Impact of a nations culture on high-tech innovation and entrepreneurship success

Impact of a nations culture on high-tech innovation and entrepreneurship success

The aim of our activities are to address cultural aspects for high-tech entrepreneurship and high-tech innovation success.

We do this by providing education and information, organizing informational events, conducting (online) workshops and research work.

Research questions we address are e.g.:

  • What are cultural influencers for success in high-tech companies? (e.g. five key cultural dimensions)
  • How does culture interact with other innovation ecosystem dimensions (markets, context, institutions)?
  • What measures can be taken to overcome cultural influencers early in high-tech companies and increase their success rates? (e.g. how to create a balanced founder team)
  • Can the magnitude of success be influenced by these measures? (e.g. create more unicorns and more high-tech jobs)
  • Can the value of high-tech companies be increased? (e.g. enable exits in the hundreds of millions USD)

In order for a nation to excel in technological entrepreneurship and high-tech innovations many aspects play a role.  Our advisor – Prof. Shlomo Maital – who has 30 years’ experience in entrepreneurship education – talks in his book (Mapping National Innovation Ecoystems 1) ) about the four key dimensions of innovation that build a generic innovation ecosystem:

  • culture;
  • markets;
  • context (including infrastructure); and
  • institutions (including regulations).

While these four dimensions interact in complex ways, one of the most important one and maybe the most critical for large success is culture.

Why is this?

Following a few collected thoughts supporting the importance of culture for innovation adoption and entrepreneurship success:

The organizations that compete best in competitive environments are those that learn the fastest to adapt to changing circumstances. – Peter Drucker

The ability to learn plays a key role in understanding cultural differences regarding innovation. – Lundvall et al. (1994)

“… national culture and ICT adoption rate are closely related”. – Erumban et al. (2006).

Scholars who use culture and other factors to explain cross-country differences in high-tech industry include Chen (2008) and to explain differences in entrepreneurship Ardagna et al. (2008).

Power distance dimension (refers to the inequality of the distribution of power in a country) and uncertainty avoidance dimensions (the degree to which members of a society feel uncomfortable with uncertainty and ambiguity) are the most significant cultural factors by which some of the differences in ICT adoption rates among countries can be explained. The research on the role of culture (shared values) should be balanced by noting that often, entrepreneurs have unique personality traits that shape how they behave (Nga et al., 2010).

Cautious note: Culture is essentially a “given”. To some degree, company culture can be shaped, but perhaps less than many companies pretend. Nor should value judgments, “good” and “bad”, be attached to cultural dimensions. They are simply there, like body height and eye color. However, in order to “fit” innovation policy to a nation’s ecosystem, it is important to understand the nature of a nation’s culture and the constraints and opportunities it provides.

Kreiser et al. (2010) use data from 1048 firms in six countries to assess the impact of national culture on entrepreneurship, and focus on a key aspect of culture, that of risk-taking among SMEs.”

Hofstede et al. (2010) deepened our understanding of culture and its role in management by quantifying five key cultural dimensions.

Individual/collective
measures how people live and work in groups or each chooses his or her own path; it measures how and whether individual achievement is highly valued.

Masculinity
measures masculine traits in the culture, like aggression, competitiveness and materialism.

Uncertainty avoidance
measures how people react to uncertainty and risk.

Long-term/ short-term
measures whether people focus on immediate, short-term gratification or are patient and seek long-term reward.

Power distance
measures the extent to which society is rigidly hierarchical, with highly perceived distance between those at the top and at the bottom, or “flat”, where people perceive they can interact with and communicate with those in control, no matter where they are in the hierarchy.

  Min-max scores, countries Switzerland (estimated) Explanations/examples

Individual/collective

Israel, USA and China above average Europe average Below average In Switzerland entrepreneurship does not have the same status as working for established companies. Success does not have the same recognition as in Israel, US or China.

Masculinity

Europe average Israel and Latin America higher average

Uncertainty avoidance

China 35
USA 46
world average 65
Japan 90
Europe average 74
80+

few Japanese take entrepreneurial risk indicating overall, an aversion to uncertainty (and perhaps the risk attendant on innovation).

Long-term/ short-term

48 world average
USA, 30 Britain, Canada, 20
China 95
Japan 80
India, 61
Asian average 85
80

China’s saving rates
Asian innovators are more patient in working on long-term projects. Impatience may explain entrepreneurial urgency in the West, but failure in longer-term projects.

Power distance

Israel low
40 USA
30 UK
80 China
77 India
70 Silicon Valley entrepreneurship garage startup culture

1) The above content was partly taken from but adapted and extended:

Mapping National Innovation Ecosystems

Amnon Frenkel, Associate Professor of Urban and Regional Planning and Senior Research Fellow

Shlomo Maital, Professor (emeritus) and Senior Research Fellow, Samuel Neaman Institute for Advanced Studies in Science and Technology


In the news

https://www.inc.com/anna-hensel/switzerland-is-big-on-innovation-but-short-on-startups-heres-how-its-trying-to-f.html

“I think the big challenge we face here in Switzerland is we’re still lacking in the startup DNA,” explains Mike Baur, the co-founder and executive chairman of Swiss Startup Factory, a Zurich-based accelerator.

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