How the Buzz Emanating from Sustainable Entrepreneurial
Agglomeration Affects the Interaction between Sustainability
Start-ups and Multinational Enterprises
A Qualitative Multiple Case Study in the City of Amsterdam
Master Thesis
M.Sc. Business Studies - International Management
Supervisor Dr. Johan Lindeque
Second Reader Dr. Markus Paukku
Student Caroline Bartels
Student Number 11199407
Date of Submission 24, March, 2017
I
Statement of Originality
This document is written by the student Caroline Bartels who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
II Abstract
Recent studies show increasing interest in the activities of start-ups and multinational enterprises in sustainable entrepreneurship. In view of growing agglomeration of sustainable entrepreneurial activity in cities, this study asks how sustainability start-ups and multinational enterprises interact in these buzzing eco-systems. Academic literature suggests stimulating factors for socio-economic interaction in agglomerations as well as potentials for collaborations between these players to bring progress to sustainable development. To explore this interaction, a multiple case study was conducted. This strategy allows an in-depth investigation of each case as well as the identification of patterns across the cases, which is appropriate for studies in novel research fields. The study builds its evidence on data gathered through semi-structured interviews with sustainable start-ups in Amsterdam. The results of the research confirm a multi-dimensional connection between local buzz and the interaction between sustainability start-ups and multinational enterprises. Yet, the study does not identify a conclusive effect, emphasizing the need for further research to provide clarification on the connection between sustainability-related buzz and the interaction between start-ups and multinational enterprises.
Keywords: Sustainability Start-up, Sustainable Entrepreneurship, Sustainable Innovation, Multinational Enterprise, Local Buzz, City Cluster
III
Acknowledgements
I would like to express my gratitude to my supervisor Johan Lindeque who was always available to support my work with his valuable feedback and who has motivated me throughout the entire progress.
I would like to thank all 15 participants of my research who took their limited time to give me the interesting insights I needed to fill this thesis with life.
Finally, I would like to express my gratefulness for the infinite support of my family.
IV Table of Contents 1. Introduction ... 1 2. Theoretical Foundations ... 3 2.1. Sustainability in Business ... 3 2.1.1. Sustainable Development ... 3
2.1.2. Sustainable Entrepreneurship and Innovation ... 3
2.1.3. Sustainability Transformation of Industries ... 5
2.2. Sustainable Entrepreneurs ... 5
2.2.1. Sustainability Start-ups ... 5
2.2.2. Corporate Sustainable Entrepreneurship in Multinational Enterprises ... 7
2.3. Buzz in Sustainable Entrepreneurial Agglomeration ... 8
2.3.1. The Concept of Local Buzz ... 8
2.3.2. Theoretical Integration ... 10
3. Methodology ... 12
3.1. Research Philosophy ... 12
3.2. Research Strategy ... 12
3.2.1. Qualitative Multiple Case Study ... 12
3.2.2. Quality Criteria ... 13 3.3. Research Sample ... 14 3.4. Data Collection ... 16 3.5. Data Analysis ... 18 4. Findings ... 20 4.1. Within-Case Analysis ... 20 4.2. Cross-Case Analysis ... 32 4.2.1. Discussion of Findings ... 35 5. Conclusion ... 40 References ... 42 Appendix ... 47 Appendix 1: Concepts ... 47
Appendix 2: Template for Semi-structured Interviews – Sustainability Start-ups ... 47
V List of Tables
Table 1: Research Sample ... 15
Table 2: Overview Interviewees ... 17
Table 3: Coding Scheme ... 19
Table 4: Analytical Table of the Within-Case Analysis for Case A ... 21
Table 5: Analytical Table of the Within-Case Analysis for Case B ... 22
Table 6: Analytical Table of the Within-Case Analysis for Case C ... 23
Table 7: Analytical Table of the Within-Case Analysis for Case D ... 24
Table 8: Analytical Table of the Within-Case Analysis for Case E ... 25
Table 9: Analytical Table of the Within-Case Analysis for Case F ... 26
Table 10: Analytical Table of the Within-Case Analysis for Case G ... 27
Table 11: Analytical Table of the Within-Case Analysis for Case H ... 28
Table 12: Analytical Table of the Within-Case Analysis for Case I ... 29
Table 13: Analytical Table of the Within-Case Analysis for Case J... 30
Table 14: Analytical Table of the Within-Case Analysis for Case K ... 31
Table 15: Analytical Table of the Within-Case Analysis for Case L ... 32
Table 16: Findings of the Cross-Case Analysis ... 34
Table 17: Findings to Working Propositions ... 38
List of Abbreviations
CSR Corporate Social Responsibility MNE Multinational Enterprise
1 1. Introduction
Sustainable entrepreneurship is a very recent concept in the academic literature. Scholars suggest it to be an effective mean to solve social and environmental problems through commercial activity (Cohen & Winn, 2007; Schaltegger et al., 2016). Innovations that integrate sustainability principles into their core of business appear to be more sufficient than conventional ways like CSR programs through which businesses have tried to address their performance beyond economic parameters (Bocken et al., 2014; Parrish, 2010).
Recent studies acknowledge initial disruptive changes in industries induced by sustainable innovations. Scholars that investigate the sustainability transformation of these industries draw specific attention to the interplay of activities by start-ups and large corporates like multinational enterprises (MNEs). While sustainability start-ups (SSs) are perceived as pioneering change agents that develop and implement radical novel paths of doing business, MNEs are considered as the driving force to bring sustainable innovations to scale (Hockerts & Wüstenhagen, 2010; Schaltegger & Wagner, 2011). Hockerts & Wüstenhagen (2010) point towards the need of further research regarding how these organisations approach each other and in which arenas they interact. An improved understanding of the interaction of SSs and MNEs is important to gain in order to identify how synergies can be effectively exploited to accelerate sustainable transformations.
Theory suggests that the interaction, communication and relationship building between economic actors is stimulated in buzzing clusters. Local buzz describes a vibrant environment which arises from the co-agglomeration of various actors with mutual interests (Bathelt et al., 2004). Due to the high agglomeration of start-ups, investors, hub organisations and other actors with mutual interest in sustainable innovation in the city of Amsterdam, this research aims to answer the following research question:
How does the buzz emanating from sustainable entrepreneurial agglomeration affects the interaction between sustainability start-ups and multinational enterprises?
In order to investigate the activity of SSs and their interaction with MNEs in the cluster, a multiple-case study is conducted, consisting of a within-case analysis and a cross-case analysis. The study builds its evidence on primary data gathered in semi-structured interviews regarding twelve cases. The within-case analysis thoroughly investigates four embedded units of analysis for each case contained in the research sample: the degree of buzz within a sector, the degree
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of attraction of knowledge-seeking MNEs, the degree of institutional pressure within the sector and the degree of interaction and MNEs. This extensive examination allows the researcher to identify patterns across cases (Eisenhardt, 1989) and thus to conduct a cross-case analysis. The detected patterns across cases are applied to support or reject the stated working propositions in order to answer the underlying research question.
This study contributes to research in three ways. First, it alleviates the general scarcity of research on the interplay between SSs and MNEs. Second, unlike extant studies that take an industry view, the current analysis focusses on the interaction on a sub-national level. Third, extant theory that investigates the interaction of start-ups and MNEs did not account for specific characteristics of sustainability start-ups due to the nascent state of this phenomenon.
Summarizing the main findings of this study, the analysis confirms the existence of a connection between the buzz emanating from sustainable entrepreneurial activity in Amsterdam and the interaction of SSs and MNEs. The within-case analysis reveales differing degrees of buzz intensity, in the attraction of knowledge-seeking MNEs, different degrees of institutional pressure within the sector and of interaction between SSs and MNEs for each case. In the subsequently conducted cross-case analysis, an unambiguous attraction of knowledge-seeking MNEs due to the buzz emanating from sustainable entrepreneurial agglomeration in Amsterdam within sectors could be identified. An albeit restricted connection between the degree of institutional pressure regarding sustainability within a sector and the degree of buzz could be shown as well a limited reciprocal relationship between the local buzz intensity and the level of interaction between SSs and MNEs in Amsterdam.
The remainder of the paper is organised as follows. Section 2 presents the theoretical foundations and integrates relevant concepts. Section 3 describes the methodological approach undertaken in this research. The results of the analysis are presented and discussed in section 4. Finally, section 5 concludes.
3 2. Theoretical Foundations
This section provides the theoretical foundations for the analysis. To understand sustainability in the business context, section 2.1. introduces the idea of sustainable development (Sustainable Development Commission, n.d.) and explains how its principles are turned into sustainable business innovations (Bocken et al., 2014). The section closes with the sustainability transformation of industries, which concerns contemporarily observed developments (Bohnsack et al., 2014; Hockerts & Wüstenhagen, 2010; Schaltegger et al., 2016; Schaltegger & Wagner, 2011). Section 2.2. addresses sustainable entrepreneurial activities of start-ups and MNEs (Hockerts & Wüstenhagen, 2010) and indicates their incentives to interact. Section 2.3. addresses the concept of local buzz in such clusters (Bathelt et al., 2004; Storper & Vernables, 2004) and presents the theoretical integration.
2.1. Sustainability in Business 2.1.1. Sustainable Development
The concept of sustainable development came up in the 1970ies when governments started to become aware of negative outcomes of certain human activities on social and environmental systems (Sustainable Development Commission, n.d.). The concept of sustainable development pursues the achievement of human well-being, alongside the preservation of ecological capital in accordance with economic welfare (Parrish, 2010). The principles of sustainable development include a moderate and efficient usage of natural resources, the prevention of mass consumption and a respectful treatment of human beings (Bocken et al., 2014). These principles illustrate the fact that sustainable development is a complex objective, requiring actions on multiple levels (Parrish, 2010). In order to address aggravating sustainability-related issues such as the exhaustion of irreversible resources, changes in consumer behaviour, consumption habits, industries, technologies and policies are necessary (Bohnsack et al. 2014; Schaltegger et al., 2016).
2.1.2. Sustainable Entrepreneurship and Innovation
Following the emergence of the concept of sustainable development, the idea of sustainable entrepreneurship and business innovations arose. Academic research in this field focusses on the role of businesses and their contribution to sustainable development (Schaltegger et al.,
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2016). Sustainable innovative commercial activity and business practices solve issues concerning the damage of societies and eco-systems in a financial sustainable way (Cohen & Winn, 2007; Dacin et al., 2010; Robinson, 2006; Schaltegger et al., 2016; Weerawardena & Mort, 2006). Sustainable innovations have increasingly gained attention among academics and practitioners as they are recognized to be more effective than conventional approaches, such as activities that have been traditionally addresses under the umbrella term of Corporate Social Responsibility (CSR) (Aguinis, 2011; Bocken et al., 2014). It is neither a lack of awareness nor the lack of investment into CSR, but the fact that the undertaken CSR measures, used to bring progress to sustainable development of businesses, often are isolated from commercial activities and strategies (Andersen & Skjoett-Larsen, 2009; Baumann-Pauly et al., 2013; Spence, 2007). Investing in additional measures that are not integrated in the core activities of a business can lead to insufficiencies (Porter & Kramer, 2006). The academic literature suggests that companies will only be able to significantly improve their sustainability performance if they change their entire organisational logic, away from the profit focus towards the integration of sustainability principles in business activities and strategies (Bocken et al., 2014; Stubbs & Chocklin, 2008). The main point of access to the necessary reconceptualization of commercial purposes and the integration of the concept of sustainability into business strategies and activities is consequently laying in sustainable business innovations (Gauthier & Gilomen, 2016; Schaltegger et al., 2016).
Bocken et al. (2014) provide a framework that explains how principles of sustainable development are translated into sustainable business innovations. In order to provide a deeper understanding of what applies as sustainable business innovations to the reader, this framework is explained in the following. It is distinguished between three main groupings of technological, social and organisational innovation archetypes. Technologically sustainable innovations aim to increase resource efficiency, reduce waste and promote the use of natural and renewable resources (Bocken et al., 2014). Examples are recent concepts of the circular and sharing economy or the providers of renewable energy. Sustainable innovation in the social grouping concentrate on improvements in value chains, such as fair trade products and standards and services that promote the well-being of end-users (Bocken et al., 2014). Finally, organisational sustainable innovations, address the shift of purpose of companies from solely profit-maximisation towards the inclusion of social and environmental welfare (Bocken et al., 2014). Examples are bottom-of-the-pyramid business models that provide low-income markets with access to specific services or platform solutions for which businesses serve as an intermediator as it is the case with open source platforms (Bocken et al., 2014).
5 2.1.3. Sustainability Transformation of Industries
Hart & Milstein (1999) pointed towards the early stages of radical disruption of our socio-economic systems into the direction of sustainable development. More recent studies in fact acknowledge initial disruptive changes through sustainable innovations in the transport and energy sector (Bohnsack et al., 2014) as well as in the food industry (Hockerts & Wüstenhagen, 2010).
Studies of Schaltegger et al. (2016) and Hockerts and Wüstenhagen (2010) have found different patterns of the diffusion of sustainable innovation. They observe three different scenarios. In the first scenario, the initiator of a sustainable innovation is scaling up its business through the implementation of such innovations, thus reaching greater market shares (Schaltegger et al, 2016). In the second scenario, the sustainable innovation diffuses as other market players adjust their businesses by replicating and imitating these innovations, due to competitive pressures (Schaltegger et al, 2016). Finally, mergers and acquisitions have been observed to play a role for the diffusion of sustainable innovation (Schaltegger et al, 2016).
Industries have reached different levels of awareness for sustainability. The institutional theory provides reasons why industries seem to experience different degrees of devotion to sustainability-related issues. The institutional theory argues that businesses react to pressures coming from society, suppliers and other interest groups (DiMaggio & Powell, 1991; Pedersen & Gwozdz 2014; Waddock, 2008). This notion has been applied to explain why and when businesses incorporate sustainability principles into their strategies (Aguinis & Glavas, 2012).
2.2. Sustainable Entrepreneurs
The academic literature of sustainable entrepreneurship distinguishes between the activities of start-ups and established corporates (Hockerts & Wüstenhagen, 2010). Specific interest has been drawn to the distinct roles that these organisations play in the sustainability transformation of industries (Bohnsack et al., 2014; Hockerts & Wüstenhagen, 2010; Schaltegger et al., 2016; Schaltegger & Wagner, 2011).
2.2.1. Sustainability Start-ups
The recent concept of SSs draws upon different streams of literature concerning social and environmental entrepreneurship which leads to diverse wordings among academics describing the concept (Bacq & Janssen, 2011; Hockerts & Wüstenhagen, 2010). The current research
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defines a SS as an organisation younger than ten years (European Start-up Monitor, 2016), that integrates a social or ecological objective into its core strategy (Hockerts & Wüstenhagen, 2010).
SSs and sustainable entrepreneurs as founders and managers of such organisations have gained specific awareness due to their capability to create sustainable business innovations (Bocken et al., 2015; Dacin et al., 2010; Hockerts & Wüstenhagen, 2010; Sharir & Lerner, 2006; Zahra et al., 2009). SSs are agile organisations that are able to think “outside of the box” which enables them to develop innovative ways of doing business (Bohnsack et al., 2014; Hockerts & Wüstenhagen, 2010). Moreover, the flexibility of small SSs due to their organisational structure facilitates the implementation of radical innovation. Additionally, sustainable entrepreneurs as founders of such organisations are recognized as pioneers with specific leadership skills and an intrinsic drive enabling them to commit others for their mission and bring forward change (Weerawardena & Mort, 2006; Hockerts & Wüstenhagen, 2010).
SSs are often niche players as they are young and have not yet reached large mainstream markets but a selected group with specific interest in sustainability themes (Hockerts & Wüstenhagen, 2010). The innovative character of their products and services can create challenges in achieving social legitimacy and greater awareness of their businesses (Bohnsack et al., 2014). Moreover, sustainable innovations often raise standards in production which is followed by an increase in costs, leading to sustainable innovations often being more expensive than conventional solutions (Hockerts & Wüstenhagen, 2010). This is adding to the difficulty in reaching mainstream customers. Summarizing, SSs are seen as the key driver of change within the field of sustainability. However, their limited capacities sets constraints to scale-up their sustainable innovations.
SSs give highest priority to their sustainability objective as it is integrated in their core strategy (Schaltegger et al., 2016). However, the academic literature acknowledges differences in the personal intentions and management ideologies of their initiators (Schaltegger, 2002; Zahra et al., 2009; Hockerts & Wüstenhagen, 2010). Hockerts & Wüstenhagen (2010) argue that SSs that arise from a personal desire to disrupt unsustainable solutions are often run by idealists. An idealist can be seen as a person with a certain idea of what is good and strong concerns against everything which acts against it (Chonko et al., 2003). Hockerts & Wüstenhagen (2010) suggest that these idealists are characterised by an intrinsic motivation to solve a specific social or ecological problem, a radical approach to go against its catalysts and an anti-mainstream attitude. The anti-mainstream attitude see the authors in a reluctance to grow to larger markets.
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An idealistic person is considered to perceive MNEs as a symbol for methods they do not agree with and try to disrupt, or as Hockerts & Wüstenhagen (2010) put it literately as the giants they aim to slay. However, individuals that set-up SSs are not necessary idealistic heroes (Parkinson & Howorth, 2008) but individuals that use their entrepreneurial capabilities to identify a way to turn social and environmental issues into profitable business cases the concept also includes sustainable entrepreneurs with commercial business mind-sets and financial interests (Cohen & Winn, 2007; Schlange, 2006). Authors take different perspectives when it comes to say what sustainable entrepreneurs differentiate from commercial ones (Austin, 2006; Schlange, 2006).
2.2.2. Corporate Sustainable Entrepreneurship in Multinational Enterprises
MNEs are defined as large corporates operating in more than two countries (Rugman & Verbeke, 1992). Recent studies increasingly recognise the interest of large corporates in sustainable innovations (Hockerts & Wüstenhagen, 2010; Bohnsack et al., 2014; Schaltegger et al., 2016). Despite rich resource endowments of their MNEs could use to develop innovations, organisational characteristics can create obstacles regarding the initiation of innovations. Previous research point out that large enterprises are subject to organisational inertia (Chesborough, 2010; Hannan & Freeman, 1984). Ahuja & Lampert (2001) discuss three traps preventing large corporates to experiment with or implement disruptive innovations. The first trap, the familiarity trap, describes the phenomenon that established technologies are often preferred over new technologies. This is due to the fact that the formerly established competences of MNEs regarding conventional technology make investments into new solutions relatively less profitable in the short run (Ahuja & Lampert, 2001). Furthermore, managers can be exposed to cognitive barriers when searching for innovative approaches due to well-functioning of currently applied business models (Chesbrough, 2010). Empirical studies support this constraint by showing that MNEs have a diminished interest to implement new strategies as long as they are still profiting from unsustainable solutions (Bohnsack et al., 2014; Cohen & Winn, 2007). Bohnsack et al. (2014) have studied how prior investment prevent MNEs from investments into more sustainable innovations for the automobile industry. Their findings suggest MNEs to be in fact constraint to reconsider their established businesses by prior investments into specific capabilities, production technologies and facilities. Secondly, the maturity trap describes the phenomena that MNEs tend to prefer the implementation of technologies are better understood, legitimacy proven and less risky than novel ones (Ahuja & Lampert, 2001). The last trap, the propinquity trap, characterize the prioritization of solutions
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that are similar to existing solution in order to further exploit existing assets and competences (Ahuja & Lampert, 2001; Bohnsack et al., 2014;). In fact, managers of MNEs seem to be hesitant when fearing contradictions with existing assets and resources (Chesbrough, 2010). These challenges that many MNEs face regarding the development of sustainable business innovations reveal that corporates have incentives to catch-up ideas outside their boundaries and to adopt them into their own business model.
Previous paragraphs indicate the incentives for sustainable start-ups and MNEs to collaborate. Prior the analysis of how buzz affects the interaction between SSs and MNEs, possible challenges of this interaction are discussed.
2.3. Buzz in Sustainable Entrepreneurial Agglomeration
A trend of an increase of SSs in Europe has been observed over the past years (European Commission, 20141). Entrepreneurial activities often agglomerate in cities that are known to attract talented and creative people, accessibility to finance, proper infrastructures and co-presence of relevant services like consultancies, authorities and research institutions (Glaeser et al., 2010). The increase of SSs occurs with new forms of investors like impact or green venture capitalist and organised hubs (European Commission, 2014).
2.3.1. The Concept of Local Buzz
This conglomerate of people and organisations in a specific city with mutual interests can create a vibrant environment that scholars have connoted with the “local buzz” in clusters (Bathelt et al., 2004; Storper & Vernables, 2004). The local concentration of diverse actors triggers frequent contact and interactions which facilitates the development of social and business relationships (Bathelt et al., 2004). Storper & Vernables (2004) stress the significance of face-to-face interaction in the process of trust and relationship building which makes spatial proximity essential. Face-to-face interaction implies that individuals do not simply exchange explicit words but communicate on a multidimensional level of transmission, interpretation and development of complex content (Asheim et al., 2007). Actors that engage with each other on an enduring basis incrementally develop supportive social institutions (Bathelt et al., 2004).
1 The report of the European Commission (2014) uses the wording social enterprise. The exact definition depends on the country but the report generally considers also small enterprises with an ecological purpose.
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These social institutions such as informal codes of conducts (Williamson, 2000) play a facilitating role for socio-economic interaction as they function as a guide for involved actors what is socially accepted (North, 1991). Especially in informal arrangements, when conditions and rules are not backed up in contracts as it the case in formalized collaborations, social institutions deliver a sense of security for economic actors (Dahl & Pedersen, 2004; Meyer et al., 2009). Frequent interaction and exchange of experiences promotes the development of mutual conventions and understandings, which facilitates and stimulates the building of partnerships (Bathelt et al., 2004). Scholars conclude that the positive additive effects of personal and frequent interaction on the socialization in clusters (Storper & Vernables, 2004) creates an efficient “information and communication ecology”, called local buzz (Bathelt et al., 2004, p. 38).
Buzz emanates when socioeconomic interactions concentrate. Co-agglomerations do not necessarily lead to intensive buzz but is created in interaction and exchange between cluster actors (Bathelt et al., 2004). Accordingly, clusters incorporate distinct intensities of buzz. The intensity of buzz is determined by the level of interaction and the frequency of exchange between its actors. Situations in which local buzz is stimulated are planned conferences, fairs, workshops, community activities, other network events as well as unanticipated gatherings such as spontaneous meet-ups (Bathelt & Turi, 2011; Bathelt et al., 2004). Clusters can be vibrant for involved firms in the sense that they are in spatial proximity to organisations with mutual interests and relevant expertise. The quality of buzz and relevance differs between single actors (Bathelt et al., 2004).
Buzz is less about the exchange of complex knowledge which has been considered to take place in formal strategic collaborations but particularly about getting inspired, exchange ideas and being up to date. What is specific for buzz is that actors that actively and frequently participate in relevant interaction can enjoy exclusive benefits from being part of the circle (Asheim et al., 2007). Being part of the circle should mean that enterprises get access to information they could not easily acquire on other ways (Bathelt et al., 2004). Accordingly, Asheim et al. (2007) argue that actors participating in buzz exchange group-based information, which does not only relate to specific information about trends, technologies, markets and strategies (Bathelt & Turi, 2011), but also to community-specific gossip and news (Gertler, 1995), personal recommendations, rumours and impressions (Grabher, 2002). Actors intending to harness the advantages of buzz, such as getting access to insider information and get in touch with relevant
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partners, are required to participate actively in order to build necessary relationships with relevant actors.
2.3.2. Theoretical Integration
In this section, the above elaborated theoretical concepts are set in relation to the underlying research question. Three working propositions are stated to approach the assessment of the effect of the agglomeration of sustainable entrepreneurial activity in Amsterdam on the interaction between SS and MNEs. The research proposes that the agglomeration of sustainable entrepreneurial activity in Amsterdam and its resulting buzz attract knowledge-seeking MNEs. Furthermore, different sectors are subject to distinct degrees of institutional pressure, which is proposed to be reflected in the intensity of buzz within a sector. This mechanism is self-reinforcing, as a higher intensity of buzz reciprocally leads to higher attraction of MNEs, increasing the intensity of buzz even further. Finally, the research proposes a positive correlation between the intensity of buzz and the level of interaction between SSs and MNEs. It is thus assumed that high intensity of buzz leads to amplified interaction between SSs and MNEs in the cluster and vice versa. Including the previously proposed, it is therefore assumed that the influence of the attraction of MNEs and the influence of institutional pressure on interaction through buzz intensity shall also be assessed.
The geographic agglomeration of actors with mutual interests leads to specific cluster effects like local buzz (Bathelt et al., 2004). The first underlying assumption of the research is that the sustainable entrepreneurial agglomerated activity in Amsterdam creates sustainability-related buzz. Sustainability related buzz is considered as the evolving information and communication channels surrounding sustainable innovations that originate from the interaction between actors. Examples for such actors are municipalities, entrepreneurs and investors.
Previous studies acknowledge increasing interest of MNEs in sustainable innovations and discuss the challenges of these corporates to develop them internally. MNEs that intent to absorb knowledge outside their boundaries are therefore attracted to locations where innovation activity concentrates (Enright, 2000; Mudambi, 2002). MNEs that tap into clusters to absorb information and knowledge through interactions with co-agglomerated actors are labelled “knowledge-seeker”. The first working proposition therefore suggests:
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The second underlying assumption of this research is that this process of attraction is leading to interaction and information exchange between the SSs and the MNEs.
Literature suggests that companies respond to pressures originating from distinct interest groups (Waddock, 2008). The pressure concerning sustainability standards claimed by stakeholders are expected to differ between sectors. The different degrees of institutional pressures across sectors are expected to be visible through the intensity of buzz:
WP2: Distinct degrees of institutional pressures concerning sustainability within sectors is reflected in the intensity of local buzz in Amsterdam.
SSs and MNEs interacting in mutual socioeconomic environments simultaneously contribute and receive information and cluster-specific knowledge (Bathelt et al., 2004). The intensity of buzz and the level of interaction between SSs and MNEs in a cluster is considered to be reciprocal. When the buzz intensity rises, the interaction between SSs and MNEs is expected to increase and vice versa. This mechanism is expected to be self-reinforcing.
WP3: The higher the intensity of buzz, the higher the interaction between SSs and MNEs, and vice versa.
12 3. Methodology
3.1. Research Philosophy
The research philosophy declares what assumptions and personal beliefs the researcher holds on the reality and how it conceptualises the world (Rynes & Gephart, 2004; Saunders & Lewis, 2012). When investigating phenomena in which social actors play a key role an interpretative research approach seems to be adequate (Saunders & Lewis, 2012). Interpretivism in social sciences suggests reality to be constructed by subjective meanings which the researcher tries to understand based on narratives (Rynes & Gephart, 2004). Taking an interpretative approach in the current research is appropriate, as the research particularly builds on personal perceptions, perspectives and experiences from members of start-ups.
3.2. Research Strategy
3.2.1. Qualitative Multiple Case Study
The coevolution of SSs and MNEs in the process of transformation of industries towards sustainable development has just recently started to be investigated in explorative inductive studies (Hockerts & Wüstenhagen, 2010; Schaltegger et al., 2016). For the analysis of relatively new and fairly understood phenomena a qualitative research approach is preferred (Saunders & Lewis, 2012). Unlike quantitative methods that establish correlations between established variables, qualitative research methods allow to investigate how and why a specific phenomenon occurs in a certain manner (Yin, 2010). Interviews with members from SSs and network organisations as external observers allowed for an in-depth investigation on the interaction between SSs and MNEs.
This research adopts a multiple case study strategy which allows cross-case comparisons aiming to identify patterns in the collected data (Eisenhardt, 1989). Taking a deductive approach, existing academic literature was first examined to draw verifiable inferences to the research question (Eisenhardt, 1989). This strategy does not target statistical generalizable findings for a representative sample but pursues the generalization to theory (Yin, 2009). The study consists of twelve single cases, whereas each case presents one SS in its environment cluster. The analysis contains four embedded units of analysis, the intensity of buzz within the cluster, the level of attraction of MNEs with interest in innovative knowledge, the role of institutional pressure within the cluster and the level of interaction between SSs and MNEs. As the research sample consists of heterogeneous cases, the distinct findings across cases are expected to differ
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(Yin, 2013). Then, the cross-case analysis uses the results of the within-case analysis to assess the working propositions stated by the author and finally answers the research question of this paper.
3.2.2. Quality Criteria
In contrast to quantitative research methods that are based on numeric data, qualitative approaches have been argued to create relatively more loopholes for biases are influencing the objectivity of the research findings (Gibbert & Ruigrok, 2010). Such biases can arise throughout the entire research process, beginning with the selection of an unrepresentative sample, the creation of systematic errors while conducting interviews, as well as bias created in the analytics part due to a subjective interpretation of the research results by the author (Saunders & Lewis, 2012). To manifest the quality of its findings the research uses four criteria suggested by Yin (2009) to be considered during conducting qualitative research. The quality ensuring criteria of construct validity, the concepts of internal and external validity and the criteria of reliability are presented in the following.
The construct validity assesses whether a research indeed investigates what it intends to investigate (Gibbert & Ruigrok, 2010; Saunders & Lewis, 2012). To ensure that the researcher is clear about it defined all relevant concepts that are relevant in the analysis based on theoretical foundations. A table explaining the key concepts underlying the working proposition of this research can be found in Appendix 1. The research increase its level of construct validity by building its evidence on multiple data sources (Gibbert & Ruigrok, 2010).
The concept of internal validity refers to potential bias occurring in the analytical part of the research (Yin, 2009). Internal validity is ensured when the inferences drawn from the findings of the analysis are grounded on plausible and logical argumentations (Gibbert & Ruigrok, 2010). The author of the current research ensures internal validity by drawing conclusions from various sources by conducting pattern-matching across the analysed cases (Gibbert & Ruigrok, 2010). Moreover, the critical reflection on possible biases in the interpretative analysis (Saunders & Lewis, 2012) and alternative explanations ensure the validity and reliability of the drawn conclusions (Gibbert & Ruigrok, 2010).
External validity indicates to which degree the research findings would be applicable outside the particular study frame (Yin, 2009). As the study’s evidence emerges out of multiple cases, it is claimed that its findings are of greater robustness than the study of single cases (Eisenhardt
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& Graebner, 2007). The multiple case study strategy with purposively selected homogenous cases allows to generalize the findings to theory (Yin, 2009). The researcher is therefore able to investigate more profoundly whether the findings support or reject the expectations identified and based on the theoretical foundation.
The last criteria proposed by Yin (2009) for high-quality research findings is the concept of reliability. It addresses the transparency of the undertaken analysis and the replicability of its findings (Gibbert & Ruigrok, 2010). In order to make the research process fully comprehensible for the reader, all data generated through interview are backed as records and transcripts. Finally, all analytical steps from the data to its findings are outlined to the reader.
3.3. Research Sample
The context for the research is the city of Amsterdam. A considerable number of SSs has agglomerated in Amsterdam in the recent past. Even though the exact number of SSs in the Dutch capital is not clear and differs between definitions, the municipality of Amsterdam estimates the number of social and impact enterprises at approximately 270 in 2010 and at 750-1000 in 2015 (Gemeente Amsterdam, 2015). Amsterdam is considered one of the leading social innovation hubs worldwide (Probono Australia, 2017). The co-presence of various SSs (Gemeente Amsterdam, 2015), headquarters of international corporates (the number of headquarters of international companies in Amsterdam is estimated at 450; Municipality Amsterdam, n.d.). and organised networks with a focus on sustainable entrepreneurship and innovations suggest rich opportunities for the data collection.
The research sample were selected by a purposive sampling method based on specific criteria chosen by the researcher (Saunders & Lewis, 2012). The criteria for the selected start-up cases were not to be older than ten years at the moment of analysis following the European Start-up Monitor (2016), to have a team with a maximal number of 50 based on the definition by the European Commission of small enterprises (European Commission, 2015) and to have a business model that can be applied to the framework of sustainable business innovation archetypes by Bocken et al. (2014). Ten of the twelve research cases are located in Amsterdam, which has been determined according to Google Maps on a total surface of approximately 220 km. Two cases have their registered office outside of Amsterdam but also run operations in Amsterdam and have social and business relations within the capital city. The research chose a cross-sectorial sample as it anticipated heterogeneous findings for the role of buzz within the agglomeration.
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The researcher identified relevant SSs in Amsterdam according to previous knowledge and experience gained in discussions with other academics and by conducting further research. The online homepages of Dutch organisations with specific sustainability objectives and the online data basis LexisNexis which helps to filter relevant information in media reports facilitated further identification of relevant SSs. Initial inquiries about the availability of interviewees took place via phone, e-mail or in person. The researcher reached out in total to 42 SSs. The procedure finally resulted in the selection of the SSs listed in the research sample Table 1.
Table 1: Research Sample
Case Sustainable Business Innovation (Bocken et al., 2014) Product/Service (Industry) Date of Foundation Team Size A Social Customer Health
Snacks with healthy ingredients and manufacturing certifications
(Food & Beverages)
2015 3 B Technological Sharing Assets Social Community Building
Platform for book sharing and community exchange
(Entertainment/Books) 2015 2
C
Technological Renewable Energy
Service Market Place
(Energy) 2014 15
D
Technology Take back Management
Social
Functionality rather than ownership Product Maintenance
Product-as-a-service for eco-efficient and long-lasting
washing machines (Household Devices) 2015 5 E Technological Renewable Energy
Fast Charging Stations for Electric Vehicles (Transport) 2012 20 F Social Consumer Health Resource Stewardship
Bio-based materials for artificial soccer fields
(Materials, Cork)
2016 2
G
Social Customer Well Being
Fair Trade Consumer Education
Chocolate with specific certifications for organic, high quality ingredients,
fair trade (Food & Beverages)
2009
16 3.4. Data Collection
The key source for the evidence of the research is primary data gathered in semi-structured interviews. The conduction of semi-structured interviews provides predetermined themes to ensure the cover of essential issues by simultaneously leaving freedom to add and eliminate questions during questionnaires (Saunders & Lewis, 2012). This is appropriate as the field of interest has been relatively little investigated. Semi-structured interviews are suitable due to the anticipated diversity of the research sample concerning SSs’ interest in local networks, experiences and interest in partnerships with MNEs which called for flexible discussion templates.
Fourteen out of in total fifteen interviews were conducted via phone; one interview took place in the office of the respective organisation in Amsterdam. The length of the interviews ranged between 20 and 55 minutes and lasted on average approximately 30 and in total around 440 minutes. All interviews were conducted in English. This was done to minimize the risk of meaning modification through translations but also due to the fact that this was the language the researcher and the interviewees had in common.
As outlined in Table 2 twelve interviews were held with members of the SS from the research sample and three interviews with members of network organisations. The interviews with the
H
Social Stewardship Role
Fair Trade
Coffee brand that supports farmers and local entrepreneurship where
coffee is grown
(Food & Beverages) 2012 15
I
Social Customer Well Being
Open Source
Application that enables consumer to manage and restrict the usage of their
online information
(Personal Data Security Systems) 2015 3
J
Technological Recycling
Encourage technology adoption
3D printer for which less clean plastic waste can be used as input
material (Design)
2015 2
K
Technological Maximise Energy Efficiency
Intelligent Energy Management System
(Energy) 2015 2
L Technological Sharing Assets
Car Sharing Technology (Transport)
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SSs were held with members in different positions within the organisations. Eight interviews were held with the founders of the SS. In four cases in which the founders were not available for an interview due to time issues the researcher spoke to members in other positions. Their knowledge about the interview themes were ensured via phone or e-mail before the actual interview.
Table 2: Overview Interviewees
Organisation Position Title Date of
Foundation SS A Founder 2015 B Founder 2015 C Founder 2014 D Founder 2015 E Founder 2012 F Business Developer 2016 G Commercial Manager 2014 H Impact Officer 2015 I Founder 2015 J Founder 2015 K Founder 2015 L CEO 2012 Network Organisation
Impact Hub Program Director 2014 Nudge Community Director 2013 Social Enterprise NL Public Affairs 2012
The interviews with members from SSs covered three top themes as viewed in Appendix 2. Covered are the vision and intention of SS, their participation in buzz related context and their experience with MNEs in and outside Amsterdam. The first themes target questions concerning the self-definition, the vision, the perception of their role within their industry and their evaluation of their performance. These questions are aimed to get an understanding whether and how the investigated SS perceive themselves as differentiated from commercial innovative businesses. The second theme involve questions to the members of the SS regarding their
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memberships in local sustainability related initiatives and network organisations, their relationships with other SSs and their activity in the cluster. The third part target their experiences with MNEs. Two final questions has an open character guiding the lenses to the respective industry and personal thoughts the interviewees would like to add which is anticipated to bring valuable novel views on the research theme.
The network organisations ImpactHub, Social Enterprise NL and Nudge were asked for an interview to get the perspective from external observers on the interaction between SSs and MNEs. Specifically these organisations were chosen due to their location in Amsterdam, their close contact to SSs and MNEs, their activities in community building and their initiating function of network events with a specific focus on sustainability related themes. This information were gathered on the homepages of the respective organisations. The interviews with the members of the network organisations addressed their activities that encourage the interaction between SS with MNEs, their perspective on the interaction and relationships and the role of the city of Amsterdam for sustainable innovations in contrast to other European Hubs The pre-defined template for the semi-structured interviews are found in Appendix 3.
In order to be able to fully concentrate on the discussion and for the subsequent analysis the researcher recorded all interviews with a recording device and a smartphone as a back-up besides taking notes. In accordance with the code of the University of Amsterdam for researchers all interviewees were asked for permission in beforehand. One participant stated its preference for anonymity, the remaining respondents agreed to a full disclosure of their names and of the names of their organisations. The permissions and preferences given are backed up in records. The analytical part foregoes the use of personal names and uses job titles to respond to information sensitivity. All recorded discussions were manually transcribed to prepare the collected data for the subsequent analysis. The entire interview transcript consist of 74 double spaced pages. The typed transcript excludes the introduction part and final discussions from the records that had no direct relation to the research topic.
3.5. Data Analysis
To make sense of the information gathered in the semi-structured interviews and to finally clarify whether the responses given support or reject the working propositions, the researcher used a thematic coding approach (Ryan & Bernard, 2003). To identify relevant data units from the semi-structured text source, codes were defined. These codes relate the final sub-codes to the
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theoretical founded working propositions. Sub-codes then classify the gathered information of the coding by using the indicators. The applied codes, sub-codes and specific indicators are shown in Table 3. Drawing upon the bottom-up approach, further indicators were added during the research process.
Table 3: Coding Scheme
Code Sub-Codes Indicators WP
Involvement in Local Buzz
Participation
Memberships, member, network, meet-ups, conferences, meet, talks, relationship, relations,
connections, contact WP1
Level of activity
often, frequent, every week, every day; seldom, rarely, not really
Sustainability-related Buzz
Action talking, events, networking
WP1 Topic circular economy, social, fair trade, new energy, green, sharing, car, food, impact
Knowledge-seeking MNEs
Presence MNE, international, multinational, corporate, firm
WP1 Motive knowledge, inspiration, want, information, innovation
Institutional Pressures Differing degrees of awareness for sustainability between sectors
Coffee, book, car, energy, transport, food, chocolate,
recycling, plastic, circular, design, data, IT, cork, snack WP2
Intensity of Buzz
a lot, talking, everybody, multiple, often, always WP3
20 4. Findings
This section provides the results of the two analyses undertaken, the within-case analysis and the cross-case analysis, respectively. During the within-case analysis the four embedded units of analysis, the degree of buzz, the degree of attraction of knowledge-seeking MNEs, the degree of institutional pressure within a sector and the degree of interaction between SSs and MNEs, are assessed in depth for each of the twelve cases contained in the research sample. Thereafter, the cross-case analysis is executed by comparing each embedded unit of analysis across the twelve cases. This approach allows to identify similar patterns and differences across cases regarding the degree of buzz, the attraction of knowledge-seeking MNEs, the degree of institutional pressure and the degree of interaction between SSs and MNEs. Finally, the results of the cross-case analysis are discussed and related to the working propositions.
4.1. Within-Case Analysis
The within-case analysis has a descriptive character (Eisenhardt, 1989) and gives an overview of each case following four embedded units of analysis. Each SS in a specific sector is investigated according the intensity of buzz within the cluster, the attraction of MNEs with interest in innovative knowledge, the role of institutional pressure and the interacting of SSs with MNEs.
Case A
The first case presents start-up A which established in 2015 in the Dutch capital. A operates within the food industry as a distribution and marketing platform for providers of innovative healthy snacking alternatives. The degree of interaction with other SSs and MNEs within Amsterdam is relatively low due to the national orientation of its business. The local market has relatively little relevance for the start-up A due to specific preferences in the snacking sector of the customers within Amsterdam. The intensity of local buzz is perceived to be low by the founder of A. This is due to the just developing relevance of sustainability in the snacking industry. Active connections and interactions with MNEs are not present for case A. This is not due to little interest of A in a partnership but due to little interest of MNEs in the start-up because of two reasons. MNEs seem to be not interested in A due to the low scale the start-up is operating on and the novelty of its products. Second, MNEs within this sector profit from their established market structure that are oriented on large scales and small product ranges. Large
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MNEs in the sector of A block the market entry of novel snacking alternative. Thus, an interaction with MNEs in Amsterdam does not take place due to the national orientation of the start-up itself and little relevance of its business for MNEs.
Table 4: Analytical Table of the Within-Case Analysis for Case A
Embedded Unit of Analysis
Level Supportive Quote
Buzz Low
If you really talk about sustainable development, and that it also what you can see in the platforms, at De Groene Zaak and so on the focus is on energy and transport; food is just evolving.
Attraction
of MNEs -
Institutional
Pressure Low
They are reluctant to facilitate the introduction of new products.
It is a very slow progress and I do not see how any kind of MNE in this sector can really help.
They are not willing or capable to change or embark on the fundamental type of innovation within the years to come.
Interaction Low
As long as we are not capable to make sustainability really worthwhile at will be a very, very slow process when it is to come about large companies, it will more come from the smaller companies.
Case B
This case presents the start-up B which was established in 2015 in the Dutch city Utrecht. The start-up developed the first book sharing platform in the Netherlands. The intensity of buzz regarding sustainable innovation in the book industry is thus very low. Yet, the founder of B follows the business community operating in the sharing economy in Amsterdam and is aware of network events in the capital city. However, the start-up B has neither active connections nor partnerships with MNEs in Amsterdam. Due to its relatively recent existence, the start-up B has not reached yet greater awareness in the market which partly explains the low level of interaction. The start-up has active partnerships with large national libraries which reveals important learning effects for B to improve its service. Large libraries show great interest in new concepts like the one of B as they would face great challenges to initiative new concepts themselves. To conclude, the level of local buzz in Amsterdam in the book sector is perceived to be low and has relatively little relevance for the start-up B, due to its national business focus. The start-up B does not interact with MNEs as it is, at first, just developing its business.
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Table 5: Analytical Table of the Within-Case Analysis for Case B
Embedded Unit of Analysis
Level Supportive Quote
Buzz Low
You see very little development in the book industry. (…) So far, E-books are only 5 % of the whole book industry. You do not see many new concepts. Libraries, for instance, are really hardly looking for how to reinvent themselves and they find it very difficult to do so.
Attraction
of MNEs -
Institutional
Pressure Low
Libraries, for instance, are really hardly looking for how to reinvent themselves and they find it very difficult to do so.
Interaction Low For the industry in whole: I expect the most from new entrants, but it will go very slowly, with very small steps, very small business trying new things.
Case C
The case C presents a start-up in the energy sector. Start-up C delivers a platform on which house owners can find providers for services in energy efficiency improvement. C was established in the year 2014 in Amsterdam and is since then part of an accelerator program through which it is connected to several SSs within the cluster. The founder of C indicates an excessive number of local network events in Amsterdam for its field of interest, sustainable innovations in the energy sector. C takes a pro-active approach in local networks within Amsterdam. The achievement of the business objective of the start-up C, which is to improve bad energy levels in Dutch households and tackle the climate change, requires collaborations and partnerships on multiple levels. Local networks and partnerships therefore have great relevance for its business. C is actively approached by MNEs on various levels. Local media and online platforms are channels on which C has created visibility towards MNEs. MNEs within its sector actively seek for innovations and differentiation towards competitors. Partnerships with MNEs have great value for C as they intensify trust building for its relatively young business and give access to broad customer bases. The founder C connects with members of MNEs primarily on local network events in Amsterdam and through the accelerator program it is part of. Local network events are therefore one of the primary facilitator of connecting with MNEs. The analysis of the case C reveals that the founder of the start-up perceives the level of local buzz in Amsterdam to be very intense within its sector. C actively uses formal and informal networks and has very frequent interactions with MNEs.
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Table 6: Analytical Table of the Within-Case Analysis for Case C
Embedded Unit of Analysis
Level Supportive Quote
Buzz High
If you really talk about sustainable development, and that it also what you can see in the platforms, De Groene Zaak and so on the focus is on Energy, Transport, food is just evolving. (stated by A)
Attraction
of MNEs High They are looking for innovation and they are looking for PR. Institutional
Pressure High
I mean in the public debate there is quiet some attention for the fact that we use too much fossil fuels that we are destroying the Earth but with every cup of coffee that we drink right now we somehow precede to the situation that the coffee farmer has a terrible life. So it is a bit strange ethically speaking that there is no sense of urgency. (stated by H)
Interaction High
On network events sometimes; Rockstart. I think this is the most primary one. Through radio, media, it is a small world, so they can find us very easily so around 60 % they come to us, the rest of the time we contact them.
Case D
Start-up D initiated a product-as-a-service business model for washing machines. Its business objective is to provide households access to premium priced products which have higher quality and better eco-efficiency levels. D perceives its role in the industry as an intermediary between large manufacturers of washing machines and households. Large manufacturers traditionally distribute their products through large retailers that focus on price and style rather than on the accessibility of high quality products. The start-up is located in Amsterdam since the year 2015 when it started its business in support with an accelerator program. The start-up has its office near other domestic SSs but is not in close contact with SSs outside the accelerator program. Local networks facilities like the accelerator program and co-working spaces in Amsterdam are of great relevance for D. It uses these opportunities to learn from other actors for the development of its business. The founder of D mentions a high frequency of networks events concerning circular economy in Amsterdam in which he regularly participates. D frequently connects with MNEs on network events. MNEs, in the case of D large manufacturers in the washing machine industry, show great interest and awareness of novel concepts from the sharing and circular economy. MNEs are interested in interacting with start-ups to internalise innovation because their capabilities are not specialized on customer services but on large scale distributions. D is in close contact with MNEs with whom it is planning to work closer together in future. The analysis of case D shows that the start-up which operates in the circular economy
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perceives high intensity of local buzz in Amsterdam. The start-up actively uses local networks and facilities in Amsterdam to develop its business. Furthermore, the level of interactions of MNEs is high.
Table 7: Analytical Table of the Within-Case Analysis for Case D
Embedded Unit of Analysis
Level Supportive Quote
Buzz High
I think every manufacturer or big company knows about trends and the sharing economy, the circular economy, all these words are very popular in the scene. People talk about it, read about it, everybody thinks about it.
Attraction of MNEs - Institutional
Pressure High
There is a big agenda point about circular economy and stuff like this, everybody is talking about it. (stated by J)
Interaction High Mostly we are talking with business developers, CFOs, CMOs.
Case E
Founded in 2012, start-up E operates in the Dutch capital from which it has established a national network of fast charging stations for electronic vehicles. E connects with other actors in the electronic-mobility sector through diverse forums. The founder of E recognises a high frequency of network events in Amsterdam. Yet, as the sector for electronic mobility is characterised by high government funding in the Netherlands, local networking is less relevant for actors in this sector in order to build up their businesses. The magnitude of events and the awareness of the Dutch government for the sector indicates a relatively intensive buzz in the city of Amsterdam. The start-up E does not use local networks in Amsterdam extensively as its partners and relevant firms are operating on a sectorial level. The industry of electric vehicles is characterised by few MNEs and little new entrances. Due to the great visibility of single actors in an industry with limited players the start-up is able to connect with MNEs on a direct level. To conclude, start-up E, operating in the e-mobility sector, perceives the local buzz in Amsterdam as relatively high. However, it assigns relatively low relevance of this buzz to its business, as its interactions with MNEs take place on a direct and not local but sectorial level.
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Table 8: Analytical Table of the Within-Case Analysis for Case E
Embedded Unit of Analysis
Level Supportive Quote
Buzz High
We do have a lot of forums about electric mobility, charging where we connect. E-mobility is at the moment still an industry which is largely defined by government
spending money to companies to help them. Attraction
of MNEs High
They are on a fishing exhibition. They are fishing for knowledge, so see where they might find that interesting industry, finding a sign.
Institutional Pressure Low
It is very difficult to build a car company. See Tesla. There are simply not that many new entrances. Let’s say there are 10 large car makers in the world and they control the system.
Interaction High
Well, you do meet people. (…) We work a lot with the ones who make the cars or of course the cars that need charging networks, so we have relationships with them. On a bit lower level a national sales company which sales the car in the countries, leasing companies, that lease these cars. Some relationships with customers driving that cars, so let’s say ING buys a fleet driving around but not that much. And of course, companies that supply equipment to us, example given,
transformers.
Case F
Start-up F was recently established in the end of 2016. Its main office is located in the South of the Netherlands but its business is also developed from Amsterdam. F established a sustainable innovation in cooperation with a MNE located in Portugal. The innovation of F is a specific type of cork as an input material for artificial soccer fields. Its objective is to provide an alternative for conventional artificial soccer field input materials, in which researchers found cancer-causing components. F has very frequently contact to governmental authorities and the Dutch football association that show interest in its innovation. F takes an active role in educating and helping actors to develop healthier input materials. So far, the start-up has no connections or relationships with other domestic SSs in Amsterdam. F does not rely on external funding and is not focused on business-to-customer. These are two reasons why local networking in Amsterdam so far has been less relevant for the start-up. Due to its initial stage, foremost the focus of F lays on identifying partners that could be relevant in future. The low intensity of local buzz and the low level of interaction with MNEs in Amsterdam can be explained with the very early stage of the industry.
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Table 9: Analytical Table of the Within-Case Analysis for Case F
Embedded Unit of Analysis
Level Supportive Quote
Buzz Low We are the only ones. Attraction
of MNEs -
Institutional
Pressure Low
We have a really active role in organising the best type of cork we can use and I think we are the only one. If you want any cork you can go to big suppliers like Amorin, they do not mind which one you buy, just buy one.
Interaction Low We are just talking to the government.
Case G
The start-up G was founded in 2010 and is located in Amsterdam Noord. G produces and distributes chocolate products of high quality produced under fair conditions. The manager of G reports a high density of SSs in the organic food sector within the cluster. G regularly uses informal gatherings with other SSs located in its neighbourhood to exchange experiences. The manager of G has an extensive personal professional network in and outside Amsterdam that he has built throughout his previous employment in an MNE. While pointing out the high level of buzz in the energy sector, the manager of G perceives the local buzz in its own sector to be relatively low. However, manager G reports growing interest of customers and increasing success of smaller domestic firms in the chocolate industry originating from Amsterdam. These recent developments have led to greater awareness for sustainable innovations in the chocolate sector. The start-up has no active connections or relationships with MNEs in Amsterdam. The manager indicates relatively low interest of MNEs in interaction due to very specific product segment G is operating and the premium price of its product. The sustainability standards in this sector are in initial stages and just starting to increase. In sum, start-up G perceives growing awareness and increasing exchange in informal relationships between other organic brands within its cluster. However, the intensity is yet still perceived to be low. The low level of interaction with MNEs can be explained with the relatively high price segment start-up G is operating, compared to other chocolate products in the assortment of large firms.
