University as an opportunity space enabler in a regional entrepreneurial ecosystem

ABSTRACT

Universities are widely recognized as key players in entrepreneurial ecosystems that support entrepreneurial activities to create economic and social value in the region. Previous research has increased our understanding about the role of universities contributing to regional economic development and entrepreneurship through knowledge transfer mechanisms, increasing human capital and innovation activity. However, little is known about the contribution of universities to the actual entrepreneurial processes in spatial context. Utilizing the case study approach, this study examines university as an ecosystem actor, focusing particularly on the enabling role of universities in entrepreneurial opportunity formation. As a result, this study provides a conceptualization of four different entrepreneurial opportunity spaces, bounded by the varying degrees of knowledge applicability and opportunity proximity. This article contributes to research on regional entrepreneurial ecosystems and on the role of universities as ecosystem actors contributing to research knowledge-based entrepreneurial opportunity formation for innovative entrepreneurship.

KEYWORDS:

• Opportunity formation
• opportunity space
• entrepreneurial ecosystems
• innovative entrepreneurship
• case study

1. Introduction

Universities’ influence on regional economic development is fostered by knowledge transfer mechanisms, human capital and innovations (Valero and Van Reenen, 2019). Universities contribute to local and regional economic development by generating new knowledge and qualified research scientists, as well as by generating and attracting talent for the local economy and providing formal and informal technical support to local industry (Bramwell and Wolfe 2008). Research intensive universities can produce frontier research, which is attractive to firms, but may simultaneously suffer from a gap between the research produced and the needs of local firms, as well as mission overload (Atta-Owusu, Fitjar, and Rodríguez-Pose 2021). For local businesses to fully utilize the opportunities provided by the university, the activities of entrepreneurial and innovation ecosystems need to be aligned, since without optimizing the entrepreneurial ecosystem, the generated innovations alone may not be successful because of the inability of the ecosystem to nurture new business high growth ventures (Szerb et al. 2020). Especially in non-mature entrepreneurial ecosystems universities can become hub organizations by acting as boundary spanners and by building and orchestrating the network of the stakeholders in the local system of innovation (Schaeffer and Matt 2016).

Entrepreneurial processes (O’Shea et al. 2021; Spigel and Harrison 2018) are needed for the development of successful entrepreneurial ecosystems that can utilize university-based innovations and transfer them into business opportunities (Szerb et al. 2020). As the first phases of entrepreneurial process relate to the elaboration of the opportunity, there is a need to integrate entrepreneurial process perspective to entrepreneurial ecosystems (O’Shea, Farny, and Hakala 2021) and develop the flow of entrepreneurial resources in the ongoing processes (Spigel and Harrison 2018). More research is called for to investigate how entrepreneurs and other actors integrate ‘ecosystem knowledge’ into the entrepreneurial process (Wurth, Stam, and Spigel 2022). Previous research acknowledges the need to study entrepreneurial activity at a local context, highlighting the geographically bounded nature of entrepreneurial ecosystems (Audretsch and Belitski 2017), as well as to explore the intersecting perspectives of different ecosystem actors in different contexts (Pugh et al. 2019; Theodoraki, Messeghem, and Rice 2018).

To address the identified research gap, this study investigates university as an ecosystem actor contributing to research knowledge based entrepreneurial opportunity formation processes within the ecosystem. The research question set for this study is: ‘What kind of opportunity spaces does university enable for the regional entrepreneurial ecosystem?’ This study brings out new insights on the university’s role in regional entrepreneurial ecosystems. The study is conducted in a region located in South-East Finland outside the capital region and other growth areas of Finland. This study contributes to ongoing discussion on how opportunities evolve in entrepreneurial ecosystems (O’Shea, Farny, and Hakala 2021). We develop a framework that proposes a conceptualization on the university’s role in the entrepreneurial ecosystem as an opportunity space enabler and on the operations within these spaces.

2. Literature review

2.1. Entrepreneurial ecosystems

This study builds on the entrepreneurial ecosystem concept. Definitions of entrepreneurial ecosystems vary but based on prior research they are viewed as systems consisting of interdependent actors and factors that support entrepreneurial activities to create economic and social value (Brown, Gregson, and Mason 2016; Stam 2015). The elements of entrepreneurial ecosystems consist of cultural, material and social attributes within a specific region (Spigel 2017). The community culture in a region defines the ways and means by which individuals and groups interact (Huggins and Thompson 2014). The interactions, shared interests and goals of different ecosystem actors provide coherence within an entrepreneurial ecosystem, and they are crucial for resource acquisition and vicarious learning (Malecki 2018). The material attributes of an entrepreneurial ecosystem consist of the university, the support services, facilities, open markets, as well as policy and governance (Spigel 2017). Universities have a crucial role in entrepreneurial ecosystems, since they educate skilled workforce and future entrepreneurs, produce new commercial or non-commercial knowledge, and engage with regional stakeholders (Huang-Saad, Duval-Couetil, and Park 2018).

Social networks within an entrepreneurial ecosystem provide an information flow that enables an effective distribution of resources, and they act as conduits for new knowledge about opportunities and technologies (Spigel 2017; Stam 2015). The ability of resources to flow through social networks helps to separate strong, well-functioning ecosystems from weak, poorly functioning ones. Strong and successful ecosystems are resource rich with dense social networks. In the resource rich entrepreneurial ecosystems poorly functioning networks may hinder learning and development, and consequently lead to weak entrepreneurial ecosystem (Spigel 2017). Prior research shows that relational ‘face to face’ interactions with like-minded individuals allow quicker access to local knowledge and opportunities and enable individuals within the ecosystem to undertake vicarious learning opportunities, which is important for developing new ideas. In addition, these conversational spaces enable policy makers to become aware of emergent growth bottlenecks long before official evidence such as government surveys capture these emerging trends (Rocha, Brown, and Mawson 2021).

2.2. Role of universities in entrepreneurial ecosystems

Universities are key players in entrepreneurial ecosystems as they generate new knowledge, advance technology and innovation, educate high skilled labour and new entrepreneurs, and generate start-ups (Audretsch 2014; Clarysse et al. 2014; Guerrero et al. 2016; Spigel 2017; Stam 2015). To promote the regional impact of universities, the expertise offered by the university and the regional conditions must be compatible. For the region to be able to take full advantage of the presence of the university, it must have favourable conditions for utilizing the innovations produced by the university (Lahikainen, Pihkala, and Ruskovaara 2020). These regional conditions include, for example, local companies that can take advantage of the university's know-how and competitive infrastructure (including science parks, business incubators and venture capital), as well as high-quality local labour markets (Clarysse et al. 2014; Smith and Bagchi-Sen 2012). In addition, the propensity of local firms to collaborate with external partners with the same region, leads to a higher propensity to collaborate also with the university (Atta-Owusu, Fitjar, and Rodríguez-Pose 2021). Further, dedication to entrepreneurial processes, sharing of knowledge and recourses lead to more integrated entrepreneurial ecosystem, whereas public support programmes, e.g. public funding, may lead towards disintegrative dynamics, since they might not be well suited to all ecosystem actors (Pocek 2022).

The traditional role of universities is to forward science-based innovation activity that relies on the use of explicit knowledge, scientific methods and world class scientific expertise in narrow fields (Gibbons et al. 1994; Harmaakorpi, Melkas, and Uotila 2017). When it comes to research-based innovations, the goal of universities is to produce radical innovations that can act as seeds of change for society-level socio-technical transitions (Geels 2002; 2004). The research-based discoveries and niche innovations are often unable to create direct entrepreneurial opportunities as they are not aligned with the existing regime level configurations of institutions, rules and practices that determine the development and use of technologies (Geels 2002; Smith, Stirling, and Berkhout 2005). Therefore, the direct applicability of the knowledge produced by research activities tends to be rather low. Also, in these types of activities entrepreneurial opportunity can be rather far in the future and very uncertain. The utilization of new knowledge happens through application-based processes that can result in innovations (Gold, Malhotra, and Segars 2001). University-based research aims at creating new knowledge, but from the viewpoint of entrepreneurial opportunity it is important to note that even though knowledge creation provides potential for value creation, knowledge usage (or application) is needed to realize it (Dahiyat 2015).

As presented in previous literature (e.g. Audretsch 2014; Clarysse et al. 2014; Coenen 2007), universities have a central role in generating new knowledge in a region, which makes them potential institutional actors in furthering the birth and development of new industries and new entrepreneurial opportunities. Previous studies have also raised questions about what kind of a role as a regional actor should universities have or whether the regional role is relevant from perspective of universities main missions (Kempton 2019; Motoyama and Mayer 2017; Smith 2007). Universities meet great expectations from the regional actors, although universities’ main interests are in high-level international research and education, not in the economic development of its’ geographical surroundings. However, by generating new knowledge and networking research staff, entrepreneurs and development actors across regions and countries, universities create preconditions for innovative entrepreneurship and contribute to the formation of entrepreneurial opportunities (Guerrero et al. 2016; Huang-Saad, Duval-Couetil, and Park 2018).

2.3. Opportunity spaces for innovative entrepreneurship

Recent research has examined how opportunities develop in entrepreneurial ecosystems (O’Shea, Farny, and Hakala 2021). The authors proposed that opportunity develops through different phases, and it is developed by multiple stakeholders before actual commercialization as a spin-off or through participating corporates. This is in line with McMullen and Shepherd (2006), who distinguished first-person and third-person opportunity beliefs. Third-person opportunities are an important node between innovation and entrepreneurship, as they are generic opportunities for someone else in the marketplace. Therefore, universities can be considered as important actors in this generation and development of third-person opportunities. Third-person opportunities evolve to entrepreneur´s first-person opportunity and typically this development is facilitated by the presence of market or user knowledge (Autio, Dahlander, and Frederiksen 2013).

From the entrepreneurial perspective, universities’ basic research creates opportunities that can be rather far in the future and accessed through mobilization of large-scale systems. Universities can be regarded as key actors in entrepreneurial ecosystems in creating those preliminary mental images of new products, offerings and problem-solution spaces. In basic research, the scope of research is often rather narrow and far from the existing markets and practices, whereas applied research is much closer to the existing operational environment and thus often succeeds better in addressing the company perspective and seeking first-person opportunities. The applicability of the knowledge produced by basic research and applied research requires different types of capacities from a firm to be able to both recognize the entrepreneurial opportunity and to exploit it. For a regional entrepreneurial ecosystem to capture the value created by the knowledge and innovation produced by universities, it needs companies that have the capacity to take advantage of the university’s know-how (Clarysse et al. 2014), or in other words, companies that hold the ability to respond to distant and/or near proximity opportunities.

In contrast to the individual entrepreneur focused view, opportunities have also been discussed in regional context from the viewpoint of regions’ past and future development trajectories, which depend on how well regional agents are able to construct and exploit ‘opportunity spaces’ (Grillitsch and Sotarauta 2020). The opportunity space concept widens the view on opportunities from first-person and third-person opportunities to socially constructed place and opportunity process formation within it. The opportunity space concept adds a spatial dimension to the process view on opportunity development presented by O’Shea, Farny, and Hakala (2021). Grillitsch and Sotarauta (2020) perceive opportunity spaces through agency and identify innovative entrepreneurship as the form of agency essential for the exploitation of opportunity spaces. Drawing from Massey’s work on the concept of space, opportunity spaces are not ‘empty containers’ but products of agents and relations within it in a certain time and the spaces always under construction (Massey 2009; 2017). Therefore, opportunity spaces should not be seen as spaces constructed by some and exploited by others but as being built in a certain time to a certain form depending on the agents involved in the construction. Innovative entrepreneurs are not just the agents exploiting these spaces and opportunities imbedded in them, but also the ones involved in constructing and shaping the opportunity spaces with for example their agent-specific knowledge bases.

2.4. Theoretical framework

Opportunity spaces as defined above, are constituted by multiple agents and relations within it. In this study, we focus on the ones that are central in the universities’ research and educational activities. We base our empirical analysis on previous literature on entrepreneurial ecosystems, entrepreneurial opportunity and opportunity spaces for innovative entrepreneurship discussed in the literature review. A theory-based framework was formed to direct the empirical study (Figure 1). The framework consists of two axes: opportunity proximity axis and knowledge applicability axis. Opportunity proximity refers to the time element of opportunity, understood as future visions (Davidsson 2015). When opportunity proximity is high the entrepreneurial opportunity is near in time, the opportunity is related to existing and identified markets and demand, and the opportunity is fairly easily applicable to current business. Then again, when opportunity proximity is low the entrepreneurial opportunity is much further away in future, there are no existing markets yet for example for the new technology related to the opportunity, or the technology is not compatible with existing technologies and regime level configurations of institutions, rules and practices. In this context, knowledge refers to research-based knowledge that is generated and transmitted to other actors within the university's research and educational activities, and knowledge applicability refers to the nature of the research-based knowledge that fuels the opportunity formation process. Knowledge that has low applicability, is often associated with basic research, and can be uncertain, theoretical or conceptual, and linked to a very narrow field of science. When knowledge applicability is high, knowledge is often associated with applied research activities that aim to apply new knowledge in real-life contexts.

Figure 1. Theoretical framework.

This study contributes to the previous research on entrepreneurial ecosystems, opportunity formation and opportunity spaces by focusing on the role of innovative entrepreneurship as a part of regional change and future path creation. We provide empirical evidence on how universities as regional actors and institutions can be involved in the opportunity space creation as a part of their main research and educational activities.

3. Research methodology

As a research approach, this study utilizes a qualitative case study methodology. The chosen methodological approach enables creating deeper understanding about the phenomenon through an iterative research process and multiple sources of evidence (Eisenhardt 1989; Yin 2009). The aim of the case study was to enrich and extend existing theory and provide empirical evidence on the phenomena (Hsieh and Shannon 2005). The study focuses on the specific role of a technological university in the opportunity space formation for regional entrepreneurship ecosystem. The case university is LUT University, which is among the top 300 universities in the Times Higher Education (THE) World University Rankings in 2022, and it ranks third among universities in Finland. In the ranking, one of the specific strengths of the university was university-industry collaboration, which reflects the entrepreneurial mindset promoted within the university both in education and in research activities. The university’s strategic aim is to influence the society by helping companies and other societal actors use solutions provided by research on emission-free energy, clean water and air, the circular economy and sustainable business.

The university is located in South Karelia region in Finland in the city of Lappeenranta. The region is characterized by strong forest industry and it forms Europe’s most important forest industry cluster with centralized research and development activities to bioeconomy made by the forest industry. The need for industrial renewal is recognized in the region and the Regional Council of South Karelia has aligned its strategic aims with the strategic aims of the university. For example, the current innovation strategy emphasizes the development of experimental environments and the promotion of knowledge-based entrepreneurship in the strategic fields of green energy and environment, new industrial processes and materials, and smart services.

To cover the research topic, the collected empirical data contains 17 expert interviews, and observations and group discussions from a regional innovation strategy workshop. The interviews were conducted in August–September 2021. Duration of the interviews varied between 31 and 55 minutes, and all interviews were recorded and transcribed. Ten of the interviewees represented university staff from different university departments. The interviewees were selected based on their experience in university-industry collaboration and their central position from the viewpoint of developing research-industry collaborations and societal interaction. Seven of the interviewees were managing directors of local companies. The companies were selected based on the maximum variation sampling (Patton 2015).

The innovation strategy workshop was held online (MS Teams) in June 2021. The three-hour workshop consisted of presentations followed by short discussions and comments as well as two rounds of group discussions in five breakout rooms (2 × 15 minutes). Discussions in the breakout rooms concerned the contents and critical focus areas of the innovation strategy, as well as collaboration between the different actors that coordinate R&D activities in the region. The workshop data consists of observation notes made during the workshop as well as group discussion recordings. The 25 workshop participants represented key organizations (municipalities, higher education institutions, Regional Council of South Karelia, Chamber of Commerce, regional development companies and regional representatives of governmental organizations, such as Business Finland and Centre for Economic Development, Transport and the Environment) of the regional entrepreneurial ecosystem.

The data were analysed utilizing the software-assisted qualitative content analysis method directed by the literature-based theoretical framework presented in Figure 1 (Elo and Kyngäs 2008; Hsieh and Shannon 2005; Kaefer, Roper, and Sinha 2015). All three researchers were involved both in the data collection and the data analysis process which enabled investigator triangulation throughout the research process. The data analysis process consisted of several rounds during which phases of individual researcher work alternated with phases of research group work. First, the researchers got familiarized with the data and conducted the first round of coding by exploring the data and discovering topics and concepts related to the theoretical framework that were recurring in the data. The aim of the first level coding was to categorize the data and reduce it into manageable segments for the second-level coding (Miles and Huberman 1994). The first level codes consisted of categories such as the type of activity, key actors, communication and interaction, and university’s internal processes and practices for facilitating university-industry collaboration.

The first round of coding was followed by several rounds of coding and analysis, including interactive interpretation of the coded data among the research group and reflections to prior literature. During these rounds of coding and analysis the researchers progressed gradually from close and concrete codes to more abstract and interpretative categories and themes linked to the mechanisms and characteristics of opportunity space formation (Graneheim, Lindgren, and Lundman 2017). In practice, this meant for example combining more fine-grained (such as funding source related) codes to more general (such as the ‘research-driven projects’) access points that could again, based on their characteristics, be placed in the framework. Also, individual restricting and enabling elements were combined and their impact on the activities and interaction within certain spaces were identified. This phase of analysis resulted in descriptions of the opportunity spaces and their access points as well as the enabling and restricting elements in relation to the theoretical framework.

4. Results: opportunity spaces for innovative entrepreneurship

From the viewpoint of opportunity formation, the role of the university in entrepreneurial ecosystem is to enable the formation of opportunity spaces for innovative entrepreneurship through its’ core missions of research, education and societal interaction. The different outputs of the university such as education of skilled workforce and future entrepreneurs, production of new commercial or non-commercial knowledge and engagement with regional stakeholders (Huang-Saad, Duval-Couetil, and Park 2018) create different conditions for opportunity formation. As a result of the data analysis, the characteristics of four types of university-driven opportunity spaces for entrepreneurial activities in the region were identified. In Figure 2, these opportunity spaces are presented in relation to the theoretical framework. It should be noted that the boundaries of these spaces aren’t strict but change gradually as the degree of opportunity proximity and knowledge applicability change. The different university activities positioned in the framework represent the access points through which the regional entrepreneurs gain access to the opportunity spaces through interaction with the university.

Figure 2. Spaces for collective entrepreneurial opportunity formation.

The opportunity spaces create a sort of a landscape for a company to explore opportunities, and a loop for third-person and first-person opportunities (Autio, Dahlander, and Frederiksen 2013; McMullen and Shepherd 2006), indicated with the arrow in Figure 2. As third-person opportunities are still rather generic and not specific, they are typical results from research-driven innovation processes (spaces 1 and 4). On the right side (spaces 2 and 3) the focus of the collaboration is leaned towards first-person opportunities, where it is investigated whether the opportunity would actually turn in to business for the company.

4.1. Glimpses of the future (space 1)

Glimpses of the future – space is characterized by future-oriented and uncertain nature of basic research related knowledge that is not easily applicable in other fields or in business context. Opportunity proximity is rather low and hence benefiting from this opportunity space requires the ability to recognize the links between science-based ‘glimpses of the future’ and future business opportunities. From the university perspective, creating these spaces together with entrepreneurs and other actors requires the ability to recognize the relevance of scientific results for business and for future business opportunities. As some of the interviewees pointed out, basic research often focuses on a very narrow field, and the mismatch between university’s research interests and the local businesses may become a challenge for opportunity formation. The field of research also influences opportunity formation. For example, engineering sciences related research topics might have closer links to near future business opportunities than more theory driven business economics research. As one of the university interviewees put it:

And we may have the fact that, I think, business studies here are so far away from the challenges of these local businesses. You can have that encounter problem, quite much. But we could always find fragments where the common interface is there and at least so that we could start something new from it in the future.

The university provides two types of access points to space 1: research-driven projects and research platforms. From the university’s research activities’ point of view, the most important means to create opportunities is to conduct research projects that are based on the problems identified by the research teams. Also, from the company's point of view basic research can be beneficial since the university has the needed equipment and resources, and therefore companies do not need to make any investments by themselves. The identified challenge regarding the research projects is that they are often for testing vague ideas of what might work, and from the company perspective the timespan is too far in the future. In addition, the interviewees’ experience was that companies lose their interest towards these projects if the outcomes are not tested in practice.

To make the opportunities of the research projects more attractive for the business, three issues were brought up: First, the importance of professors and research teams to learn about the needs of the industry, before they contact the company representatives about their research. Second, for the researchers it is easier discuss with the R&D department of the company, but the first-place contact should be the CEO, since it is important to understand the strategic thinking of companies when developing solutions for the future. Third, communicating the key findings of the research outcomes to the public. Making even the incremental findings known to the public might help the entrepreneurs and companies to develop their businesses.

The university has several research platforms, which from the business collaboration viewpoint have been designed to act as windows of opportunities offered by the university in specific research areas. The interviewees viewed the research platforms as ecosystems linking the university and researchers from different research areas with businesses, and thus also viewed them as a benefit when applying for external funding. Usually, research teams are very attached to their own research. Multi-disciplinary platforms were viewed to broaden horizons and bring out business prospective. However, based on how much the interviewees stressed the importance of communication and personal contacts, benefitting from the existence and activities of the research platforms also requires active communication with the business community and utilization of various communication channels, such as personal contacts, websites, LinkedIn groups and so on.

4.2. Business prospects (space 2)

The business prospects – space consists of collaboration mechanisms and projects that are typically firm-initiated, very focused projects conducted as the clear business case can be visioned, and thus the opportunity is near. The university provides two types of access points to space 2: contract research and business-driven projects.

Contract research is conducted as companies contact university to solve a concrete technical challenge rather than searching solutions for visionary challenges together with researchers. Companies that conduct contract research with university are usually larger companies that have their own R&D and product development activities. As contract research requires resources and strategic thinking from the companies, it was viewed that many companies located in the region see that their problems are too small for the university to solve.

In Finland, the Finnish government organization Business Finland is the main source for innovation funding. For the universities Business Finland offers funding for business-driven research projects and for the commercialization of research results. As one of the prerequisites of these projects is company involvement, they offer better possibilities for the opportunity exploitation than university’s research-driven projects. As in the case of contract research, local companies might not have the needed resources to participate in the projects funded by Business Finland. As an informant from the university put it:

I work with many companies, so South Karelia … I don’t really think of it by regions because I find the companies that I need, according. If we have a project that is for South Karelia then of course I, look for, companies in this area but then, if it’s Business Finland then I’m looking for any Finnish, companies that fit.

According to the interviewees, university researchers would welcome regional companies to participate in the Business Finland projects, but at the same time they acknowledge that there are not that many potential companies in the region and those who have potential might need extra help in drafting project proposals. In addition, the university’s Business Finland projects have focused on projects related to green energy, and collaboration possibilities in other areas, such as in the data-analytics are not properly investigated.

4.3. Practice and business (space 3)

Practice and business – space is characterized by emphasis on knowledge application and proximity of opportunities. The main university-based access points to space 3 are testbeds and collaborative research infrastructure, commercialization of research results, and student course project works.

Testbeds form an applied research collaboration possibility for the regional ecosystem actors. The testbeds discussed by the interviewees and workshop participants focused on very practical level testing of technology and its applicability and hence, it is positioned as an applied research activity in this study. The city of Lappeenranta has been very active in facilitating establishment of various kinds of testbeds. Based on the interviews and workshop discussions, it is acknowledged both by the university and regional development actors that joint platforms targeted to companies are needed. These testbeds are either led by the university campus or they are testbeds located at the sites of growth companies that can be utilized also by the university researchers and students.

To the most extent the current testbeds are established with the help of EU-funding. The challenge is how to communicate about the availability of the testbeds to companies, also after the projects end. In addition, there is a wish to apply the developed technologies in other fields. With slight modifications the solutions might work in other fields and bring out new business opportunities. Further, the applicability of the university research could be tested in an authentic business environment and thereby possible juridical questions and business opportunities could arise.

The university has been very successful in receiving ‘From research to business’ – funding from Business Finland. Over the years, these projects have resulted in university-based spin-offs that are operating in the region. According to the interviewees, the main challenge in these projects is that a business champion needs to be nominated in the beginning of a project, and it is very challenging to find a person, who would make this kind of commitment, especially committing a full-time work for the project. Researchers and professors do not seem to have the needed passion and risk-taking abilities and students lack the needed creditability to take over this kind of a position. In addition, lack of venture capital in the region was viewed to hinder the formation of university-based spin-offs. Further, university inventions are often too immature to be commercialized:

We have the technology. It is a real classic that we have the equipment by which we are going to make money. However, the business model is totally missing. Also, the ones who need the product are missing, and why they need it is missing, and how they will get it, and to whom they would pay for it is missing.

For the local companies, university provides easy access points to space 3 through course project work of students. There are some great examples of companies that have managed to develop their business activities with the help of student work. The most active companies start contacting the students at the beginning of their studies to recruit them at a later stage. Course project works are usually closely linked to the company’s existing operations and markets and opportunity proximity is thus often high. One of the company interviewees described the opportunities provided by student work in the following way:

Yeah. I would say it depends because sometimes we just may need, for instance last time we were deciding on some design work on our devices, do we want something to be you know designed locally, or do we just get some ideas, (say) for the physical device or how we want our device to look … so they had a bunch of students come up and you know make a few designs, so that way it helps us in a way, to get (an idea) to what we want to see. Because it may not be the idea that we choose, but at least it gives us options to see … And for the students it’s helping because they’re associating with an actual company, and for a company it helps because we get to see options.

4.4. New beginnings (space 4)

New beginnings – space activities also emphasize knowledge application but in contrast to space 3, in space 4 the proximity of opportunities is lower. Activities associated with space 4 bring new and fresh food for thought for entrepreneurial actors although the entrepreneurial opportunity that lies in this new knowledge is rather far in the future.

In this space recruitment of students before or after their graduation is one of the key contact points between universities and local companies. Recruiting new young talent can be viewed as a way to have a peek to the future and get to utilize university-based knowledge in the company’s daily activities. Another way to test what these new talents have to offer for the company is to hire them for thesis work. One of the university interviewees described the opportunity potential of student recruitment as:

 … it is just this with students that … one entrepreneur said that “but they think so strangely”. And I said that that’s the point [laughs]. That if they thought the same way as you, then it would be nothing new, just the same as before.

As testbeds discussed in previous section, regional development projects are also financed by the EU-funding. From the university perspective these projects offer a possibility to generate external funding and conduct research for developing future solutions. Local companies were described to participate in these projects as steering group members and with a small share of their own funding. The main motivation for the companies to participate in these projects is to follow up the university research. As a company CEO put it:

 … as the involvement of companies in these projects is needed, we joined on board as we were asked by the university … We might not get new knowledge, since we are very advanced by ourselves and we cannot reveal the details of our technology, since there are other parties involved and all the information generated in the frame of the project is public. That is the main problem of these projects.

In addition, the development projects offer local companies a possibility to get technical solutions and consultancy to smaller problems and deepen the collaboration with the university. As a conclusion, in these cases, development projects can be an access point to space 3 where the entrepreneurial opportunity is closer in time. However, as the benefits of EU-funded development projects should extend beyond the needs of particular companies, the opportunities generated by these projects can be expected to be more general level observations of future opportunities and therefore their opportunity proximity can to stay rather low. Based on the data our interpretation is that from the regional development point of view, the EU-funded development projects are very scattered and to utilize the available funding more efficiently developing a regional R&D roadmap and clearer division of labour between the different actors applying for funding could be beneficial.

4.5. Enabling and restricting elements

In addition to the spaces for collective entrepreneurial opportunity formation, different supporting elements that enable university actors’ involvement in the opportunity formation within spaces, and elements that restrict the volume of these operations were also identified from the data. Enabling elements that the interviewees pointed out were a university unit that promotes the commercialization of research, university’s research support services and a student team tasked with promoting student-business collaboration. Commercialization of research results is particularly relevant within space 3, and direct student-business collaboration within space 4. The role of research support services is highlighted within spaces 1 and 2. University’s professors of practice, who have a strong background in industry and business, were also viewed to strengthen the university research’s connection to the entrepreneurial ecosystem in general (within all four spaces).

Regional business-focused networks were also brought up as existing and evolving structures that enable the development of new contacts, project ideas and seeds for opportunities, and are thus connected to all the four opportunity spaces. However, the role of networks is dependent on the university staff’s involvement in these networks and network events. The role of events was brought up surprisingly rarely in the data, although for example projects, research platforms and intermediary organizations organize events where both business representatives as well as university research staff are invited. Based on previous literature, joint events with participants from both, the academia as well as from firms could further the development of social networks that are important channels of knowledge flow. Based on the data, it was not evident what the contradiction between the supposed significance of the events and the lack of them in the interviews was due to. Direct contacts between university staff and entrepreneurs could act as access points to any of the four opportunity spaces but utilizing these access points requires existing personal networks.

A business incubator, that is operated by the local university of applied sciences and that locates in the same campus area as the university, was mentioned as the main entrance to the campus for companies. However, this entrance is not that obvious to all as the approachability of the university was one of the identified restricting factors relevant within all four opportunity spaces. From the entrepreneur point of view approachability includes the ease – or in this case the difficulty – to find the right contact persons and service channels from the university, as well as the images they have of university collaboration and research projects. From the university point of view approachability relies on the ability to define its service offering, and to create a leadership and an ownership structure for university-business interaction and collaboration. University’s communications channels and platforms also have an essential role in fostering approachability and hence contributing to the volume of activities within the different opportunity spaces.

From the entrepreneurial opportunity formation point of view a restrictive element is the stage of technology readiness of the new research-based solutions. Also, in its early stage, research-based idea or a concept might appear too distant from the entrepreneurial actors’ point of view, or there aren’t existing markets for the technology as it is too far from the current socio-technical regime. When the technology readiness level is low and the markets for the solution are non-existent it was described by the university interviewees to be very challenging to attract entrepreneurial partners who are looking for a solution to an existing or a near future business challenge. This can be a challenge particularly within spaces 1 and 4, where the opportunity proximity is extremely low from the entrepreneurial opportunity viewpoint:

 … the major problem here is that when it comes to development of new processes, the processes are too early stage for companies to be interested in. They always- first they’re very interested when we send them and invite when I speak to them and tell them about (the project idea), they’re very excited but then when they meet the professors and they dig a bit deeper, then they realize okay, none of this has been tested and then they lose interest very quickly.

External funding is the key enabling resource as well as the key driver for university’s entrepreneurial activities and business collaboration. Small businesses rarely have the needed financial resources to buy contract research from universities, which steers their involvement towards the opportunity spaces with high knowledge applicability (spaces 3 and 4) such as employing thesis workers or providing cases for course project works. Different funding instruments also determine the form and objectives of university’s entrepreneurial collaboration and the type of organizations that are eligible as collaboration partners. When it comes to research activities, the role of external funding is relevant within all four spaces, whereas entrepreneurial collaboration within educational activities is less dependent on funding. However, as one of the interviewees pointed out, time is another funding-related resource that is important from the opportunity formation viewpoint, as university staff’s societal interaction and knowledge-transfer require time which again requires financial resources from the university side:

But perhaps the most critical would be that time there on the academic side. When there is so much to do and on-going things to do, from where could we find time into that search for something new and knowledge-transfer, as it would be so critical. I don’t think we are at currently at the point where we should be in this, but I think we could move towards it very systematically if we were willing to rethink this logic of our basic activity a little more.

Operating within different opportunity spaces requires also mutual trust among actors and the role of trust is highlighted in spaces where entrepreneurial opportunity proximity is high (spaces 2 and 3). In contract research non-disclosure agreements limit the possibilities of the research staff to interact or let alone collaborate with other businesses in the same or close fields. As expected, university operations are directed by its two main missions, education and scientific research, and the internal incentives are not designed to reward the research staff from being active in entrepreneurial activities as such. This can limit the research staff’s involvement in entrepreneurial activities particularly within spaces 3 and 4.

5. Discussion and conclusions

‘Entrepreneurs do not create new ventures out of thin air’ (Kimjeon and Davidsson 2021, 1). Universities provide fuel for entrepreneurs to create new ventures by producing non-commercial and commercial knowledge. Universities provide knowledge through four different types of opportunity spaces that offer various channels to manage the tension between firms’/entrepreneurs’ and universities’ sometimes conflicting goals. These spaces for innovative entrepreneurship can be characterized by their varying degrees of opportunity proximity and applicability of the available research-based knowledge.

Firms and entrepreneurs seek to engage in activities where the business potential is near in time, whereas universities tend to prefer novel research which is not very certain on its value as an entrepreneurial opportunity. As also prior research presents, a number of limiting factors for university engagement in regional innovation exist and often the expectations placed upon universities as ‘regional’ innovation actors can be overextended (Kempton 2019). The aim of this study was to answer the research question acknowledging these limiting factors by focusing on the existing university-based activities and the entrepreneurial opportunity spaces created through these collective activities.

From regional viewpoint, the regional university-led innovation activity is strongly focused on research-based innovations and their utilization, rather than on entrepreneurship and new venture creation. While the university strives for global impact of research, the regional impact is in danger of disappearing in the background. The regional context and for example the historical background and the institutional environment of the region are probable to have a great impact on the links between regional entrepreneurship and innovation ecosystems. This study also supports the findings of previous studies in that both university and regional characteristics influence the regional impact of universities (Clarysse et al. 2014; Smith and Bagchi-Sen 2012), also when it comes to regional entrepreneurial processes.

The opportunity spaces are characterized and supported by different funding mechanisms. Ranging from firm’s own pockets to public funding sources such as region-specific EU-funding and nationwide Business Finland funding, they all enable access to knowledge, but depending on the type of projects, abilities of local firms to participate in or utilize the outcomes of the projects are different (Smith and Bagchi-Sen 2012). Since the maturity level of entrepreneurial opportunity formed within the projects varies, entrepreneurs do not see the opportunities having low opportunity proximity as attractive as the opportunities with high proximity, since the low proximity opportunities are usually visionary research results that are not tested in the market. Funding both directs and enables university’s entrepreneurial activities, making different funding instruments important policy tools that can influence the universities’ role in the ecosystems. As a key enabling resource, the lack of financial incentives could diminish the entrepreneurial impact of universities.

One of the hindering factors for the regional entrepreneurial ecosystem to take the advance of the opportunities provided by the university, is the lack of conversational spaces, in which ecosystem actors can meet in person. Prior research acknowledges that the development and flow of entrepreneurial resources (Spigel and Harrison 2018), and the availability of conversational spaces are essential for successful entrepreneurial ecosystems (Rocha, Brown, and Mawson 2021). In this case study, the company base of South Karelia region is rather mature, and the culture of collective endeavours and ‘buzz’ is weak. Collaboration with the university is typically based on bilateral relations.

In relation to previous literature, the contribution of the opportunity space approach is that it diversifies the idea of universities’ role in entrepreneurial ecosystems, as it brings forward a wider understanding of the research-based opportunities than the narrow focus on commercialization of research results and the promotion of academic entrepreneurship. The role of the university in system level opportunity formation is to enable – within the framework of its basic missions – the creation of different types of entrepreneurial opportunity spaces where opportunity formation is enabled through a process of individual or collective interpretation of research-based knowledge.

This study has both theoretical and practical implications. From the theoretical viewpoint, the insights gained from this study propose a conceptualization on the university’s role in the entrepreneurial ecosystem as an opportunity space enabler and on the operations within these spaces. In addition, this study provides new insights into university’s role in the economic development of a region, especially in the new business creation and in the development of existing businesses through innovative entrepreneurship. From the practical viewpoint, the results of the study will help decision-makers to design supporting programmes and practices for innovation and entrepreneurship, which will enable to better utilize the potential of universities in fostering regional economic development. In addition, this research provides new information on the specific enabling and hindering conditions of the university’s participation in the activities of regional innovation and entrepreneurship ecosystems.

This study has its limitations. First, this study focuses on the specific case of a technological university with a history of strong university-industry collaboration, located in a specific type of region in Finland. The expected entrepreneurial impacts of this type of a university can differ from universities with for example wider spectrum of research and educational fields. Therefore, the results of this research might be biased and not applicable to other type of universities and regions. Secondly, although this study deals with the use of research-based knowledge as the ‘fuel’ for the entrepreneurial process, it does not focus on the knowledge management perspective, for example, for individual and organizational processes related to the exploitation of information, such as the company's absorptive capacity. Instead of individual and organizational levels, this study sought to focus on the ecosystem level and the applicability of knowledge in the current operational environment. Future work on this topic could further investigate and test the framework in the context of a specific thematic field or conduct comparative analyses between different fields. Also, studying how the entrepreneurial ecosystem environment can contribute to the absorption, exploitation and application of knowledge shared and generated within different opportunity spaces would serve as a valuable path for future research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work is a result of the research project ‘Instigating a spark: University as the engine of regional innovation and entrepreneurship ecosystems’ funded by EkspFoundation.