Knowledge reallocation and challenges for KIE : the case of the European roller coaster industry

When firms and individuals act on opportunities, either by starting a new venture or by diversifying the existing product portfolio through innovation, existing knowledge is reallocated and applied in new situations. This is also the case for knowledge intensive entrepreneurship (KIE), which according to the definition provided in this volume, involves the start of a new business that is innovative, has significant knowledge intensity in their activities and develops innovative opportunities in diverse sectors. It might be problematic, however, for new firms to enter due to a need for large investments or the sophistication of the knowledge that can only be handled by larger, more established firms. This may be particularly true for industries that produce complex products and where customers base their buying decision on reputation, which is in fact the case in the roller coaster industry that is the focus of this chapter. Over the years, researchers have investigated the role of pre-entry knowledge and how the nature of this knowledge affects entry. These studies have investigated a large diversity of industries, for example, the evolution of the automobile industry, as presented in Klepper (2009) and Boschma and Wenting (2007), but also the evolution of knowledge intensive and high-tech industries like the production of lasers (Buenstorf, 2007). The interest has led to a typology of entry modes, mainly distinguishing between pre-entry knowledge and the experience of the founders alongside the relationship of the entrant with the parent firm. Helfat and Lieberman (2002) have formulated the most common distinctions,