Technological Achievements in Entrepreneurial Firms: Legacy, Value Chain Experience, and Division of Innovation Labour

This paper examines whether founders’ origin is systematically associated with the technological orientation of their new established organisation. Using an exploratory design, we empirically investigate how the technological achievements of organisations are associated with the founder’s prior experience identifying where in the industry’s value chain the founder worked previously. Using a unique dataset of Swedish and Danish biotechnology start-up firms, we explore the relationship between the founders’ prior position in the value chain and the technological achievements of their start-up. Firms established by founders from academia tend to perform well in early stages of technology development, while firms established by founders from further up the value chain tend to exhibit technological achievements in the later stages of development. Building on these results, we discuss possible mechanisms that may trigger these empirical regularities and propose that these mechanisms cause a division of innovation labour among biotechnology start-ups.