The space industry is generally perceived as very innovative. Normally, one might expect innovative environments to be conducive to entrepreneurship. However, the space industry seems to be an exception owing to the highly regulative impact of institutions operating within it. Generally, institutions influence entrepreneurship and set out the “rules of the game” that shape enterprise or even prevent it. Currently, within academia, there is little research examining how institutions impact on entrepreneurship at an industry level. Studying entrepreneurship in the context of the space industry offers the opportunity to deepen academia’s understanding of industry-specific conditions that form the rules of the game for innovation.

New research, conducted in part at the House of Innovation, seeks to understand how entrepreneurship in the space industry is enabled and constrained by institutions, and what this implies for the freedom to be entrepreneurial.

The research findings suggest that the institutional framework has a profoundly negative effect on start-ups and growth. Formal institutional factors in the space industry discourage entrepreneurial initiatives and stymie the growth of small firms. This institutional context favors the established firms that dominate the sector, challenging entrepreneurship.

To counteract this negative environment, the researchers recommend that policymakers:

(1)   strengthen private-public-partnership arrangements;

(2)   implement policies to attract venture capitalists to transform and reinvigorate the upstream segment; and

(3)   design specific incubation mechanisms for space start-ups.

With these changes in place, the researchers remain confident that the space context could evolve into a wonderful launchpad from which entrepreneurship can take off.

These findings are based on a ten-year study originating in an extended case study of a smaller entrepreneurial space industry firm. The case study was eventually extended to include other start-up founders and CEOs of existing businesses. Researchers then tapped into the perceptions of business angels and incubator managers and interviewed key influencers in large space companies and space agencies. These case studies and interviews combined yielded an appreciation of how different space industry stakeholders make sense of and inform their organizations’ entrepreneurial role and practices.

Future research ought to extend this European focus to other contexts, such as the USA, Canada, Russia, India, and China.

Researchers

Wadid Lamine¹  Alistair Anderson²  Sarah Jack³  Alain Fayolle⁴

¹ Telfer School of Management, University of Ottawa
² Lancaster University Management School, Lancaster University
³ House of Innovation, Stockholm School of Economics
⁴ Center for Innovation and Entrepreneurship Activities, University of Cagliari