Journal of Business Venturing – Interactive PDW for a Special Issue on:
SCALE-UPS, SCALING, AND SCALABILITY: ENTREPRENEURIAL SCALING IN THE DIGITAL AGE
Guest Editors: (alphabetical order)
- Erkko Autio, Imperial College Business School
- Nicole Coviello, Wilfrid Laurier University
- Satish Nambisan, Case Western Reserve University
- Holger Patzelt, Technical University of Munich
- Llewellyn Thomas, IESE Business School
Overview to the PDW Focus and Special Issue
In this special issue, we aim to explore how certain firms, behaviors, and capabilities exemplify entrepreneurship: scale-ups, scaling, and scalability. This focus reflects our limited knowledge of the role and nature of scaling, particularly in a contemporary digital context. And, with the tendency to refer to all high-growth firms as scale-ups, what it means to scale has become unclear. Although being ‘scalable’ or having ‘scalability’ are now commonly used terms, these constructs remain poorly defined and, to date, they have not been operationalized nor measured in any meaningful way. Thus our goals for this special issue are to: 1) stimulate research to address this knowledge gap of theoretical and practical significance for researchers, entrepreneurs, managers, investors, and policy-makers; and 2) unpack if and how scaling firms (and their implications) are distinct from high-growth firms.
Given JBV is a multi-disciplinary, multi-functional, and multi-contextual journal, we invite submissions from multiple theoretical perspectives. We are open to conceptual papers or empirical studies drawing on any relevant source of data (in-depth interviews, cases, surveys, secondary data, etc.). Comparative studies are of particular interest in order to identify and understand any distinctions between scale-ups and high-growth firms.
In recent years, entrepreneurship scholars have begun to examine various issues pertaining to high-growth firms. Examples include studies of the characteristics of entrepreneurs in such firms (Baum & Bird, 2010), board composition and growth intentions (Rasmussen, Ladegard & Korhonen-Sande, 2018) or the interrelationships between various performance outcomes as the firm grows (Coad, Cowling & Siepel, 2017). The review paper from Demir, Wennberg and McKelvie (2017) takes a wider perspective, concluding that five dimensions underpin high growth: human capital, human resource management, strategy, capabilities, and innovation.
In a parallel stream of work, some scholars refer to high-growth firms as ‘scale-ups’ (DeSantola & Gulati, 2017; Duruflé, Hellmann & Wilson, 2017, Gulati & DeSantola, 2016). This practice is consistent with influential policy-makers and entrepreneurial ecosystem perspectives. For example, ‘The Scale-Up Report on UK Economic Growth’ (Coutu, 2014), the UK’s ScaleUp Institute, and Nordic Innovation all target ‘scale-ups’ and define them using the OECD (2007) definition of a high-growth firm. That is, scale-ups are referred to as firms with: 1) average annualized growth greater than 20% over a three-year period; and 2) ten or more employees at the beginning of the observation period.
We have two concerns with the above. First, although a high-growth firm might be identified using employee numbers or revenue growth, we ask: can a ‘scale-up’ be defined by numbers alone? Our question stems, in part, from Barclay’s ‘Scale-Up UK’ report (Hellmann & Kavadias, 2016). In it, an important point is made: ‘scale-up’ is a stage “when a company takes a proven concept and delivers it to a wider audience, often through market penetration and geographic expansion” (p. 7). Notable here is that Hellmann & Kavadias (2016) flag the importance of factors other than firm size when identifying a firm that is a scale-up or in the scale-up stage. Further complicating the reliance on (for example) revenue growth, some firms now grow at extraordinary rates; rates that far exceed the OECD’s reference point of average annualized growth greater than 20% over a three-year period. For example, the top 10 firms in the 2020 USA Deloitte Fast 500 competition grew (over four years) at rates between 21,724% and 106,508%. Such firms are assumed to be scaling but this leads to our second concern.
Despite research signaling the relevance of scale economies (Autio et al., 2018; Hennart, 2014; Monaghan & Tippmann, 2018; Monaghan et al., 2020), ‘scale-ups’ are too often discussed without acknowledging the importance of identifying and leveraging different economies of scale (cf Coviello, 2019) in various parts of the organization. We know small firms can use technology to quickly achieve this type of advantage (Josefy et al., 2015), but what needs to be scaled in the firm? When?
At this point in time, we are still learning about what it means for a firm to scale or to have scalability. In Sullivan’s (2016) interview with Reid Hoffman (co-founder of PayPal, founder of LinkedIn), Hoffman argues that scaling involves: 1) growing revenue; 2) growing the customer base; and 3) scaling the firm to serve a large and usually global market. Hoffman also observes that scaling is more about the “character of the company than it is the exact employee headcount” (Sullivan, 2016, p. 47). Complementing Hoffman’s experiences, Shepherd and Patzelt (in press) conceptualize the knowledge implications of ‘organizational scaling’, defining it as “spreading excellence within an organization as it grows."
We believe these initial findings are only the tip of the iceberg for entrepreneurship research. As digitalization continues across all industries and markets, firms are increasingly networked both technologically and organizationally. These results lead us to wonder: does extant knowledge on how much firms grow really help us understand their scalability, how they develop it, and how they scale-up?
Illustrative Research Topics
We encourage submissions that focus on one or more of the areas below, although this list is not intended to be mutually exclusive or collectively exhaustive. More details can be found at: https://bit.ly/3gHAu1b
- What is scalable? What does a firm need in order to scale?
- What is the role of digitalization in scaling?
- How do firms transform as they scale?
- How do entrepreneurial ecosystems (including accelerators, incubators, universities, regions) influence firms trying to scale?
- How do firms leverage innovation ecosystems to scale?
Paper Development Workshop
In the interest of maximizing scholarly refinement, the guest editors of this Special Issue are holding a virtual (Zoom) paper development workshop. This will be hosted by the Lazaridis Institute (Waterloo, Canada) on 21 Sept 2021. Authors intending to submit a manuscript are encouraged to attend this workshop.
The workshop will involve the guest editors hosting roundtable sessions in an interactive format. Feedback from the guest editors and other participants will be provided, based on two-page paper summaries provided by each author team. These paper summaries will highlight the core research problem and expected contributions, as well as problem areas or questions that might be addressed by the editors in an effort to provide guidance during paper development. Workshop participation does not guarantee acceptance of the paper in the Special Issue. It is also not required for consideration or publication.
Submission Process for Special Issue
- Submissions should be prepared using the JBV Manuscript Preparation Guidelines.
- Papers will be reviewed according to the JBV double-blind review process.
- The deadline for submission is 1 February 2022 although we encourage earlier submissions. Papers will be published in regular JBV issues when they are accepted. They will then be curated virtually into a JBV Special Issue.
- Manuscripts should be submitted through the JBV online submission process: journals.elsevier.com/journal-of-business-venturing
- Informal enquiries relating to the Special Issue, proposed topics, and potential fit with the Special Issue objectives are welcomed. Please direct any questions on the Special Issue to Nicole Coviello (firstname.lastname@example.org).