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Innovation and Entrepreneurship in small firms: The

influence of entrepreneurial attitudes, external


relationships and learning orientation

Innovasjon og Entreprenrskap i sm selskaper: pvirkning av entreprenrielle


holdninger, eksterne relasjoner og lringsorientering

Philosophiae Doctor (PhD) Thesis


Erlend Nybakk
Department of Economics and Resource Management
Norwegian University of Life Sciences
s 2009

Thesis number 2009: 07


ISSN 1503-1667
ISBN 978-82-575-0873-9

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 Erics
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, slaug 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.

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, VestAgder 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 oppettholde konomisk vekst og sysselsetning i distriktene og nasjonalt er man
avhenging av sm og konkurransedyktige selskaper og enkeltmannsforetak. De
representerer det absolutte flertallet av bedriftene og er en viktig kilde til nyskaping og
utvikling i bde tradisjonelle og nye sektorer. Hvordan man skal promotere
entreprenrskap og innovasjon blant disse selskapene har vrt et sentralt tema i den
politiske debatten. Det overordnede mlet med avhandlingen er frembringe kunnskap
om faktorer som trigger nyskaping og innovasjon i smbedrifter, med et hovedfokus p
foretak som tilbyr ikke-tmmerprodukter og tjenester fra skogen (ITP&T). Artikkel I
er basert p en sprreunderskelse til skogeiere i Telemark og Agderfylkene og viser at
sannsynligheten for starte opp med ITP&T er strre blant skogeiere som er
risikovillige og mulighetsskende. Artikkel II og III er basert p en sprreunderskelse
til selskaper som driver med natur-basert turisme. Den frste av dem bygger videre p
Artikkel I og viser at selskaper som er risikovillige og mulighetsskende har en strre
sannsynlighet for endre mten de leverer produktene og tjenestene sine p. Artikkel III
viser betydningen av eksterne relasjoner p innovativitet og hvordan innovativitet
pvirker konomisk prestasjon. Sammenhengene eksemplifiseres ogs gjennom et casestudie. Artikkel IV er basert p en underskelse til et tilfeldig utvalg av skogeiere med
mer en 250 ml skog i Sr- og st Norge. Underskelsen viser at eksterne relasjoner og
lringsorientering har en positiv effekt p innovativitet og igjen p konomisk
prestasjon blant skogeiere, relatert til ITP&T. Artikkel V er basert p en
sprreunderskelse til sm, kunnskapsintensive selskaper og viser betydningen av
eksterne relasjoner p produkt-, prosess- og markedsinnovasjon. Hver av artiklene
presenterer implikasjoner av funnene og forslag til videre forskning.

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

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

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 landowners 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
8

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 (Bjrkhaug, 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

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
10

(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 largerscale 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-

11

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).
12

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
13

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
14

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 knowledgeintensive 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

15

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; Gemnden 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
16

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 Chrismans (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
17

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 (Grnhaug


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
18

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 Schumpeters 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
19

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). Grnhaug 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 (Schn, 1963). Jenssen (2004) defines a
champion as a person willing to take risks by enthusiastically promoting the
20

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 Randy, 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 Schumpeters definition, it is a process by which individuals pursue
21

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).

22

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.

23

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
24

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 knowledgeintensive 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.

25

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
RQ#1. What influence do entrepreneurial
attitudes have on the possibility of startups?
RQ#2. What influence do entrepreneurial
attitudes have on innovativeness and
change in firms?

Main theoretical position


Entrepreneurship: Creation of a New
Organisation

Paper
Paper I

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?
RQ#6. What effect does local
entrepreneurial climate have on
innovativeness?
RQ#7. What effect does innovativeness
have on economic performance?

Innovation and Innovativeness


Learning orientation
Innovation and Innovativeness
Entrepreneurial climate

Paper
IV
Paper
IV

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
26

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 startups?

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 Schumpeters 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, Kirzners (1973; 1999) entrepreneur spontaneously discovers and utilises
undiscovered opportunities and disequilibrium in the market.

27

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 enterprises 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 todays 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 firms 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
28

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 Grnhaug, 2005).

29

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).

30

Other researchers focus more on the strategic nature of external relations. Gulati
et al. (2000) belong to this group, defining strategic networks as stable interorganisational 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
31

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?

32

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
33

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


economy, the focus has been to increase the innovation capacity of small and mediumsized 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 entrepreneurs 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).

34

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).
Grnhaug 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?

35

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-upsan 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
36

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.

37

Table 2. Theoretical perspectives, context and research questions.


Theoretical key words
Entrepreneurship theory;
Creation of a new
organisation, risk
aversion and
opportunity recognition
Entrepreneurship theory,
opportunity recognition
and innovation

Context
Active Forest
owners (forest
owners association
members)

Research question/Hypotheses
Forest owners entrepreneurial attitudes
generate a higher probability of starting up
new activities.

Nature-based
tourism microfirms

Paper
III

Innovation,
Innovativeness, Social
Network and Innovation
System

Nature-based
tourism micro-firms

Paper
VI

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

Forest owners with


more than 25
hectares forest land

Paper
V

Innovation,
innovativeness and
external relations (social
external networks)

Small and
knowledgeintensive 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.
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.
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.
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.

Paper
I

Paper
II

38

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
39

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
40

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.

41

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 personyears. 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 Rdset
(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

42

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 Randy (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.
Paper
I
Paper
II
Paper
III

Paper
IV

Paper
V

Variables
Start-ups
Risk taker
Opportunity recognition
Innovativeness
Change in net income
Risk taker
Opportunity recognition
Network
Innovativeness
Performance
Social Network
Entrepreneurial Climate
Learning Orientation
Innovativeness
Economic Performance
Property Size
Product Innovation
Process Innovation
Market Innovation
Market participates in product development
Supplier participates in innovation
Market co-operation
Top management interaction with other firms
Top management interaction with external RandD
Participation in courses/business-specific networks
Inter-firm co-operation for technology acquisition
Systematic environmental scanning

Items
1 item
1 item
1 item
4 items
1 item
1 item
1 item
7 items
4 items
3 items
6 items
6 items
6 items
6 items
6 items
1 item
4 items
2 items
2 items
2 items
2 items
3 items
2 items
2 items
3 items
3 items
3 items

Scale
Yes/No
(1-6)
(1-6)
(1-6)
(1-3)
(1-6)
(1-6)
(1-6)
(1-6)
(1-3)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
Cont*
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)
(1-7)

43

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

44

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.

P1
P2and3

Response
rate
45%
55%

Usable
responses
223
178

P4

35%

683

P5

34%

151

Data collection
Mail survey by post. One reminder by postcard.
Letter explaining the objective and importance of the study was
mailed and followed by an e-mail survey with two e-mail
reminders.
Mail survey by post following a modified Dillman (1978). Two
reminders and one full package similar to the first wave.
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

45

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 owners 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 nonresponse 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 ttest/chi-square-test. The results showed that respondents had significantly higher
education and were significantly younger than non-respondents. This finding indicates
nonresponse 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
46

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 1 + 2 (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 Cronbachs alpha test. This is a test of internal
consistency, based on the average inter-item correlation (SPSS 13). A Cronbachs 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).
47

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 models 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.

48

Table 5. Hypotheses, significant levels and comments in the thesis.


Hypotheses
Opportunity recognition Start-ups
Risk aversion Start-ups

Sign
9**
9**

II

Opportunity recognition Innovation


Risk aversion Innovation
Opportunity recognition Performance
Risk aversion Performance

9**
9***

9*

III

External Networks Innovativeness


Innovativeness Performance
External Networks Innovativeness
Learning orientation Innovativeness
Entrepreneurial Climate Innovativeness
Innovativeness Performance
Moderation effect: Property size
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

9***
9***
9***
9***

9***
9**

9994
94
94
994

Inter-firm co-operation for technology acquisition Innovation1


Systematic environmental scanning Innovation 1

994

IV

Comments
1
RTandPO=.45
,RAandPO=.24 ,
RTandNO=.23 ,
RAandNO=.10
2
RTandPO=.53
,RAandPO=.32 ,
RTandNO=.32 ,
RAandNO=.17
3
RTandPO=.58
,RAandPO=.37 ,
RTandNO=..49 ,
RAandNO=.30
H1: = .46, R2 = .07
H2: = .50, R2 = .17
H1: = .32, R2 = .32
H2: = .37, R2 = .32
H3: Not sign
H4: = .31, R2 = .09
H5: x2 = 4.1
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; = 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
49

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
50

market their products and services, and the way in which they organise the firm and find
collaborators. This result is consistent with Schumpeters (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
51

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,
52

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
53

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.

54

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
55

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 owners 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

56

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
57

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
58

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 learningrelated 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 Randy (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.
59

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 Randy (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
60

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 Randy (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 Randy, 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
61

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:
62

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
63

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 Grnhaug (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 institutions 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.
64

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 nonresponse 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
65

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 Slevins (1989) model, which includes innovation, proactiveness and risktaking, 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
66

(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.

67

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84

Paper I
Reprinted with permission from
Elsvier LTD

Forest Policy and Economics 8 (2006) 683 690


www.elsevier.com/locate/forpol

Entrepreneurial attitudes and probability for start-upsan


investigation of Norwegian non-industrial private forest owners
Anders Lunnan a,*, Erlend Nybakk b, Birger Vennesland b
a

Norwegian Forest Research Institute, Hgskoleveien 8, 1430 Aas, Norway, and Department of Economics and Resource Management,
Agricultural University of Norway, P.O. Box 5033, 1432 Aas, Norway
b
Norwegian Forest Research Institute, Hgskoleveien 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 farms 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 entrepreneurship. 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

* Corresponding author. Tel.: +47 64 94 89 35; fax: +47 64 94 31


80.
E-mail address: anders.lunnan@skogforsk.no (A. Lunnan).
1389-9341/$ - see front matter D 2005 Elsevier B.V. All rights reserved.
doi:10.1016/j.forpol.2005.06.016

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

Paper 2
Reprinted with permission from
Elsvier LTD

Forest Policy and Economics 10 (2008) 473479

Contents lists available at ScienceDirect

Forest Policy and Economics


j o u r n a l h o m e p a g e : w w w. e l s e v i e r. c o m / l o c a t e / f o r p o l

Entrepreneurial attitude, innovation and performance among Norwegian


nature-based tourism enterprises
Erlend Nybakk a,b,, Eric Hansen c
a
b
c

Norwegian Forest and Landscape Institute, Postboks 115, N-1431 s, Norway


Department of Economics and Resource Management, Norwegian University of Life Sciences, N-1432, s, Norway
Department of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA

A R T I C L E

I N F O

Article history:
Received 26 March 2007
Received in revised form 23 January 2008
Accepted 10 April 2008
Keywords:
Entrepreneurship
Entrepreneurial attitude
Risk taker
Opportunity recognition
Innovation
Performance
Nature-based tourism

A B S T R A C T
Entrepreneurship and innovativeness have seen considerable attention in the literature. However, little
research has focused on micro-scaled enterprises, especially in the context of nature-based tourism. This
work investigates how entrepreneurial attitude inuences innovativeness and performance in Norwegian
nature-based tourism enterprises. Data collection consisted of an e-mail survey and resulted in 178 usable
responses. Respondents that exhibit a stronger entrepreneurial attitude appear more likely to change the
way they organize their enterprise and tend to have higher income growth. Results point to potential policy
actions that could positively impact rural development as well as individual rm actions that may enhance
performance.
2008 Elsevier B.V. All rights reserved.

1. Introduction
Historically, the forest sector has been an important industry for
the Norwegian economy, particularly for rural areas. Increasing
globalization and competition in the wood products industry and a
simultaneous reduction in income from timber sales among forest
landowners have created increasing debate regarding economic
diversication and who might best commercialize non-wood forest
products in Norway. Politicians agree on the desirability of maintaining rural populations and robust regions throughout Norway and
promotion of innovation and entrepreneurship in traditional sectors
like forestry and agriculture is seen as important for ensuring the
economic health of rural areas.
The study of rm-level entrepreneurship is a central issue in the
entrepreneurship literature (Zahra, 1993). Current research identies
two different views of entrepreneurship (Sharma and Chrisman, 1999)
where one group of scholars focuses on the outcome of entrepreneurship (Sharma and Chrisman, 1999), such as creation of value and
another larger group focuses on the characteristics of entrepreneurship (Sharma and Chrisman, 1999), in other words, innovativeness.
Both groups agree that opportunity recognition is at the center of
Corresponding author. Norwegian Forest and Landscape Institute, Postboks 115, N1431 s, 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

entrepreneurship (Ireland et al., 2003). Researchers in the second


group offer two accepted and frequently used denitions: 1) Schumpeter (1934) denes entrepreneurship as the process of carrying out
new combinations, and 2) Gartner (1988) denes it as the creation of
new 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 are
investigated. Lunnan et al. (2006) identify two main elements of
entrepreneurship among non-industrial private forest owners related
to non-timber activities: the ability to recognize business opportunities and the ability to take calculated risks. Further, they examine
how entrepreneurial attitudes affect the possibility for business startups. Rather than investigating entrepreneurship related to start-ups,
this study focuses on existing enterprises. The rst objective is to
develop an understanding of how entrepreneurial attitudes inuence
innovativeness and change in Norwegian nature-based service
enterprises.
Favorable market position (Porter, 1985) and possession of
valuable, rare, imperfectly imitable, and non-substitutable resources
distinctive to the enterprise (Barney, 1991) have frequently been
described as sources of competitive advantage. Drawing from
Schumpeter (1934), later research highlights the value of creativity
and innovation for opportunity and advantage-seeking behaviors

Paper 3
Reprinted with permission from
Journal of Forest Products
Business Research

Paper 4
Reprinted with permission from
Elsvier LTD

Forest Ecology and Management 257 (2009) 608618

Contents lists available at ScienceDirect

Forest Ecology and Management


journal homepage: www.elsevier.com/locate/foreco

Antecedents to forest owner innovativeness: An investigation of the


non-timber forest products and services sector
Erlend Nybakk a,b,*, Pablo Crespell c, Eric Hansen d, Anders Lunnan a,b
Norwegian Forest and Landscape Institute, Postboks 115, N-1431 As, Norway
Department of Economics and Resource Management, Norwegian University of Life Sciences, N-1432 As, Norway
c
FP Innovations Forintek, 2665 East Mall, Vancouver, BC, Canada V6T 1W5
d
Department of Wood Science and Engineering, Oregon State University, 119 Richardson Hall, Corvallis, OR 97331-5751, USA
a

A R T I C L E I N F O

A B S T R A C T

Article history:
Received 22 January 2008
Received in revised form 22 September 2008
Accepted 23 September 2008

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 a moderating variable. Data were collected via a mail 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 ndings that may be used by policy makers, landowners and research.
2008 Elsevier B.V. All rights reserved.

Keywords:
Innovativeness
Entrepreneurial climate
Social network
Learning
Economic performance
Forest owners

1. Introduction
Agriculture and forestry in Norway are crucial land uses that
serve as a platform for economic diversication, but recent decades
have seen a relative decline in income from these traditional
industries (Vennesland, 2004). This decline has led to an increased
effort to stimulate growth and create other job opportunities based
on landowners utilization of non-timber aspects of their forestland. In Norway, non-timber forest products and services (NTFP&S)
refer to a different suite of activities than the non-timber forest
products commonly referred to in, e.g. North America. The term is
similar to what Lunnan et al. (2006) call alternative income
activities. Examples of these uses in Norway are nature-based (eco) tourism and sales of shing and hunting licenses. We use the
NTFP&S to describe a broad suite of activities involving commercial
utilization of forestland and wilderness except for the sale of
timber and rewood. We realize that this denition goes beyond

* 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).
0378-1127/$ see front matter 2008 Elsevier B.V. All rights reserved.
doi:10.1016/j.foreco.2008.09.040

what is traditionally considered non-timber forest products.


However, because we have not found a perfect term for the
concepts used in this study, we continue to use NTFP&S, stressing
that our use is broader than the traditional non-timber forest
products.
Because of the economic decline in traditional sectors,
alternative income streams have become increasingly important.
In theory, enhancing innovativeness of forest owners can increase
alternative incomes and positively impact rural development in
Norway. As a result, policies have been implemented to increase
innovation by promoting social networks, increasing knowledge
and fostering an entrepreneurial climate among rural landowners
in Norway (Amdam et al., 1995). The policies have also had a strong
focus on improving environmental and social sustainability
(Vennesland, 2004).
Nybakk et al. (2008) found that the degree of social networking
by various individuals and organizations had a positive effect on
innovativeness among nature-based recreation tourism companies, more than half of which were forest owners. Rametsteiner
et al. (2005) studied forest owners in Central Europe and found that
the innovation process was affected by both personal and external
factors and that co-operation with suppliers, customers and forest

Paper 5
Reprinted with permission from
the International Journal of
Innovation Management

International Journal of Innovation Management


Vol. 13, No. 3 (Sept. 2009) pp. 441466
Imperial College Press

INTER-ORGANIZATIONAL INNOVATION PROMOTERS


IN SMALL, KNOWLEDGE-INTENSIVE FIRMS

JAN INGE JENSSEN


University of Agder and Agder Research, Servicebox 422
4604 Kristiansand, Norway
jan.i.jenssen@hia.no

ERLEND NYBAKK
Department of Economics and Resource Management, University of Life
Sciences 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 rms. Our ndings indicate that external relations are
benecial for innovation. The analysis shows that it is necessary to treat innovation as more
than a concept. Our independent variables related differently to product innovation, process
innovation, 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 interaction
with other rms had a positive effect on market innovation and that top management interaction with external R&D had a positive effect on product innovation. This nding 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 conferences and
courses positively inuences process and market innovation and that systematic environmental scanning positively inuences product innovation.
Keywords: Innovation; innovation promoters; external relations; small, knowledge-intensive
rms; Norway.

Introduction
In recent decades, we have seen a shift from an industry-based economy to a more
knowledge-dependent one. A knowledge-dependent economy differs greatly from
an industry-based economy (Houghton and Sheehan, 2000), as it is characterised
by exible, co-operating, networked organisations that exploit knowledge in order
to 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 s,
Norway
www.umb.no/ior

Section for Forest Technology


and Economics
Norwegian Forest and
Landscape Institute
Postboks 115
N-1431 s
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 Masters, 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), Bod 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 Erlends supervisors.
E-mail: nye@skogoglandskap.no, Telephone: +47 41420809