Managing competences in entrepreneurial technology firms: A comparative institutional analysis of Germany, Sweden and the UK

Innovating firms in new industries face a number of technological and market risks, especially appropriability and competence destruction. However, the relative significance of these varies between different sub-sectors, and so do managerial ways of dealing with them. These in turn are influenced by institutional frameworks, particularly those governing skill formation systems and labour markets. Consequently, the relative success of firms in fields with different appropriability and competence destruction risks is likely to vary between countries with contrasting patterns of labour market organisation. In the biotechnology and computer software industries, there are major differences in the dominant risks faced by innovating firms such that we would expect their relative success to differ between Germany, Sweden and the UK. While the UK and, to a limited extent, Sweden, have developed institutions similar to those found in the US that help govern "radically innovative" firm competences, Germany has invested in institutional frameworks associated with "competency enhancing" human resource practices that give its firms an advantage in more generic technologies in which organisational complexity is higher. While the distribution of public companies across sub-sectors broadly follows these expectations, Sweden has developed considerable strength in middleware software. This results from changing property rights and personnel policies at Ericsson. © 2003 Elsevier B.V. All rights reserved.