On the interaction between the growth process and the development of technical knowledge in young and growing technology-based firms

This paper investigates the tensions that exist in young and growing technology-based firms between (1) increasing technological opportunities for further growth and (2) the costs of developing these opportunities. Data from 70 medium-sized, young technology-based firms were used to test two hypotheses concerning changes in the number of separate fields of technical knowledge during growth. Increasing the number of separate fields of technical knowledge increases the technological opportunities available to the firm, but increases the cost of developing and integrating knowledge from multiple fields. The results indicate that tensions between technological opportunities and the costs of technological development in young technology-based firms are created due to both the advances in science and technology and the firms’ growth process itself.