘experience economy’. They remarked that goods and

services are no longer enough, and that experiences are the foundation for future

economic growth. Subsequent to the marketing of commodities, goods and services, the

future will belong to experiences and transformations. The authors argued that

consumers no longer pay for the activity the supplier provides (in the service business)

but for the emotions customers have as a result of hiring the service provider

(experience business) or the personal transformation they experience (transformation

business) (Pine and Gilmore, 1999).

The creation of “meaningful experiences” for consumers should be the concern

of innovation (Boswijk et al., 2005). “Experiential services” centre on the experiences

of the clients during interaction with the service providers instead of only the

advantages that follow from the products and services they receive (Voss and

Zomerdijk, 2007). Product and process innovation occur along with incremental process

innovations, and the creation of additional business models is particularly characteristic

of experiential services. The uncritical use of manufacturing-based arrangements may

be unsuitable for the study of innovation in the service sector (Voss and Zomerdijk,

2007).

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Family-owned firms often vary from other private businesses in their objectives

and business methods. The owners of small family enterprises do not act according to

the normal processes of growth and profit capitalisation (Carlsen et al., 2001). They are

more concerned with the desires and preferences of their families, and are frequently

unwilling to expand or to move the business to a more ideal location (Vennesland

2005). Firms that offer eco-based services are generally found in sparsely populated

rural regions. In these circumstances, the need to pool resources becomes important

(Vennesland, 2004) for certain tasks such as marketing the area as a tourism destination

(Ritchie and Crouch, 2005). Even though competition plays a vital part in sparking

innovation, trust among businesses is also important.

There is research showing that the tourism sector is dominated by micro and

small businesses, mainly owned and operated by a single person or family (Hjalager,

2002). There can be both large and small firms linked to tourism, but nature-based

tourism businesses pertaining to woodlands in Norway usually have fewer than five

employees and can be defined as micro firms (Vennesland, 2005). These are

comparatively small and can be considered lifestyle businesses, not growth businesses.

An illustration of a micro-firm is a business that is an adjunct to the farm business.

Thus, firms supplying a nature-based service or product are mainly situated in rural

areas (Vennesland, 2004). Innovations in these firms are more prone to embrace familiar

products and processes instead of involving newly created products, procedures, or

services.

Customarily, rural concerns have been researched within rural sociology (Flora

et al., 2003) and to some extent within agricultural economics (Castle, 1998); a portion

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of this literature has been used in the articles in this thesis. The main point here is that

the entrepreneurship and innovation viewpoint can also contribute to the understanding

of rural challenges. Additionally, there is the desire to introduce a new methodological

perspective by using causal models and latent variables.

Even though there has been a great deal of research on industries related to

NTFP&S that are concerned with innovation and entrepreneurship, there is still a large

gap. Several studies have described a difference related to creativity in this sector

(Hjalager, 2002; Walder et al., 2006). The use of theories that have already been

constructed for research design in industry and their transference to experiential tourism,

for example, are not desirable (Voss and Zomerdijk, 2007). In addition, there are large

differences in the service sector, and innovation research in one part of this area is not

necessarily transferable to another (Hollenstein, 2003). For all intents and purposes,

causal models with latent variables that influence innovation are absent. In order to

achieve a certain validity and reliability in such studies, it is essential to develop

measurement instruments that have been tested in similar contexts. One of the intended

contributions of this thesis is the beginning of this kind of work, with the development

of such models that can provide a foundation for further study. In addition, there is also

the need to confirm theories that have been constructed for other sectors such as the

production industry.

1.2.3. Small knowledge-intensive firms.

In recent decades, we have seen a change from a trade-based financial system to a more

knowledge-dependent one. A knowledge-dependent economy varies quite a bit from a

trade-based economy (Houghton and Sheehan, 2000) because it is distinguished by

adaptable, cooperating and networked organisations that make the most of knowledge in

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order to innovate and continue to exist in a worldwide market (Acs and Preston, 1997;

Houghton and Sheehan, 2000). Innovation is believed to be a crucial facilitator of

financial growth (Simmie, 2002), and innovations can result in imitations that generate

even newer innovations (Segerstrom, 1991), keeping up the tempo in the battle for

survival.

Relationships among organisations and their milieu provide businesses with

ideas that can result in innovation and financially viable performance (Birley, 1985;

Burt, 1992; Goes and Park, 1997; Granovetter, 1973; Hall, 1982; Jenssen, 1999;

Minzberg, 1979; Tushman, 1977; Tushman and Scanlan, 1981). Peripheral relationships

make sharing of information and other assets among firms possible (Ahuja, 2000;

Aldrich, et al., 1986; Jenssen, 2001). Development of diverse capabilities can result in

the loss of specialisation. Purchasing skills in the marketplace can produce high

changeover expenditure. Therefore, the most advantageous solution can be collaboration

among firms (Mitchell and Singh, 1996); in many instances it is the only solution

(Ahuja, 2000). Furthermore, two or more cooperating businesses can invest more in

innovation ventures due to economies of scale (Ahuja, 2000).

“Small” and “knowledge-intensive” are examples of comparative terminology,

and the formation of realistic definitions is not inconsequential. It is vital that the

research answer questions germane to the Norwegian configuration of industry. Because

there are many small firms in the knowledge-intensive sector in Norway, it is essential

to obtain information on the growth of these companies. The challenges of knowledge-

intensive businesses are affected by their size (Maureen and Taggart, 1998). In this

regard, this thesis defines small knowledge-intensive (SKI) firms as firms with between

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3 and 30 employees, with more than one-half of the staff having a higher education

(university degree or better).

SKI firms have commonly been thought of as the losers in comparison with

large firms, in terms of both capital and innovative capacity (Acs and Audretsch, 2005).

This viewpoint is shifting, as research shows that SKI firms create a great proportion of

new jobs and that they are a factor in both innovation and technological transformation

(Acs and Audretsch, 2005). Nowadays, SKI firms are thought of as key players in the

improvement and revitalisation of the economy (Cosh, et al., 2005). In addition to

introducing new products and services, these businesses also modify existing products

and services to better fit consumer needs (OECD, 2000).

A good deal of research on innovation in this perspective has already been

accomplished (e.g., BarNir and Smith, 2002; Berry and Taggart, 1998; Birley et al.,

1991; Gemünden et al., 1992; Mazzarol and Rebound, 2008; Pavia, 1990; Phillips,

1991; Verhees and Meulenberg, 2004). Nevertheless, there are still several missing

links. For example, diverse networking, knowledge gathering and coalition pursuits

(external networks) have been acknowledged as having a positive outcome in

innovation, but how is this valid in knowledge-intensive firms? In addition, how does it

relate to various types of innovation, e.g., product, process and market innovation?

1.3. Outline of the thesis

This thesis includes five different papers. Before presenting the five papers, a short

theoretical background for the seven main research questions will be presented. The

presentation of the five papers will be followed by a summary of all study methods

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including question development (measurement), sampling, non-response bias analyses

and a short overview of the statistical analyses used. Finally, the results are presented

and discussed, implications suggested and study limitations and future research outlined.

The full versions of all five papers are attached as appendices.

2. Theoretical Insights and research questions

This chapter briefly presents the theoretical background and aims to position the

seven main research questions with respect to the previous literature and existing theory.

2.1. Defining innovation and entrepreneurship

There are four key terms used in this thesis: 1) entrepreneurship, 2) entrepreneurs, 3)

innovation and 4) innovativeness. Definition of any of these terms is not an easy task;

one can find almost as many definitions as there are researchers in the field. The terms

are also defined differently by the different areas or ‘camps’ in the innovation and

entrepreneurship literature. The different studies in this thesis are positioned in different

camps; however, some basic common definitions can be used as a starting point. First,

Sharma and Chrisman’s (1999) definitions of entrepreneurship and entrepreneurs are

used; entrepreneurship includes acts of organisational creation, renewal, or innovation

that occur within or outside an existing organisation. Entrepreneurs are defined as

individuals (or groups of individuals) who act independently or as part of a corporate

system, who create new organisations, or who initiate renewal or innovation within an

existing organisation. Josef Schumpeter (1934) is largely regarded as the first important

source of modern innovation theory. In his economic analyses, Schumpeter focused on

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the firm and the role of the entrepreneur in the economic process. In general, innovation

denotes the successful introduction of novelties. The word “innovation” itself originates

from the Latin word “innovare”, which can be translated as “renewal”. To be innovative

thereby indicates the ability to create something new. It is normal to separate the act of

innovation and the output of innovation. It is also normal to distinguish between

inventions and innovations. An invention is the first occurrence of an idea for a new

product or process, and innovation is the act of putting it into practice (Fagerberg et al.,

2005). From an economic perspective, an invention must be advantageous, or at least

thought to be advantageous, to be considered an innovation.

Despite extensive study, there is no unified definition of “innovation” (Grønhaug

and Kaufmann, 1988). Innovation is defined in this thesis as the act of carrying out

ideas, while innovativeness is a characteristic of a firm that carries out ideas. As the

definitions illustrate, the concepts of innovation and entrepreneurship partly overlap in

the literature. The term “entrepreneurship” also has no unified definition (Wickham,

2004). The complexity of the term makes it flexible, thus a universal definition of the

term should not be expected (Wickham, 2004).

2.2. Different directions in the entrepreneurship and

innovation literature

Entrepreneurship and innovation are contested terms (Gartner, 1988). In the last

decades, there has been an inflation of the use of these terms, especially “Innovation”

(Fagerberg et al., 2005). The meanings of these terms were frequently discussed in

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conference presentations and journals in the 1970s. At the same time, the field of

entrepreneurship struggled to gain academic legitimacy (Aldrich and Ruef, 2006). The

different directions, camps and competing perspectives related to entrepreneurship are

overlapping and are categorised and defined in different ways. Nevertheless, the four

academic directions that are used in this thesis and include 1) innovation and

innovativeness, 2) opportunity recognition, 3) creation of a new organisation and 4) the

systems of innovation (SI) approach. Additionally, different debates are connected to

the independent variables used in the present study, i.e., learning orientation,

entrepreneurial climate and social network.

Joseph Schumpeter is considered one of the most influential social scientists of

the last century and has had a large impact on most research related to changes, renewal

and innovations among persons, organisations and institutions (Fagerberg et al., 2005).

Schumpeter (1934) discussed entrepreneurship theory in his work on economic

development, where he viewed entrepreneurs as drivers of economic development in

that they destroy the existing economy to create something new (i.e., by innovating).

Before his work, innovation was a word with negative implications (Morck and Yeung,

2001).

The first of the four academic directions, here called ‘Innovation and

Innovativeness’, is perhaps more related to Schumpeter’s work than the others. Here,

entrepreneurship should focus on innovation activity and the process by which

innovations carry along new products and markets (Aldrich and Ruef, 2006). According

to Schumpeter (1934), an entrepreneur is a person who carries out new combinations.

Following this definition and view, managers who bring innovations into an established

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firm will be considered entrepreneurial. These new combinations can take several

forms: new goods or new quality of a product, new methods of production, new

markets, new sources of supply or a new way of organisation. Following this definition,

entrepreneurship is the process of carrying out new combinations (Sharma and

Chrisman, 1999).

An important topic among researchers studying innovation and innovativeness

concerns effects on performance and can be traced back to Schumpeter (1934), who

looked at economic development as a process of quantitative changes, driven by

innovation (Fagerberg et al., 2005). Grønhaug and Kaufmann (1988) linked

innovativeness to organisational performance and argued that firms must be innovative

to gain a competitive edge in order to survive and grow. Other authors have also

emphasised the importance of innovation (Deshpande et al., 1993, Han et al., 1998;

Rogers, 2003; Knowles et al., 2007; Crespell and Hansen, 2008). However, still others

have argued that failure is the most likely outcome of product innovations (Schilling and

Hill, 1998; Cooper, 2001; Jenssen, 2003), and that the imitator and not the innovator

may be left with the profit (Teece, 1986).

Another important topic concerns the antecedents to innovation and

innovativeness. To a large extent, research about innovation and innovativeness can be

classified in accord to the level of the independent variable. Four levels can be

distinguished: the individual level, the organisational level, the inter-organisational

level and the societal level. On the individual level the importance of single persons or

‘innovation champions’ is emphasised (Schön, 1963). Jenssen (2004) defines a

champion as a person willing to take risks by enthusiastically promoting the

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development and/or implementation of an innovation inside a corporation through a

resource acquisition process without regard to the resources currently controlled. The

importance of champions on innovation has been studied extensively (e.g. Littler and

Sweeting, 1985; Howell and Higgins, 1990; Beath, 1991; Beatty and Gordon, 1991).

The second level is the organisational level, focusing on organisational culture

and structure (Minzberg, 1979). Factors on the organisational level that are assumed to

influence innovation might be categorised as: organisational structure and

communication (e.g., De Brentani, 1989; Lievens and Moenaert, 2000), organisational

culture (e.g., Bang, 1995), strategy (e.g., Ducker, 1993; Jenssen and Randøy, 2000;

2002 Tidd and Bessant, 2009); incentives (e.g., Beatty and Zajac, 1994), finances (e.g.,

Freel, 2000) and slack (e.g.Goes and Park, 1997; Jensen, 1993).

On the third level, the focus is on relationships between organisations, and it is

assumed that relationships between individuals in different companies and networks of

individuals in different organisations stimulate innovation in organisations (e.g. Burt,

1992; 1997; Granovetter, 1973; Hall, 1982; Tushman, 1977; Tushman and Scanlan,

1981). On the societal level, studies on the effect of regional clusters are an important

example (Porter, 1999). Porter (1990) argued that that the development of clusters is

important for national competiveness.

The second academic direction, here called “Opportunity Recognition”, argues

that opportunity recognition forms the heart of entrepreneurship and entrepreneurial

activities (Kirzner, 1973; 1999; Shane and Venkataraman, 2000; Venkataraman, 1997).

Adding to Schumpeter’s definition, it is a process by which individuals pursue

22

opportunities without regard to resources they currently control (Stevenson and Jarillo,

1990). Entrepreneurship is defined as the study of how, by whom and with what effects

opportunities to create future goods and services are discovered, evaluated and exploited

(Venkataraman, 1997; Shane and Venkataraman, 2000). Given that both supply and

demand exists, the opportunity for bringing them together has to be recognised before

the mach-up can be implemented either through an existing company or a new company

(Sarasvathy et al., 2003).

The third direction focuses on and views entrepreneurship as the Creation of a

New Organisation (Gartner, 1988). This focus marks a shift from what the entrepreneur

is to what the entrepreneur does (Gartner, 1988). Although not intended as a definition,

it has often been employed as such in the literature (Sharma and Chrisman, 1999).

Gartner (1988) argues that entrepreneurship researchers should study the behaviour and

activities of people who are creating or are trying to create businesses and not their

psychological states and personality characteristics. This perspective further argues that

entrepreneurs are people who create new social entities (Aldrich and Ruef, 2006).

In summary, the two definitions of entrepreneurship by Schumpeter (1934) and

Gartner (1988) contribute to research by covering different themes. Carrying out new

combinations such as product innovation may or may not lead to the creation of a new

organisation. The creation of a new organisation can also lead to new combinations, but

many new organisations can make no claim to innovative activities (Sharma and

Chrisman, 1999).

23

The fourth direction selected in this thesis is the Systems of Innovation (SI)

approach. The SI approach to study innovation was introduced by Freeman (1987) and

developed by Lundvall (1992) and Nelson (1993). An institutional view of innovation is

reflected in the literature on systems of innovation. The institutions shape and are

shaped by the actions of organisations and relationships among them (Edquist 1997).

The main components of a system of innovation are actors, institutions, and their

interactions. Actors are considered to be organisations, which are seen as formal

structures with an explicit purpose that are consciously created (Edquist and Johnson,

1997). Interaction among actors and institutional settings is important for innovation

activities. Companies do not normally innovate in isolation. Instead, innovations are

seen as based on learning that is interactive among organisations in the SI approach

(Edquist, 1997; 2001).

There are many definitions of institutions in the literature. Scott (1995:33)

defined an institution as: “…[institutions] consist of cognitive, normative, and regulative

structures and activities that provide stability and meaning to social behaviour.

Institutions are transported by various carriers – cultures, structures, and routines – and

operate at multiple levels of jurisdiction.” According to North (1991), institutions are

understood as a set of habits, routines, rules, laws or regulations that regulate the

relations and interactions among individuals, groups and organisations. An institution

connects to a practice, a relationship or an organisation that has been institutionalised

within a society or culture. Private property rights and forest owner organisations are

examples of institutions. An institution can also be connected to a place or an object,

such as forest owners in rural districts, a library, or a university in Norway.

24

The main contributors to SI research (Freeman, 1987; Lundvall, 1992; Nelson,

1993) have focused on National Innovation Systems (NIS). Later innovation systems

approaches have been further developed as Sectoral Innovation Systems (SIS) and

Regional Innovation Systems (RIS). Sectoral Innovation Systems focus on various

technology fields or product areas (e.g., Breschi and Malerba, 1997; Carlson 1995). In

the debate concerning the nature of the innovation process at the local and regional

level, the innovation model is called RIS. Most of the contributions on the nature of

innovation in RIS refer to innovative dynamics based on technological change,

organisational learning, path dependency, organisational selection, networks,

institutions and governance. These became distinct elements of the new theories

(Carlson and Jacobson, 1997). It is explicitly recognised by scholars that learning and

technological change are rooted in the structure of the economy; they are characterised

by regional specificities and include strong elements of path dependency (Rametsteiner

and Weiss, 2006ab; Rametsteiner et al., 2005).

However, other and different definitions of entrepreneurship can also be

justified. For example, another group focused on high growth and high capitalisation,

and called attention to this focus in entrepreneurship studies (Aldrich and Ruef, 2006).

Provided an alternative to high-growth firms, more traditional firms or more lifestyle

firms with lower growth will then exist. The most cited definition in this regard is given

by Carland et al. (1984), who defined entrepreneurs according to their aims of profit and

growth for their ventures and their use of strategic planning.

The four different directions cover different fields but also strongly overlap, not

only between the different directions, but also inside the same ‘camp’. Seeking one

25

universal definition would restrict the research on this topic. However, the different

definitions and assumptions make it important to clearly define how the terms are used

and understood in each study. The different research questions and how they are

positioned in the innovation and entrepreneurship literature are presented in the

following chapter.

2.3. Research questions

Research questions, how they are positioned and how they are related to the five

papers are presented in Table 1. The five papers are attached in this thesis and will be

presented in Chapter 3. A good deal of research has been conducted on innovation and

entrepreneurship in general, but there is still a lack of knowledge regarding how

findings apply to landowners and regarding the utilisation of NTFP&S in rural areas.

The overall objective of this thesis is to gain a better understanding of the role of some

selected antecedents to renewal, or innovation and thus economic performance, in small

and micro-firms, with a main focus on the NTFP&S sector. In addition to applying the

research on NTFP&S, one of the studies concerned was applied to small knowledge-

intensive firms. Little research regarding innovation in such firms in these regions has

been done. This part of the study focuses on the effect that external relations (social

networks) have on product, process and market innovation.

26

Table 1 shows the seven research questions, their theoretical position and the papers that include them. The papers are introduced in Chapter 3.

Research question Main theoretical position Paper RQ#1. What influence do entrepreneurial attitudes have on the possibility of start-ups?

• Entrepreneurship: Creation of a New Organisation

Paper I

RQ#2. What influence do entrepreneurial attitudes have on innovativeness and change in firms?

• Entrepreneurship: Opportunity Recognition

• Innovativeness and change

Paper II

RQ#3. What influence do entrepreneurial attitudes have on a change in economic performance?

• Innovation and Innovativeness • Innovation System • Social networks

Paper II

RQ#4. What effect do external relations (social networks) have on innovation and innovativeness?

• Innovation and Innovativeness • External relations /Social networks

Paper III, IV and V

RQ#5. What effect does learning orientation have on innovativeness?

• Innovation and Innovativeness • Learning orientation

Paper IV

RQ#6. What effect does local entrepreneurial climate have on innovativeness?

• Innovation and Innovativeness • Entrepreneurial climate

Paper IV

RQ#7. What effect does innovativeness have on economic performance?

• Innovation and Innovativeness

Paper III, IV

The main research questions will be presented in the following chapter. All of the

research questions are connected to a specific context. Some of the papers in this thesis

address similar research questions applied to different contexts. However, in the

following chapter, the research questions are addressed without mentioning the specific

context and papers. The different papers and their context will be presented first in

Chapter 3

2.4. Effect of entrepreneurial attitudes on start-ups,

innovativeness and firm performance

Gartner (1988) viewed entrepreneurship as the creation of an organisation and

belongs to a tradition that is referred to as the ‘Creation of a New Organisation’. His

focus marked a shift from what the entrepreneur is to what the entrepreneur does

(Gartner, 1988). An entrepreneurial attitude can be defined in different ways but has

27

frequently been linked to two indicators (Brouwer, 2002) also used in this thesis: Risk

Aversion and Opportunity Recognition. Risk takers are more likely to initiate a new

activity (Knight, 1921), and risk attitude affects the selection of individuals for

entrepreneurial positions (Cramer et al., 2002). Opportunity recognition is linked to

Schumpeter (1934) who argues that some people are able to see and realise business

opportunities whereas others are not. This leads to the following research question:

RQ#1. What influence do entrepreneurial attitudes have on the possibility of start-

ups?

Entrepreneurship includes not only the acts of organisational creation as described

above but also innovations that occur within or outside of an existing organisation

(Sharma and Chrisman, 1999). This implies that the field of entrepreneurship can also

be applied to existing firms. According to Schumpeter (1934), an entrepreneur is a

person who carries out new combinations. These new combinations can take several

forms: new products or product quality, new processes, new markets or new ways of

organising the firm. Following this definition, entrepreneurship is the process of

carrying out new combinations (Sharma and Chrisman, 1999). Stevenson and Jarillo

(1990) also follow Schumpeter’s definition but additionally maintain that it is a process

by which individuals pursue opportunities without regard to resources they currently

control. This definition of entrepreneurship is frequently used among modern scholars

(Kubeczko and Rametsteiner, 2002). While Schumpeter writes about the disruptive

nature of technologies, destroying the pre-existing state of equilibrium with new

innovations, Kirzner’s (1973; 1999) entrepreneur spontaneously discovers and utilises

undiscovered opportunities and disequilibrium in the market.

28

An entrepreneurial organisation has a higher level of innovation compared to an

average firm (Jennings and Lumpkin, 1989), and corporate entrepreneurship is the sum

of an enterprise’s innovation, renewal, and venturing efforts (Zahra, 1995). These

observations suggest the following research question:

RQ#2. What influence do entrepreneurial attitudes have on innovativeness and

change in firms?

There have been many studies on how an entrepreneurial orientation affects

performance (Wiklund and Shepherd, 2005). Some empirical studies find that those

enterprises that have adopted an entrepreneurial orientation have exhibited superior

performance (e.g., Wiklund, 1999; Zahra, 1991). However, researchers who have found

this link between entrepreneurial orientation and performance also note the paucity of

empirical documentation. Other researchers have not found a significant relationship

(Wiklund and Shepherd, 2005), indicating that the relationship is inconsistent. A shorter

product life cycle is a general tendency in today’s business environment (Hamel, 2000),

which makes existing operations more uncertain and causes businesses to seek new

opportunities (Wiklund and Shepherd, 2005). Consequently, operations can benefit from

being entrepreneurially oriented by taking risks, being innovative, and changing

products, processes, markets and organisations (Wiklund and Shepherd, 2005).

Ireland et al. (2003:965) state: “Exploring entrepreneurial opportunities

contributes to the firm’s efforts to form sustainable competitive advantage and create

wealth.” Entrepreneurship can also provide an added benefit by preserving the existing

enterprise rather than improving its profitability (Zahra, 1993). Motivations for

entrepreneurship can also be other non-financial outcomes, such as increasing

29

employment and task involvement (Zahra, 1993). Nevertheless, the relationship between

entrepreneurial attitude and performance has been empirically demonstrated in past

research, suggesting the following research question:

RQ#3. What influence do entrepreneurial attitudes have on economic

performance?

2.5. Effects of external relations on innovation and

innovativeness

External relations can be defined as all kinds of formal and informal relations

developed for the purposes of exchanging and sharing human capital, finances,

knowledge and physical goods, and all kinds of joint ventures undertaken in order to

gain competitive advantage, reduce risks and/or achieve economic success. Social

theory and network analysis have emphasised the importance of networking among

heterogeneous groups (Powell and Grodal, 2005) and that there are advantages in

having large and diverse social circles (Granovetter, 1973; Burt, 1992; Foss, 1994;

Jenssen, 1999). A strong social network may also influence growth (Zhao and Aram,

1995). A social network has been defined as a specific set of linkages among a defined

set of persons that provides entrepreneurs with social capital (Coleman, 1988) or as

qualities that can exist between people that increase the return of human capital such as

intelligence, education, and work experience (Burt, 1997). Interactions must last for a

meaningful time period for them to be considered as part of a social network (Jenssen,

1999; Foss and Grønhaug, 2005).

30

Previous scholars have also emphasised the importance of the number of ties

(e.g., Ahuja, 2000). Ties make knowledge sharing possible (Granovetter, 1973; Ahuja,

2000; Jenssen, 2001), allowing acquisition of the necessary complementary knowledge

(Arora and Gambardella, 1990; Ahuja, 2000) and cooperation to implement larger

projects, which again can generate more knowledge (Ahuja, 2000).

In the rapidly changing knowledge economy, firms have found it necessary to

undertake alliances with other firms and thereby to involve themselves in external

relations (Houghton and Sheehan, 2000). Relationship configurations are numerous and

may vary according to the aim of the collaboration (Koza, 2000). External knowledge is

believed by several researchers to be beneficial for both the rate of innovation

(Levinthal and Cohen, 1990) and firm performance (Stuart, 2000). This is supported by

Lundvall (1992), who claims that both joint entrepreneurship and interactive learning

are of great importance to innovation. Participation in a regional environment with

interactive networks can give firms access to a value greater than what each firm can

possess by itself (Collinson, 2000); this might strengthen their activities and their

capacity for renewal. An external relation can be classified as horizontal or vertical,

depending on its participants. Horizontal relations indicate collaboration with

competitors and consortia in order to gain complementary knowledge about a market or

technology, while vertical relations indicate cooperation with customers or suppliers,

mainly to achieve cost reduction (Tidd and Izumimoto, 2002). However, it is also

possible to achieve collaboration with a more neutral entity, such as a public university

or research institution. (Houghton and Sheehan, 2000).

31

Other researchers focus more on the strategic nature of external relations. Gulati

et al. (2000) belong to this group, defining strategic networks as “stable inter-

organisational ties, which are strategically important to participating firms. They may

take the form of strategic alliances, joint ventures, long-term buyer-supplier

partnerships, and other ties.” According to Pittaway and Robertson (2004), several

studies indicate that participation in networks in general, particularly in networks with

diverse partners, positively affects innovation. Thus, the management of such network

relations is of great importance to innovation. Several researchers noted that most

innovations are the result of cooperation among many entities that exchange information

and resources to make the innovation happen (Becker and Dietz, 2004; Houghton and

Sheehan, 2000).

The main reasons for participating in such external relations are related to

expected beneficial outcomes (Stuart, 2000) and access to complementary technology,

processes and products (Acs and Preston, 1997). However, cooperation is not limited to

the exchange of physical assets, but may well include the exchange of practical

knowledge related to such issues as obtaining external financial aid, acquisition of

premises, office equipment and other materials, obtaining information about both

market opportunities and limitations that might possibly affect the firm, and determining

whom to approach for crucial expertise (Collinson, 2000).

There are also other potential benefits that motivate cooperation. External

relations may be a way of gaining access to new markets, increasing power in the

market, altering competition, sharing research and expenses, and reducing risks (Koza,

2000). External relations affect innovation by providing firms with access to assets they

32

could hardly have achieved single-handedly and by adding valuable knowledge

(Houghton and Sheehan, 2000). Innovativeness is also affected by the way in which

inter-organisational relations allow the diffusion of new ideas and information (Aiken

and Hage, 1971).

Relationships can comprise both a formal and an informal exchange of

knowledge. Regarding informal relations, Konstadakopulos (2004) noted that valuable

ideas can be exchanged during leisure activities such as social events and gatherings.

This is also supported by Collinson (2000), who recognised that informal channels of

information and knowledge are extremely influential in the Scottish multimedia

industry. Although there are potential benefits to be gained from external relations,

cooperation is challenging, and it is important to choose external partners strategically.

The Systems of Innovation (SI) approach (Freeman, 1987; Lundvall, 1992;

Nelson, 1993) has clear similarities with the social network literature. The interaction

among actors is important for innovation activities. Additionally, SI focuses on the

importance of institutional settings as a factor affecting innovation. Firms do not

normally innovate in isolation; instead, innovations are seen as based on learning that is

interactive among organisations in the SI approach (Edquist 1997; 2001). Social

network theory, innovation theory and the system of innovation approach support the

following research question:

RQ#4. What effect do external relations (social networks) have on innovation and

innovativeness?

33

2.6. Learning orientation and local entrepreneurial climate

effects on innovativeness

Recent innovation work emphasises the role of learning, or a learning orientation,

as an antecedent to an innovative culture (Hult et al., 2004, Hurley and Hult, 1998).

Proactive learning allows a firm to be more innovative, e.g., by identifying new market

opportunities and having the knowledge and expertise to exploit those opportunities.

Calantone et al. (2002) studied the relationships among learning orientation, firm

innovativeness, and firm performance using a broad array of US industries. Learning

orientation was defined as a set of activities that created and used knowledge to enhance

competitive advantage. Most research in this area has utilised measures of learning

orientation that are specific to the context of larger firms. The literature contains no

guidance regarding the measurement of the phenomenon in small or micro-firms.

The Systems of Innovation literature has also emphasised the importance of

social interaction and learning in innovation (e.g., Lundvall and Johnsen, 1994; Isaksen,

1999; Edquist, 2005). The basic idea in the literature is that innovations come from the

interaction and knowledge flow among different actors (Edquist, 1997; 2001). This

knowledge is tacit and can therefore be difficult to transfer over longer distances. This

suggests the following research question:

RQ#5. What effect does learning orientation have on innovativeness?

The literature has emphasised the importance of localisation for entrepreneurs

and firms. Porter (1990; 1999) argued that firms may gain competitive advantage

through highly localised processes such as economic structures, values, cultures,

institutions, and histories. This view has also been supported by regional innovation

34

systems and “learning economy” literature (Edquist, 2005). Positioned in a “learning

economy”, the focus has been to increase the innovation capacity of small and medium-

sized firms (SMEs) by identifying how the climate fosters innovation (Storper, 1995).

Various terms have been used to describe this socio-cultural impact on local regions.

Lordkipanidze et al. (2005) studied sustainable tourism firms, finding that poor

entrepreneurial culture and climate impede economic development.

Entrepreneurial climate can be defined as the set of local cultural factors, social

factors, and traditions that influence the entrepreneur’s innovativeness. A positive

entrepreneurial climate gives a local community positive spillover effects resulting from

entrepreneurial activities plus social and cultural capital that are important for

innovativeness. Rametsteiner et al. (2005), who studied factors fostering innovation

among forest owners in central European countries, used the term “entrepreneurial

milieu” for the same concept.

RQ#6. What effect does local entrepreneurial climate have on innovativeness?

2.7. Innovativeness effects on Economic Performance

Innovation is a risky activity, and there are no guarantees of success or economic

victory. This has been confirmed by Schilling and Hill (1998), Cooper (2001) and

Jenssen (2003), who claim that failure is the most likely outcome of product innovation.

It may also be the case that the imitator, and not the innovator, is left with the profit

(Teece, 1986). However, other studies maintain that innovative businesses are more

successful than others (Knowles et al., 2007; Wheelwright and Clark, 1992).

35

The link between innovation and performance has been a central issue in the

literature. This can be traced back to Schumpeter (1934) who looked at economic

development as a process of quantitative changes, driven by innovation (Fagerberg et

al., 2005). Other literature has also emphasised the importance of innovation

(Deshpande et al., 1993). Possible profits make firms willing to undertake the risks

connected to innovation, and sometimes, firms choose to cooperate in order to cope with

the challenges of innovation. Recent research applied to the forest products industry in

the United States has shown a positive relationship between innovativeness and

performance (Knowles et al., 2007; Crespell and Hansen, 2008; Crespell, 2007).

Grønhaug and Kaufmann (1988) link innovativeness to organisational performance and

argue that firms must be innovative to gain a competitive edge in order to survive and

grow. The diffusion literature has documented the importance of innovation in

organisations (Rogers, 2003). Other literature has also shown a link between

innovativeness and performance (Han et al., 1998).

RQ#7. What effect does innovativeness have on economic performance?

36

3. Introduction of the papers in the thesis

The present thesis is based on the following papers, which will be referred to by their

Roman numerals:

I. Lunnan A., Nybakk E. and Vennesland B. 2006. Entrepreneurial attitudes and

probability for start-ups—an investigation of Norwegian non-industrial private

forest owners. Forest Policy and Economics. 8 (2006) 683– 690.

II. Nybakk, E. and Hansen E. 2008. Entrepreneurial attitude, innovation and

performance among Norwegian nature-based tourism firms. Forest Policy and

Economics, 10(7-8), 473-479.

III. Nybakk E., Vennesland B., Hansen E. and Lunnan A. 2008. Networking,

Innovation and Performance in Norwegian Nature-Based Tourism. Journal of

Forest Products Business Research, 5(article no 4): 26.

IV. Nybakk E., Crespell P., Hansen E. and Lunnan A. 2009. Antecedents to Forest

Owner Innovativeness: - An investigation of the non-timber forest products and

services sector. Forest Ecology and Management, 257, 608-618

V. Jenssen, J.I. and Nybakk, E. 2009. Inter-organizational innovation promoters in

small and knowledge intensive firms. International Journal of Innovation

Management 13: 441-466.

The different theoretical perspectives, some selected references and research

questions are presented in Table 2. Paper I investigates the probability of founding a

start-up based on whether the forest owner has an entrepreneurial attitude. Paper II

investigates whether entrepreneurial attitude impacts the possibility of being innovative

37

and having an increased net income. Both studies are positioned in the entrepreneurship

literature, but Paper I looks at the possibility for start-ups and Paper II looks at

innovation and change in net income in already existing firms (nature-based tourism).

Paper III looks at the social interaction effect on innovativeness and, again, the effect of

innovativeness on economic performance among nature-based companies. This paper is

positioned within the innovation, network and innovation system literature. In addition,

Paper III illustrates this through a case study. Paper IV investigates the impact of social

networks (external relations), entrepreneurial climate and learning orientation on

innovativeness and economic performance in the context of forest owners. Paper V

investigates different external relations that affect product, process and market

innovation in the context of small and knowledge-intensive firms. Papers IV and V are

also positioned in the innovation literature.

38

Table 2. Theoretical perspectives, context and research questions. Theoretical key words Context Research question/Hypotheses

Paper I

Entrepreneurship theory; Creation of a new organisation, risk aversion and opportunity recognition

Active Forest owners (forest owners association members)

Forest owners’ entrepreneurial attitudes generate a higher probability of starting up new activities.

Paper II

Entrepreneurship theory, opportunity recognition and innovation

Nature-based tourism micro- firms

Nature-based tourism micro firms with an entrepreneurial attitude: 1) will be more innovative 2) are likely to have had increased net income during the last three years.

Paper III

Innovation, Innovativeness, Social Network and Innovation System

Nature-based tourism micro-firms

Among nature-based tourism firms: 1) The greater the extent of social interactions, the greater the degree of innovativeness 2) The higher the degree of innovativeness, the greater the economic performance.

Paper VI

Innovation, Innovativeness, Social Network and Innovation System, learning orientation

Forest owners with more than 25 hectares forest land

Among forest owners: 1) The higher the level of entrepreneurial climate in the local community, the greater the degree of innovativeness 2) The greater the extent of local social networking, the greater the degree of innovativeness 3) The higher the level of learning orientation, the greater the degree of innovativeness 4) The higher the degree of innovativeness, the greater the economic performance 5) Property size moderates the effect of innovativeness on performance, with large owners benefiting the most from being innovative.

Paper V

Innovation, innovativeness and external relations (social external networks)

Small and knowledge-intensive firms

1) Market participation in development positively affects innovation in SKI firms. 2) Supplier participation in innovation has a positive effect on innovation in SKI firms. 3) Market co-operation has a positive effect on innovation in SKI firms. 4) Top management interaction with other firms has a positive impact on innovation in SKI firms. 5) Top management interaction with external R&D has a positive impact on innovation in SKI firms. 6) Participation in courses, conferences and business-specific networks has a positive impact on innovation in SKI firms. 7) Co-operation in order to gain access to technology has a positive impact on innovation in SKI firms. 8) Environmental scanning positively affects innovation.

39

4. Data and method

Data were collected through four surveys and some qualitative personal interviews.

Measurement, questionnaire development, sampling and data collection, analyses on

non-response bias and the statistical analyses used are presented in this chapter. First,

some issues related to the philosophical approach and overall research design are

addressed.

Easterby-Smith et al. (2008) emphasised positivism and social constructionism

as the two main contrasting views in social science research. In positivist studies, the

observation must be independent, the explanations must demonstrate causality and the

research progresses through hypotheses and deductions. However, in social

constructionism, the observer is a part of what is being observed, the explanations aim

to increase the general understanding of the situation and the research progresses

through gathering of rich data from which ideas are induced. Furthermore, concepts

need to be operationalised and further measured and the units of analyses reduced to

their simplest terms in positivism, while in social constructionism, the concepts should

incorporate stakeholder perspectives, and the unit of analysis may include greater

complexity. Positivism typically includes high numbers of observations and statistical

analyses, while social constructionism generalises through theoretical abstractions and

analysis of few cases (Easterby-Smith et al., 2008).

Looking at the two contrasting perspectives, this thesis is clearly positioned

closer to the positivism side. The research designs through the different studies in this

thesis should ideally be as objective and value-free as possible; it is based on hypotheses

and tested surveys and analysed through statistical tools. However, there are many

40

subjective elements such as the choice of model and constructs. The use of latent

variables measuring constructs such as attitudes makes the research approach closer to

the constructionist side. It can be argued that a latent variable is a construction of the

human mind, that its existence thus needs to be ascribed as independent of

measurement, and that it therefore could be positioned as constructionism (Borsboom et

al., 2003).

However, positivism may be called an old-fashioned position in social science;

realism is a more suitable position that is nearer to this thesis. There are many different

forms of realism, but some basic theses are reiterated (Borsboom et al., 2003). There is

realism about theories; theories are either true or false. Another general view is that

some theoretical entities exist. Finally, realism is often associated with causality. It can

be consequently argued that the ingredients of realism compose the simple key to the

success of science: learning about entities in society through causal interaction,

and thereby bringing the theories closer to the truth (Borsboom et al., 2003). This thesis

consists of different studies positioned in the entrepreneurship and innovation literature

and contributes to the field and literature by applying theories to small firms, with a

special attention on non-wood forest products and services firms.

4.1. Measurement

When testing causal models with latent variables, the use of multiple items based on

previous studies is recommended (Churchill, 1979). Nevertheless, when building

knowledge in new areas, it can be necessary to start with basic measurements and build

from there. Paper I was measured with single items, and Paper II was measured with

partly single items and multiple item scales. Multiple-item scales were used in Papers

41

III, IV and V. Whenever possible, measurement scales from previous research, modified

to the relevant setting, were used. Little research has been done in the context of

NTFP&S, nature-based firms and self-employed forest owners running their own family

firms. Most firm-level innovativeness research focuses on larger firms in well-known

industrial sectors. There are major organisational differences between larger firms and

those of interest in this industry. Examples include the number of employees, the scale

of activities, and the levels of professional management. Substantial modification was

therefore needed in the scales utilised. In the cases where pre-existing scales were not

available, items were developed on the basis of the conceptual definitions of the

constructs made by previous studies of forest owners.

Start-ups in Paper I were evaluated by asking if they had started up a new

business related to the farm. Entrepreneurial attitude was measured the same way in

Paper I and Paper II to allow direct comparisons. Respondents were asked two single

questions about (1) their willingness to take a high degree of risk when looking for

opportunities, and (2) whether they were thinking about offering new services and

products because they thought it could increase their income (Rametsteiner et al., 2005;

Brouwer, 2002). In Paper II, Innovativeness was limited to process innovativeness

including organisational innovativeness. Four questions were asked as a measure of

innovativeness: 1) have there been significant changes during the last three years in the

way products/services are supplied, 2) have there been changes during the last three

years in the way products are marketed, 3) has the firm been reorganised during the last

three years, and 4) has there been interaction with new collaborators during the last

three years.

42

In Paper III, Networks were studied from the perspective of the System of

Innovation. All items measured the level of interaction with institutions and actors,

which are locally and nationally connected to innovations and changes in micro-firms.

All items were developed specifically for this study, but all institutions and actors were

identified based on previous literature (Isaksen, 1997; 1999; Asheim et al., 2003;

Rametsteiner et al., 2005). Innovativeness was measured based on changes in the firm

during the previous three years. Firms with more innovations were considered to be

more innovative. The study followed Schumpeter (1950), who divides innovation into

product, process, organisational, and market innovation. Performance was measured

with three items: 1) growth in sales, 2) growth in net income and 3) growth in person-

years. Growth is the most important aspect of performance in small firms (Wiklund,

1999). To make the questions as easy as possible to answer, respondents were asked if

each item had: 1) increased, 2) stayed the same or 3) decreased.

In Paper IV, a social network scale was used that consisted of three items that

were adapted from Antia and Frazier (2001), in addition to three items that were

developed specifically for this study. The scale was designed to measure only the local

social network. Four items were used that were adapted from Evensen and Rødset

(2002) and their study of Norwegian forest owners, in addition to two new items that

were developed. Learning orientation was measured following five items from

Calantone et al. (2002). The items were modified to fit the context of forest owners and

to stand as one rather than two dimensions. An additional item was created specifically

for this study. In this study, an incremental view of innovation was obtained from

Calantone et al. (2002) and a six-item scale was drawn from Hurt et al. (1977), Hurt and

Teigen (1977) and Hollenstein (1996). Performance was measured with two items that

43

were adapted from Olson et al. (2005) in addition to three that were created for this

study. Property Size was measured by the number of hectares of forestland.

In Paper V, measurement scales from previous research were used, based on

Jenssen (2003 and 2004) as well as Jenssen and Randøy (2002 and 2006). Some new

items were developed. The eight concepts used in the study and the number of items

used are presented in Table 3.

Table 3. Construct, number of items in each construct and scale used for measurement in thesis. Variables Items Scale

Start-ups 1 item Yes/No Risk taker 1 item (1-6)

Paper I

Opportunity recognition 1 item (1-6) Innovativeness 4 items (1-6) Change in net income 1 item (1-3) Risk taker 1 item (1-6)

Paper

II Opportunity recognition 1 item (1-6) Network 7 items (1-6) Innovativeness 4 items (1-6)

Paper III

Performance 3 items (1-3) Social Network 6 items (1-7) Entrepreneurial Climate 6 items (1-7) Learning Orientation 6 items (1-7) Innovativeness 6 items (1-7) Economic Performance 6 items (1-7)

Paper IV

Property Size 1 item Cont* Product Innovation 4 items (1-7) Process Innovation 2 items (1-7) Market Innovation 2 items (1-7) Market participates in product development 2 items (1-7) Supplier participates in innovation 2 items (1-7) Market co-operation 3 items (1-7) Top management interaction with other firms 2 items (1-7) Top management interaction with external RandD 2 items (1-7) Participation in courses/business-specific networks 3 items (1-7) Inter-firm co-operation for technology acquisition 3 items (1-7)

Paper V

Systematic environmental scanning 3 items (1-7)

44

4.2. Questionnaire development

This thesis is based on analyses of data from four different questionnaires. The first

questionnaire (Paper I) consisted of three major sections: Start-ups, Risk taker and

Opportunity recognition. Papers II and III were based on Questionnaire 2. The part of

the questionnaire designed for Paper II consisted of four major sections: Innovation,

Change in net income, Risk taker and Opportunity recognition. The part of the

questionnaire designed for Paper III consisted of three major sections: Network,

Innovativeness and Performance. Paper III also had a qualitative component with

personal interviews. The third questionnaire (Paper IV) consisted of three major

sections: Social Network, Entrepreneurial Climate, Learning Orientation,

Innovativeness, Forest Size and Performance. The fourth questionnaire (Paper V)

consisted of eleven major sections (see Table 2). All four questionnaires had additional

items related to descriptive information. All of them also had items designed for other

purposes, which were not used in this thesis. All questionnaires were pre-tested.

4.3. Sampling and Data Collection

In the first survey, 500 forest owners were randomly drawn from the member list of

Agder-Telemark Forest Owners’ Association. In the second survey, 366 nature-based

recreation services firms in Norway were surveyed. The firm name and contact

information was collected from five forest owners’ associations. Additionally, all

relevant firms were selected from the organisations Norwegian Rural Tourism and Food

from the Farm. The sample frames provided a list of firms representing virtually all

regions of the country. In the third survey, a complete, official list with the names and

contact information of Norwegian forest owners constituted the sample frame. All forest

owners located in southern, middle and eastern Norway with more than 25 hectares of

45

forest land were selected for an adjusted list, which came to a total of 24,897 forest

owners. Following this, 2007 forest owners were randomly drawn from the adjusted list.

Data from the fourth survey were gathered through a quantitative survey of a

target group of small, knowledge-intensive firms situated in Norway. The respondents

were selected by the Norwegian National Bureau of Statistics, and the selection of firms

was based on two criteria: annual average R&D expenditure exceeding 50,000 NOK per

employee, and a size ranging from 5-30 employees. Then, 445 firms and their managers

were selected. Response rate, usable responses and a short description about the data

collection are presented in Table 4.

Table 4. Response rate, usable responses and description of the data collection for the four surveys in the thesis. Response

rate Usable responses

Data collection

P1 45% 223 Mail survey by post. One reminder by postcard. P2and3 55% 178 Letter explaining the objective and importance of the study was

mailed and followed by an e-mail survey with two e-mail reminders.

P4 35% 683 Mail survey by post following a modified Dillman (1978). Two reminders and one full package similar to the first wave.

P5 34% 151 E-mail survey

4.4. Non-response test

A concern in all survey research is that the respondents may be systematically

different from those who did not complete the questionnaire. Only an extremely high

response rate could limit this concern, and even with a high response, bias may still

exist (Needham and Vaske, 2008). In the first three papers, non-response bias was tested

using t-tests, where the earliest respondents were compared to the latest respondents

with respect to a selection of variables. The results showed no significant differences

46

between early and late respondents, suggesting that non-response bias was not a concern

in any of the three papers.

In Paper IV, which utilized the randomly drawn address list, one survey item had

information about the forest owner’s property size and the location of the property.

There were no indications of bias related to number of respondents from different

regions. Property size was analysed using t-tests where the respondents were compared

to the complete sample list. No significant differences were found, indicating the non-

response bias related to size was not a concern.

Needham and Vaske (2008) suggested that a non-response check should involve

contacting a sample of original non-respondents and asking questions from the

questionnaire. A phone survey was conducted by calling 962 original non-respondents,

resulting in 105 completed questionnaires. Of these people, 33 percent answered that

they did not respond due to a lack of time, and 11 percent answered that they were not

interested in this type of questionnaire. Differences in age and education between

respondents from the survey and from the non-response survey were tested with a t-

test/chi-square-test. The results showed that respondents had significantly higher

education and were significantly younger than non-respondents. This finding indicates

non–response bias and that the response rate among young and educated forest owners

probably may be higher than average. The results of these various tests indicate possible

non-response bias. One potential method for adjusting for this problem would be to

weight the data. The response rate in the non-response test was only 11 percent, which

could introduce additional non-response bias problems. Additionally, the original survey

had a high response rate and number of respondents. It was therefore concluded that

47

weighting the data could do as much harm as good. The results of the study are

therefore discussed in the context of potential non-response bias.

4.5. Statistical Analysis

Multiple logistic regression with maximum likelihood estimates and model fit were used

in Papers I and II. Logistic regression is one of the most frequently used methods in

models where the dependent variable is dichotomous (Agresti, 1996). All the analyses

using logistic regression were done using SAS version 9.1 (SAS, 2003). When dealing

with dichotomous variables, here coded as one or zero, it is easy to calculate the logistic

probabilities with results from the odds ratio (Hosmer and Lemeshow, 2000) and

present them in a 2 x 2 table. Here, the logit difference is equal to β1 + β2 (Hosmer and

Lemeshow, 2000).

Latent variables represent the opposite of the observed variables (or constructs).

They cannot be measured directly but are measured through other variables that can be

measured. An example of a latent variable is a value or an attitude. By using a number

of observed variables, it is possible to explain an underlying concept that is considered

necessary for analysis. Latent variables should be measured with multiple item scales

(Churchill, 1979). Reliability analysis allows the study of properties of measurement

scales and the items that compose the scales (SPSS 13). In Paper V, the reliability of

each latent variable was tested with a Cronbach’s alpha test. This is a test of internal

consistency, based on the average inter-item correlation (SPSS 13). A Cronbach’s alpha

value over the cut-off point of .7 indicates reliability in the scale. All items with a higher

“alpha if deleted” than the “overall alpha” were deleted. The following step in the

analyses was to calculate the mean of each construct. The new variables were used in

hypothesis testing in a regular OLS regression (Hair et al., 2006).

48

Papers III and IV were tested with structural equation modelling (SEM). SEM is

a statistical technique for testing and estimating causal relationships using a

combination of statistical data and qualitative causal assumptions. It takes a

confirmatory approach to analysing the bearing of a structural theory on some

phenomenon (Byrne, 2006). There are two important aspects in such modelling: 1) the

causal processes studied are represented by a series of structural equations, and 2) these

structural relations can be modelled pictorially to enable a clearer conceptualisation of

the theory under study (Byrne, 2006). SEM is a two-step analysis, featuring a

measurement model and a structural model. The measurement model is a model

specifying the indicators for each construct; this enables an assessment of construct

validity (Hair et al., 2006). The structural model is a set of one or more dependent

relationships linking the hypothesised model’s constructs (Hair et al., 2006). Paper III

was analysed using LISREL and Paper IV was tested using EQS.

5. Results and discussion

A summary of results for all hypotheses tested in the five papers is presented in Table

5. The results are presented and briefly discussed in the following text.

49

Table 5. Hypotheses, significant levels and comments in the thesis. Hypotheses Sign Comments I Opportunity recognition Start-ups

Risk aversion Start-ups ** **

1RTandPO=.45 ,RAandPO=.24 , RTandNO=.23 , RAandNO=.10

II Opportunity recognition Innovation Risk aversion Innovation Opportunity recognition Performance Risk aversion Performance

** ***

χ *

2RTandPO=.53 ,RAandPO=.32 , RTandNO=.32 , RAandNO=.17 3RTandPO=.58 ,RAandPO=.37 , RTandNO=..49 , RAandNO=.30

III External Networks Innovativeness Innovativeness Performance

*** ***

H1: β = .46, R2 = .07 H2: β = .50, R2 = .17

IV External Networks Innovativeness Learning orientation Innovativeness Entrepreneurial Climate Innovativeness Innovativeness Performance Moderation effect: Property size

*** ***

χ *** **

H1: β = .32, R2 = .32 H2: β = .37, R2 = .32 H3: Not sign H4: β = .31, R2 = .09 H5: x2 = 4.1

V Market participates in product development Innovation1 Supplier participates in innovation Innovation1 Market co-operation Innovation1 Top management interaction with other firms Innovation1 Top management interaction with external RandD Innovation1 Participation in courses/business specific networks Innovation1 Inter-firm co-operation for technology acquisition Innovation1 Systematic environmental scanning Innovation 1

χ χ

4 4 4

4 χ

4

H1: Non-sign results H2: Non-sign results H3: All three models sign H4: Market innovation sign H5: Product innovation sign H6: Process and market innovation sign H7: Non-sign results H8: Prod and Process innovation sign

Significance level; *: p<0.10; ** = p< 0.05; *** = p< 0.01; χ = not significant at the 10-percent level. 1 Possibility for start-ups: ( RT=risk taker, RA= risk averse, NO= negative opportunity recognition, PO=positive opportunity recognition) 2 Possibility for being innovative: 3 Possibility for increased net income:

4 Three models tested with 1) Product, 2) Process and 3) Market Innovation as dependent variables.

5.1. Entrepreneurship, Entrepreneurial attitude and

innovation

Entrepreneurial attitudes have an effect on the probability of founding start-ups

In Paper I, it was hypothesised that forest owners with entrepreneurial attitudes would

be more likely to start up some new activity. The analyses and results supported this

hypothesis. Opportunity recognition and risk aversion were significant, indicating that

more entrepreneurial forest owners show a higher probability of founding a start-up.

Calculation of logistic probabilities with the results from the odds ratio showed that for

a forest owner who had a (1) positive opportunity recognition and was a (2) risk taker,

the probability of starting something new was 45%. If the forest owner was risk-averse

50

and not able to recognise opportunities, the probability of starting something new was

only 10%. The results suggest that forest owners with an entrepreneurial attitude are

more likely to start up new activities related to their forest. This general idea is also

supported in research outside of nature-based tourism (e.g., Schumpeter, 1934; Knight,

1921; Brouwer, 2002). There is a general agreement in the entrepreneurship literature

that entrepreneurship can be learned to a large degree (e.g., Spinelli and Timmons,

2003). Non-longitudinal data were collected in this study; however, as supported by

previous literature, this finding can indicate that forest owners searching for new

opportunities will learn and increase their possibility of success. The respondents (forest

owners) also emphasised the importance of learning more about the market and

marketing by running the business. Narver and Slater (1990) have found a positive

relationship between market orientation and business probability of founding start-ups.

Entrepreneurial attitudes have an influence on innovativeness and change in firms

Paper I also indicated that services were among the most important activities for the

farmers outside of traditional farming and forestry sales. In Paper II, the target

population included Norwegian nature-based tourism firms (start-ups). It was

hypothesised that firms with managers with an entrepreneurial attitude would be more

innovative. The analyses and results supported this hypothesis. Both variables

(Opportunity Recognition and Risk Taker) showed significant effects. Nature-based

tourism micro firms in this study that had an entrepreneurial attitude were more

innovative. The possibility of being innovative was greater when the firms’ owners were

risk takers and when they had positive opportunity recognition. The results indicated a

positive connection between entrepreneurial attitude and innovation in nature-based,

tourism micro-firms. This result indicated that more risk-seeking firms were more likely

to change the way in which products/services are supplied, the way in which they

51

market their products and services, and the way in which they organise the firm and find

collaborators. This result is consistent with Schumpeter’s (1934) work and other studies

(e.g., Knight, 1921). The Opportunity recognition variable was significant among the

innovation variables. This is consistent with the basic ideas from Schumpeter (1934).

Respondents who were labelled as positive-opportunity-recognition firm managers had

a significantly higher possibility of being categorised as being more innovative.

Entrepreneurial attitudes have an influence on change in economic performance

In Paper II, it was also hypothesised that firms with managers with an entrepreneurial

attitude would be more likely to have had increased net income over the past three

years. The analyses and results gave no clear support to this hypothesis. Nevertheless,

the results showed weak support for the second hypothesis: nature-based tourism micro

firms with an entrepreneurial attitude are more likely to have had increased net income

over the past three years.

This is supported by previous findings that suggest that firms with an

entrepreneurial attitude are also more likely to perform better (Wiklund, 1999; Wiklund

and Shepherd, 2005; Zahra, 1991). Wiklund (1999) investigated entrepreneurial

orientation, extensive innovation, proactiveness and risk-taking in small Swedish firms.

The results indicated a positive relationship between entrepreneurial orientation and

performance. This study also finds a positive connection between entrepreneurial

attitude and performance in micro-scale, nature-based tourism firms in Norway. Firms

exhibiting positive opportunity recognition that are also risk takers have a higher

probability of having had increased net income during the last three years. Despite some

indication of a relationship between entrepreneurial attitude and performance, the

52

significance level was too low to make any strong statements. The “opportunity

recognition” variable was especially weak. There could be different reasons for this.

First of all, the link between entrepreneurial attitude and performance is not necessarily

consistently positive. Entrepreneurial activity can influence different dimensions of

performance differently and at different points in time (Zahra, 1993). The timing of

financial payoff from entrepreneurial ventures can also be different in micro-scaled

firms than in larger firms. Descriptive data in this study showed that the firms were

often related to forest land and farms. The business can support the activity of a farmer

or a forest owner when the aim of the activity is to maintain the farm and the forest land

rather than to maximise earnings. Entrepreneurial activities can also pay off primarily

by preserving the existence of the firm, rather than by improving its revenue generation

(Zahra, 1993).

5.2. Antecedents to innovativeness

External relations (social networks) have an effect on innovation and

innovativeness

Scholars have emphasised that there are advantages to having large and diverse social

circles (Granovetter, 1973; Burt, 1992; Foss, 1994; Jenssen, 1999). Firms do not

normally innovate in isolation. Instead, innovation is seen as based on learning that is

interactive among actors in the System of Innovation approach (Edquist, 1997; 2001).

Papers III, IV and V address this issue as applied to small and micro-firms. All three

studies support the idea that external relations had a positive impact on innovation.

Paper III had two objectives: 1) to determine whether networking was positively related

to innovativeness and whether innovativeness was positively related to performance in

the nature-based tourism industry in Norway, and 2) to develop an in-depth

understanding of how different actors trigger a member of the industry to change,

53

create, or otherwise innovate. In the quantitative part of the study, it was conceptualised

that networks have a positive impact on innovations; this hypothesis was supported.

External relations (social networks) were one among several antecedents to

innovativeness in a survey targeting forest owners. It was conceptualised that external

relations would have a positive impact on innovativeness. The findings suggested that

external relations have a positive effect on Innovativeness. Paper V examined the

relationship between external relations and innovation in small and knowledge-intensive

Norwegian firms. The results indicate that external relations are beneficial for

innovation. The analysis shows that it is necessary to treat innovation as a multifaceted

concept. The independent variables related differently to product innovation, process

innovation, and market innovation. The results indicate that market participation in

product development has a positive impact on product, process and market innovation.

The results also show that the interaction of Top Management with other firms had a

positive effect on market innovation, and that the interaction of Top Management with

external R&D had a positive effect on product innovation. This finding probably

indicates that access to R&D resources is vital for product development in the context of

knowledge-intensive products. The results also show that participation in courses and

business-specific networks positively influences process and market innovation and that

systematic environmental scanning positively influences product innovation.

The qualitative part of Paper III illustrates how institutions trigger a member of

the industry (the case firm) to change, create, or otherwise innovate. Besides the actors,

the customers, neighbours, and other local and international firms have an influence on

the innovation process. The case firm obtained its inspiration to create something new

54

from many different actors, but none was indispensable. The overall impression from

the case example was that interaction with external actors has a limited effect on

innovation and creation in the firm. The interviews show how the interactive innovation

model could work in real life; they illustrate the interdependence among actors involved

in the model. It is important, however, to recognise that the interactions did not take

place solely between the main firm and others. There were interactions found between

actors in most directions. This illustrates the interdependence among actors involved in

the system. The manager of the firm emphasised internal factors as the most important

with respect to creativity and innovation. This was also supported by the quantitative

study, where the network was found to have a small but significant effect on innovation.

One reason for this could be the small size of the firms in the industry.

The literature shows that external relations are important for the innovation

process (Asheim et al., 2003). Various types of actors are also involved in the

innovation process, and they interact in innovation systems (Lundvall, 1992; Edquist,

1997). Customers, suppliers, competitors, and R&D organisations are examples of

important actors. Small firms face innovation barriers, have a low capacity and tendency

for networking, and are not interested in or able to carry the overhead cost related to, for

example, conducting research projects (Asheim et al., 2003). This was also consistent

with the findings in this study where local politicians, extension services, and national

public support institutions had limited influence on the innovation process. The findings

also indicated that the respondent firms networked more with neighbours, other small

firms, and customers that were equal in size and nature.

55

The effect of learning orientation and local entrepreneurial climate on

innovativeness

In Paper IV, it was also hypothesised that entrepreneurial climate and learning

orientation would have a positive impact on innovativeness. No evidence was found of

the impact of Entrepreneurial Climate on innovativeness in the model. The literature has

suggested that a positive entrepreneurial climate facilitates innovativeness among forest

owners (Rametsteiner et al., 2005). When other actors in the local community are

entrepreneurial and utilise NTFP&S in a new, innovative way, this should have a

positive effect on innovativeness among others. It is possible that more innovative forest

owners are more critical of a lack of a positive entrepreneurial climate. Thus, they might

experience frustrations from what they perceive to be a poor entrepreneurial climate.

This would then be a question of measurement. Learning orientation was positively

related to innovativeness. A forest owner committed to learning seeks a better

understanding of the environment, resources, markets, customers and suppliers. This

finding suggests that innovation itself is a process of learning that fosters

implementation of new ideas, new products, and new ways of running the business. This

is consistent with both the organisational management literature (e.g., Calantone et al.,

2002) and the Systems of Innovation literature (e.g., Lundvall, 1992; Isaksen, 1999).

Organisational management literature emphasises that a positive learning orientation

also reflects an acknowledgement of and preference for assimilating new ideas (Hurley

and Hult, 1998; Calantone et al., 2002).

The effect of innovativeness on economic performance

The relationship between innovation and performance has been well documented in the

previous literature. However, there is a lack of knowledge on the relationship between

the antecedents of innovation, innovation itself, and economic performance in small and

56

micro-scaled firms. Papers III and IV address this issue. In Paper III, innovativeness was

found to be positively related to performance among nature-based tourism firms. In

Paper IV, a conceptualised model with different antecedents of innovativeness, and

performance was tested. Consistent with the earlier literature, innovativeness was

positively related to performance. Despite a clearly significant relationship, the findings

also suggest that a great deal of economic performance cannot be attributed to this

relationship (low r2). Many other factors beyond innovativeness affect the performance

of the forest owner’s operations. In addition, being highly innovative carries risk and

added costs that can potentially negatively affect performance. The effect of

innovativeness on performance may have a time delay. Investments in innovations may

require cash outlays that can negatively impact short-term profitability. Time is required

to implement innovations, learn about markets, etc., before profits are generated.

Nevertheless, the relationship was significant, and the finding emphasised the

importance of innovativeness for performance and potential economic growth.

Additionally, Property Size was proposed as a moderating factor enhancing the

impact of Innovativeness on Performance for larger landowners. The test revealed a

significant difference between groups for the relationship between innovativeness and

performance, supporting the existence of the moderator effect. This suggests that

owners of large properties benefit more from being innovative.

6. Implications

57

6.1. Implications for policymakers and practice

6.1.1. Entrepreneurship - start-ups - innovation

The results emphasize two main elements of entrepreneurial attitude: the ability to

recognise business opportunities and the ability to take a calculated risk. It was found

that there was a significantly higher probability of the commencement of new activities

among respondents with entrepreneurial attitudes in the study population of Norwegian

non-industrial private forest owners. Results of a study on nature-based firms indicated

that respondents that exhibit a stronger entrepreneurial attitude appear more likely to

innovate and tend to have higher income growth. This suggests that government policy

has a role in increasing entrepreneurship in the NTFP&S sector. How these can be

implemented to adjust or even create new policy tools related to rural development

policy in Norway is a more complex issue. Policies that limit risk can serve to promote

more start-ups and make existing firms more entrepreneurial and more innovative. This

should, in turn, result in better performance and enhanced rural vitality. As there is a

clear drive to maintain rural populations in Norway, rural and regional policy should be

directed towards maintaining these small operations and helping them thrive. Because

the traditional forest industry has not followed general economic development, the

diversification of rural economies is critical. Innovation and entrepreneurship are the

ingredients of rural vitality.

Another central theme concerns the question of whether opportunity recognition

and ability to take calculated risk are innate or if they can be learned. There is a large

body of literature indicating that most entrepreneurship capacities can be learned (see

discussion in Timmons and Spinelli, 2003) and that in fact all entrepreneurship

education builds on this result. The results from this thesis indicate that policies that

58

make people more entrepreneurial in the next round will lead to more start-ups. This

result supports government spending on entrepreneurship policy.

Such findings also have two implications for managers in existing NTFP&S

firms. First, according to the empirical results of this study, an entrepreneurial attitude

has a positive effect on innovativeness in these firms. Earlier research has found that

innovativeness gives small firms a competitive advantage, for example by

differentiating their firm from competitors (e.g., Wiklund and Shepherd, 2005). Second,

an entrepreneurial attitude contributes to improved performance (growth in net income),

implying that managers can gain from increasing the entrepreneurial climate of their

operations. Proactively pursuing new ideas and regular experimentation should benefit

these small firms.

6.1.2. Effect of external relations and learning orientations on

innovation

Results applied to forest owners, nature-based firms and small knowledge-intensive

firms showed a positive relationship between external relations and innovation and

innovativeness. This is consistent with different traditions in management and

economics literature (e.g., Granovetter, 1973; Burt, 1992; Foss, 1994; Jenssen 1999).

Small firms innovate not alone, but in cooperation with others. Networking can

contribute to innovative capacity and innovativeness among small firms by giving them

novel ideas and access to resources as well as by transferring knowledge. Accordingly,

small firms that invest in networking with local actors will obtain an advantage by

gaining new ideas, concentrating on core expertise and finding new and better ways to

run their businesses. By developing new policy instruments to promote networking and

59

clustering in rural regions, policymakers can help to develop innovativeness among

forest owners.

The results also suggest that forest owners committed to learning seek a better

understanding of their environment, resources, markets, customers and suppliers. This

finding suggests that innovation itself is a process of learning that fosters the

implementation of new ideas, new products, and new ways of running the business. This

is consistent with both organisational management literature (e.g., Calantone et al.,

2002) and Systems of Innovation literature (e.g., Lundvall, 1992; Isaksen, 1999).

Accordingly, forest owners will benefit from being committed to learning. Forest

owners’ associations and politicians can facilitate innovation by supporting learning-

related activities and a learning climate in rural areas. This can be done by organising

courses and conferences where forest owners can learn and develop skills as well as

share existing knowledge. This is crucial for product and services development and

improvement of existing products. Gielen et al. (2003) studied agricultural entrepreneurs

in the Netherlands and emphasised the importance of new inputs from weak, unknown

networks for farmers to be continuously innovative. Meetings, conferences and courses

are important to help forest owners to establish such networks. Another issue is that

learning about innovation largely consists of ‘learning by doing’.

This thesis has found that innovation cannot be treated as one concept and that

the separation made in Jenssen and Randøy (2002; 2006) between product, process and

market innovation seems to be reasonable. This is of practical managerial interest

because it indicates that different actions are necessary in order to stimulate different

kinds of innovation.

60

6.1.3. Innovation - performance

Consistent with previous literature, these results have shown a link between

innovativeness and economic performance. This emphasises the importance of being

innovative and creative for managers in small firms, who do not have the resources to

invest in RandD. Additionally, for NTFP&S firms, contact with research institutes and

universities is almost totally absent. Investing time and commitment in new ideas,

concentrating on core expertise, and finding new and better ways to run their firms

would therefore be important to obtain an advantage. It is important to create an

innovative climate in the firm and to allow employees to interact with various actors.

6.2. Implications for theory and research

The largest part of this thesis has dealt with innovation theory. The theoretical

perspective and empirical analyses have contributed to innovation theory by collecting

evidence related to how different external relations affect product, process and market

innovation. The different innovation studies that are a part of this thesis were applied to

the case of NTFP&S companies or small knowledge-intensive firms. However, this does

not mean that the findings are not applicable to a wider range of small firms. The

findings have shown that innovation cannot be treated as one concept. The separation

made in Jenssen and Randøy (2002; 2006) between product, process and market

innovation seems to be fruitful. Knowles et al. (2007) divided innovation into three

groups: process, product and business system innovation. They used the three groups as

a composite variable, measuring the same phenomena. Crespell and Hansen (2008) used

a similar technique of measuring innovativeness, using innovativeness as one construct

with composite variables and investigating the antecedents. The findings in this thesis

61

show that product, process and market innovation can be looked at as three different

constructs, and that each of them can have different antecedents. This is of theoretical

interest because it clearly shows that the term “innovation” includes different aspects

that must be understood and studied separately.

The findings also showed, as expected, that external relationships are of

importance to innovation. Market participation in product development has a positive

impact on product innovation, process innovation and market innovation; these findings

support earlier findings from Goes and Park (1997). Jenssen and Randøy (2002;2006)

found that top management has an important role in innovations, and BarNir and Smith

(2002) found that small firms’ networks are critical in their external relations. This

thesis has found that the interaction of top management with other firms is positively

related to market innovation and that interaction with external R&D is positively related

to product innovation. Research has shown that cooperation among firms improves their

innovative performance and competitiveness by combining resources and processes of

interactive learning (Asheim et al., 2003; Jenssen and Randøy, 2002; 2006). This thesis

has found that participation in courses and business specific networks is positively

related to process and market innovation. Further, systematic environmental scanning

has been found to be positively related to product innovation and process innovation.

Previous findings have emphasised the need for market knowledge in innovation

(Auster and Choo, 1994).

A significant amount of research has been done on innovativeness among

general tourism companies (e.g., Hjalager, 1994; 1997; 2002; Hallenga-Brink and

Brezet, 2003; Ioannides and Petersen, 2003). However, little research has investigated

62

the antecedents to landowner innovativeness and whether innovativeness positively

impacts economic performance in this setting. Research has shown that innovativeness

theory is not necessary transferable from one context to another (Hollenstein, 2003).

This thesis has shown that social networking and a learning orientation positively

impact innovativeness but that entrepreneurial climate does not. Innovativeness was

found to positively impact economic performance. This is the first conceptual causal

model using latent variables to try to understand the antecedents to innovativeness in the

context of Norwegian forestland owners and their involvement in non-timber forest

products and services.

Several studies have been conducted based on the institutional view of

innovation with a focus on institutions that are important for stimulating innovations

related to nature-based tourism and to the forest sector in general (see Hansen et al.,

2006 for an overview). Cross-country studies have been made with case studies from

several countries (e.g., Wisse et al., 2007). However, there have not been many

qualitative studies that have examined the effect of networks on innovativeness and,

again, performance, where networks involve the degree to which companies interact

with different institutions and actors. This thesis has found a positive connection

between networking and innovativeness and between innovativeness and performance,

supporting that previous findings in the general literature (see e.g. Isaksen, 1997) are

also applicable in the context of nature-based tourism.

This thesis contributes to the opportunity-based view on entrepreneurship by

applying it to nature-based tourism. The findings in the thesis support the existence of

three aspects of entrepreneurship in nature-based tourism enterprises in Norway:

63

opportunity recognition, risk taking, and innovativeness. However, opportunity

recognition was found to have only a weak connection with innovativeness and should

be further investigated. Risk taking and innovativeness have been two of three central

dimensions of entrepreneurship research (Miller, 1983). The third dimension used to

characterise and test entrepreneurship according to Miller (1983) was proactiveness.

Additionally, this thesis contributes to the entrepreneurship literature by showing that

entrepreneurial attitudes have a positive affect on the probability for start-ups among

non-industrial forest owners. Entrepreneurial attitude was defined as the ability to

recognise business opportunities and the ability to take a calculated risk. This reinforced

the previous view on more general industries, e.g. Cramer et al. (2002).

7. Limitations and future research

A relatively low R2 in the models with innovation and innovativeness as dependent

variables indicates that important independent variables are missing. There are

undoubtedly other important antecedents to innovativeness that have not been addressed

in this study. Future studies should identify and address these issues by seeking a more

complex model. This is important for improving knowledge regarding who can trigger

innovation and entrepreneurship among small and micro- firms.

This study clearly shows that external relations and networks have a positive

influence on innovation in small and micro-firms. It also addresses these issues using

both the social network approach and the innovation systems approach. Network theory

normally distinguishes between strong and weak ties, where the strength of the

relationship depends on factors such as trust, friendship, level of interaction, and the

duration of the relationship (Granovetter, 1973). A person has a strong tie to someone

64

with whom regular interactions occur, and a weak tie to an acquaintance with whom

interactions are rare. The literature has emphasised the importance of both strong and

weak ties in innovations (Powell and Grodal, 2005). Strong ties are important for social

support, while weak ties provide much of the novel information. Weak ties have a

longer reach but lack depth. It can be argued that strong ties only circulate old ideas and

have limited importance for innovativeness. On the other hand, it is important,

especially for individual entrepreneurs without the support of an organisation, to have a

trusted and supporting social network. Foss and Grønhaug (2005) also emphasise that

external relations can have an effect such that the network influences the firm just as

much as the firm can influence actors in the network. More in-depth studies should look

into these issues connected to smaller firms, e.g., in nature-based tourism. One of the

important issues concerns which different factors moderate the effect between number

of ties and innovations. Examples of moderating effects include redundancy, variation

of knowledge, variation in geographic location, position in the network and firm age.

This could also be linked to an innovation system approach where the institution’s role

is examined to determine what affects the link between ties and innovations.

This study emphasised the importance of relations but did not look at their

antecedents. These antecedents can be important for managers as they seek to change

their organisations and create more valuable external relations. Gaining a better overall

picture and in-depth information about the antecedents will also be important for

policymakers by directly addressing the issue of how politicians can exert influence

through policy instruments. Future research could identify the antecedents, seek a more

in-depth understanding of external relations, and construct a comprehensive framework

of both antecedents and consequences. This would allow researchers to provide more

practical advice to managers.

65

A complete list of nature-based firms does not exist. There was no complete list

of nature-based tourism micro firms in Norway. All forest owners’ associations were

contacted to obtain as complete a sample as possible. Two forest owners’ associations

did not have a list, and one did not want to release its list. To generate a more

representative sample, all relevant respondents from a list of members of the Norwegian

Rural Tourism and Food from the Farm were contacted. These organisations have long

lists of businesses involved in rural tourism and traditional food products. Descriptive

information was used to look for bias in the sample, and none was found. Still, there is

no guarantee that the sample is representative. A new study should obtain a better

overview of the full population of firms to secure representativeness.

Non-response bias may be present in the study. A concern in all survey research

is that the respondents may be systematically different from those who did not complete

the questionnaire. The data collection design in one paper did not allow a test for non-

response bias. Three papers tested non-response bias only by comparing early and late

respondents. Paper IV had a careful investigation of non-response bias; it appears that

younger and more educated forest owners with higher economic performance related to

NTFP&S were more likely to respond. A potential reason for this could be that these

people were more interested in these topics. This suggests that our findings may be

more representative of this group of forest owners. To reduce this problem in further

studies, the response rate should be increased among older and less educated owners.

The first two papers used single items to measure latent variables. To increase

validity and reliability, multi-item scales should always be used. Study findings

66

supported the existence of three aspects of entrepreneurship in nature-based tourism

firms in Norway: opportunity recognition, risk-taking, and innovativeness. However,

opportunity recognition was found to have only a weak connection with innovativeness

and should be further investigated. Risk-taking, innovativeness and proactiveness have

been three central dimensions of entrepreneurship research (Miller, 1983). The most

common operationalisation of entrepreneurial orientation is that developed by Covin

and Slevin (1991). To gain a deeper understanding of entrepreneurship in micro-firms,

Covin and Slevin’s (1989) model, which includes innovation, proactiveness and risk-

taking, should be adapted and tested.

Further research should develop measurement scales to measure innovativeness

that are better suited to micro-scaled, nature-based tourism firms. Most measurement

schemes (multiple item scales) are developed for larger industries and are therefore not

suitable for the smallest firms.

Measuring performance in micro-scaled firms (e.g., nature-based tourism) is a

challenge. According to Dess et al. (2003), a set of multiple measures of economic

outcomes such as profitability and sales growth should be used. The nature-based

tourism firms investigated in this study are small or micro-scale. Collecting data to

measure performance as typically carried out for larger firms is problematic. Many of

the respondents will, for example, not have separate financial statements for their

business, and a detailed questionnaire could drastically reduce the response rate. There

has been no consensus regarding how to measure small-firm performance, and research

has focused on easy-to-gather variables (Wiklund, 1999). Therefore, researchers make a

case for using growth as the most important performance measure for small firms

67

(Wiklund, 1999). This can be seen as support for using change in net income as an

indicator of performance in this study.

Only cross-sectional studies were performed, and no longitudinal data were

collected, which prevents conclusions regarding causality. Nevertheless, the study

results were supported by theory, which may indicate causality. A similar study should

be repeated after several years to see if the findings are constant over time. In some of

the papers, only firms still in business were surveyed. No firms that had gone out of

business were included in the sample, and findings in this study can thus only be

generalised for surviving firms. It is logical that risk-taking firms may have a higher

chance of failure.

The effect of innovativeness on performance is also likely to have a time lag. To

gain a better understanding of this topic, longitudinal data should be collected. Together

with multiple case studies, causal relationships could then be identified.

Studies on innovation and innovativeness among small or micro-scale,

agricultural low-technology firms have found that network has a significant impact on

innovation and on performance. A cross-sector study could have given more

information about how small low- and high-technology firms differ with respect to

innovation and different antecedents of innovativeness.

68

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Paper I

Reprinted with permission from Elsvier LTD

Entrepreneurial attitudes and probability for start-ups—an

investigation of Norwegian non-industrial private forest owners

Anders Lunnan a,*, Erlend Nybakk b, Birger Vennesland b

a Norwegian Forest Research Institute, Høgskoleveien 8, 1430 Aas, Norway, and Department of Economics and Resource Management,

Agricultural University of Norway, P.O. Box 5033, 1432 Aas, Norwayb Norwegian Forest Research Institute, Høgskoleveien 8, 1430 Aas, Norway

Abstract

Agricultural policy has in the last 50 years taken much of the risk and the initiative away from Norwegian farm forest

owners. Subsidies in agriculture have guaranteed an acceptable income and there has been neither need nor incentives for

starting up new activities at the farms. This situation is now gradually changing. The income both from agriculture and forestry

is decreasing and farm forest owners have either to move, to find job opportunities outside the farm or to start up new activity at

the farm using the farm’s resources. Entrepreneurship theory is used to study the question why some farm forest owners choose

to start up some new activity based on the forest resources they have. We identify two main elements of entrepreneurship; the

ability to recognise business opportunities and the ability to take calculated risk. In a survey to 500 forest owners in southern

Norway (response rate 45%), we included questions about opportunity recognition and risk aversion. From the answers, we

were able to split the forest owners in two groups, those with entrepreneurial attitudes and those without. Using logistic

regression we found a significantly higher probability for start-up of new activities in the group with entrepreneurial attitudes.

This result has very interesting policy implications. Many studies show that entrepreneurial attitudes to a large degree can be

learnt. The first way of learning about entrepreneurship is through the education system and through courses and training of

forest owners. The other way is dlearning by doingT, which is most probably the most efficient way to learn about entrepreneur-

ship. Public policy should stimulate more owners to ddoT, by that they will dlearnT and that will again lead to more

entrepreneurial activities at the holdings.

D 2005 Elsevier B.V. All rights reserved.

Keywords: Start-ups; Entrepreneurship; Risk taker; Opportunity recognition

1. Introduction

In 1940 the employment in the primary, secondary

and tertiary sectors was about the same in Norway.

Fig. 1 shows that since that time there have been large

structural changes. The employment in the primary

1389-9341/$ - see front matter D 2005 Elsevier B.V. All rights reserved.

doi:10.1016/j.forpol.2005.06.016

* Corresponding author. Tel.: +47 64 94 89 35; fax: +47 64 94 31

80.

E-mail address: anders.lunnan@skogforsk.no (A. Lunnan).

Forest Policy and Economics 8 (2006) 683–690

www.elsevier.com/locate/forpol

Paper 2

Reprinted with permission from Elsvier LTD

Entrepreneurial attitude, innovation and performance among Norwegiannature-based tourism enterprises

Erlend Nybakk a,b,⁎, Eric Hansen c

a Norwegian Forest and Landscape Institute, Postboks 115, N-1431 Ås, Norwayb Department of Economics and Resource Management, Norwegian University of Life Sciences, N-1432, Ås, Norwayc Department of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA

A B S T R A C TA R T I C L E I N F O

Article history:Received 26 March 2007Received in revised form 23 January 2008Accepted 10 April 2008

Keywords:EntrepreneurshipEntrepreneurial attitudeRisk takerOpportunity recognitionInnovationPerformanceNature-based tourism

Entrepreneurship and innovativeness have seen considerable attention in the literature. However, littleresearch has focused on micro-scaled enterprises, especially in the context of nature-based tourism. Thiswork investigates how entrepreneurial attitude influences innovativeness and performance in Norwegiannature-based tourism enterprises. Data collection consisted of an e-mail survey and resulted in 178 usableresponses. Respondents that exhibit a stronger entrepreneurial attitude appear more likely to change theway they organize their enterprise and tend to have higher income growth. Results point to potential policyactions that could positively impact rural development as well as individual firm actions that may enhanceperformance.

© 2008 Elsevier B.V. All rights reserved.

1. Introduction

Historically, the forest sector has been an important industry forthe Norwegian economy, particularly for rural areas. Increasingglobalization and competition in the wood products industry and asimultaneous reduction in income from timber sales among forestlandowners have created increasing debate regarding economicdiversification and who might best commercialize non-wood forestproducts in Norway. Politicians agree on the desirability of maintain-ing rural populations and robust regions throughout Norway andpromotion of innovation and entrepreneurship in traditional sectorslike forestry and agriculture is seen as important for ensuring theeconomic health of rural areas.The study of firm-level entrepreneurship is a central issue in the

entrepreneurship literature (Zahra, 1993). Current research identifiestwo different views of entrepreneurship (Sharma and Chrisman,1999)where one group of scholars focuses on the outcome of entrepreneur-ship (Sharma and Chrisman, 1999), such as creation of value andanother larger group focuses on the characteristics of entrepreneur-ship (Sharma and Chrisman, 1999), in other words, innovativeness.Both groups agree that opportunity recognition is at the center of

entrepreneurship (Ireland et al., 2003). Researchers in the secondgroup offer two accepted and frequently used definitions: 1) Schump-eter (1934) defines entrepreneurship as the process of carrying outnew combinations, and 2) Gartner (1988) defines it as the creation ofnew organizations.Innovation in the service sector has been a topic of growing

interest among researchers and policy makers (e.g. Hjalager, 1994,1997, 2002; Ioannides and Petersen, 2003; Hallenga-Brink and Brezet,2003). In this study, nature-based tourism enterprises in Norway areinvestigated. Lunnan et al. (2006) identify two main elements ofentrepreneurship among non-industrial private forest owners relatedto non-timber activities: the ability to recognize business opportu-nities and the ability to take calculated risks. Further, they examinehow entrepreneurial attitudes affect the possibility for business start-ups. Rather than investigating entrepreneurship related to start-ups,this study focuses on existing enterprises. The first objective is todevelop an understanding of how entrepreneurial attitudes influenceinnovativeness and change in Norwegian nature-based serviceenterprises.Favorable market position (Porter, 1985) and possession of

valuable, rare, imperfectly imitable, and non-substitutable resourcesdistinctive to the enterprise (Barney, 1991) have frequently beendescribed as sources of competitive advantage. Drawing fromSchumpeter (1934), later research highlights the value of creativityand innovation for opportunity and advantage-seeking behaviors

Forest Policy and Economics 10 (2008) 473–479

⁎ Corresponding author. Norwegian Forest and Landscape Institute, Postboks 115, N-1431 Ås, Norway. Tel.: +47 64 94 90 99; fax: +47 64 94 80 01.

E-mail address: erlend.nybakk@skogoglandskap.no (E. Nybakk).

1389-9341/$ – see front matter © 2008 Elsevier B.V. All rights reserved.doi:10.1016/j.forpol.2008.04.004

Contents lists available at ScienceDirect

Forest Policy and Economics

j ourna l homepage: www.e lsev ie r.com/ locate / forpo l

Paper 3

Reprinted with permission from Journal of Forest Products Business Research

Paper 4

Reprinted with permission from Elsvier LTD

Antecedents to forest owner innovativeness: An investigation of thenon-timber forest products and services sector

Erlend Nybakk a,b,*, Pablo Crespell c, Eric Hansen d, Anders Lunnan a,b

aNorwegian Forest and Landscape Institute, Postboks 115, N-1431 As, NorwaybDepartment of Economics and Resource Management, Norwegian University of Life Sciences, N-1432 As, Norwayc FP Innovations Forintek, 2665 East Mall, Vancouver, BC, Canada V6T 1W5dDepartment of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA

1. Introduction

Agriculture and forestry in Norway are crucial land uses thatserve as a platform for economic diversification, but recent decadeshave seen a relative decline in income from these traditionalindustries (Vennesland, 2004). This decline has led to an increasedeffort to stimulate growth and create other job opportunities basedon landowners’ utilization of non-timber aspects of their forest-land. In Norway, non-timber forest products and services (NTFP&S)refer to a different suite of activities than the non-timber forestproducts commonly referred to in, e.g. North America. The term issimilar to what Lunnan et al. (2006) call alternative incomeactivities. Examples of these uses in Norway are nature-based (eco-) tourism and sales of fishing and hunting licenses. We use theNTFP&S to describe a broad suite of activities involving commercialutilization of forestland and wilderness except for the sale oftimber and firewood. We realize that this definition goes beyond

what is traditionally considered non-timber forest products.However, because we have not found a perfect term for theconcepts used in this study, we continue to use NTFP&S, stressingthat our use is broader than the traditional ‘‘non-timber forestproducts’’.

Because of the economic decline in traditional sectors,alternative income streams have become increasingly important.In theory, enhancing innovativeness of forest owners can increasealternative incomes and positively impact rural development inNorway. As a result, policies have been implemented to increaseinnovation by promoting social networks, increasing knowledgeand fostering an entrepreneurial climate among rural landownersin Norway (Amdamet al., 1995). The policies have also had a strongfocus on improving environmental and social sustainability(Vennesland, 2004).

Nybakk et al. (2008) found that the degree of social networkingby various individuals and organizations had a positive effect oninnovativeness among nature-based recreation tourism compa-nies, more than half of which were forest owners. Rametsteineret al. (2005) studied forest owners in Central Europe and found thatthe innovation process was affected by both personal and externalfactors and that co-operation with suppliers, customers and forest

Forest Ecology and Management 257 (2009) 608–618

A R T I C L E I N F O

Article history:

Received 22 January 2008

Received in revised form 22 September 2008

Accepted 23 September 2008

Keywords:

Innovativeness

Entrepreneurial climate

Social network

Learning

Economic performance

Forest owners

A B S T R A C T

Increased urbanization in many societies is having a negative impact on vitality of rural areas. To

maintain the vitality of these areas governments have employed a variety of policies, some of which are

designed to facilitate innovation and enhance landowner innovativeness. However, little research has

investigated the antecedents to landowner innovativeness and whether innovativeness positively

impacts economic performance in this setting. The present study investigates these issues in the context

of Norwegian forestland owners and their involvement in non-timber forest products and services

(a form of ecosystem services). The authors present a conceptual model hypothesizing that social

networking, entrepreneurial climate, and a learning orientation each have a direct, positive impact on

landowner innovativeness and innovativeness has a direct, positive impact on economic performance.

Property size is included as amoderating variable. Datawere collected via amail survey and a total of 683

useable responses were received reaching an adjusted response rate of 35%. Results show that social

networking and a learning orientation positively impact innovativeness, but that entrepreneurial climate

does not. Innovativeness was found to positively impact economic performance. The authors outline

implications of the findings that may be used by policy makers, landowners and research.

� 2008 Elsevier B.V. All rights reserved.

* Corresponding author at: Norwegian Forest and Landscape Institute, Postboks

115, N-1431 As, Norway. Tel.: +47 41 42 08 09; fax: +47 64 94 80 01.

E-mail address: erlend.nybakk@skogoglandskap.no (E. Nybakk).

Contents lists available at ScienceDirect

Forest Ecology and Management

journal homepage: www.e lsev ier .com/ locate / foreco

0378-1127/$ – see front matter � 2008 Elsevier B.V. All rights reserved.

doi:10.1016/j.foreco.2008.09.040

Paper 5

Reprinted with permission from the International Journal of Innovation Management

International Journal of Innovation ManagementVol. 13, No. 3 (Sept. 2009) pp. 441–466© Imperial College Press

INTER-ORGANIZATIONAL INNOVATION PROMOTERSIN SMALL, KNOWLEDGE-INTENSIVE FIRMS

JAN INGE JENSSEN

University of Agder and Agder Research, Servicebox 4224604 Kristiansand, Norway

jan.i.jenssen@hia.no

ERLEND NYBAKK

Department of Economics and Resource Management, University of LifeSciences and Norwegian Forest and Landscape Institute, Norway

erlend.nybakk@skogoglandskap.no

This paper examines the relationship between external relations and innovation in small,knowledge-intensive Norwegian firms. Our findings indicate that external relations arebeneficial for innovation. The analysis shows that it is necessary to treat innovation as morethan a concept. Our independent variables related differently to product innovation, processinnovation, and market innovation.We found that market participation in product development has a positive impact on

product, process and market innovation. We also found that top management interactionwith other firms had a positive effect on market innovation and that top management inter-action with external R&D had a positive effect on product innovation. This finding probablyindicates that access to R&D resources is vital for product development in the context ofknowledge-intensive products. The results also show that participation in conferences andcourses positively influences process and market innovation and that systematic environ-mental scanning positively influences product innovation.

Keywords: Innovation; innovationpromoters; external relations; small, knowledge-intensivefirms; Norway.

Introduction

In recent decades, we have seen a shift from an industry-based economy to a moreknowledge-dependent one. A knowledge-dependent economy differs greatly froman industry-based economy (Houghton and Sheehan, 2000), as it is characterisedby flexible, co-operating, networked organisations that exploit knowledge in orderto innovate and survive in a global market (Acs and Preston, 1997; Houghton and

441

Erlend Nybakk Department of Economics and Resource Management Norwegian University of Life Sciences PO Box 5003 N-1432 Ås, Norway www.umb.no/ior Section for Forest Technology and Economics Norwegian Forest and Landscape Institute Postboks 115 N-1431 Ås www.skogoglandskap.no ISSN: 1503-1667 ISBN: 978-82-575-0873-9

Erlend grew up in Hallingdal (Norway) and attended Gol secondary school. In 1994/1995 he was an exchange student in Kingston, Jamaica. He earned a master's degree at the Department of Economics and Resource Management, Norwegian University of Life Sciences (UMB) in 2001. As a part of his Master’s, he spent half a year at the University of Natal, Pietermaritzburg, South-Africa in 2000, where he studied industrial economics. Erlend has been employed at the Norwegian Forest and Landscape Institute since 2001. As a part of his PhD he took classes at Oregon State University (USA), Norwegian School of Economics and Business Administration (NHH), Bodø Graduate School of Business, CERAM Sophia Antipolis - European School of Business (France), University of Helsinki (Finland) and UMB. In 2006/2007 he was a visiting researcher at Oregon State University for one year. This thesis consists of an introduction and five independent papers. The foremost goal with this thesis is to advance knowledge about the factors that trigger creativity and innovation in small firms, with the main focus on firms that offer non-timber forest products and services (NTFP&S).Article I was based on a questionnaire for forest owners and shows that the likelihood of starting up with NTFP&S is greater among forest owners that recognize opportunities and are risk takers. Articles II and III were based on a questionnaire for firms that work with nature-based tourism. The first of them builds on Article I and shows that forest owners that recognize opportunity and are risk takers have a greater likelihood of changing the way they supply their products and services. Article III shows the effect of external relationships on innovation and how innovation affects economic accomplishment. The relationships are also exemplified through a case study. Article IV was based on a study of a random selection of forest owners with more than 25 hectares of forest in southeast Norway. The study shows that external relationships and learning orientation have a positive effect on innovation and again on economic success among forest owners, related to NTFP&S. Article V was based on a questionnaire for small, knowledge-intensive firms and shows the impact of external relationships on product, process and market innovation. Each of the articles presents implications of the findings and suggestions for further research. Professor Anders Lunnan (UMB) and Professor Eric Hansen (OSU) were Erlend’s supervisors. E-mail: nye@skogoglandskap.no, Telephone: +47 41420809