Contributions to Management Science

Paola De Bernardi
Danny Azucar

Innovation
in Food
Ecosystems
Entrepreneurship for a Sustainable
Future
Contributions to Management Science
More information about this series at [Link]
Paola De Bernardi • Danny Azucar

Innovation in Food
Ecosystems
Entrepreneurship for a Sustainable Future
Paola De Bernardi Danny Azucar
Department of Management Department of Management
University of Turin, School of University of Turin, School of
Management and Economics Management and Economics
Turin, Italy Turin, Italy

ISSN 1431-1941 ISSN 2197-716X (electronic)

Contributions to Management Science
ISBN 978-3-030-33501-4 ISBN 978-3-030-33502-1 (eBook)
[Link]

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Foreword (1): The Future of Food Ecosystems

The food system encompasses a multitude of actors, elements, and processes that
relate to the production, processing, distribution, preparation, consumption, and
disposal of food. It includes the environment, people, businesses, infrastructure,
institutions, and the effects of their activities on our society, economy, landscape,
and climate.
It is a complex system made up of many interrelations—and it is adaptive—
influenced by endogenous and exogenous factors.
Today’s food systems are evolving to meet consumers’ ever-changing demand
for healthy and nutritious food that is accessible and affordable for all, ensuring high
levels of food safety and traceability coherent with sustainable and resource-efficient
business models, and aiming to conserve our planet’s precious resources for future
generations. People are becoming aware of the deep impact the current food system
has had on the planet and society and are demanding a new way of producing and
delivering food.
The global food system still faces many interlinked challenges: growing con-
sumer demand for ever higher quality ingredients, locally grown products based on
climate smart food systems adaptive to climate change, conservation of natural
resources, and implementation of resource-efficient circular economy principles,
all the while reducing the environmental footprint and safeguarding ecosystems
which includes soil quality and pollination. At the same time, there remains the
need to address hunger and malnutrition, reduce the incidence of non-communicable
diet-related diseases, and help all citizens adopt sustainable and healthy diets for
good health and well-being.
In this context, food systems are recognised as one of the main drivers of global
environmental change and are now known to impact many socio-economic dimen-
sions. Indeed, according to the UN (2019), food production around the world
currently accounts for 40% of land use, 30% of greenhouse gas emissions, and
70% of freshwater consumption. What’s more, the world population is expected to
increase from 7 to 10 billion people by 2050, and global demand for food is expected
to increase roughly 60% (UN, 2019). Meanwhile, the process of exponential

v
vi Foreword (1): The Future of Food Ecosystems

urbanisation will cause a rise in the percentage of people living in urban areas from
50% to 80%. This process of urbanisation creates the negative effects of an increase
in natural resource use in urban areas depending largely on imported resources,
which in turn creates the need for longer supply chains resulting in increased
greenhouse gas emissions and more food waste.
It is clear that food systems must be transformed through boosting innovation
while empowering communities, industries, institutions, policymakers, and civil
society to contribute to the solution of the grand challenges mentioned above.
As a result of the changes and the pertinent challenges, it is now imperative to
treat these challenges together using a multidimensional and pluri-disciplinary
approach, in order to manage interdependencies between key parts of the food
system and avoiding the risks of overlooking trade-offs and synergies. That means
thinking of the food system as a broad innovation ecosystem that leads to new
business models and value-added products, goods, and services, meeting the
needs, values, and expectations of society in a responsible and ethical way.
Behavioural research on consumerism, new farming methods, new ingredients,
and the adoption of digital technologies to food production and delivery processes
shows that there are big opportunities for change.
The key levers for transforming the food system and delivering impact have been
identified as innovative forward-thinking approaches that include growing entrepre-
neurial skills to develop the right innovations and bring them to market, as well as
embracing digitalisation and data analytics to find new solutions which will feed the
world, address health issues, and tackle the environmental crisis. In order to provide
sustainability for, and ‘future proof’ our food ecosystems, food institutions and
stakeholders must be able to encourage innovation, promote sustainable living,
and include every member of the food ecosystem when proposing innovations or
radical transformations.
These transformations will require unprecedented collaboration between stake-
holders, and both radical and incremental innovation across the entire food value
chain, including food production and processing side streams. In many cases, such
innovations tend to arise in a ‘bottom-up’ fashion from small and medium-sized
enterprises (SMEs) and emerging start-ups. Unfortunately, clear guidelines or ‘blue-
prints’ for identifying entrepreneurial individuals and recommendations on the best
methods to support their business ventures are still scant from both literature and
practice.
This book provides an essential synthesis of the nexus between innovation and
entrepreneurship in food ecosystems and an in-depth discussion of the processes
seen throughout the developmental cycle of start-ups: from the identification of
entrepreneurial talent, identifying business opportunities, designing the business,
funding business ventures, and the transition from individual entrepreneurship
centres to promote innovation to the creation of multicentre and interdisciplinary
innovation ecosystems.
It is an important piece for researchers and academics who wish to help drive
sustainability in food ecosystems through innovation and entrepreneurship. It pro-
vides clear examples of real-world scenarios of food ecosystems that provide the
Foreword (1): The Future of Food Ecosystems vii

reader with a window to the many possibilities for entrepreneurship and innovation
in food ecosystems.
I wish you joy and insights from reading this important book.

EIT Food, Heverlee, Belgium Andy Zynga

Foreword (2): ‘Open Innovation in Food
Ecosystems’

The European food system—from farmers and fishermen to consumers—is currently

delivering ample and safe food to Europeans, who benefit from a historically unique
and stable supply of high-quality and healthy food year-round based on the Medi-
terranean diet. The food system at large is providing jobs for millions of people and
income for thousands of smaller companies and cooperatives (EU, 2019)1. Yet, the
global food system still faces a range of challenges, including the triple burden of
malnutrition (i.e. undernutrition, over-nutrition, and micronutrient deficiencies),
biodiversity loss, climate change, resource scarcity, growing and ageing populations,
urbanisation, food waste, and food poverty. This requires food systems’ transfor-
mation with a shift towards more sustainable and healthy diets aiming to ensure food
and nutrition security for all, in essence food that is good for you and good for the
planet.
Innovative strategies and solutions that tackle systemic challenges, having high
social, environmental, and economic impact, will play an essential role, becoming an
unavoidable interplay of various parties who combine their knowledge, turning
challenges into opportunities.
The idea that ad hoc interactions to provide solutions and business opportunities
to challenges in food ecosystems is no longer the rule but the exception. Economies
and industries have recently transitioned to a system of global innovations, where
collaborations based on compatible and complementary differences must be sought.
Companies most likely to thrive in the emerging complex economies are, not
surprisingly, those that are able to innovate effectively in collaborative environ-
ments. Effective innovations in the increasingly interconnected global environment
will therefore depend on co-creation efforts that transcend individual company or
organisational boundaries.

1
Niels Halberg, Henk Westhoek, The added value of a Food Systems Approach in Research and
Innovation, European Commission, July 2019.

ix
x Foreword (2): ‘Open Innovation in Food Ecosystems’

In this context, food companies are looking beyond the walls of their own
organisations, actively seeking knowledge, technology, and partners to implement
a portion of the innovation process. They can orchestrate open innovation strategies,
forming external networks to develop innovation processes among the partners they
collaborate with (i.e. chain partners, knowledge institutions, governmental bodies,
and even competitors), thus contributing to tackle food system’s challenges in the
whole ecosystem.
Open innovation ecosystem approach involves the sharing of knowledge between
multiple stakeholders in order to gain, at the same time, sustainability and business
goals, co-creating and co-sharing product and service innovation. Alliances, partner-
ships, and alignments in the food ecosystem, downstream, upstream, and side-
stream, are paramount for cross-fertilisation and synergy, representing a paradigm
shift towards accelerating co-development of sustainable innovation, with alignment
of the entire value chain with a consumer-centric focus.
Successful food companies and emerging start-ups are usually those that are able
to identify and exploit opportunities to co-create value by challenging the traditional
‘closed’ approaches to research and development and innovation. Adopting the
notion of open innovation within food ecosystems involves embracing both internal
and external resources and ‘paths to markets’—and especially, moves food stake-
holders away from the idea that successful innovation requires strict control, and
stimulates towards a set of more organisation-wide ‘open principles’.
This book provides an overview of entrepreneurship and innovation in food
ecosystems, and a critical discussion of how ‘open innovation’ is currently adopted
and implemented among food companies and emerging start-ups. Specifically, the
authors provide a range of important examples and a case study representing a
comprehensive synthesis of the emergence of open innovation strategies in food
ecosystems. Furthermore, the book highlights the role of academia, food companies,
and research institutions in creating successful ecosystems centred on a culture of
open innovation. Finally, the authors present a summary of the main challenges in
the creation of food ecosystems and highlight the possible implications for the future
of open innovation in food ecosystems.
The authors harness this reality and discuss specific recommendations to facilitate
this process and engage in open innovation in food ecosystems with the involvement
of food companies, start-ups, and individual stakeholders in the so-called knowledge
triangle.
The authors have clearly highlighted that successful open innovation culture
requires slight transformations across the entire food value chain, presenting critical
discussions, insights, and recommendations to make these transitions towards open
innovation in food ecosystems successful.

Open Innovation Senior Manager, Giancarlo Riboldi

Barilla Group
Parma, Italy
Preface

Recent experience has taught me that many students and scholars cultivate ideas that
have the power to drive meaningful transformations in the food ecosystem but
oftentimes lack knowledge and resources to turn them into viable business ventures.
Many authors suggest that a massive barrier to translate research and innovation
into business ventures is the low level of essential business creation skills among
academics and low levels of research expertise from business experts, e.g. significant
amounts of funding are often lost when supporting new ventures that are not
scientifically proven to work, and breakthrough scientific discoveries are seldom
supported by business creation experts.
This gap in multidisciplinary knowledge and entrepreneurship mindset for busi-
ness innovation is what ignited my motivation to write this book.
Entrepreneurship and innovation have become extremely relevant in the Euro-
pean Union especially since the passing and approval of the Sustainable Develop-
ment Goals (SDGs).
With this book, we address the intersection of entrepreneurship, innovation, and
sustainability in food ecosystems and critically discuss the importance of
transforming food production and consumption in order to achieve worldwide
sustainability goals.
This book is specifically written for aspiring entrepreneurs, students, food eco-
system stakeholders, and organisations seeking to create a new systemic approach
for the ‘future of food’. Today, food companies find themselves operating in a
competitive and interconnected market that inevitably reduces the life cycle of
products and services launched on the market, thus affecting margins and perfor-
mances. In this scenario, it is easy to understand how it is no longer possible to
confine innovation processes, but it is appropriate to open them to collaboration with
an extensive network of external actors to find new ideas, leverage external
resources, develop new products, and generate sustainability and value for the
whole ecosystem. To do this, it is necessary to be able to generate and consolidate
relationships with a wide range of players, interfacing not only with suppliers and
customers along the food value chain but also including companies specialising in
innovation, research centres and universities, and business incubators, accelerators,
xi
xii Preface

technology parks, and ecosystems of innovation that consider start-ups one of its
founding elements.
The main contribution of this book is to provide a basis of support for stake-
holder-led innovation and entrepreneurial endeavours. It describes how multi-actor
approaches and multidisciplinary environments can co-create and co-share innova-
tive and sustainable solutions that can tackle present and future challenges threaten-
ing our food ecosystems.

Turin, Italy Paola De Bernardi

Contents

1 The Food System Grand Challenge: A Climate Smart and Sustainable

Food System for a Healthy Europe . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Introducing Actual Food Systems: From “Farm to Fork”
to “Industry to Fork” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.1 Grand Challenges Related to Actual Food Systems . . . . . 2
1.1.2 A Focus on the European Scenario . . . . . . . . . . . . . . . . 4
1.1.3 Global Food Systems in a Networked Society . . . . . . . . 5
1.2 Sustainable Development in Food Systems: Highlighting a Need
for Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Holistic Thinking and Sustainable Food Systems . . . . . . . . . . . . 8
1.3.1 A Sustainable Food System Approach: The Food System
Wheel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3.2 The Food System Development Paradigm . . . . . . . . . . . 11
1.4 Addressing the Sustainability Paradigm in the European Union . . 12
1.4.1 Safeguarding the Agricultural Sector and Food
Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.4.2 Managing Waste: The Waste Framework Directive
and Other Network Policies . . . . . . . . . . . . . . . . . . . . . 14
1.4.3 Transitioning Toward a Circular Economy: The Circular
Economy Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.5 From Food Systems to Food Ecosystems . . . . . . . . . . . . . . . . . . 15
1.5.1 Innovation as a Driver in Food Ecosystems . . . . . . . . . . 17
1.5.2 Sustainable Innovation in Food Ecosystems . . . . . . . . . . 18
1.6 Entrepreneurship and Innovation as Key Elements
for Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

xiii
xiv Contents

2 The Role of Universities in Harnessing Entrepreneurial

Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1 Introduction: Entrepreneurs and Entrepreneurial Opportunities
in Food Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2 It All Begins with an Opportunity . . . . . . . . . . . . . . . . . . . . . . . 30
2.3 The Focus on Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.4 Entrepreneurial Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.5 Opportunity Discovery and Creation in Food Systems . . . . . . . . . 39
2.5.1 Opportunity Creation: Tangible Resources . . . . . . . . . . . 41
2.5.2 Opportunity Recognition: Intangible Resources . . . . . . . 41
2.6 Entrepreneurial Universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7 Entrepreneurship Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.8 Entrepreneurship Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.8.1 Technology Transfer Offices/Centers . . . . . . . . . . . . . . . 52
2.8.2 Incubators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.8.3 Accelerators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.9 Triple-Helix Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.9.1 The Knowledge Triangle . . . . . . . . . . . . . . . . . . . . . . . 56
2.10 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries,
and Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
3.1 Introducing the Ecosystems Concept . . . . . . . . . . . . . . . . . . . . . 74
3.2 Innovation Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.2.1 Differences Between Innovation Ecosystems and Other
Cluster Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.2.2 An Innovation Ecosystems Mapping Effort: The
Ecosystem Pie Model . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.3 Entrepreneurial Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.3.1 The Emergence of Entrepreneurial Ecosystems . . . . . . . 81
3.3.2 Limitations and Further Developments of Current
Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
3.4 Structure of Innovation and Entrepreneurial Ecosystems . . . . . . . 83
3.4.1 Similarities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
3.4.2 Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
3.4.3 Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
3.4.4 Personal and Systemic . . . . . . . . . . . . . . . . . . . . . . . . . 90
3.4.5 Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3.4.6 Change, Growth, and Performance . . . . . . . . . . . . . . . . 91
3.4.7 Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
3.4.8 Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
3.5 Food Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
3.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Contents xv

4 Innovation for Future Proofing the Food Ecosystem: Emerging

Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
4.2 Innovation in Food Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . 107
4.3 Open Innovation in Food Ecosystems . . . . . . . . . . . . . . . . . . . . . 108
4.4 Emerging Food Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.5 Vertical Farms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
4.5.1 Aeroponics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
4.5.2 Aquaponics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
4.5.3 Hydroponics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
4.6 Short Food Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
4.7 Precision Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
4.8 Bio-Fertilizers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
4.9 Meat Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
4.10 Waste Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
4.11 Health and Wellbeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
4.12 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience
and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.2 Beyond Linearity in Food Supply Chains: Systems Thinking . . . . 137
5.3 Resilience and Sustainability in Food Ecosystem . . . . . . . . . . . . 140
5.3.1 Barriers to Resilience . . . . . . . . . . . . . . . . . . . . . . . . . . 141
5.4 Holistic Innovation and Entrepreneurship . . . . . . . . . . . . . . . . . . 143
5.5 Systems Thinking for Food System Transformation . . . . . . . . . . 145
5.6 Responsible Research and Innovation (RRI) and Food Systems . . 148
5.7 Multi-level Innovation and Entrepreneurship . . . . . . . . . . . . . . . . 152
5.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
6 Startups and Knowledge Sharing in Ecosystems: Incumbents
and New Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
6.2 Knowledge into Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
6.3 Startups and High Growth Firms (HGFs) . . . . . . . . . . . . . . . . . . 166
6.4 Aligning Solutions to Consumer Needs . . . . . . . . . . . . . . . . . . . 169
6.4.1 Market Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
6.4.2 Competitive Landscape . . . . . . . . . . . . . . . . . . . . . . . . 171
6.4.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
6.5 From Ideas to Business Models and Business Plans . . . . . . . . . . . 173
6.5.1 Writing a Business Plan . . . . . . . . . . . . . . . . . . . . . . . . 173
6.5.2 Company Overview: ‘About Us’ . . . . . . . . . . . . . . . . . . 174
6.5.3 Product or Service Offered . . . . . . . . . . . . . . . . . . . . . . 174
xvi Contents

6.5.4 Target Market, Customers, and Competition . . . . . . . . . 174

6.5.5 Sales and Marketing Strategies . . . . . . . . . . . . . . . . . . . 175
6.5.6 Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
6.5.7 The Startup Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
6.5.8 The Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
6.6 Digitalization as a Driver for Entrepreneurial Ecosystems
and Business Creation: Fact or Fiction . . . . . . . . . . . . . . . . . . . . 177
6.7 Startups and Innovation Ecosystems: Do They Work? . . . . . . . . . 179
6.8 Your Startup, Your Brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
6.8.1 Brand Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
6.8.2 Sustainability and Brand Creation . . . . . . . . . . . . . . . . . 183
6.9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
7 Innovative and Sustainable Food Business Models . . . . . . . . . . . . . . 189
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
7.2 Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
7.3 Business Model Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
7.4 Business Model Innovation for Sustainability . . . . . . . . . . . . . . . 197
7.5 Circular Business Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
7.6 Business Modelling: Tools for Designing New Business
Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
7.7 Business Models in the Food Sector: Where Are We Going? . . . . 207
7.7.1 Food-Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
7.7.2 Agri-Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
7.7.3 Food Digital Platform . . . . . . . . . . . . . . . . . . . . . . . . . . 211
7.7.4 Urban Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
7.7.5 Food on Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
7.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
8 Funding Innovation and Entrepreneurship . . . . . . . . . . . . . . . . . . . . 223
8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
8.2 The Supply of Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
8.3 Venture Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
8.3.1 Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
8.3.2 Investment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
8.3.3 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . 236
8.3.4 Alignment of Interest: Carried Interest . . . . . . . . . . . . . . 239
8.4 Corporate Venture Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
8.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Contents xvii

9 A European Food Ecosystem: The EIT Food Case Study . . . . . . . . . 245

9.1 Introduction: The European Institute of Innovation
and Technology (EIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
9.1.1 Knowledge and Innovation Communities (KICs) . . . . . . 249
9.2 EIT Food: Pan-European Food Network . . . . . . . . . . . . . . . . . . . 250
9.2.1 EIT Food Co-location Centers . . . . . . . . . . . . . . . . . . . . 251
9.3 EIT Food Vision, Mission, Strategy, Values and Goals . . . . . . . . 256
9.4 EIT Food Strategic Pillars and Business Areas . . . . . . . . . . . . . . 261
9.4.1 Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
9.4.2 EIT Food’s Innovation Programs . . . . . . . . . . . . . . . . . . 263
9.4.3 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
9.4.4 Business Creation and Entrepreneurship . . . . . . . . . . . . 264
9.4.5 Communication and Public Engagement . . . . . . . . . . . . 265
9.5 EIT Food Growth Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
9.6 EIT Food Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . 268
9.6.1 EIT Food Organizational Governance Structure . . . . . . . 268
9.7 Multi-Annual Business Models . . . . . . . . . . . . . . . . . . . . . . . . . 269
9.7.1 Financial Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . 272
9.8 EIT Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
9.8.1 EIT Food Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . 272
9.8.2 Partner Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
9.9 Start-Up Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
9.9.1 Rising Food Stars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
9.9.2 EIT Food Sparks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
9.10 EIT Food Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
9.10.1 EIT Food Impact through Synergies . . . . . . . . . . . . . . . 276
9.10.2 Key Performance Indicators . . . . . . . . . . . . . . . . . . . . . 277
9.11 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
List of Figures

Fig. 1.1 How food systems are connected with all the SDGs. Source: Azote
for Stockholm Resilience Center, Stockholm University (2016) . . . 7
Fig. 1.2 The food system wheel. Source: FAO (2018) . . . . . . . . . . . . . . . . . . . . . . . 11
Fig. 1.3 The food system development paradigm. Source: FAO (2018) . . . . 12
Fig. 1.4 The CAP food system vision. Source: Recanati et al. (2018) . . . . . . 13
Fig. 3.1 The ecosystem pie model. Source: Talmar et al. (2018) . . . . . . . . . . . . 78
Fig. 3.2 Structural framework for entrepreneurial ecosystems.
Source: Autio et al. (2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Fig. 5.1 Diagram of food system simplified. Source: Food 2030 . . . . . . . . . . . . 139
Fig. 5.2 Holistic model of food ecosystems. Source: [Link]
(2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Fig. 6.1 SWOT analysis grid output—food system example.
Source: Author’s elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Fig. 7.1 Business model canvas. Source: Based on Osterwalder
and Pigneur (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Fig. 7.2 Lean business model canvas. Source: Based on Maurya (2012) ..... 204
Fig. 7.3 Sustainable business model canvas. Source: Based on Joyce
and Paquin (2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Fig. 7.4 Circular business model. Source: Planing (2015), adapted from
Ellen MacArthur Foundation (2014) and Stahel and Reday-Mulvey
(1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Fig. 8.1 The investment cycle. Source: Adapted from Cardullo (1999) . . . . . 228
Fig. 8.2 Investment process. Source: Own elaboration . . . . . . . . . . . . . . . . . . . . . . . 237
Fig. 8.3 The startup funding cone. Source: Own elaboration . . . . . . . . . . . . . . . . 238
Fig. 9.1 Knowledge and innovation communities. Source: EIT (2019c) . . . . 250
Fig. 9.2 Visual cloud of EIT food members. Source: EIT Food (2018) . . . . . 256
Fig. 9.3 EIT food co-location centers. Source: EIT Food (2018) . . . . . . . . . . . . 257
Fig. 9.4 EIT food estimated budget. Source: EIT Food (2018) . . . . . . . . . . . . . . 258
Fig. 9.5 Four pillars of EIT food. Source: EIT Food (2019b) . . . . . . . . . . . . . . . . 261
xix
xx List of Figures

Fig. 9.6 Smart entrepreneurial development model. Source: EIT Food

(2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Fig. 9.7 EIT food organizational structure. Source: EIT Food (2018) . . . . . . . 269
Fig. 9.8 Multi-annual business model. Source: EIT Food (2018) . . . . . . . . . . . . 273
Fig. 9.9 Projected impacts of EIT food. Source: EIT Food (2018) . . . . . . . . . . 278
List of Tables

Table 2.1 Triple-Helix approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table 3.1 From clusters to innovation ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Table 3.2 Invariants of the ecosystem approach . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . 87
Table 3.3 Conceptual overview of innovation and entrepreneurial
ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Table 4.1 Inventory of possible R&I breakthroughs . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Table 4.2 High tech indoor farming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Table 6.1 Business concepts 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Table 6.2 Solo and partnered—what’s in it for me? . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Table 7.1 Definitions of a business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Table 7.2 Business model innovation definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Table 7.3 Sustainable business model definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
Table 7.4 Sustainable business model innovation definitions . . . . . . . . . . . . . . . . 201
Table 8.1 Life cycle phases and types of operation . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Table 8.2 The corporate venture capital models . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . 242
Table 9.1 List of member countries and partners by country . . . . . . . . . . . . . . . . 252
Table 9.2 Governance, management, and executive positions
of EIT food . . .. . .. . .. . .. . .. . .. . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . 270
Table 9.3 EIT food core processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

xxi
Chapter 1
The Food System Grand Challenge:
A Climate Smart and Sustainable Food
System for a Healthy Europe

Abstract Current food systems rely on mass production processes that should be
designed to provide people with nurturing and healthy food, and to ensure food
access to every region around the world. However, unprecedented growing world
populations, emerging production technologies, and diverging agendas from food
system stakeholders have created a chasm in food systems. This chasm is evident
in the alarming rate food production is straining environmental systems, as well as
in the current rates of malnutrition and lack of food access. Indeed, evidence
suggests that food production is one of the main contributors to climate change,
biodiversity loss, freshwater use, and land systems change. Due to the threats posed
by current, interconnected, global food systems to health and environmental
degeneracy, attempts to transform them in a more sustainable way are increasingly
emerging all-around the world. In particular, the trend is to shift from isolated
and individualized agendas to collective and integrated strategies with combined
and interdependent targets that can effectively support the actual transformation of
food systems to be more sustainable. In this chapter, we discuss how this sustain-
able transition of current food production and consumption systems may be
spurred across multiple scales. We begin with an analysis of the Sustainable
Development Goals (SDGs) and discuss how they are all in some way related to
multi-actor and trans-disciplinary food systems. We provide a synthesis of the
current policies and strategies that most effectively drive toward a more holistic
thinking of food systems. In this sense, the European scenario is particularly
analysed, by introducing the concept of food ecosystems and how they help to
address the sustainability paradigm. Finally, how the presence of an entrepreneur-
ial mindset, skills, and opportunities can spur sustainable innovation is taken into
consideration.

Keywords Food systems · Grand challenges · Sustainable development goals

(SDGs) · Food ecosystems · Food sustainability

© Springer Nature Switzerland AG 2020 1

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
2 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

1.1 Introducing Actual Food Systems: From “Farm

to Fork” to “Industry to Fork”

Historical trends in human activity have been creating mounting pressures on Earth’s
ecosystems and its natural resource supplies. In this regard, traditional food systems,
coupled with economic growth, are recognized as the most significant cause of
global environmental change (Willett et al., 2019). The expression food system is
commonly employed in discussions about nutrition, meal production and consump-
tion, health, economic development, and agriculture. Food systems can be described
as adaptive systems exhibiting complex dynamics and oriented to feed the world’s
growing population (Ingram, 2011; Jagustović et al., 2019), including both the
inputs needed (e.g., natural resources) and outputs generated (e.g., innovations and
sustainable solutions) within the food supply chain. Indeed, they comprise all the
processes, infrastructures, and actors involved throughout each level in the agri-food
chain, going from food production, aggregation, and processing that originate from
agriculture, forestry or fisheries, to food distribution, consumption, and disposal
(Muth et al., 2019).
Our current food system, which is often focused on mass production, is a result of
the industrial revolution that fuelled large-scale industrialization and a mass labour
market (Johnson, 1941). The industrial revolution witnessed a shift from self-relying
people for food sources, to counting on bigger food organizations and productions,
thereby slowly improving food security and diversity (Kamminga & Cunningham,
1995; Overton, 1996). These processes, however, inadvertently also led to a dra-
matic lengthening of the food supply chains, thereby intensifying the need for
resources and energy and the emission output of global food industries. So, in its
attempts to provide greater food access for the world’s populations, the food industry
slowly transitioned from a system of “farm to fork” to “industry to fork”.

1.1.1 Grand Challenges Related to Actual Food Systems

Those fundamental shifts in agricultural production have undoubtedly exacerbated

the human impact on the so-called grand challenges, environmental, and societal
problems that need to be addressed in a few decades or will lead to disruptive global
consequences (Robertson & Swinton, 2005; Rounsevell et al., 2012). Examples of
grand challenges related to current food production methods are the extensive use of
fertile land and freshwater, ocean acidification, high levels of greenhouse gas (GHG)
emissions, the disruption of nitrogen and phosphorus cycles, and the contribution to
biodiversity loss (Hoekstra & Wiedmann, 2014; Rockström et al., 2009; Steffen
et al., 2015; Whitmee et al., 2015). Therefore, actual food systems have led to a more
significant impact of the ecological footprint of human activities, which increased its
demand from requiring less than one ‘Earth’ worth of natural resources for healthy
living in 1961 to needing two Earths by 2030 (Global Footprint Network, 2019).
1.1 Introducing Actual Food Systems: From “Farm to Fork” to “Industry to Fork” 3

According to recent estimates of the Food and Agriculture Organization (FAO) of

the United Nations, for example, around 40% of global land is used for agricultural
purposes (Foley et al., 2005). Moreover, as a result of the emergence of productivity-
enhancing technologies and significant increases in natural resources employment
for farming, agricultural production more than tripled between 1960 and 2015 (FAO,
2017). The burden that food systems place on the environment is also evident in
marine systems. Oceans appear overexploited for about 90% with 60% of world fish
stocks full and more than 30% overfished (Willett et al., 2019). As a consequence,
food production is responsible for about 30% of GHG emissions (Vermeulen,
Campbell, & Ingram, 2012) and 70% of freshwater use (Steffen et al., 2015),
while global marine fisheries have experienced a steady decline in catch throughout
the past couple of decades (Food and Agriculture UN, 2016).
Krijin J. Poppe, chair of the independent Food 2030 European Commission
expert group defined the food system as a system far from being resilient. “It has
too many negative effects on the environment and on our health. The system delivers
more affordable food at larger quantities than ever, but this goes at the expense of
future generations. This is an important insight for the direction in which we have to
innovate the food system. At a global level this has been recognised by the adoption
of the Sustainable Development Goals (SDGs) and the signing of the Paris’ Agree-
ment on climate change (COP21)” (European Commission, 2018d, p. 3).
Given the above, it is clear that, in efforts to ensure food availability to a
significant number of people, traditional food production approaches have progres-
sively compromised the world’s capability to fulfil its future food and nutritional
needs (De Bernardi, Bertello, & Venuti, 2019; De Bernardi, Bertello, Venuti, &
Zardini, 2019). This has sharply highlighted the necessity of addressing grand
challenges through a transition towards more sustainable systems, adjusting actual
food production practices for ensuring they become suitable to the evolving avail-
ability of resources in the global environment. Some experts predict that if food
production and consumption patterns continue in line with the traditionally adopted
Western models, these environmental pressures will only intensify in occurrence and
magnitude and steady increases in population growth could further aggravate them
(Davis et al., 2016; Jalava, Kummu, Porkka, Siebert, & Varis, 2014; Springmann,
Godfray, Rayner, & Scarborough, 2016; Tilman & Clark, 2014). In 2010 the global
population was estimated at 6.8 billion people, and this number is projected to reach
between 8.5 and 10 billion people by the year 2050, a 34% increase (Samir & Lutz,
2017). Most of the population increases are expected to occur in the world’s
developing countries and urban areas, with an expected growth of more than 70%
of the global urban population. Therefore, urbanization will bring additional changes
in food production and consumption behaviours within cities. Providing healthy and
nutritious food for such an increased number of world inhabitants signifies that the
subsequent food demand will directly amplify the existing environmental pressure
exerted by food production on the planet. Especially, it is projected that by 2050 the
global food production, in quantity terms, would have to increase by 60% in order to
meet the expected food demand (Alexandratos & Bruinsma, 2012; Tilman, Balzer,
Hill, & Befort, 2011).
4 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

Besides representing one of the most significant environmental challenges of

current ages, food also poses itself as one of the major health challenges of the
twenty-first century. Throughout the past decades, as previously stated, societies
have shaped global food production and consumption patterns based on a quantita-
tive model. This attention to improving production practices and increasing their
related outputs, on one hand, has had positive impacts in reducing hunger, improv-
ing life expectancy, lowering child mortalities, and decreasing global poverty
(Steffen et al., 2015; Whitmee et al., 2015). On the other, driven by trends in rapid
urbanization and increasing incomes, these health enhancements have been offset by
global changes toward detrimental consumption behaviours and dietary preferences
(Willett et al., 2019). Food overconsumption, unbalanced high-calorie diets, and con-
sumption of high quantities of heavily processed and animal source foods can be
listed among the others. As a consequence, in recent years, steady increases in
overweight and obesity rates have been registered around the world. According to
the World Health Organization (2018), over 650 million adults resulted in being
obese (13% out of the world population) and more than 1.9 billion adults overweight
(39% out of the world population) in 2016, leading to almost triple the global obesity
rate since 1975.
Nevertheless, one relevant aspect to note is that despite the prominent increases in
food production and the complex evolution of supply chains, persistent starvation
and poor nutrition still represent significant threats that are diffused all over the
world. In particular, inadequate food production and availability remain the primary
cause of food insecurity in Sub-Saharan Africa, where 23% of people remain
undernourished (Conceição, Levine, Lipton, & Warren-Rodríguez, 2016; FAO,
2017). Conversely, in Southern Asia and South America, the prevalence of under-
nourishment increased, respectively, from 9.4% to 11.5% and from 5% to 5.6% in
the biennium 2015–2016 (FAO, 2017).

1.1.2 A Focus on the European Scenario

For what concerns the European Union (EU), specifically, since countless actors take
part in the production, refining, transportation, marketing, and selling of food, the
food sector represents one of the main contributors to employment and gross
domestic product (GDP). However, it is estimated that approximately one-fourth
of the European population (around 119 million people) were exposed to poverty or
were socially marginalized in 2015, while about 42.5 million people were unable to
have access to a high-quality meal every other day (Eurostat, 2019). Furthermore,
much like at the global scale, the European food system also employs many natural
resources, such as freshwater, land, and energy, additionally contributing to their
depletion and GHG emissions production. For example, agriculture alone is respon-
sible for 70% of European freshwater consumption, whereas industrial activities
related to food systems require approximately 26% of Europe’s energy demand
(Willett et al., 2019). Additionally, it is appraised that around 87 million tons of food
1.1 Introducing Actual Food Systems: From “Farm to Fork” to “Industry to Fork” 5

are wasted in the EU every year, with associated costs estimated at 143 billion
Euros. More generally, current estimates report that around one-third of all produced
food perishes before reaching consumer markets or is thrown away in households
(Springmann et al., 2018). Subsequently, if compared to countries, wasting food
would be the third in the world in regards to GHG emissions (FAO, 2017;
Gustavsson, Cederberg, Sonesson, van Otterdijk, & Meybeck, 2011).
Innovation and research are the key drivers that can help to boost up sustainable,
diversified, inclusive and resilient processes coping with the complex social and
ecological effects of increased urbanisation, population growth, changing demo-
graphics, climate change and resource scarcity. Indeed, the European Commission’s
FOOD 2030 initiative, defined a clear strategy for the European food system based
on four priorities: (i) nutrition for sustainable and healthy diets; (ii) climate smart and
environmentally sustainable business models; (iii) circular and resource efficiency-
based food systems; (iv) innovation and empowerment of communities.

1.1.3 Global Food Systems in a Networked Society

Considering Europe is the world’s largest exporter and importer of agricultural and
food products (European Commission, 2018a), these environmental impacts are not
limited to its boundaries but affect other countries as well. Indeed, every global food
system can be seen as an assortment of sub-systems (e.g., farming, waste manage-
ment, marketing, and distribution) that directly and continuously interact with each
other and other global systems (e.g., energy, technology, and health systems). These
intertwined interactions and their interdependencies imply that direct changes in one
system or sub-system may potentially exacerbate or alleviate issues in others.
Additionally, and even more importantly, global food systems are influenced by
the broader social, political, economic, and environmental elements characterizing
the contexts in which they are embedded. As a consequence, structural changes in
food systems do not necessarily originate from within the specific system itself but
may also come from alterations in other systems. For example, a local policy that
bans the use of plastic could drive changes for alternative packaging options, or
consumers may drive production trends in producing specific food products that
match their expectations (e.g., low fat, organic, vegan). For these reasons, as well as
evolving in parallel to societal demands, food systems necessarily require human
capital, research, innovation, and education (Ericksen, 2008; Wilkins & Eames-
Sheavly, 2011). Indeed, an improved comprehension of the interplays between the
different actors and elements constituting the current food systems may accelerate
the required transition toward sustainability. In this sense, communication technol-
ogies, and especially the Internet, have paved the way in recent years, also facilitat-
ing connections between diverse global systems.
The increasing interconnected challenges that limit natural resource availability
and population growth, together with their resulting consequences on European and
global food systems, have catapulted sustainable production and security of food
6 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

as an urgent objective in a rapidly changing world (De Bernardi, Bertello, & Venuti,
2020). The emergence of globally networked societies has marked a transition from
the industrial society to the networked society, that has emerged as a network of
networks (Tataj, 2015). In conclusion, the complexity of food systems and their
mutual interdependence with other global systems thus requires a holistic and
coordinated approach that can tackle not only the challenges related to the prompt
availability of food for populations but also the increased demand on global
resources. Many of the current food security and sustainability challenges are
complex. As a result, their proposed solutions usually transcend disciplinary, cul-
tural, and institutional boundaries.

1.2 Sustainable Development in Food Systems:

Highlighting a Need for Transition

For investigating the state of global ecosystems and assessing the consequences of
their changes on human well-being, the Millennium Ecosystem Assessment (MEA)
project was founded from 2001 to 2005 (Millennium Ecosystem Assessment, 2005).
What resulted from the MEA analysis was that more than 60% of the investigated
ecosystems were in a state of degradation or not being used sustainably (FAO,
2009). The predictions for future environmental ecosystems and the prospects of the
Earth’s natural resources bring up the issue if the projected food demand can be
satisfied while achieving sustainability and if so, how?
The belief that we are currently living in an environmentally turbulent world
and need nothing less than a transformation towards a sustainable future is interna-
tionally widespread across many industries and disciplines. As a consequence, in
September 2015, this belief culminated in the adoption of the United Nations
(UN) 2030 Agenda for Sustainable Development and its 17 related targets (United
Nations, 2015). These targets, the Sustainable Development Goals (SDGs), can be
described as a call to action for each of the 196 signatory countries, from developing
countries to high-income ones, “to promote prosperity while protecting the planet”.1
They address the grand challenges human populations currently face, including
poverty, climate change, inequality, and justice. Moreover, they recognize that
strategies for improving human life must be interconnected with strategies able
to leverage economic development and fulfil a multitude of social needs such as
instruction, social welfare coverage, and employability. In essence, the SDGs
provide a blueprint to accomplish a better and more sustainable future for everyone,
which can be considered both a tremendous opportunity and monumental obligation
for humanity (Rockström & Sukhdev, 2016). For a full list of the SDGs, please
visit—[Link]
Specifically, within the agreement of the SDGs and their objectives, lies the
humanitarian consensus to eradicate hunger, improve food security and nutrition,

1
[Link]
1.2 Sustainable Development in Food Systems: Highlighting a Need for Transition 7

and promote sustainable agriculture and food production by 2030 (Goal 2). Notably,
the 2030 Agenda acknowledges that the way food production and consumption are
effectively managed and sustainable agriculture supported directly impact on pro-
gress toward achieving several of the other SDGs. Examples can be the eradication
of poverty (Goal 1), the response to climate change (Goal 13), and the sustainable
use of ecosystems, both marine and terrestrial (Goals 14 and 15). Rockström and
Sukhdev, CEO of the EAT Advisory Board and CEO of the Green Indian States
Trust Advisory, respectively, have further confirmed this conclusion during their
keynote speech at the Stockholm EAT Food Forum in 2016. Indeed, they discussed
an innovative way of viewing the economic, social, and ecological aspects of the
SDGs, highlighting that all those targets are directly or indirectly connected to
sustainable food production and consumption (Fig. 1.1).
Progress toward SDG 2 is strictly connected with addressing diverse factors that
drive other SDGs and vice-versa. Subsequently, for effectively achieving sustainable
food production and consumption, all the possible interactions between them, both
in a synergic or balancing way, should be considered. For this reason, the UN 2030
Agenda for Sustainable Development encourages countries to explicitly pursue
political unity toward sustainability and establish enabling environments for sus-
tainable development at all levels and by all actors (SDG 17). However, despite
the proposal of these international and collaborative frameworks for sustainable

Fig. 1.1 How food systems are connected with all the SDGs. Source: Azote for Stockholm
Resilience Center, Stockholm University (2016)
8 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

developments, clear strategies for achieving sustainable food production and con-
sumption remain scant, and national action plans and political involvement in this
topic vary (Wezel et al., 2018).
With this in mind, the international community has also recognized and begun to
address the grand challenges associated with accomplishing the SDGs’ objectives. A
significant challenge in adopting sustainable practices is that attempts to increase
sustainability in one industry, such as the food industry, may often lead to the
degradation of other systems. Further evidence suggests that existing endeavours
to achieve sustainability in food production and consumption will not be enough to
meet SDG 2 and eradicate hunger by 2030 (FAO, 2017). This is troublesome since
food security has been a pressing global issue for a long time, and as outlined in the
SDGs, transformation toward a sustainable global food industry necessitates harmo-
nious progress on economic, social, and environmental avenues. The well-
documented and long-standing effects of the current food industry on natural
resource depletion, exhaustion of freshwater reserves, forest and biodiversity loss,
and erosion serve as precise indicators of this challenge. Given the many scenarios
regarding the mutuality between food and sustainability, it is safe to say that the
ability to provide food for health and poverty alleviation are crucial characteristics in
a successful transition to achieving the SDGs; a transition that must occur at a rapid
pace. Specifically, research also encourages a continued movement toward sustain-
ability that is inclusive of innovation, and challenges stakeholders to engage in a
paradigm shift of truly seeing planet Earth as non-negotiable, while simultaneously
not viewing this fact as a limitation for prosperity, transformation, and success.
Solving the challenges with sustainability and food systems requires all stake-
holders, including both private and public institutions, to act in a synergistic way
within food systems at all levels, from global to local ones, and across multiple
avenues including agriculture, commerce, policy, public health, education, and
infrastructure to name a few. What authors and field experts recommend is a
synergetic merging of knowledge, or knowledge sharing, rather than a destructive
clashing of progressive ideas from various industries and disciplines. Therefore, the
present food scenario is in desperate need of investments, both of monetary and
intellectual value to curve the food industry’s impact on the environment and create a
more sustainable dyad to decelerate the present rates of natural resource decline.

1.3 Holistic Thinking and Sustainable Food Systems

Research points out that the imminent increase in food demand will be the combined
result of the increasing world population, especially in urban areas, and their related
incomes, as well as of the gradual food saturation in developing countries (FAO,
2009). For decades, the world has been slowly heading toward unhealthy and
unsustainable patterns of food production and consumption. These patterns not
only pose numerous challenges to sustainability efforts, but they also serve as
reminders that current resource-intensive food production practices do not represent
1.3 Holistic Thinking and Sustainable Food Systems 9

adequate vehicles for achieving sustainable agriculture and food production. The
industrial era was brought about by the availability of natural resources, new
methods to quantitatively improve food production, and access to networks of
power and decision making. However, the newly emerging and interconnected
global society is conditioned by the availability of knowledge, resources, and
connectivity to multiple other global resources, production, and service systems
(Tataj, 2015). As extensively evidenced in the literature, food systems face complex
and systematic challenges that cannot be tackled by single subjects, and thus require
stakeholders at every level, from local actors to large corporations and institutions, to
collectively contribute to tackling these challenges (FAO, 2018).
In this regard, the idea of systematically thinking about food systems must be
appraised in the context of co-occurring environmental elements, rapid population
growth and urbanization processes, income increases, evolving consumer behav-
iours, natural resources depletion, and the interdependencies afforded by globaliza-
tion (Nguyen, 2018). An improved comprehension of the diversity of food systems
and the interconnected actions of their actors are crucial to minimizing their negative
contributions, especially those related to the environment, and maximizing their
beneficial impacts. For these reasons, food systems thinking seems particularly
proper. Food systems thinking does not segregate single actors (e.g., farmers, pro-
ducers, distributors, retailers) (Rezaei, Papakonstantinou, Tavasszy, Pesch, & Kana,
2019), sub-systems (e.g., food marketing, production), or disciplines, but instead
enhances the illustration and understanding of sustainability challenges in the food
sector as an intricate and interacting web of member activities and feedback (FAO,
2018).
The notion of food systems as interconnected organisms is fostered by increased
global connectivity and has led to the concept of sustainable food systems, namely
systems providing individuals reliable access to sufficient and nourishing amounts of
food while not compromising the necessary resources for achieving the same result
in the future (FAO, 2018). The concept of building sustainable food systems is at the
core of the UN 2030 Agenda, which demands disruptive shifts in both agriculture
and food systems for ending hunger and achieving both food security and nutrition
through the SDGs. In order to reach the SDGs, global food systems will need to be
revised to become not only more sustainable, but also more efficient, embracing
towards all its members, resilient, and capable of delivering health-giving food to
everyone. Following this idea, during the SDG-Conference “Towards Zero Hunger:
Partnerships for Impact” held at the Wageningen University and Research Centre on
August 2018, the food systems approach emerged as a major buzzword and a viable
solution to address sustainability challenges. Van Berkum, Dengerink, and Ruben
(2018) expressly defined the food systems approach as analysing “the relationship
between different parts of the food system and the outcomes of activities within the
system in socio-economic and environmental/climate terms”. Therefore, speakers,
panellists, and other field experts not only agreed that food systems need a transition,
but they also recognized the food systems approach as a crucial takeaway concept for
achieving a successful sustainability development.
A food systems approach takes into consideration the element of interconnected-
ness amongst system members, assesses the food system in its entirety, and considers
10 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

all the food system components, their relationships, and resulting consequences.
Therefore, it helps to overcome the existing constraints of many conventional pro-
duction and consumption approaches to achieve food security, which are usually
segmented with narrow objectives that are either handled by single institutions or
apply systemic thinking to specific sub-systems’ challenges. Promoting systems
thinking amongst all members results in increased multi-actor collaborations and
policy actions that promote a harmonious interaction of resource input and value
output to address future sustainability challenges.

1.3.1 A Sustainable Food System Approach: The Food

System Wheel

Merging the agendas of the varied selection of food system stakeholders will, of
course, provide both challenges (e.g., conflicting priorities of food sub-systems,
adherence to SDGs) and opportunities (e.g., knowledge sharing, increased commu-
nication and collaboration amongst members) to accomplish multiple objectives. A
well-adopted framework proposed by the FAO (2018) to illustrate systems thinking
in food is the “food system wheel” (Fig. 1.2), which provides a sort of guideline for
assessing the performance of a system in achieving the FAO’s primary goals of
reducing poverty and achieving food security and nutrition. These goals are reported
at the centre of the wheel.
Furthermore, this framework posits that achieving overall system goals depends
on the conduct of stakeholders within the whole food chain. Particularly, it includes
layers of both production and consumption behaviours and of services that condone
them. These behaviours are themselves embedded and affected by the more signif-
icant social context, which includes existing policies, laws, and regulations, as well
as social norms and existing infrastructures, all of which depend on natural
resources. In this sense, the food system wheel posits the idea that the development
of food systems must address sustainability threefold. First, economically, by pro-
viding benefits for each of the involved stakeholders and guaranteeing profits of
fiscal viability throughout. Second, socially, by assuring widespread and equally
distributed benefits to people, especially considering vulnerable groups, and advanc-
ing essential socio-cultural factors (e.g., food nutrition and security, health, and wel-
fare). Third, environmentally, not harming the planet, by ensuring that the involved
stakeholders’ activities impact on natural resources positively or at worst neutrally.
In fact, the three dimensions of sustainability in food systems highlight that any
proposed innovation to address sustainability challenges must be holistically
appraised to ensure there is minimal to no risk for unwanted consequences on
other sustainability dimensions. This holistic vision of food systems allows for the
exploitation of emerging synergies to reveal eventually hidden trade-offs, ensuring
that both the targeted result of specific policies or activities and their overall net
impact remain positive for the entire food system.
1.3 Holistic Thinking and Sustainable Food Systems 11

Fig. 1.2 The food system wheel. Source: FAO (2018)

1.3.2 The Food System Development Paradigm

With a specific focus on the economic dimension of sustainability, the FAO has
further developed its “food system development paradigm” (Fig. 1.3). As men-
tioned above, economic sustainability is respected if the benefits for each of the
involved stakeholders are guaranteed. So, the FAO (2018) has identified five main
components that have to be encompassed: (i) returns to asset owners, mainly
referring to profits for entrepreneurs; (ii) salaries to employees; (iii) benefits to
consumers, with particular attention on food supplies, respecting both food security
and nutrition; (iv) fiscal incomes to governments and public institutions; (v) a
positive, or at least neutral, impact on the socio-cultural and natural environment.
Moreover, according to the FAO, the value added by respecting the economic
dimension of the sustainability paradigm is what catalyses the four feedback loops
12 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

Fig. 1.3 The food system development paradigm. Source: FAO (2018)

shown in Fig. 1.3, which are referred to as: (i) the economic resources reinvested by
companies in the food system, in the shape of savings and profits (investment loop);
(ii) the increased level of wealth generated by salaries that workers spend (multiplier
loop); (iii) the positive impact on the socio-cultural and natural environment, driven
by public investments (progress loop); (iv) the broader impact of food systems on
other economic, social, and environmental systems (externalities loop). That said, it
is clear that the four feedback loops are broadly related to each of the three
dimensions of sustainability (economic, social, and environmental) and could
boost the sustainable shift of food systems if effectively used. Indeed, these feedback
loops could foster and guide a transformational change of food systems by helping to
change behaviours and countries to address the SDGs.

1.4 Addressing the Sustainability Paradigm

in the European Union

In the European Union, policies and legislation that aim at protecting plants, animals,
and human health, as well as their host environment, have long been employed. For
example, in full compliance with the UN 2030 Agenda and the Paris Climate
Agreement, signed during the COP 21 in 2016, the European Union plays a
significant role in helping the world to transition toward resource-efficient econo-
mies. Furthermore, some of the policies that have been developed to foster transi-
tions toward a sustainable future will be briefly presented in the following
sub-paragraphs.
1.4 Addressing the Sustainability Paradigm in the European Union 13

1.4.1 Safeguarding the Agricultural Sector and Food

Consumers

One of the first policies ever instituted was the Common Agriculture Policy (CAP)
in 1962, which poses itself as a partnership between the EU and both its farmers
and citizens. This policy, renewed in 2018 through the presentation of a legislative
proposal regarding the CAP beyond 2020, aims at supporting farmers, assuring
them better conditions to conduct a reasonable living, improving agricultural
productivity, and ensuring stable supplies of affordable food (European Commis-
sion, 2018b). Moreover, it helps to promote employability in the agricultural
and other related sectors, address climate change, avoid the depletion of natural
resources, and preserve territories and landscapes across Europe. Recanati,
Maughan, Pedrotti, Dembska, and Antonelli (2018) provided a visual abstract
(Fig. 1.4) of the current food system under the CAP and the way it simultaneously
drives a transition toward more sustainable food production and consumption
models and supports European farmers for the competitivity of food systems.
Conversely, for what concerns protecting consumers’ interest more specifi-
cally, the Regulation on Food Information to Consumers (European Commission,
2019a) was launched in 2011. The Regulation takes into special consideration
health and ethical behaviours, asking food manufacturers and retailers to provide
food information and labels readily to consumers, thus empowering them to make
informed decisions regarding the safety and effects of food. Current practices to
label food dates (e.g., use by, best before, or sell before) in the food system also
contribute a significant impact on food waste (Wilson, Rickard, Saputo, & Ho,
2017). In 2018, for example, the European Commission published a study
that explored date marking practices, reporting how 10% of the total amount of
food waste that is annually produced in the EU is linked to them (European
Commission, 2018c).

Fig. 1.4 The CAP food system vision. Source: Recanati et al. (2018)
14 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

1.4.2 Managing Waste: The Waste Framework Directive

and Other Network Policies

The European Commission is an active player also in tackling the issue of food
waste, recognizing that it has significant implications for reducing food systems’
resource over-exploitation. For example, European Waste Framework Directive
(WFD) was initially introduced in 1975 and successively amended in 1991, 2006,
and 2018 in which three new targets related to the municipal waste management
were introduced. Particularly, these targets are to prepare to recycle or re-use at
least 55% of waste by weight by 2025, leveraging this rate to 60% by 2030, and
65% by 2035, where preparing refers to all the activities that are necessary to make
products ready for being recycled or re-used (e.g., being sorted, checked, cleaned
or repaired). Indeed, the main function of the WFD is to turn Europeans into
a recycling society, establishing the main concepts and rules regarding waste
management and requiring member states to decrease their outputs of food
waste at every stage of the food supply chain. In this sense, the WFD illustrates
how to distinguish between real waste and products that can be recovered, living a
second life or becoming raw materials, or that can be recycled. The directive also
individuates what substances are considered harmful and must be removed from
products, as well as how to manage waste without harming human health or the
planet.
Tackling the ever-present issues of food waste however requires the coordinated
actions between key players in the food chain (e.g., farmers, manufacturers, retailers,
policymakers, and consumers themselves) to better identify, understand, and find
possible solutions. Therefore, some policies oriented to build multi-actor networks
have also been instituted. For example, in 2016 the EU “Platform on Food Losses
and Food Waste” (FLW) was founded to accelerate the progress toward achieving
the SDG 12.3, namely reducing food losses along the food production and supply
chains (European Commission, 2019b). To do so, the FLW launched an open
call to actively engage institutions and field experts from both public and private
sectors to define how food losses and waste can be avoided, share their best
practices, and assess the advancements made in that regard (European Commission,
2019b). Furthermore, for addressing SDG 12.3, a digital network for improving
collaborations and information exchanges amongst field experts from 12 European
countries and China was established in 2017. The objective of this network, called
“Resource Efficient Food and dRink for the Entire Supply cHain” (REFRESH), is to
pose a scientific base to understand the food waste problem better. In this sense,
REFRESH was born as an international research project finalised at: (i) supporting
policymakers to develop informed legislations and frameworks regarding food
waste; (ii) improving the decision-making process of relevant food systems’ stake-
holders; and (iii) developing new processes and technology-based solutions for
reducing food waste and enhancing its valorisation (European Commission
REFRESH, 2019).
1.5 From Food Systems to Food Ecosystems 15

1.4.3 Transitioning Toward a Circular Economy: The

Circular Economy Action Plan

The European Commission has long acknowledged the need to work on sustainable
transitions relating to food and particularly toward circular economy models as
evidenced by the Circular Economy Action Plan (CEAP) adopted in 2015
(European Commission, 2019d). Indeed, the European Commission further argues
that the traditional linear model of economic growth (i.e., take-make-dispose), and
especially its usage of natural resources, is no longer sustainable for the environ-
ment. Furthermore, the European Commission acknowledges the need for progress
in scaling up circular economies and highlights five key requirements to achieve this
objective: (i) continued support and investments for research to develop and dem-
onstrate innovative solutions; (ii) address the challenges related to the circular use
of natural resources; (iii) support new circular business models and consumption
production patterns; (iv) enhance circular and sustainable water use; and (v) develop
appropriate indicators and governance systems to measure the progress and accel-
erate the transition to circular economy. The concept of the circular economy pro-
vides an opportunity to balance environmental, social, and economic goals while
simultaneously guiding human activities to a path toward sustainability. Beyond the
creation of new knowledge, innovation, company-wide solutions, and industrial
transformations, implementing a circular economy agenda will also require signif-
icant changes in the way people behave toward, and perceive food.
Notably, the CEAP calls for revisions to waste legislation, and proposes
pioneering recycling targets, i.e., the first European strategy for plastics in the
circular economy and its proposed actions on single-use plastics, and a revision on
fertilizers regulation that focuses on waste-based products (European Commission,
2019d). Moreover, it also sets out 54 actions to close the loop of product and material
life cycles through improved eco-friendly designs, increased recycling, and greater
re-use of materials; currently, all 54 actions have been or are being implemented.
This Action Plan has been considered a model for smart policymaking at the
international level in the efforts to transition to a circular economy. Indeed, the
European Commission won the World Economic Forum’s Circular Economy prize
for it.

1.5 From Food Systems to Food Ecosystems

Re-defining the food system and its practices is necessary in order to tackle current
and future barriers for achieving sustainability. For example, traditional vertically
operating food industries offer standardized food access and employment opportu-
nities but do not usually include an ongoing concern for smaller stakeholders or the
environmental effects of the recent lengthening of food supply chains. This can be
the case of small farmers who might not have adequate resources for marketing their
16 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

locally grown products and as a result lose consumers in favour of bigger industries.
One way to address this apprehension toward sustainability is by making the
food industry itself more efficient, resilient, and inclusive of stakeholders at every
level. However, due to the known complexities that persist in coordinating multiple
members of the food supply chain, many of the efforts for improved sustainability
have been undertaken by single actors and have thus yielded impacts that are less
than remarkable. In light of this realization, to achieve increased sustainability in
food production and consumption behaviours, a handful of industry stakeholders
have begun coordinated inter-disciplinary and inter-country collaborations, designed
to consolidate individual efforts into a consortium of actors for increased effective-
ness in sustainable endeavours.
Food systems are often uncertain, and this uncertainty is determined by com-
pound multilevel environmental, societal, and technological trends. The accompa-
nying uncertainty and complexity in tackling grand global challenges, especially in
their relation to food systems, requires more than innovative technology-driven
paradigms; technology is fundamental of course, but not enough to solve the
cross-societal and pressing global issues. Sustainability and its complex interactions
with different systems and resources is a longitudinal and multidisciplinary endeav-
our that requires the involvement of a wide range of stakeholders. This transition
toward an approach where actors, knowledge, techniques, institutions, and the
entirety of members interact within systems has been regarded as the creation of
an ecosystem. Ecosystems have been adopted as the concept that describes the
“evolutionary features of the interactions between individuals, their relationships
with innovative activities, and their relations with the environment in which
they operate” (Mercan & Goktas, 2011, p. 103). Whereas systems are composed
of components interacting with each other according to pre-defined rules, ecosys-
tems can be described as the associations that are formed between, and within,
communities of living beings and their environment. The components within an
ecosystem develop a specific network for the exchange of resources (i.e., tangible
and intangible) and the maintenance and development of their own activities.
Given these conceptualizations of ecosystems, food ecosystems can be described
as composed of industries, farmers, retailers, academia, research institutions,
startups, Small and Medium sized Enterprises (SMEs), and consumers, to name a
few. The ecosystem approach to food systems has been harnessed as an integral
component to tackling the elaborate challenges for food systems, primarily since it
facilitates the consideration of the dynamic interactions that occur within different
sections of the food production system and value chains at various levels. This view
of food ecosystems, therefore, implies that a natural, and continuous, exchange of
knowledge between different members of the ecosystem is essential. For example,
“Forward Fooding” is a global network of entrepreneurs that involves both large and
small actors, from institutions and established food companies to farmers and other
individual food system members. In this way, it seeks to provide appropriate and
timely support systems for enabling collaborations and partnerships between sub-
jects who seek to create innovative solutions and products through startups (Forward
Fooding, 2019). A similar initiative is “Future Food”, which is an exclusive network
and inspirational platform designed to drive positive transitions in the global food
1.5 From Food Systems to Food Ecosystems 17

system. At the core of their operations lie the principles of excellence for food
intelligence, and a training platform for change makers, climate shapers, and future
leaders in food innovation (Future Food Network, 2019). Finally, in view of the
2015 Expo “Feeding the Planet, Energy for Life”, the Municipality of Milan
launched its “Urban Food Policy Pact”, a voluntary action pact which has been
signed by mayors of more than 199 cities from all over the world, comprising over
450 million inhabitants. The purpose of the Urban Food Policy Pact is to use their
inter and trans-disciplinary network of inhabitants and professionals to provide
strategies to member cities to help them achieve more sustainable food systems
(Milan Urban Food Policy Pact, 2015).

1.5.1 Innovation as a Driver in Food Ecosystems

The natural structure of food ecosystems generates relationships amongst its mem-
bers that, in turn, influence their behaviour and capabilities. Members of food
ecosystems are interdependent and can themselves impact one another’s incentives
and capacities to drive change. The recent guidelines that offer insight toward
creating and measuring food systems’ performance in terms of sustainability, for
example, are a result of these intertwined connections between members of the food
ecosystem. Governments, companies, farms, consumers, and every other stake-
holder have the power to influence the overall performances of the system, initiating
or inspiring change and shaping the conduct of every other member. Therefore, an
evolutionary process always defines the ecosystem structure (FAO, 2018).
According to Durst and Ståhle (2013), like open innovation (discussed in
Chap. 5), food ecosystems depend on the knowledge shared among interdisciplinary
system members, which results in facilitated collaboration and co-creation. This
view is in line with the ideas expressed by Laursen and Salter (2014), who argue that
companies need to learn from a large number of subjects, co-creating and sharing
knowledge with them if they want to innovate effectively. Both ideas proposed by
the scholars mentioned above confirm that innovation appears as an ever-present,
self-perpetuating system of information exchange and knowledge sharing. Thus,
in the era of rapid dissemination of information and communication, innova-
tion becomes a collective distributed open learning process and an essential compo-
nent of the capacity to transform in a continually changing world (Tataj, 2015).
Furthermore, Tataj (2015) defines innovation as a social process of knowledge
production and dissemination, during which human creativity leads to a translation
of knowledge into shared and enriched capacities, she then goes on to state that
innovation can be either low-cost and non-technological yet entrepreneurial and
meaningful. Innovation in the food ecosystem may range from food technologies,
food biochemistry, to agricultural processes, and production strategies. Furthermore,
innovation has been evidenced as an essential element to facilitate the food ecosys-
tems’ transition to achieve sustainability. According to Jonker (2018), CEO of EIT
Digital, “The future of innovation is ecosystems, bringing together stakeholders
working towards the same goals, and having both economic and societal impact”.
18 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

1.5.2 Sustainable Innovation in Food Ecosystems

As stated by Hirsch‐Kreinsen (2008), in slow-growing industries innovation mainly

comes from the industry’s existing knowledge base, usually implying small
improvements to existing products and services or companies’ processes, namely
defined as incremental innovations. Conversely, the characteristics of the interplays
between individual actors and their relations with both innovation activities and the
environment in which they take part are capably described by the ecosystem concept
(Mercan & Goktas, 2011). Therefore, innovations toward sustainability in the food
industry, which has up until recently been considered a slow-growing sector, tend to
depend on individual member contribution, the interactions between them, and their
existing collective knowledge that is distributed through exchanges in formal and
informal networks. Actually, what can be called a food ecosystem.
The recently attributed importance to sustainability and the food industry’s
outstanding role in the future of natural resources, has fostered the transitions from
a focus of simply improving food availability through more complex supply chains
and higher production, to a focus on creating ecosystems designed to promote
knowledge sharing in order to develop solutions for food sustainability through
entrepreneurship and innovation. There has never been a better moment to redefine
how we produce, distribute, and consume our food. If the necessary steps toward
sustainability in food ecosystems are taken, agriculture, forestry, and fisheries would
be able to provide nutritious food for all populations, while preserving the environ-
ment. A remarkable transformation in the current food ecosystem is needed in order
to sustain the 815 million people who suffer from hunger today, and the additional
two billion people expected to be undernourished by 2050 (FAO, 2017).
The theories that guide the onset of innovation are perfectly suited in the context
of knowledge sharing within food ecosystems. Holding the idea that the subjects
taking part in ecosystems do not seek innovation for themselves but aim to co-create
it in collaboration with other members of their ecosystem, innovation processes
necessarily require interactions between them and can be defined as systemic in
nature (Bayona-Saez, Cruz-Cázares, García-Marco, & Sánchez García, 2017). This
definition is also in line with the idea of innovation systems, introduced by Freeman
in 1987 through analysis of networks established between institutions of both the
public and private sectors (Freeman, 1987). Therefore, the invaluable combination
of the food ecosystem concept and collaborative innovation approaches has the
potential to help design innovation-oriented policies and support a sustainable
transition of multi-actor and interdisciplinary innovation communities (Pigford,
Hickey, & Klerkx, 2018).
However, one major challenge with innovations toward greater sustainability in
food ecosystems is that only a small portion of the innovative products and services
reaching the market are able to provide the necessary disruptive changes. Winger
and Gavin (2006) for example, report that 75% of all new products in the food
industry are considered failures, and when they compared the food industry to
others, they found lower levels of engagement in research and development. In
1.6 Entrepreneurship and Innovation as Key Elements for Sustainability 19

this direction, according to Bayona-Saez et al. (2017), the food industry is progres-
sively implementing open innovation changes, but new frameworks are needed to
guide the newly emerging relationships between actors at diverse levels of the
industry and increase their innovative output.

1.6 Entrepreneurship and Innovation as Key Elements

for Sustainability

The key issue for sustainable economic development regards not only what is
produced in food systems, but also how. The “how” regarding food production,
however, is a complex web of never-ending interactions that still have to be clearly
studied and defined. Therefore, to effectively tackle the challenges in our current
turbulent food ecosystems we must adopt the notion of a knowledge-driven econ-
omy, where innovation and entrepreneurship, and their advanced networks and
nature of knowledge sharing, are critical drivers for growth (Tataj, 2015). Entrepre-
neurship has been widely regarded as one of the most significant contributors to
innovation and economic development. The concepts of innovation and entrepre-
neurship are usually considered as overlapping. Entrepreneurs are risk-takers and
adventurers by nature since they like exploring unconventional practices and
unknown areas (Knudson, Wysocki, Champagne, & Peterson, 2004), to the extent
that they have often been defined as individuals that carry out activities all related to
innovation (Wee, Lim, & Lee, 1994). Specifically, entrepreneurs of the food eco-
system are no exception. Over the past decades, the changes in economic and
environmental scenarios have placed unsustainable pressures on global food sup-
plies and security. Thus, novel practices regarding food are ever emerging due to the
current uncertainty within the food ecosystem, which has fostered several important
innovations regarding its processes and procedures (e.g., sustainable packaging and
substitutes for unsustainable food products, discussed further in Chap. 7).
According to Liang (2018), there are three pillars for establishing a successful
venture: (i) having the appropriate mindset and attributes; (ii) possessing entrepre-
neurial knowledge and skill; (iii) and taking the right opportunities. Food ecosystems
involve resources, decisions, actions, and outcomes that include every phase of the
supply chain, which face significant challenges that give appealing opportunities
to entrepreneurs that want to actively develop innovative solutions to existing
problems. In current competitive and dynamic food ecosystems, limitless chances
for providing entrepreneurial skill and opportunities exist, therefore individuals and
organizations must adopt an entrepreneurial strategy for acquiring competitive
advantages through continually seeking innovation. In particular, scholars (Short,
Ketchen Jr, Shook, & Ireland, 2010) suggest four factors that could drive changes in
future food ecosystems: (i) consumer demand, (ii) changes in resources, (iii) infor-
mation exchanges, and (iv) external market changes. The first, consumer demand,
creates opportunities for entrepreneurs to cater to newly emerging market needs. For
20 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

example, increasing consumer awareness of healthy and sustainable food or locally

sourced produce might drive changes in market expectations, and entrepreneurs
could benefit from addressing these emerging demands. Secondly, changes in
resources, such as limited natural resources or development of new flavour or
packaging products, offer entrepreneurs opportunities to remodel their value chains.
The third driver, information exchanges, may provide more opportunities for those
entrepreneurs that possess the right skill and resources to address them. Fourth,
external market changes are positioned to present the most comprehensive opportu-
nities, such as companies seeking alternatives to single-use plastics after the
European policies that have banned them (Watts, 2019).
However, entrepreneurs seeking to disrupt current food ecosystems should con-
sider developing concepts based on feedback from the entire food value chain.
Importantly, the idea of entrepreneurship should not be limited to only financial
returns; whatever the value, social and economic entrepreneurship is inherently
linked to innovation, where social entrepreneurship can be defined as a specific
kind of entrepreneurial activity designed to bring impact rather than generate profit
that fosters a new model for growth (Tataj, 2015). First, because innovation needs
entrepreneurs to take it to the market and society, and secondly because entrepre-
neurship requires innovation since entrepreneurs reallocate resources in a more
competitive manner (Tataj, 2015). As innovations happen in different dimensions,
entrepreneurship does not necessarily have to adopt a for-profit agenda, thus intro-
ducing the concept of social entrepreneurship (Tataj, 2015). Through social entre-
preneurship, companies are assisted in redesigning their value chains and business
model innovations, in integrating social metrics with financial criteria, and in
adopting social capital as a new asset class. Nowadays, many entrepreneurs recog-
nize that current food production and consumption patterns are a severe problem in
the modern world. For this reason, they have started being increasingly engaged in
knowledge exchanges and interdisciplinary efforts to address the SDGs. Entrepre-
neurship has long been a critical driver in the design and development of innovative
food strategies at local, national, and regional levels. As a consequence,
policymakers have acknowledged that an immense amount of entrepreneurial and
innovative potential is hidden in the food industry. Following this idea, in 2008 the
EU founded the European Institute of Innovation and Technology (EIT), which later
established a specific Knowledge and Innovation Community (KIC) aimed at
empowering all the relevant stakeholders to cultivate innovative solutions for
improving current food ecosystems (Kuckertz, Hinderer, & Röhm, 2019). Name
of this pan-European consortium is EIT Food, deeply examined in Chap. 9.

1.7 Conclusion

The European food industry is still in need of a systems approach to foster trans-
formations toward sustainable practices. Specifically, a better understanding of the
critical interactions between the abundant networks of members is crucial for an
1.7 Conclusion 21

effective change (Gill et al., 2018). The adoption and integration of open innovation,
knowledge sharing, and collaboration amongst multiple partners from the industry
place the future of sustainability within the food industry not on a single actor or
institution, but concedes responsibility to the collective ecosystems and its networks
(Bayona-Saez et al., 2017; Kühne, Vanhonacker, Gellynck, & Verbeke, 2010).
For what regards research streams, the European Commission recommends
prioritizing and integrating research and innovation on four key areas that are
considered necessary elements for EU food ecosystems to become sustainable,
resilient, responsible, competitive, diverse, and inclusive (European Commission,
2019c). These key areas are (i) nutrition, (ii) climate, (iii) circularity, and (iv) inno-
vation. However, even though sustainability research has skyrocketed in recent years
(Fischer et al., 2015), research alone is not enough. Successful transitions also
require the translation of research into practice and should not be thought of as an
optional undertaking, but as a collective responsibility that is shaped by the behav-
iour of every member of the food ecosystem (Tataj, 2015). Therefore, action from
stakeholders is needed now more than ever to effectively change consumer behav-
iour patterns and deliver social impact (Willett et al., 2019); this is also believed to
depend on a certain degree of openness from the members of the ecosystem
themselves (Bayona-Saez et al., 2017).
Current food ecosystems require innovation that protects and improves the
available natural resource supplies while simultaneously improving investments,
productivity, skills, and infrastructures (Parfitt, Barthel, & Macnaughton, 2010).
Technological enhancements, along with substantial reductions in economy-wide
and food ecosystem natural resource use, would also help reduce future negative
impacts that affect all of the Earth’s ecosystems and diurnal aspects of human life. A
recent report by the FAO concludes that massive efforts are necessary for
transforming global food ecosystems to achieve environmental sustainability and
food security by 2050 (FAO, 2017). It is now that radical transitions are needed
towards a safe operating space that promotes resilience and sustainability in food
ecosystems. Fundamentally, food ecosystem sustainability requires a shift towards a
new paradigm that reconnects food production and consumption strategies to the
biosphere as a pathway for healthy and sustainable diets for the future (Springmann
et al., 2018). From the literature, two overarching conditions emerge as essential for
achieving these objectives. The first is to invest more in research and development
for guaranteeing advancements in productivity rates, infrastructures, policy-making,
and resource management and preservation. The second is to adopt policies that
ensure access to nutritious food, with particular attention on the most vulnerable
populations and social groups. Due to recent shifts toward food ecosystems and the
necessity of innovative frameworks (Traitler, Watzke, & Saguy, 2011), the food
industry seems a great avenue to explore.
The purpose of this book is to provide a critical review of the trends and
challenges that limit food ecosystems’ sustainability, and the technological and
innovative solutions proposed by entrepreneurs and other stakeholders. We discuss
the role that innovation and entrepreneurial ecosystems play within food ecosystems
for sustainability. Specifically, we dive into the topic of entrepreneurship and
22 1 The Food System Grand Challenge: A Climate Smart and Sustainable Food. . .

innovation in food ecosystems, and their role in ameliorating sustainability issues

and tackling sustainability challenges in food production and consumption at the
local community, state, and national levels. Further, we discuss the potential impact
of specific innovations that drive major transformations toward sustainability in food
ecosystems. Finally, we discuss the best strategies and practices to foster the
development of innovation in food ecosystems through entrepreneurial thinking
from a diverse range of fields and backgrounds and present a case study of one of
Europe’s most innovative and cutting edge food ecosystems, the EIT Food.

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Chapter 2
The Role of Universities in Harnessing
Entrepreneurial Opportunities

Abstract Universities have been documented as key influencers in the performance

of agri-food innovation and entrepreneurial activities, and have been evidenced as
significant contributors to building the competencies of food system members. Their
role in promoting sustainable transitions in food systems through knowledge creation
and human capital development cannot be ignored. The current food systems
provide an array of entrepreneurial opportunities for its institutions and invidual
members who seek to create value while simultaneously ameliorating the present
challenges that threaten natural resources. However, it has been noted that individual
entrepreneurial skills are not enough to fully assess the presence of opportunities in
the complex food system. Universities are therefore seen as key elements to provide
further practical education that includes social and interaction techniques, education
for business creation, and provide access to diverse networks and viable markets in
order to boost opportunity recognition capacities for aspiring entrepreneurs. In this
chapter we provide a review of the main drivers of the university’s role in promoting
research, innovation, and entrepreneurship through their entrepreneurial strategies
and programmes.

Keywords Entrepreneurial university · Knowledge spillover · Entrepreneurship ·

Entrepreneurial education · Entrepreneurial opportunity

2.1 Introduction: Entrepreneurs and Entrepreneurial

Opportunities in Food Systems

It is widely accepted that organizations and individuals seeking to create or capture

value through entrepreneurial initiatives and innovations in order to tackle sustain-
ability challenges cannot act in isolation. Our current global environment is rapidly
changing, and specifically, the increases in food production, consumption, and waste
due to a growing population, combined with rapidly evolving dietary behaviors pose
serious challenges to the global food system (Lindgren et al., 2018). One important
question that professionals from interdisciplinary backgrounds seek to answer is

© Springer Nature Switzerland AG 2020 27

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
28 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

how to meet the increasing food demand while simultaneously providing healthy
and high quality food for present and future generations, without compromising the
Earth’s natural resources and without trespassing the planetary boundaries (Godfray
et al., 2010; Steffen et al., 2015). The Food and Agriculture Organization (FAO)
(FAO, 2014, 2016) recommends that agriculture systems and food supply chains
transition from the dominant industrial system designed for abundant production,
sufficiency, and affordability (Prost et al., 2017), to a system concerned with
sustainable agri-food business models that conserve land, water, and other natural
resources, and that are not socially or environmentally oppressive but economically
viable and culturally acceptable (FAO, 1989).
To date however, little attention has been paid to the critical components of food
systems that ignite these sustainable transitions to begin with, i.e. entrepreneurs. An
evident example of this is the Global Entrepreneurship Monitor, an international
study that annually compares entrepreneurial activities for a number of economies,
which surprisingly does not provide any information regarding entrepreneurship in
the food industry (Global Entrepreneurship Monitor, 2019). Furthermore, GEM
categorizes entrepreneurs as either necessity (e.g., pushed into an endeavor) or
opportunity-driven (e.g., pulled into an endeavor). This fact is of particular interest
since global food systems, with their complexity and desperate need for transitions,
provide a quintessential environment for entrepreneurial opportunities based on both
need and desire.
The relationship between food systems and entrepreneurs has only recently
gained marked recognition by European policy makers, and the appreciation of
this dyad is one of the major elements that led to the creation of the Food Knowledge
and Innovation Community within the European Institute of Innovation and Tech-
nology, i.e. EIT Food, that aims to empower entrepreneurs and others to provide
novel solutions to the most relevant challenges with our food systems (EIT Food,
2019).
Furthermore, researchers and field experts highlight that the food system’s
industrial approach to the use of natural resources has lost its ability to produce
satisfactory results, thus giving rise to the knowledge economy as a possible solu-
tion to the planetary challenges affecting our lifestyles today (Carayannis &
Rakhmatullin, 2014; Di Nauta, Merola, Caputo, & Evangelista, 2018). Food systems
are experiencing a shift in productivity and growth practices, in which they are
becoming more dependent on human resources in terms of social capital (e.g.,
knowledge and relationships) than on the availability of physical resources, which
outlines the importance for effective interactions between universities, societies,
private industrial sectors, and governments.
The emergence of the knowledge economy as a main driver for sustainable
transitions has been accompanied by an interest in the role of universities as conduits
for economic development within regions, and as nodes for entrepreneurial devel-
opment (Guerrero, Granados, & González, 2014). In addition, in the knowledge
economy, universities are encouraged to actively seek close interactions with private
industry and government entities in order to achieve socio-economic development.
2.1 Introduction: Entrepreneurs and Entrepreneurial Opportunities in Food Systems 29

This involves interweaving universities, industries, and governments in a pattern of

linkages to advance economic and social development through innovation strategies
(Etzkowitz, Schuler, & Gulbrandsen, 2000). The knowledge economy by nature
signifies a rejection of the traditional organizational, cultural, and normative pro-
cesses that have segmented these entities at the cost of economic competitiveness
and technological progress (Etzkowitz & Leydesdorff, 2000).
Europe, along with most regions of the world (e.g., USA, China, and Brazil),
has experienced a gradual transition toward a knowledge-based economy, which
has not only served as an important driver for the emergence of entrepreneurial
activities, but has also introduced knowledge and innovative ideas as substitutes
for physical capital and as sources of competitive advantage (Thurik, Stam, &
Audretsch, 2013).
Universities are viewed as essential actors with a key role in regional develop-
ment, and as catalysts for entrepreneurship since they supply the regional entrepre-
neurial ecosystem with a skilled labor force by developing new knowledge and
technologies and by making resources readily available for organizations and indi-
viduals, and have been recognized for their role in cultivating human capital and
fostering an environment that is supportive of entrepreneurship (Abreu & Grinevich,
2013; De Bernardi, Bertello, & Forliano, 2019; Etzkowitz & Dzisah, 2008;
Grimaldi, Kenney, Siegel, & Wright, 2011; Lindqvist, Ketels, & Sölvell, 2013;
Miller, Alexander, Cunningham, & Albats, 2018).
Increasingly, more universities around the world have begun to implement
entrepreneurial activities and mechanisms to support entrepreneurship within
their institutions (Gür, Oylumlu, & Kunday, 2017). This has resulted in a transition
in university research from a model of isolated knowledge hubs to engaging in
partnerships with business entities and governmental organizations (Zhang, Mac-
Kenzie, Jones-Evans, & Huggins, 2016). However, a ‘uniform’ method to guide
how universities should engage in collaboration with businesses and governments
remains absent, and manifestations of these collaborations vary.
Universities are also considered key players in promoting and stimulating knowl-
edge sharing (Theodoraki, Messeghem, & Rice, 2018). For instance, the creation of
startups using knowledge cultivated by universities is considered an important
source of knowledge spillover for regional economic development (Belitski &
Heron, 2017).
Due to the aforementioned characteristics of universities, their strategic position-
ing within ecosystems and communities, and their role in knowledge spillovers and
trans-disciplinarity ignited by the knowledge economy, we believe that exploring the
leading role of universities as key players to drive and promote the identification and
eventual exploitation of entrepreneurial opportunities, where the entrepreneurship
process begins, is essential. We further posit that the successful identification and
exploitation of entrepreneurial opportunities for food system development that
involves business sectors, policy makers, and universities as nodes that connect
these stakeholders to community members is the starting point, and a driving force
for transformations toward sustainable food systems.
30 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

2.2 It All Begins with an Opportunity

Entrepreneurial opportunity is essential to the entrepreneurial process, and opportu-

nities present themselves in food systems in four different ways, as outlined by
economic theory (Alvarez & Busenitz, 2001). The first is through consumer
demands, which provide opportunities for entrepreneurs to envision and create
products and services that satisfy consumers; these demands can arise from
increased customer knowledge about healthy or sustainable products that drive
new market expectations. A second opportunity comes from changes in supply
chains such as new products or new processes, which allow entrepreneurs to remodel
existing value chains. Third, entrepreneurial opportunities may arise from new
information outlets that expose sectors in need of improvements; these information
outlets may include platforms for information sharing between food consumers and
producers about production processes, food risks, food transparency and traceability,
and food waste. Finally, opportunities for entrepreneurs in food systems may be due
to outside shocks to the market; for example, policy changes such as the European
Union’s (EU) initiative to ban single-use plastics and promote a circular economy,
which prompts entrepreneurs to invent sustainable alternatives (European Commis-
sion, 2018a).
In a recent study, Kuckertz, Hinderer, and Röhm (2019) investigated the presence
of entrepreneurial opportunities in food systems by identifying where startup
investors allocated their investments, specifically, in the categories of ‘agriculture
and forestry’ and ‘food and beverage’. They categorized investments into a five-
step conceptualization of the food value chain: (i) agriculture, (ii) transforming,
(iii) converting and packaging, (iv) shipping & selling, and (v) consuming. They
conclude that most investments (63%) were allotted to (iii) converting and packag-
ing, which is where products are composed from ingredients and packaged ready for
transportation (Kuckertz et al., 2019). For their study, they employed the Dow Jones
VentureSource database (a comprehensive database tracking the behavior of startup
investors in Europe and the U.S.) for the period of 2013–2017 and focused on
investments in food startups. Overall the authors report an increase in investment
activity in the food value chain, with arise from 443 investment deals in 2013 to
747 in 2017, thus evidencing a growing interest in food startups (Kuckertz et al.,
2019) and highlighting the rising potential for entrepreneurship and innovation in
food systems.
As heavily discussed in the literature, entrepreneurs in food systems, as like many
other systems, are the drivers of innovations, which if properly supported and
educated can succesfully develop sustainable solutions to challenges in achieving
the SDG’s in relation to food systems.
It is mainly through an exploration of the mechanisms that drive entrepreneurial
opportunities that researchers can best describe the ways to promote entrepreneurial
activity, and implement the appropriate training and education methods to stimulate
food system members to create value and sustainable initiatives through innovation.
Recently, the increased attention to sustainable development and the emergence of
2.3 The Focus on Entrepreneurship 31

entrepreneurial talents in many industries have found an important commonality,

i.e. the interest of using entrepreneurship as an instrument for sustainable develop-
ment in food systems. This new synergy translates to an increased demand for
improved knowledge, information, and technologies, which have been traditionally
mostly generated by universities (Opolot, Isubikalu, Obaa, & Ebanyat, 2018);
universities by nature connect and interact with a wide range of public and private
organizations and institutions and are in a central position to act as advocates for
entrepreneurship (O’Connor & Reed, 2018). Furthermore, the Organization for
Economic Cooperation and Development (OECD) and the European Commission
have focused on how future developments will depend on a large part on how well
universities adapt to unpredictable global environments, therefore they run different
schemes to stimulate entrepreneurial development in European universities (Gibb,
Haskins, & Robertson, 2013).

2.3 The Focus on Entrepreneurship

Entrepreneurs are oftentimes considered national assets that may be cultivated,

stimulated, and rewarded to a great extent. They drive changes in populations’
lifestyles and work behaviors, and when successful, oftentimes introduce innova-
tions that improve quality of life, create wealth through their business ventures, and
generate the necessary conditions for a prosperous and sustainable society. Entre-
preneurs are people, the actors or members of ecosystems who are unafraid to take
risks and are adept at identifying entrepreneurial opportunities where most people do
not. Entrepreneurs are considered open-minded individuals with a focus on driving
change in situations where they may not be satisfied with the status quo. This active
involvement in driving change and creating value through innovation is known as
entrepreneurship, i.e., what entrepreneurs do. Entrepreneurship is a process of
designing, launching, and running a business, which oftentimes begins as a startup,
small business, or service.
In simple terms, entrepreneurs are people and entrepreneurship is a process,
entrepreneurs are organizers while entrepreneurship is an organization, entrepre-
neurs are the inventors or innovators while entrepreneurship is the resulting
innovation.
Entrepreneurship can be defined as a project-oriented process where an entrepre-
neur, or team of entrepreneurs, re-allocates limited resources to areas where they can
achieve higher productivity in order to create superior value (Tataj, 2015). Entre-
preneurship is also defined as an activity that involves the discovery, evaluation, and
exploitation of opportunities to introduce new goods and services, ways of organiz-
ing markets, processes, and raw materials through efforts that previously had not
existed (Shane, 2003). Cogliser and Stambaugh further expand on this definition and
split the entrepreneurial process into three phases—(i) variation (i.e., opportunity
discovery), (ii) selection (i.e., opportunity evaluation), and (iii) retention (Cogliser &
Stambaugh, 2008). They argue that at each of these phases, the probability of success
32 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

depends on environmental uncertainty, organization of the local ecosystem, and

cognitive qualities of the entrepreneur. Furthermore, entrepreneurship has also been
conceptualized as the ability to integrate a set of elements into a relationship in order
to achieve a goal, or a project that can create value by evolving into a profitable
business, improving a new institution, or enhancing human health or innovativeness
of a region (European Commission, 2018b). Another popular conceptualization of
entrepreneurship is the academic entrepreneur, who is defined by commercializing
outcomes of academic research (Grimaldi et al., 2011).
The value created through entrepreneurship can be tangible, intangible, eco-
nomic, and social (Tataj, 2015). Economic value creation is manifested as new
jobs, economic prosperity, societal stability, and equal opportunities, while social
value can be a reduction in poverty, increasing the well-being of communities, and
better working conditions. Entrepreneurship can be thought of as a means to satisfy
the needs of users and customers, bring innovations to underserved communities,
and most importantly a means to tackle the current challenges associated with global
sustainability of resources.
Entrepreneurship has also been described as a powerful attitude and a discipline
that’s transversal to the areas of knowledge, science, and organizations (Brito, 2018).
In a broader sense, entrepreneurship is a transversal phenomenon that can be well
defined in a number of different settings including the non-profit and public sectors.
For the purpose of this book, we adopt the definition of entrepreneur as proposed by
Schumpeter, in which all of the entrepreneur’s activities are related to innovation
(Wee, Lim, & Lee, 1994).
Transforming an industry is an important element in describing entrepreneurs,
and as stated by Isenberg (2011), entrepreneurs are individuals who continuously
seek to create economic value through growth—implying that they are often
unsatisfied with the status quo (Isenberg, 2011). Ahmad and Seymour (2008)
provide further elaborations and describe entrepreneurs as those who seek to gener-
ate value by creating or expanding economic activity and by identifying and
exploiting opportunities to create new products, processes, or markets (Ahmad &
Seymour, 2008; Kuckertz et al., 2019). These conceptualizations of entrepreneurs,
and their goals specifically, illustrate the reasons why they should be supported;
through their many activities and initiatives they have the potential to contribute to
achieving SDG’s and sustainable food systems specifically.
Given the existing conceptualizations of entrepreneurship and entrepreneurs, it is
evident that the promotion of entrepreneurship plays an essential role in improving
the emergence and competitiveness of SMEs and in enhancing economic opportu-
nities (Ramana, Prasad, & Guda, 2018). Furthermore, knowledge emerges as the
most important aspect of entrepreneurs, and is considered the result of a collabora-
tive approach between different members of economic activities that link innovation,
learning, and entrepreneurship (Brito, 2018; Ratten, Marques, & Braga, 2018). As
noted by Abreu and Grinevich (2013), entrepreneurship involves several activities
that go beyond the simple commercialization of goods and services. These activities
can involve innovatively combining resources to cultivate new ways of organizing
2.3 The Focus on Entrepreneurship 33

offerings, or establishing new processes to deliver them, and organized efforts put
into exploiting opportunities.
The university is one of the most essential institutions to promote entrepreneur-
ship and innovation since its members, i.e., academics, can engage in a wide range of
activities which are deemed to be entrepreneurial such as facilitating networks with
industry or providing experienced faculty to offer consultancy to aspiring entrepre-
neurs, which are important steps to reaping academic and commercial rewards, not
only for the academic engaging in these activities but for the university; so long as
effective knowledge management processes are in place (Miller et al., 2018).
In efforts to provide further insight into the role of universities in foster-
ing entrepreneurship, O’Connor & Reed provide a framework that identifies five
specific roles universities play in contributing to regional entrepreneurial develop-
ment (O’Connor & Reed, 2018).
1. Human capital development: Supports the idea of educating highly skilled
graduates. This also supports the idea of a broad entrepreneurial education across
the diverse disciplines in universities.
2. Intellectual Resource: Provides conduits for knowledge sharing across academic
members from diverse disciplines, and as a hub that can create system wide
collaborations with private and public sectors.
3. Regional Governance: Includes long-term commitment, strategy development,
providing leadership, being an operational informant, and self-regulated to max-
imize community resource efficiencies. The long-term commitment stems from
the idea that developing an entrepreneurial ecosystem will take time, and the
history of longevity in the university system raises expectations that universities
are well positioned to ‘stay the course’ and provide a steady hand (as neither
government nor industry are positioned to fulfill this role).
4. Network Facilitator: Universities by nature connect with a wide range of public
and private organizations and institutions and are in a position to act as advocates
for the creation of networks able to stimulate entrepreneurship.
5. Entrepreneurial Node: Universities may serve as the ‘go-to place’ for all things
entrepreneurial. As a node, entrepreneurial and innovative ventures will be
attracted to it from either inside or outside the university. The notion of entrepre-
neurial nodes is evident when universities host a specific entrepreneurship or
enterprise center or institute. The entrepreneurial node may also not be immedi-
ately evident or identifiable as a specific place or activity, and may take place as
discipline specific activities of industry engagement or commercialization found
in various locations distributed across the university (O’Connor & Reed, 2018).
Keeping the Schumpeterian (1934) definition of entrepreneurs as individuals
who exploit market opportunities through technical or organizational innovation
(with the rise of the knowledge economy the term ‘market opportunity’ can also be
interchanged with ‘research opportunity’) we can deduce that the entrepreneurial
process requires many inputs in order to the catalyzed. Furthermore, entrepreneurial
ecosystems (discussed further in Chap. 3) require the active participation of many
34 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

system actors, and rely on mechanisms that influence the emergence and identifica-
tion of entrepreneurial opportunities, the individuals to identify them, their willing-
ness to take on risk and create new ventures, and their ability to develop a project
(Isenberg, 2010).
Further, the concept of entrepreneurial opportunity is not completely novel, as
authors have long suggested that opportunities are the heart of entrepreneurship
(Stevenson & Gumpert, 1985). Without opportunity, there is no entrepreneurship
(Short, Ketchen Jr, Shook, & Ireland, 2010).
Van de Ven (1993), specifically, was one of the first authors who did not
exclusively focus on individual traits of entrepreneurs, but instead focused on the
process of constructing an infrastructure capable of facilitating and restricting
entrepreneurship. Specifically, Van de Ven (1993) presents a “social system frame-
work” and highlights the importance of universities, financing opportunities, human
capital, and appropriate institutional arrangement to foster entrepreneurial activity.
Entrepreneurship contributes to economic prosperity by serving as an avenue
for knowledge spillovers, and by assisting in the creation of marketable products
and services that would otherwise not be commercialized. Entrepreneurship is an
accepted dynamic of any economy (Minniti & Lévesque, 2008), and universities
have long been considered as one of the essential elements of entrepreneurial
development in ecosystems that strive toward a knowledge economy.
Once successful, entrepreneurs have the potential to drive significant impacts in
their society and environment, but if entrepreneurs are not set up for success, their
ideas will simply not get them anywhere/far.
Similarly, Moore (1993) posits that entrepreneurship does not exist in a vacuum,
and that entrepreneurs are highly dependent on their environment. This finding
is also shared by a number of authors who argue that entrepreneurship is a local
phenomenon, shaped by the immediate environment and its available resources
(Feldman, 2003; Malecki, 1993; Motoyama, Konczal, Bell-Masterson, & Morelix,
2014). This idea has led to the emergence and understanding of entrepreneurship as a
system of connected networks that share resources and knowledge, and assume risks
together. Furthermore, Aulet and Murray (2013) and Isenberg (2011) identify
innovation and growth-ambition as the two main individual characteristics of entre-
preneurship. They go on to state that innovation-driven entrepreneurship requires
specific policies, support systems, and adequate environments.
The prevalent question that has been raised by authors is how entrepreneurship
can be best systemically ignited, and what are the best methods for entrepreneurial
activity to develop, be supported, and sustained.
Finally, even though a plethora of proposed definitions for entrepreneurship exist,
and diverse conceptualizations of entrepreneurs have been proposed, we do not
narrow our focus to one specific manifestation of entrepreneur or entrepreneurship.
Through systems thinking, we know that food systems are composed of all actors
from every sector of the food supply chain, and other industries that are inter-
dependent with food systems, therefore, in the remaining chapters, we consider
every member, or stakeholder, of the food ecosystem a potential entrepreneur.
2.4 Entrepreneurial Opportunity 35

2.4 Entrepreneurial Opportunity

Entrepreneurial opportunities have been regarded as positive and favorable circum-

stances that lead to entrepreneurial action, and have been lauded for their central role
in igniting entrepreneurship (Aldrich & Cliff, 2003; Eckhardt & Shane, 2003; Shane,
Nicolaou, Cherkas, & Spector, 2010). Schumpeter (1934) viewed opportunities as
central to the innovative combination of resources, and suggested that novel com-
binations and exploitations of opportunities could manifest as products and services,
new production methods, novel processes to organize markets, and new or raw
materials’ management. The appreciation of opportunities has been persistent in the
literature as evidenced by Kirzner (1979) who emphasized that opportunities are at
the core of market imperfections, and when identified and exploited, have the
potential to generate economic returns.
Based on these two main ideas behind entrepreneurial opportunity, we can see a
dichotomy of thought, i.e. the creation and discovery view. Schumpeter (1934) and
his successors support the ‘creation view’ and posit that opportunities are not
objective and must be created by the entrepreneur and his/her actions when explor-
ing new products or services. Creation opportunities are dependent on the entrepre-
neur’s perceptions and skills (Aldrich & Kenworthy, 1999). In this sense,
Schumpeter’s definition also suggests that the creation of opportunities requires
both intellect and capital. The discovery view on the other hand, proposed by
Kirzner (1979), assumes that the goal of the entrepreneur is to identify and exploit
opportunities and existing market imperfections which give way to these opportu-
nities exogenously, leaving the entrepreneur the responsibility to recognize and act
upon these changes, which can be of a technological, social, or political nature
(Shane, 2003).
The dichotomous views regarding entrepreneurial opportunities can further be
explained through theory; e.g., discovery theory and creation theory. They are
considered two main alternative theories of entrepreneurial opportunity; discovery
posits that opportunities exist in the market independently of the entrepreneur (e.g.,
need for diet programs in a high obesity region), while in creation theory the
assumption is that opportunities themselves do not exist, but must be created by
the entrepreneur (e.g., extracting by products from food waste for later use) (Baker &
Nelson, 2005; Gaglio & Katz, 2001).
Entrepreneurship engagement in the global food system is believed to be an
effective solution to address the growing global challenges (Kline et al., 2017;
Tripathi & Agarwal, 2014). But like most entrepreneurs in many industries, food
entrepreneurs also experience their share of difficulties when faced with identifying
market opportunities, creating a managerial structure behind the opportunity, and
securing funding sources to scale ideas into startups or business ventures (Cranwell,
Kolodinsky, Donnelly, Downing, & Padilla-Zakour, 2005; Opolot et al., 2018).
In the case of food entrepreneurs, for example, additional facilities such as
certified kitchens for product preparation, permits for product or service production,
and marketing channels to distribute their food products or disseminate their inno-
vations might also be necessary (Chen & Polat, 2017).
36 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

The basic premise behind opportunities or venture creation is the introduction of

new goods or services (Sarma, 2018). This relates to some of the earlier postulations
of entrepreneurship, such as Stevenson (1983) who defined entrepreneurship as the
pursuit of opportunity, without regarding the resources that are currently, and
actually, controlled.
Furthermore, we adopt the view of Santos (2018) that entrepreneurial opportuni-
ties cannot be understood as a single factor, but as a set of conditions which allow for
the viable introduction of innovations, new organizational or business models, or
customer engagement strategies for improved market results (Santos, 2018).
This chapter does not intend to contribute to existing debates regarding entrepre-
neurial opportunities, or whether these are discovered or created; however we
contend with researchers who support the idea that opportunities are both discovered
and created.
In this chapter, we aim to highlight how universities, as part of innovative
communities, can stimulate entrepreneurs to harness and exploit opportunities in the
food system. We build our argument based on the notion that opportunity identifica-
tion is not a simple “Aha!” or “Eureka!” moment, but a more circular process
comprised of knowledge acquisition and creation, knowledge sharing, and individual
reflection on new findings (Lumpkin & Lichtenstein, 2005). Furthermore, evidence
also shows that opportunity discovery can occur during the pre-conception phase of
new ventures, or in already established firms (Hayton, Chandler, & DeTienne, 2011).
A prevalent idea in the literature is that entrepreneurial opportunities arise from
disequilibrium, or market needs, which can then be harnessed and exploited by
individuals, and are usually interpreted as technological, political, regulatory, and
social opportunities (Casson, 2005; Cohen & Winn, 2007; Holcombe, 2003;
Saemundsson & Holmén, 2011). It is the recognition of these opportunities that
brings forth the positive and favorable circumstances that lead to entrepreneurial
actions.
Entrepreneurial opportunity has been conceptually divided into three themes;
discovery, creation, and recognition. Sarasvathy, Dew, Velamuri, and Venkataraman
(2003) further advanced these themes by distinguishing the three themes based on the
preconditions of their existence (Sarasvathy et al., 2003).
In short, opportunity creation occurs when neither product nor demand exist and
must be invented by the entrepreneur (Buenstorf, 2007), on the other hand, when a
product or market demand exist and another condition must be identified is known as
opportunity discovery, and if the product and market demand are obvious, then
exploring new ways to organize these demands is considered opportunity recogni-
tion. The diverse processes for identifying opportunities, coupled with the recent
stimulus to adopt systems thinking thus encourages the integration and consideration
of different vantage points of entrepreneurial opportunity simultaneously rather than
engaging in debates to promote individual and discipline specific views (Chiasson &
Saunders, 2005; Gaglio & Katz, 2001).
Systems thinking accepts the notion that the opportunity recognition process is
significantly influenced by a variety of factors, including individual cognition, social
networks, personality traits, prior knowledge, knowledge sharing, environmental
2.4 Entrepreneurial Opportunity 37

factors, and the opportunity itself (Acs, Audretsch, & Lehmann, 2013; Acs,
Braunerhjelm, Audretsch, & Carlsson, 2009; Ardichvili, Cardozo, & Ray, 2003;
García-Cabrera & García-Soto, 2009; George, Parida, Lahti, & Wincent, 2016;
Grégoire & Shepherd, 2012; Tang, Kreiser, Marino, Dickson, & Weaver, 2009;
Tumasjan & Braun, 2012); opportunity identification is shaped by objective and
subjective factors (Grégoire, Barr, & Shepherd, 2010).
Alvarez and Barney (2007) further made essential contributions proposing the
idea that the formation of entrepreneurial opportunities can be explained both
through discovery and creation processes rather than just one or the other.
Furthermore, based on the results from a systematic literature review of 189 articles
that discussed the topic of entrepreneurial opportunity recognition, George et al.
(2016) individuate a series of six influencing factors that are related to opportunity
discovery and creation, which then lead individuals to evaluate and exploit the
identified opportunities—(i) prior knowledge, (ii) social capital, (iii) cognition/per-
sonality traits, (iv) environmental conditions, (v) alertness, and (vi) systematic search
(George et al., 2016).
The authors suggest that research emphasis should be allotted to these six
influential factors that affect entrepreneurship and not on the two previously dom-
inating opportunity identification processes (e.g., creation vs. discovery). They
further evidence that these six factors are interrelated, and that excluding any of
them would misrepresent an understanding of how individuals create or discover
opportunities. A summary of the six factors follows:
• Prior Knowledge: Some individuals are able to discover opportunities due to
prior information they possess and their capacity to value it (Audretsch, 2005),
while an individual’s lack of knowledge and skill may limit their ability to
discover or create opportunities (Kourilsky & Esfandiari, 1997; Kourilsky &
Walstad, 1998). Prior knowledge can further be categorized into three dimen-
sions, (i) knowledge of markets, (ii) knowledge of ways to serve the market, and
(iii) knowledge of customer problems (Shane, 2000). Furthermore, Chandra,
Styles, and Wilkinson (2009) posit that prior knowledge must be combined
with other information from various sources that assist entrepreneurs in recog-
nizing, finding, and creating opportunities (Chandra et al., 2009; Van Gelderen
et al., 2008). Literature also suggests that prior knowledge is a fundamental
cognitive resource of an individual, a building block of the opportunity identifi-
cation process, a fountain of insights that help synthesize information regarding
opportunity identification, and a moderator in identifying opportunities (Grégoire
et al., 2010; Haynie, Shepherd, & McMullen, 2009; Rerup, 2005; Shane &
Venkataraman, 2000; Vaghely & Julien, 2010). It must also be noted that prior
knowledge can also limit new ideas and creativity, as the human brain is
accustomed to processing information in a certain way, certain bits of new
incoming information may go unnoticed or new processes might be hard to
accept over traditional methods.
• Social Capital: Social capital serves as a facilitator to access information
and tangible resources in the entrepreneurial opportunity recognition process
(Ardichvili et al., 2003; Shane & Venkataraman, 2000). Increased social capital
38 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

ensures better access to scarce resources, which in turn assist entrepreneurs

to exploit opportunities (Fuentes, Arroyo, Bojica, & Pérez, 2010). Social capital
plays a mediating role between human capital and opportunity recognition, as
well as resource mobilization (Bhagavatula, Elfring, Van Tilburg, & Van De
Bunt, 2010). Social capital is considered a critical influential factor for opportu-
nity recognition.
• Cognition and Personality Traits: These are comprised of concepts discussed
primarily in psychology and include personal traits such as creativity, self-
efficacy, risk averseness, extraversion, need for independence, and locus of control
(Ardichvili et al., 2003; Baron & Ensley, 2006; Nicolaou & Shane, 2009; Tataj,
2015; Tominc & Rebernik, 2007). Self-efficacy, for example, motivates entrepre-
neurs to set high objectives and achieve them (Wood & Pearson, 2009). Individ-
uals willing to take risks are also more adept at perceiving the larger frame of
opportunities that surrounds them (Baron & Ensley, 2006; Foo, 2011). Individuals
who are less afraid and are not intimidated by success tend to view a new venture
as an opportunity (Li, 2011). And finally, intelligence and creativity are essential
for identifying a niche opportunity (George et al., 2016). It has also been found
that entrepreneurs’ creative capacity is higher than that of the average population
(Heinonen, Hytti, & Stenholm, 2011). Finally, as posited Tataj (2015) the origin of
invention is culture with its individual and collective influences to create—that is
creativity. Tataj (2015) further states that invention is an idea, and that an invention
is transformed into innovation in a creative process that bridges the gap between
the world of ideas and market or societal reality (Tataj, 2015).
• Environmental Factors: Environmental factors can be viewed as an “umbrella
term” for a society’s economic growth, social and political contexts, geographic
location, and cultural values that affect entrepreneurs in the process of finding
or creating opportunity. For example, changes in available technologies, social
norms, political climate, and demographic conditions create pockets of new
information and necessities, which help in the processes of entrepreneurial
discovery and creation (Shane & Venkataraman, 2000). Furthermore Casson
and Wadeson (2007) evidence that changes in economic environments make
opportunity recognition feasible, and economic stability is also important for
generating a positive atmosphere for entrepreneurial activity (Global Entrepre-
neurship Monitor, 2019). Social and political factors refer to the availability of
tangible and intangible resources, government regulations, policies, and other
societal issues (e.g., the waning sustainability of food production) that may
influence the opportunity recognition process (Tominc & Rebernik, 2007).
Finally, it can be argued that entrepreneurial opportunity is dependent on infor-
mation regarding a specific region’s available resources that can be reorganized to
create value for its inhabitants.
• Entrepreneurial Alertness: Alertness is defined as the capacity to possess
insights into identifying entrepreneurial opportunities. Researchers agree that if
a person’s level of alertness is high, opportunities could be identified even
without actively searching for them, ergo by simply observing existing phenom-
ena (George et al., 2016). Gaglio and Katz (2001) suggest that alert individuals
2.5 Opportunity Discovery and Creation in Food Systems 39

possess complex and adaptive mental frameworks about change, the social
environment they find themselves in, and the industries that surround them,
however they also suggest that the process of validating the alertness construct
empirically is too complex to be quantified. In essence, alert individuals are more
prone to viewing situations from new perspectives or unconventional ways more
so than people with lower levels of alertness (George et al., 2016).
• Systematic Searchers/Resources: Systematic searches help individuals discover
opportunities (Westhead, Ucbasaran, & Wright, 2009; Zahra, Gedajlovic,
Neubaum, & Shulman, 2009). Research on systemic searches posits that entre-
preneurial opportunity discovery can only happen when entrepreneurs have
access to private information (e.g., research databases, network platforms), and
are able to use this information to help themselves obtain specific additional
insights to complement his/her prior knowledge (Fiet, 1996). Furthermore, Mur-
phy (2011) specifies that systematically searching for entrepreneurial opportuni-
ties does not represent the opposite of alertness, and developed a framework that
suggests that opportunities may also be discovered in situations that are high or
low on both dimensions (i.e., searching and alertness). Furthermore, actively
searching constitutes a key determinant of entrepreneurial success, and influences
the opportunity recognition processes (Santos, 2018; Wustrow, 2018).
In addition, George et al. (2016) evidence that only a handful of authors are
involved, or have been involved, in establishing the prominent dialogue supporting
entrepreneurial opportunity identification (George et al., 2016). This scenario leaves
room for questions such as, how, and why some individuals recognize and create
opportunities while others do not. Hechavarría and Welter (2015) argue that in order
to advance our understanding of entrepreneurial opportunities, scholars must analyze
both sides of the debate (i.e., discovery vs. creation) to determine how to best support
aspiring entrepreneurs through both perspectives.
It is quite evident that a systematic and holistic method should be considered best
practice for promoting and facilitating entrepreneurial discovery and creation through
universities. Integrating entrepreneurship aspects that involve technical and scientific
know-how, business creation, social and environmental awareness, experiential edu-
cation, and values and ethics into academic curriculums would provide universities
with the increased capacity to promote entrepreneurial opportunities.

2.5 Opportunity Discovery and Creation in Food Systems

The food system is also a significant contributor to worldwide economies, and in

2016 it accounted for 8.6% of all employment in Europe (European Commission,
2019). At the same time, the food system is faced with complicated challenges such
as food security, food waste, and resource over-exploitation, thus providing an ideal
arena for aspiring entrepreneurs to develop innovative solutions to solve or help
ameliorate these challenges. Individual entrepreneurial skills are decisive for
40 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

identifying opportunities and navigating turbulent environments (Aparicio, Urbano,

& Audretsch, 2016), however these skills must be complemented by personal
adaptability and flexibility, strong leadership, and an environment that promotes
entrepreneurial mindsets (Gibb & Hannon, 2006).
Regarding food systems, entrepreneurial and organizational competencies among
farmers are considered critical in improving their productivity and market access for
sustainable agriculture development through enhanced household food and income
security (Opolot et al., 2018). The role of training to build farmer’s capacity for
successful agricultural transitions cannot be over-estimated or exaggerated (FAO,
2014), and universities are viewed as the go-to institutions in an innovation system
framework with the responsibility to instill competencies for sustainable transitions
among farmers. Regarding the agricultural sector, universities have been viewed as
key actors in the performance of agricultural innovation system frameworks
(Etzkowitz & Zhou, 2017), and have been evidenced as significant contributors to
farmer’s competence building (Pindado, Sánchez, Verstegen, & Lans, 2018).
This was evidenced in a study conducted by Opolot et al. (2018) that assessed
the influence of a training program, conducted by Makere University in Kampala
Uganda, on smallholder farmer’s competencies, productivity, and organizational
capacity. The farmers underwent a 4-month training on topics regarding marketing,
record keeping, value addition, business planning, financial management, and
budgeting in order to build entrepreneurial capacity. From this study, scholars
discovered that the farmers, as a result of the training, developed value-added
products such as soy, coffee, soymilk, roasted and packed groundnuts, and ground-
nut paste thus evidencing the efficacy of such a practical training, and outlining the
power of such trainings in activating bottom up transitions (Opolot et al., 2018).
Opportunity recognition, however, does not only involve the provision of sufficient
and adequate resources to be used or exploited, it is also dependent on subjective
efforts to comprehend the immediate, local, or regional environment and imagine
the possibilities for resource utilization (e.g., introducing new technologies or
processes) (Patzelt & Shepherd, 2011).
Recently, the United Nations adopted the ‘UN Decade on Ecosystem Restora-
tion’, declared on March 1st, 2019 by the UN General Assembly, which aims to
scale up the restoration of degraded and destroyed natural ecosystems as a proven
measure to combat climate change and improve food security, water supply, and
biodiversity. This initiative will be led by the UN Environment and the Food and
Agriculture Organization (FAO), and offers unparalleled opportunities for job cre-
ation and food security, and paves the way for entrepreneurial endeavors and
innovations to tackle climate change (United Nations Environment, 2019).
However, this, along with other efforts to support entrepreneurship will be futile
if attention is not granted to the entrepreneurial opportunity identification process.
The food system consists of a diverse spectrum of members, from farmers, to
investors, academics, and business owners. This heterogeneity in system members
suggests varying levels of preparation to tackle entrepreneurial endeavors, and while
providing physical resources is a key aspect, another important area of focus is
providing individuals with the necessary skills to embrace the present food system
2.5 Opportunity Discovery and Creation in Food Systems 41

environment. In the next sections we outline how universities can engage with other
ecosystem members to best ignite entrepreneurial initiatives amongst food system
members.

2.5.1 Opportunity Creation: Tangible Resources

Academic institutions are perhaps the most prevalent actors in efforts to create
entrepreneurial networks and intentions, this is due to the fact that beyond a focus
on entrepreneurs themselves, a large section of entrepreneurial and innovation
research focuses on universities and their role in creating stimulating environments,
such as innovation and entrepreneurial ecosystems (Nelles, Bramwell, & Wolfe,
2005). Universities, especially, have been evidenced to maintain an active role
within entrepreneurial ecosystems even when they are not a central actor (Motoyama
& Knowlton, 2017).
However, providing vast networks, sufficient amounts of funding, and immersing
potential entrepreneurs into environments filled with many avenues for opportunity
creation will not be sufficient to ignite entrepreneurial initiatives.

2.5.2 Opportunity Recognition: Intangible Resources

Currently, economic globalization and entrepreneurship contribute to daily growth

and development, and the shift from efficiency-driven to innovation-driven devel-
opments in universities have also fostered models that promote investment in
emerging growth and multilateral alliances that enhance global competition (Brito,
2018). With the shift toward innovation-driven, and knowledge economies, univer-
sities have adopted a larger role than simple knowledge production, indeed they
engage in a range of activities that prepare future generations to meet the require-
ments to drive innovations in such a new landscape.
Regarding intangible resources such as knowledge and social capital, Hmieleski,
Carr, and Baron (2015) found that psychological capital such as optimism, self-
efficacy, and resilience positively influence opportunity creation in dynamic industry
conditions, such as the food system (Hmieleski et al., 2015). Food system members
however do not always posses the entrepreneurial competencies to enhance their
productivity and competitiveness such as strategic planning, relationship building,
marketing, and value chain development, all of which facilitate opportunity recog-
nition (Bergevoet, Giesen, Saatkamp, Van Woerkum, & Huirne, 2005; Holster,
Klerkx, & Elzen, 2008; Morgan, Marsden, Miele, & Morley, 2010). Furthermore,
stress tolerance and the willingness to bear uncertainty have been identified as
antecedents of opportunity identification (Frese & Gielnik, 2014).
Product development, documentation, organizational management, and diversi-
fication are also important enablers for farmers and food producers to create new
42 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

value through creativity; applying social capital and taking risks in adopting and
using new technologies (Chegini & Khoshtinat, 2011; Ezeibe, Okorji, Chah, &
Abudei, 2014; Rezai, Mohamed, & Shamsudin, 2011). Improving competencies in
agri-food by promoting entrepreneurial mindsets is viewed as a precondition for
ensuring sustainable agriculture and rural development (Opolot et al., 2018). Fur-
thermore, Hennon (2012) posits that entrepreneurial competencies stimulate crea-
tivity and innovativeness that re-orient food system members into thinking about and
applying new management practices that embolden their confidence to engage in
entrepreneurial endeavors. Increasing food ecosystem members’ self-efficacy in
entrepreneurial activities also enables them to work in cooperative ways, thereby
also benefitting from economies of scale (Basso, Fayolle, & Bouchard, 2009).
Regardless of the type of approach adopted by universities, the intended outcome
should generate changes in the knowledge and behaviors that enable food system
members to not only increase productivity, but also engage in practices that lead to
sustainable solutions for challenges threatening our food system.
Aspiring and potential entrepreneurs need both the adequate environment and
resources to be able to create opportunities, but also the personal knowledge and
characteristics to identify and be able to know what to do with existing opportunities.
By ensuring that the presence of explicit resources is accompanied by the substantial
tacit knowledge required for the development and use of new technologies, the
university then becomes an important resource for entrepreneurial activity (Zucker,
Darby, & Brewer, 1994).

2.6 Entrepreneurial Universities

Universities are knowledge-intensive institutions that play an important role in today’s

knowledge-based entrepreneurial economies (Acs et al., 2009; Audretsch, 2014; De
Bernardi, Bertello, & Forliano, 2019). Many scholars have examined the contributions
of universities to the economy, including knowledge spillover theory of entrepreneur-
ship (Audretsch, 2014), regional innovation ecosystems (Asheim & Coenen, 2005;
Cooke, Uranga, & Etxebarria, 1997), entrepreneurial ecosystems (Brown & Mason,
2017), academic entrepreneurship (Bertello, Azucar, & Tirabeni, 2019; Hayter, Nelson,
Zayed, & O’Connor, 2018; Siegel & Wright, 2015), and entrepreneurial universities
concept (Etzkowitz et al., 2000; Guerrero, Urbano, & Fayolle, 2016).
The concept of the entrepreneurial university emerged in the 1940’s and 1950’s
and fostered connections and collaborations with industry partners, government
agencies, and society in order to stimulate applications for research, trading patents,
and diffusing technological and scientific capacity.
The two go-to examples for entrepreneurial universities are the Massachusetts
Institute of Technology (MIT), (i.e., the most impactful entrepreneurial university)
and Stanford University in California (i.e. the most famous entrepreneurial univer-
sity) (Tataj, 2015). An entrepreneurial university can be defined as a university that
2.6 Entrepreneurial Universities 43

finds new solutions to address the pressures and challenges that stem from an
uncertain and unpredictable environment (Hannon, 2013).
University entrepreneurship ecosystems can be defined as: educational programs,
infrastructures, regulations, culture, and relationships with economic agents
(Guerrero & Urbano, 2012) acting in the knowledge-based entrepreneurial econo-
mies as facilitators of innovation and entrepreneurial opportunities. Many initiatives
have been put in place to ensure that scholars and talented individuals pursue a
career or explore potential opportunities within entrepreneurship ecosystems, such
as the concept of the ‘entrepreneurial university’. As defined by National Center for
Entrepreneurship in Education (NCEE) the entrepreneurial university can be best
characterized as promoting institutional leadership and strong entrepreneurial cul-
ture, and can create the policies and practices that are conductive to the development
of enterprising and entrepreneurial mindsets and behaviors throughout the organi-
zation (e.g., in management, administration, teaching, and research activities for
academic staff and students alike) (Hannon, 2013). The entrepreneurial university
mission is built on the traditional academic task of producing research and providing
education, with entrepreneurship being added as a third mission during the course of
the last two decades (Clark, 1998; Goldstein, 2010; Kirby, 2006; Wissema, 2009).
The emergence of entrepreneurial universities has accelerated along with the
university’s adoption of new responsibilities for knowledge transfer and technolog-
ical innovation (Bramwell & Wolfe, 2008; Martinelli, Meyer, & Von Tunzelmann,
2008). This is due to both the internal development of universities, and external
influences such as the drive for sustainable knowledge-based solutions in high-risk
regions (Etzkowitz, 2003; Etzkowitz et al., 2000; Goldstein, 2010).
The entrepreneurial university is thought of as an avenue to answer the increasing
global academic competitions, and the need to support economic growth through
knowledge transfer (Wissema, 2009). However, its important to note that universi-
ties are not entirely in control of their entrepreneurial transformation, and instead
cope with issues regarding strategies that empower them to create and disseminate
new knowledge and eventually develop such a role (Giuliani & Rabellotti, 2012).
Due to the increased focus on sustainable economic development, entrepreneurial
universities actively seek ways to interact with public and private partners and
communities in order to create a cohesive impact on sustainability challenges;
where joint efforts are needed to combine socio-economic concerns with growing
concerns regarding food nutrition and security, healthy societies, poverty, and the
mounting environmental issues leading to climate change (Cohen, 2006).
In a study of the transformation of European Universities, Clark (1998) uses the
term ‘entrepreneurial university’ to denote a characteristic of social systems, that
must be adopted by the entire university, its internal departments, research centers,
faculties, and schools (Clark, 1998).
Literature also highlights that universities can achieve the status of entrepreneur-
ial university in two main ways. The first includes the concept of ‘academic
entrepreneurship’ and focuses on the commercialization of knowledge and research
findings (Hayter et al., 2018; Klofsten & Jones-Evans, 2000), through academic
entrepreneurship universities are seen as knowledge hubs (Youtie & Shapira, 2008)
44 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

with the associated challenges and opportunities of technology transfer (Owen-

Smith & Powell, 2003). The second way includes entrepreneurial education (Gibb
& Hannon, 2006) becoming part of the university’s teaching mission, which
includes the building of entrepreneurial competencies in students and faculty
(Altmann & Ebersberger, 2013). By providing knowledge and human capital,
universities also promote an entrepreneurial culture and become catalysts for entre-
preneurial opportunity searching, startups, and spin-offs (Cohen, 2006; Guerrero
et al., 2014).
Miller et al. (2018) further evidence that throughout the literature there is an
increased interest on how to improve the effectiveness of knowledge transfer from
universities to industries, and highlight that many lists that attempt to identify the
type of activities that constitute university-industry knowledge transfer have been
developed (Bommer & Jalajas, 2004; Miller et al., 2018).
Interestingly, the development of the entrepreneurial university is conditioned by
formal and informal, and external and internal factors that relate to its available
resources and capabilities (Guerrero & Urbano, 2012). External factors may include
partnerships with stakeholders, industry collaborations, local policy structures, and
access to new technologies to name a few (Goldstein, 2010; Guerrero & Urbano,
2012). Internal factors may include entrepreneurship centers, accelerators, and
incubators (discussed in the following sections), and the individual actors, their
knowledge of entrepreneurial processes, willingness to engage, and the resulting
effect member behaviors impose on entrepreneurial culture, whether positive or
negative.
Building on the internal factors’ consideration, Goldfarb and Henrekson (2003)
compare two different approaches to support entrepreneurship in universities, a
top-down approach that is most prevalent in Europe with a more bottom-up approach
applied in the USA. Not surprisingly, they found the bottom-up approach more
successful in stimulating academics to commercialize their research results.
The attitudes of university members toward entrepreneurship are considered the
most critical factors that affect the development of entrepreneurial universities
(Guerrero & Urbano, 2012). One of the central preconditions for entrepreneurial
universities is their academics believing in their entrepreneurial potential therefore
driving a supportive atmosphere within the institution.
In addition to simply supporting and enabling the legitimacy of entrepreneurial
activities among academics, in order to truly become entrepreneurial, universities
must develop their dynamic capabilities, especially in sensing opportunities, seizing
them by relying on strong university leadership, and be able to transform policies,
strategies, and practices whenever they become unsuitable for the local environment
(Leih & Teece, 2016).
As the economy has evolved from a ‘managed economy’ driven by physical
capital, towards an ‘entrepreneurial and knowledge economy’ driven by knowledge
(Audretsch & Thurik, 2004; Thurik et al., 2013), the role universities has also
evolved (Audretsch, 2014). Universities have evolved from a Humboldtian model
whose core idea is a combination of research and teaching (Rothblatt & Wittrock,
1993), towards a model that aims to naturally include industry partners in new
2.6 Entrepreneurial Universities 45

initiatives. Known as the Third Mission, this initiative seeks to drive economic and
social development for the institution and its surrounding communities, while
concurrently developing the core pillars of research and teaching (Audretsch,
2014; Etzkowitz, 2004). Elements to foster entrepreneurial activities in universities
and move them toward the third mission include Technology Transfer Offices,
entrepreneurship courses and degrees, diverse governing models for incubators
and accelerators, mentoring, business coaching, and even university venture capi-
talists to finance academic business ventures (Tataj, 2015).
One of the most essential considerations when creating entrepreneurial universi-
ties to drive the identification and promotion of entrepreneurial opportunities is that
regional differences will always be determining factors that guide the development
of an entrepreneurial identity, therefore a uniform approach to promoting the
identification of entrepreneurial opportunities cannot be recommended.
In a study conducted by Gibson and Foss (2017) analyzed the significance of five
university entrepreneurial architecture dimensions on the entrepreneurial ‘turn’ of
ten universities. The five dimensions they individuate are the following:
1. Structure: Includes technology transfer offices, incubators, technology parks,
and business portals.
2. Systems: Focuses on networks of communication and the configuration of
linkages between structures and administration.
3. Leadership: Focuses on the qualification and orientation of key influencers
including administrators, board of directors, department heads, and ‘star
scientists’.
4. Strategies: Refers to institutional goals elaborated in institutional planning doc-
uments, incentive structures, and policy.
5. Culture: Refers to institutional, departmental, and individual attitudes and
norms.
From their study, Gibson and Foss (2017) emphasize the importance and impact
of the regional and national context in which the university is embedded concerning
the launch, development, and sustainability of programs and activities supporting
entrepreneurial turns. Another major finding supports the idea that institutional
change toward the development of ecosystems thinking must adopt both top-down
and bottom-up approaches. Furthermore, they report that even for cases that empha-
sized university autonomy, a national law or environmental stimulant was important
for a transition toward entrepreneurial university.
The entrepreneurial university engenders a culture of entrepreneurship as a whole
institution, and creates an infrastructure that promotes knowledge sharing and open
innovation, supports new ventures from established and aspiring entrepreneurs, and
offers avenues for entrepreneurial education and skills development. In order to turn
a university into an entrepreneurial university, top-down and bottom-up converging
forces are needed.
Developing entrepreneurially is a complex endeavor that crosses levels of influ-
ence and control while being strongly impacted by broader institutional and organi-
zational environments (Gibson & Foss, 2017).
46 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

In the following sections we provide a brief overview and best practices for
creating and engaging with the main elements of entrepreneurial universities, i.e.,
entrepreneurial education, entrepreneurship centers (including technology transfer
offices, incubators, and accelerators), the Triple-Helix approach for open collabora-
tion, and finally, the Knowledge Triangle, which has been the driving force behind
the creation of Knowledge and Innovation Communities funded by the European
Institute of Innovation and Technology (EIT) (Tataj, 2015).

2.7 Entrepreneurship Education

Entrepreneurship education has been previously associated with increased entrepre-

neurial skills and intention, and economic growth, as well as with new knowledge
and the discovery and development of competitive opportunities (Wong, Ho, &
Autio, 2005). This model of education dates back decades with one of the first
entrepreneurship courses developed at Harvard’s Business School in 1947 (Katz,
2003). Since then, the prevalence of entrepreneurship education programs has
experienced significant global increases (Katz, 2003; Autio, Nambisan, Thomas, &
Wright, 2018). As summarized by Fiore, Sansone, and Paolucci (2019) the number
of entrepreneurship education programs has experienced marked increases, this is
also evidenced by Katz (2003) and Torrance et al. (2013) who found 2200 entre-
preneurship related courses in over 1600 schools in the early 2000’s, and more than
5000 in 2008 (Fiore et al., 2019; Katz, 2003; Torrance et al., 2013). Entrepreneurship
education is vital for the formation of entrepreneurial activity as it provides the
ability to recognize and grasp the right opportunities and to develop them into more
elaborated business concepts (Marvel, 2013), meanwhile it is positively related with
venture performance as it provides the requested capabilities for the daily operations
of firms such as problem-solving and decision-making qualities (Chandler, & Hanks,
1994). Hence, a reinforcement of entrepreneurship education and training is strategic
for the creation of business ventures, especially in high-tech sectors.
In Europe, the European Council has stressed that entrepreneurship education
should be a priority strategy for sustainable, inclusive, and economic growth (Curth,
Chatzichristou, Devaux, & Allinson, 2015). Due to specific policy initiatives,
emerging research that highlights the positive associations between entrepreneurial
education and practical entrepreneurial skills, and the idea that entrepreneurship
education can foster entrepreneurial ecosystems, the increasing number of entrepre-
neurship education programs should come as no surprise (Cavallo, Ghezzi, &
Balocco, 2018)
Despite the high prevalence of entrepreneurship education programs (Nabi, Liñán,
Fayolle, Krueger, & Walmsley, 2017), most of them are designed for students from
specific academic fields and specific levels of academic and professional preparation.
This finding seems contradictive since Human Capital Theory suggests that multi-
disciplinarity is important for innovation and entrepreneurship (Colombo & Grilli,
2005), thus combining individuals from diverse backgrounds and investigating the
2.7 Entrepreneurship Education 47

effect of multi-disciplinarity in entrepreneurship education programs can be of

essential value.
In efforts to synthesize the way in which entrepreneurship education is executed,
Béchard and Grégoire (2005) classified entrepreneurship education into three dis-
tinct models: (i) the supply model, (ii) the demand model, and (iii) the competence
model. The supply model emerges as a theoretical-oriented teaching model, while
the demand and competence models manifest as more practical-oriented teaching
models; since a professor or faculty member acts as a tutor and facilitator in the
demand model, and as a coach or developer in the competence model, the student
takes on active roles and knowledge intake becomes practical and not theoretical.
The proposed practical dimension by Béchard and Grégoire (2005) proves quite
useful in guiding entrepreneurship education. For example, Kassean, Vanevenhoven,
Liguori, and Winkel (2015) found that students who engage in entrepreneurship
experiential learning activities report higher levels of entrepreneurial intention.
Their findings build on previous research by Rasmussen and Sørheim (2006) who
discuss that a ‘learning-by-doing’ approach that involves the student is essential when
teaching entrepreneurship since it promotes team work and open conduits for coop-
eration with more experienced entrepreneurs and mentors (Kassean et al., 2015). As
reported by Pittaway and Cope (2007), in order to best promote entrepreneurial skills
and assist aspiring entrepreneurs to harness opportunities in diverse and authentic
environments, entrepreneurship education should aim to educate ‘for’ entrepreneur-
ship by way of experiential and action learning, which includes idea generation
exercises, elaboration on real case studies, startup creation, mentorship projects,
exposure to experienced entrepreneurs, pitch simulations, and business case devel-
opment training (Kassean et al., 2015).
These findings are further supported by the Human Capital Theory, which
suggests that multi-disciplinarity is important in entrepreneurship (Colombo &
Grilli, 2005). And practice-based entrepreneurship education programs have been
evidenced to play a role in promoting entrepreneurship in the local entrepreneurship
ecosystem (Rasmussen & Sørheim, 2006).
Shedding further light on the aforementioned ideas, Fiore et al. (2019) conducted
an exploratory single case study on an entrepreneurial learning program in a
multidisciplinary environment known as the Contamination Lab of Turin (CLabTo).
CLabTo is a joint-entrepreneurship education program developed by the Polytechnic
of Turin and the University of Turin that aims to increase entrepreneurial skills and
intentions for students through challenge-based entrepreneurial learning programs.
Furthermore, in order to develop the challenge-based program, entrepreneurship
education and design thinking were combined, thus including design methods,
cognitive processes and techniques, and sensibility toward problem-solving (Fiore
et al., 2019). Furthermore, challenge-based programs allow diverse actors of the
local entrepreneurship ecosystem to be integrated into a single environment.
In CLabTo, organizers employ the ‘demand model’ introduced by Béchard and
Grégoire (2005) in order to guide student-professor interactions and enhance the
active role of students. From their results, Fiore and colleagues support the idea
that creating teams composed of individuals with diverse competencies and from
48 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

different academic backgrounds, while adopting the principles of design-thinking

are quite useful in entrepreneurial education, and that challenge-based entrepreneur-
ship courses lead to cooperation with external actors in the local entrepreneurial
ecosystem (Fiore et al., 2019). Furthermore, when seeking to develop entrepreneur-
ial skill and ability, the authors suggest employing a practical-oriented entrepreneur-
ship-teaching model, such as the one employed by CLabTo, which is inclusive of
corporations, student-led entrepreneurial organizations, and other resources such as
incubators.
Currently, there is a widespread use of experiential learning in entrepreneurial
education, and experiential learning has been recognized as a model effort to
integrate real world experiences with conceptual learning (Onyido & Duru, 2019).
A popular model for entrepreneurship education for food system members is the
Northeast Center for Food Entrepreneurship (NECFE) in the United States. It is a
collaborative effort between Cornell University and the University of Vermont, and
uses a multi-institutional and regional collaboration approach to provide technical
assistance and education for businesses in the food industry and promote sustainable
economic development of rural communities (Cranwell et al., 2005). Furthermore,
upon evaluation of the NECFE, five essential components of a model food entre-
preneurship assistance and education center were identified:
1. Multi-institutional and regional collaboration.
2. Expertise (i.e., through faculty and network contacts).
3. Facilities and resources.
4. Services.
5. Evaluation of the Center.
The authors posit that these components build on each other and enable entre-
preneurship education programs to provide possible entrepreneurs with access to
relevant technology in the food system, technical information, and skills that are
directly applicable to real world situations (e.g., opportunity identification, scale up,
management) (Cranwell et al., 2005).
Finally, individuals interested in engaging in, creating, or evaluating entrepre-
neurial learning programs must consider that they are context-specific, and are
strongly affected by the cultural and economic dimensions that characterize the
entrepreneurial ecosystem in which they are imbedded; local context plays an
important role in what is possible and appropriate in entrepreneurial education
(Ndou, Secundo, Schiuma, & Passiante, 2018; Urban & Kujinga, 2017).
In addition to entrepreneurship education, universities are also encouraged to
provide mechanisms to enable knowledge spillovers of core and applied research
from the public to the private sectors, and vice versa (Lockett, Siegel, Wright, &
Ensley, 2005; Lockett, Wright, & Franklin, 2003). In their attempts to remain
innovative and incorporate partners from outside academia in their innovation
efforts, many universities have invested into programs designed to engage students
in entrepreneurial activities. For example, Technology Transfer Offices (TTOs) have
emerged as one of the core methods to facilitate knowledge spillovers, by enabling
2.8 Entrepreneurship Centers 49

patenting activity and licensing intellectual property in some instances (Siegel,

Veugelers, & Wright, 2007). University science parks and incubators are other
examples of mechanisms created at universities to enable these spillovers (Phan,
Siegel, & Wright, 2005).

2.8 Entrepreneurship Centers

There is a clear consensus that universities should play an active role in supporting
sustainable socio-economic development and prepare human capital for entrepre-
neurial opportunity recognition, and that the most effective way to achieve is through
the adoption of an entrepreneurial university philosophy. This means creating pro-
grams, whether educational or practical, to promote knowledge sharing, and provide
avenues for networking with industry partners and stakeholders from outside of the
academic community. This realization has encouraged many universities to revisit
their business models and adopt strategies that acknowledge the importance of
entrepreneurship in socio-economic development, and to remain actively involved
in the process of promoting entrepreneurship.
In order to ensure active participation in entrepreneurial developments some
universities rely on the creation of specific Entrepreneurship Centers to serve as a
sort of headquarters for entrepreneurial activities, while other institutions are able to
weave entrepreneurial activities as part of their institutional fabric; it is important to
highlight that it is the latter of these methods that gives rise to the concept of the
entrepreneurial university. Since the introduction of entrepreneurship and entrepre-
neurial themes in universities, researchers have seen the emergence of a plethora of
initiatives such as entrepreneurial training programs, venture creation disciplines,
introduction of research streams focusing on a variety of entrepreneurial topics,
creation of ‘on campus’ incubators, and the provision of support services for students
seeking to scale their startups or business ideas. Unfortunately, reports that aim to
summarize best practices for the promotion of entrepreneurship in universities
oftentimes place varying levels of attention to issues ranging from entrepreneurship,
innovation, research and development, and support systems. Universities are there-
fore not only placed in a rapidly evolving environment, but are also tasked with
simultaneously finding the methods that allow them to best incorporate entrepre-
neurship in their institution.
In the event that universities are not well trained to incorporate entrepreneurial
initiatives in their business models, they require a carefully designed entrepreneurial
strategy, one that connects the overall university strategy with more innovation and
entrepreneurial operational activities (Ardito, Ferraris, Petruzzelli, Bresciani, & Del
Giudice, 2019). It is further recommended that such strategies consider regional
and institutional differences, and because of this, a uniform strategy that provides
effective results across a large pool of universities is not available (Tataj, 2015). A
major way universities have tried to address this complexity, as previously
50 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

anticipated, is by creating or assigning a dedicated center that can spearhead these

activities within the institution; the entrepreneurial center.
Research has mainly focused on the current tangible functions of these entrepre-
neurial centers and disregarded their future directions, which leads to the question of
whether entrepreneurial centers are engaged in activities that are in line with future
expectations (Maas & Jones, 2017). For example, there is growing evidence that
even though a wide range of entrepreneurial support activities are emerging within
universities, some of them struggle to create the future desired state of economic
growth.
Of course, as stated by Maas and Jones (2017), “it would be an ideal environment
where the Higher Education Institution’s fabric is such that a dedicated center is not
needed to stimulate enterprise and entrepreneurship activity” pg. 12. However, this
is not the case for a large part of universities and many of them require a dedicated
center to stimulate entrepreneurial activities. Furthermore, it is commonly accepted
that a considerable amount of entrepreneurial activities within universities can be
attributed to entrepreneurship centers, nonetheless, these tend to experience various
challenges such as lack of resources, and the responsibility of managing diverse sets
of expectations from their academic stakeholders. If one center must handle the
expectations from many stakeholders, from many different disciplines within the
university, they may lose focus, which not only influences their direct activities but
may also have negative effects on the sustainable development of regions.
Despite the possible challenges for entrepreneurial centers, research does exist
that supports the importance of these centers in stimulating enterprise and entrepre-
neurship in universities (Finkle, Kuratko, & Goldsby, 2006; Nelles & Vorley, 2011).
Furthermore, even though it is widely accepted that not every university student will
be entrepreneurial, it is believed that students should be exposed to entrepreneurial
learning in order to ‘plant the seed’ for them to develop individual interest or
intention to act entrepreneurially, or engage in entrepreneurial activities. Maas and
Jones (2017) also highlight that these activities should not be the sole responsibility
of entrepreneurship centers within universities; further emphasizing the importance
of trans-disciplinary collaborations, not only for university resource gain, but also
for knowledge spillovers to potential entrepreneurs not found within universities.
Finally, it should be noted that entrepreneurial centers are not homogenous in their
activities, and while some may manifest as technology transfer offices, incubators, or
accelerators, some may be research oriented and knowledge based nodes (Mazzarol,
2014).
In a study that analyzed ten Entrepreneurship Centers across seven Europeans
countries, Ndou et al. (2018) identified some common pillars off Entrepreneurship
Education (EE) as developed within these centers in terms of five key dimensions—
(i) target audience, (ii) learning objectives, (iii) entrepreneurship contents,
(iv) learning pedagogies, and (v) stakeholders engagement. Their analysis provided
the basis to introduce a process-based framework for entrepreneurial mindset
creation and recommend future EE learning programs to be organized around the
following four main phases (Ndou et al., 2018):
2.8 Entrepreneurship Centers 51

• Inspiration: Focuses on generating a broad entrepreneurial awareness; which

serves for opportunity identification.
• Engagement: Creating specific entrepreneurship capabilities in the target groups.
• Exploitation: Creating hands-on entrepreneurial capabilities that are aimed at
taking advantage of emerging opportunities.
• Sustainment: Providing the targets with techniques, instruments, resources, and
network to endure the growth and produce value through new endeavors.
Regardless of their documented success in stimulating entrepreneurship within
universities, several challenges with the current model of ‘stand alone’ entrepre-
neurship centers have also been identified. Some of these include finding the right
staff, the scarcity and variability of resources, high and diverse expectations from
stakeholders, diverse sets of internal and external actors, and developing legitimacy
within the university (Finkle et al., 2006; Finkle, Menzies, Kuratko, & Goldsby,
2013).
Finding the right staff has been reported as a challenge for entrepreneurship
centers. This is due to the nature of the center itself, and the individuals it attracts.
Entrepreneurially oriented staff might grow tired of the standby periods for promo-
tion, and thus seek out their own employment elsewhere, or create opportunities for
career advancement themselves (Clarysse, Tartari, & Salter, 2011). Furthermore,
finding a balance between research and commercial staff to provide a full-immersion
entrepreneurial experience, and achieving mutual respect between the integrated
disciplines has been reported as a challenge in a number of case studies (Maas &
Jones, 2017).
Due to the lack of uniformity in their operating environments, it comes as no
surprise that the goals of individual centers vary in regard to their approach to new
firm creation, research and development, instilling entrepreneurial mindsets in
faculty and staff, and in their contribution to the capitalization of knowledge
(Del-Palacio, Sole, & Batista-Foguet, 2008). In his work conducted in 2015, Maas
also highlights that some centers provide all-inclusive services from opportunity
identification, to idea creation, and commercialization, while others offer specialized
services such as knowledge transfer, and leave the route-to-market aspects to other
departments or services (Maas, 2015).
One important consideration is that regional differences will always be the
determining factors that guide how entrepreneurship centers should be designed;
therefore, a uniform approach to organizing these centers cannot be created. Fur-
thermore, the physical location of the entrepreneurial center within the university
and its staff play an important role in the promotion of an entrepreneurial mindset
and culture (Maas & Jones, 2017). Depending on their environment, some centers
might place higher importance on their own survival, than on creating the dynamic
networks necessary for sustainable value creation. This raises the question of
whether entrepreneurship centers promote entrepreneurship effectively, and whether
or not they make a significant contribution toward achieving the Sustainable Devel-
opment Goals discussed in Chap. 1.
52 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

There is a variety of activities performed by different entrepreneurship centers

including new firm creation, market research, skills development, motivating entre-
preneurial behavior, and entrepreneurial knowledge creation, just to name a few.
Maas (2015) also reports that this variation of center-to-center activities is often the
result of a lack of clarity regarding corporate strategy. Since the introduction of
entrepreneurial themes into university environments, the resulting entrepreneurship
centers have and should continue to play an important role in promoting entrepre-
neurship within institutions. However, as recommended by a number of authors,
particular attention should be paid to ensure that the role of entrepreneurship centers
is aligned with the overall strategy of its host institution.

2.8.1 Technology Transfer Offices/Centers

Technology transfer offices (TTOs), in some sense, should be considered interme-

diaries who must mediate between different highly educated or segmented commu-
nities, such as academic science, research bodies, and private enterprises.
Universities are traditionally the most important knowledge source for nurturing
technological innovation. Technological innovation is a dynamic process that, over
the last decade, has become much more based upon a complex and multidisciplinary
knowledge base. Accordingly, universities have been required to put more effort into
coordinating different disciplines and creating industry linkages in order to shorten
the time required for prototyping and identifying market needs. Indeed while many
universities often have TTOs, the effectiveness of these offices in stimulating
entrepreneurship within universities is debated (Chapple, Lockett, Siegel, & Wright,
2005; Siegel et al., 2007). Studies identify that TTOs are often focused on logistic
processes and metrics of startups, and less on providing expert support or helping to
develop academics’ skills to engage in other more informal activities with industry
(Abreu & Grinevich, 2013; Fini, Lacetera, & Shane, 2010; Fitzgerald & Cunning-
ham, 2016; Miller et al., 2018).
One example of a successful TTO is found in the Waginengen University
Research (WUR), a leading research institution in technology transfer in agricultural
science. Researchers highlight that WUR facilitates technology transfer through four
mechanisms:
1. Department independence to pursue different forms of technology transfer.
2. Implementation of general legal frameworks of technology transfer to lessen the
burden for departments, scientists, and aspiring entrepreneurs.
3. Embrace a culture where the prime driver for technology transfer is a ‘responsi-
bility to give back to society” rather than income.
4. Embedding itself in a location where ties with industry are the norm, and not the
exception.
Throughout the literature it is evident that technology transfer to industry is
increasingly pursued at universities as a major entrepreneurial activity. However,
2.8 Entrepreneurship Centers 53

the success of those efforts is not always guaranteed; therefore we suggest that
researchers and stakeholders apply the above components when creating or explor-
ing TTOs, always based on their specific environmental context (Hoenen,
Kolympiris, Wubben, & Omta, 2018).

2.8.2 Incubators

In efforts to foster an environment that drives innovation and entrepreneurship,

various universities have established mechanisms such as university business incu-
bators (UBIs) to promote the commercialization of innovative ideas (Theodoraki
et al., 2018). Incubators are key elements of sustainable entrepreneurial ecosystems
(Cohen, 2006; Klofsten & Lundmark, 2016; Spigel, 2017), they act as specific
entrepreneurship centers whose purpose is to function as a neutral coordinator to
promote the interests of academic entrepreneurs, remove barriers to their success,
and connect them to entrepreneurship support mechanisms both inside and outside
the university (Hayter, 2016). The incubators within these ecosystems vary with
respect to structure, support services, and operational processes, but they generally
share a common purpose: to promote entrepreneurship, innovation, the creation of
new firms, and economic development (Theodoraki et al., 2018). In some cases,
incubators are the catalysts for the creation of sustainable university based entrepre-
neurial ecosystems and, more incubators may stimulate a variety of actors (e.g.,
schools, universities, chambers of commerce, business clubs, and so forth) to
encourage the creation of programs that build awareness of entrepreneurial activity,
and that further support and develop established entrepreneurs (Hackett & Dilts,
2004; Theodoraki et al., 2018). Generally, an incubator’s purpose is to provide a
supportive environment that enhances the probability of incubatees’ survival and
success. One of the main mechanisms of an incubator for helping entrepreneurs
overcome resource gaps is by facilitating networking with external resources such as
advisers, investors, potential partners, early-adopter customers, and potential
employees (Lasrado, Sivo, Ford, O’Neal, & Garibay, 2016).
In the case of university-based incubators (UBIs), their success is thought to
depend on two main factors. The first factor is related to the decline of public funding,
since most incubators are publicly funded, reductions in public funds can influence
incubators’ survival (Tengeh & Choto, 2015). The second factor concerns the arrival
of new entrants and the impact of substitutes, or UBI stakeholders. These new
stakeholders usually consist of private parties (e.g., consultants, accountants, bankers,
lawyers, and so forth) all of whom may increase their personal support for incubates,
without threatening other public incubators that offer similar or complementary
services (e.g., negative tradeoff). With respect to their structural dimension, univer-
sity based entrepreneurial ecosystems are directly influenced by the UBIs since these
enhance the university’s networks by establishing and fostering connections among
members from different departments and research fields. Internally, these networks
include students (e.g., undergraduate, masters, and doctoral), university researchers,
54 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

incubatees, laboratories, and research centers, and externally they include other
entrepreneurship-support institutions, other incubators, experts and consultants,
funders, and industry partners from certain sectors (Theodoraki et al., 2018).
With respect to the structural dimension of social capital, incubators must create
dense and strong relationships with other university, industry, and community
members to compensate for their usually limited availability of material and
non-material resources (Hayter, 2016). With respect to the cognitive dimension of
social capital, they must develop shared values, norms, and culture to ensure the
sustainability of the ecosystem. With respect to the relational dimension of social
capital, they must develop trust among themselves, and other members of the
university ecosystem, and decrease the number of individualistic opportunistic
behaviors (Tötterman & Sten, 2005).

2.8.3 Accelerators

The changing needs of society demand closer collaboration between universities and
industries to address some of the significant challenges threatening Earth’s natural
resources (Wilson, 2012). All of this has resulted in many forward-looking univer-
sities re-evaluating their core activities and research capabilities resulting in a wide
range of modes of university knowledge transfer and business engagement which is
responsive to the needs of industry (Fitzgerald & Cunningham, 2016; Miller et al.,
2018).
Evidence also points out that while entrepreneurship centers report having a
central strategy that guides their activities, they are not always clear on how their
strategy guides their activities. This may be due, for example, to the fact that some
centers are strategically located in a certain department (e.g., business schools) while
others are placed on ‘neutral’ campus grounds (e.g., career center) (Maas & Jones,
2017). One issue with the former model is that it is commonly assumed that when a
center is placed within a specific faculty or department, then the center, naturally or
by choice, will eventually adopt and prioritize the goals of its host faculty.
Entrepreneurship Centers also experience difficulties when it comes to financial
resources. A lack of clarity about their corporate strategy can easily translate to
insecurity regarding financial resources.
In line with the findings that entrepreneurship centers can achieve more if they are
independent of a specific faculty or department, it can also be proposed that these
centers should act as guardians to the entrepreneurial ecosystem within universities.
A formalized university entrepreneurial ecosystem that is guided by a transparent
institutional strategy can perhaps address the issues regarding acceptance and legit-
imacy of business creation and entrepreneurship within universities, and help these
areas achieve the same recognition as research and academic publications among
scholars. It is recommended that a set of carefully formulated policies, procedures,
and practices be put forward in order to guide the implementation of an entrepre-
neurial ecosystem within universities (Maas & Jones, 2017).
2.9 Triple-Helix Approaches 55

2.9 Triple-Helix Approaches

The triple helix system refers to collaborations among universities, businesses, and
governments (Table 2.1).
The Triple Helix Model (THM) (Gunasekara, 2006) was originally described by
Etzkowitz and Leydesdorff (1997) who argued for a ‘new social contract between
universities and the larger society’. Etzkowitz (2003) further posits that the interac-
tion between universities, industry, and government is the key to improving the
conditions for innovation in a knowledge-based society. The THM evidences the
power of creating common goals between industry, government, and the university
sectors. The THM is in essence a long and evolutionary process that defines
relationships among industry players, universities, public research organizations
(PROs), and governmental institutions to boost local economic growth (Etzkowitz
& Leydesdorff, 2000). For a brief review of the THM and its dimensions please see
Table 2.1.
A first role of universities within the THM is their influence, which can be
associated to issues of human capital development through higher levels of general
educational attainment (Bramwell & Wolfe, 2008). Further, a second view is from
the perspective of universities as a public research provider, which posits that
knowledge spillovers are indicated as the main source of economic contribution
and that universities are expected to act as engines of economic growth (Smith &
Bagchi-Sen, 2012). This suggests that research knowledge produced by universities
promotes entrepreneurship and that universities act as essential intersections in a
regional network of innovation activity.
From the industry point of view, there are two main aspects when seeking to
foster collaboration with universities; companies are attracted to universities if they
provide both a large amount of fundamental and cutting edge research, and a
selection of innovations or potential innovations along with top quality human
capital (e.g., graduates and students).
Some universities experience difficulties when trying to initiate collaborations
with industry partners, and oftentimes attempt to reduce the problem by setting up
processes or services to promote entrepreneurship (e.g., technology transfer offices,
accelerators, and incubators).

Table 2.1 Triple-Helix approaches

Supply Demand
University R&D Customer Base
(E.g., Google was started by PhD (E.g., Facebook at Harvard)
students at Stanford)
Business Funding Customer
(E.g., many successful businesses (E.g., businesses can later become customers
fund startups and unicorns) of the startups they financed)
Government Funding U.S. intelligence agency funded the internet
(E.g., NSA and CIA funded Google) as an in house service for itself
Source: Adapted from Chinta and Sussan (2018, p. 75)
56 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

Specifically, universities have been noted to be key instruments in increasing

entrepreneurial capacity among farmers, and effective tools to foster an entrepre-
neurial culture among them (Opolot et al., 2018). By bridging linkages between
farmers and other public and private institutions, universities help expose food
system members to knowledge and ideas beyond their own horizons (Abeyrathne
& Jayawardena, 2014; Berggren & Silver, 2009). Finally, it has been noted that
effective partnerships between universities, government agencies, private busi-
nesses, and residents are a vital element of overall community development
(Etzkowitz & Zhou, 2017; Heitor, 2015).
The contribution of universities in new knowledge creation and especially the
importance of their research in fostering entrepreneurial activity and economic
growth are central to many theories regarding innovation and entrepreneurship. In
this case ‘Triple Helix Model’ Model’ (Etzkowitz & Dzisah, 2008; Etzkowitz &
Leydesdorff, 2000). In the university context, an entrepreneurial ecosystem echoes
the Triple Helix concept, in which academia, government, and industry form
trilateral networks and hybrid organizations, the actions of which are often encour-
aged, but not controlled, by government (Carayannis, Grigoroudis, Campbell,
Meissner, & Stamati, 2018; Etzkowitz & Leydesdorff, 2000).

2.9.1 The Knowledge Triangle

The Knowledge Triangle is a novel approach to designing a growth model based on

a specific type of innovation network (Tataj, 2015). Unlike most linear models of
knowledge transfer to the viable commercialization of scientific research, the
Knowledge Triangle adopts a more systemic approach to the processes of knowl-
edge transfer and innovation creation by linking the three areas of (academic)
research and knowledge creation, education and training, and business innovation.
The Knowledge Triangle is often considered as the logical evolution of other related
concepts such as the ‘third mission’, ‘entrepreneurial universities’, and the ‘THM’
(Unger & Polt, 2017).
Even though these previous concepts, especially the THM, have some overlap
with the Knowledge Triangle, the way in which these constructs are applied in
practice differs. One major advancement of the Knowledge Triangle is that whereas
other concepts focus on the actors within innovation systems as the starting point, the
Knowledge Triangle employs an activity oriented approach to linking the dimen-
sions of education, research, and innovation. Therefore, the Knowledge Triangle is a
model that focuses on the interactions among the three dimensions, with a specific
focus on the following types of interactions:
• Research and Education: These interactions are reflected by the geographical
and sectorial mobility of students, training programs, and the fundamental idea of
considering applied research as the foundation for research-based teaching, and
measures to improve skill-matching between companies and graduates.
2.9 Triple-Helix Approaches 57

• Research and Innovation: This area focuses on the support and intensification
of knowledge transfer. Specifically, it focuses on (i) public-private partnership
models (i.e., clusters, and entrepreneurial universities), (ii) the commercializa-
tion of publicly funded research, (iii) contract research and development services
from universities for the industrial sector, and (iv) university spin-offs and
academic startups, (v) knowledge and technology transfer offices (TTOs),
(vi) incubators, and (vii) open science or open innovation platforms (e.g.,
Forward Fooding).
• Education and Innovation: This dimension evaluates the collaboration between
actors by considering the support framework for the development of an entrepre-
neurial culture in the ecosystem of interest, and ensures the presence of industry-
focused and practical training programs, and the formation of appropriate human
capital competencies through education.
The Knowledge Triangle has recently gained marked importance as a framework
to conceptualize the relationships between universities, business sectors, and socie-
ties at large. This reflects the European Commission’s policy strategies, and
addresses the targets formulated in the European Union’s 2020 Strategy for Smart
Sustainable Growth (European Council, 2010). According to this strategy, effective
links between research, education, and innovation are considered key prerequisites
for tackling social challenges.
The Knowledge Triangle as an innovation network is discussed as a formalized
collaboration of research institutions, universities, and industry partners all located
in geographical proximity of an existing innovation ecosystem and linked to similar
networks operating in comparable environments (Tataj, 2015). In this context,
partners enter into dynamic and reciprocal relationships that are interdependent,
and underlined by a series of continuous flows of information exchange that include
the core drivers of innovation, i.e., talent, knowledge, and capital (Tataj, 2015).
Furthermore, the Knowledge Triangle rejects the ‘traditional belief’ that knowledge
is generated in research labs and universities, and later turned into businesses and
brought to market by industry; it argues that innovations can originate in any of these
settings.
In essence, the Knowledge Triangle as an innovation network can manifest in a
number of different ways. An exemplary model for which the Knowledge Triangle
was used as a conceptual framework is the Knowledge and Innovation Communities
(KICs) of the European Institute of Innovation and Technology (i.e., EIT). KICs
considered manifestations of the Knowledge Triangle and are specifically consid-
ered European innovation networks, and can be described as an “excellence-driven,
autonomous partnership of higher education institutions, research organizations,
companies, and other stakeholders [EIT Regulation (EC) No 294/2008] (Tataj,
2015).
To date, the EIT has established 8 KICs, each with their own focus area, including
climate, innovative energy, digital technologies, health, manufacturing, raw mate-
rials, urban mobility, and of special interest to this text, food.
For further information regarding EIT’s Food KIC or the 8 KICs (i.e., https://
[Link]/) please see Chap. 10 or the accompanying link, respectively.
58 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

2.10 Conclusion

We conclude that when structured according to the needs and resources of their local
or regional environment, entrepreneurial and innovation endeavors in universities
serve the following functions to assist food system entrepreneurs in identifying and
exploiting entrepreneurial opportunities:
– Environmental Opportunity: This means networks, interactions, events, and
connections that allow university members to interact with food system members
and vice-versa.
– Resource Opportunity: Providing funding, and human capital (e.g., mentors,
venture capitalists, and field experts).
– Growth Opportunity: teaching practical skills to individuals which take on
transversal forms for easier and diversified navigation of entrepreneurial
opportunities.
Furthermore, the importance of knowledge transfer from universities as a source
of innovative ideas positions universities as key actors in regional and national
innovation efforts (Abreu & Grinevich, 2013; Guerrero et al., 2016).
Some higher education institutions simply seem to be better at being entrepre-
neurial and developing an entrepreneurial culture. However, one important fact to
remember, and as stated by Tataj (2015), not every member of the university’s
student body will become entrepreneurs. She then goes on to divide university
students into three segments, (i) students who matter what is done will never become
entrepreneurs, (ii) students who no matter what is done will become entrepreneurs
regardless, and (iii) students who do not consider an entrepreneurial venture as their
career choice (Tataj, 2015). For example, in the case of the most famous entrepre-
neurial university, Stanford, the university did not teach entrepreneurship, but
attracted entrepreneurial people. At Stanford, students are taught to develop the
necessary skills that will increase their chances of success in the business world, but
they are not taught to be entrepreneurs. Instead, entrepreneurial skill can be
described by their fluidity in a free market economy, by acquiring entrepreneurial
skills in marketing, sales, finance, and human and environmental resource manage-
ment. Teaching students how to write a business plan, what language to use when
attempting to raise money from venture capitalists or in trying to secure a loan, and
how to present a new venture for the purpose of selling it are the factors that drive the
entrepreneurial culture at Stanford. Therefore, preparing entrepreneurs at higher
education institutions should not be exclusively about teaching students how to be
entrepreneurial, but to also teach them everyday techniques to aid them in success.
Furthermore, Shu, Ren, and Zheng (2018) support the notion of a positive
relationship between network capabilities and opportunity discovery even after
controlling for entrepreneur’s prior knowledge, cognitive bias, and political skills.
They go on to describe network capability as a four dimensional construct including
(i) network orientation (i.e., the extent to which a person is willing to depend on
social networks in their daily socializations), (ii) network building (e.g., relational
2.10 Conclusion 59

efforts to expand network), (iii) network maintenance (e.g., ensuring stable and long-
term exchange relationships with others), and (iv) network coordination (e.g.,
managing multiple relationships) (Shu et al., 2018). Thus, highlighting once again
the importance of a strong network, and the university’s role in stimulating such.
Similarly, Feld (2012) emphasizes the critical role of university as a promoter of
entrepreneurial activity due to its facilities, and abundance of potential entrepre-
neurs. Therefore, the entrepreneurial culture of the university has a great influence on
the entrepreneurial ecosystem. Universities play a dual role in fostering entrepre-
neurial ecosystems (Spigel, 2017). First, they provide human capital (Motoyama,
2014) and disseminate an entrepreneurial mindset among students, encouraging
them to create startups or seek experiences in innovative environments (Shah &
Pahnke, 2014). Second, through academic research, they develop new technologies,
hereby creating entrepreneurial opportunities (Smith, Chapman, Wood, Barnes, &
Romeo, 2014). Academic entrepreneurs can then commercialize these innovations
(Shane, 2004) or they can spill over to existing ventures (Kirchhoff, Newbert, Hasan,
& Armington, 2007). One can conclude that in addition to being the engine for
entrepreneurial activity, universities act as feeders into the entrepreneurial ecosystem
(Feld, 2012).
Up until recently, the decision to become an entrepreneur and the outcomes of
entrepreneurial ventures were viewed solely as dependent on the individual entre-
preneur, group of individuals, or individual company characteristics. However, it
was recently noted that entrepreneurship is much more than a phenomenon that
manifests itself at the individual level. Through observations of clusters of entrepre-
neurship such as the Silicon Valley, industry experts arrived at the realization that
‘place matters’, and more specifically, the resources available in these places.
Entrepreneurship has also been found to thrive across a broad spectrum of cultures
and national contexts, and a commonality amongst these different areas is the local
resources to promote entrepreneurship such as supportive local firms, engaged
universities, policies, and other local institutions.
Finally, we believe that the famous African proverb “It takes a village to raise a
child”, transcends boundaries into the business world, and postulate that “it takes an
ecosystem to raise an entrepreneur”.
Entrepreneurial activity should be interpreted as a complex system, exhibiting
technological, cultural, and social aspects and components that touch upon philo-
sophical and social issues (Tataj, 2015). It is clear that universities are important
members of entrepreneurial ecosystems and particularly, with respect to innovation
(O’Connor & Reed, 2018).
A recurring problem with the collaboration efforts between academia and indus-
try is the transition from prototype stage to mass manufacturing; to overcome
barriers between small scale and industrial production ecosystem relationships are
needed. Furthermore, policy makers consider universities important contributors to
economic growth and thus allocate resources, time, and financial support at their
disposal (Hyder et al., 2011; Riviezzo, Santos, Liñán, Napolitano, & Fusco, 2019;
Urbano & Guerrero, 2013), further highlighting the need to establish meaningful and
effective collaborations.
60 2 The Role of Universities in Harnessing Entrepreneurial Opportunities

Hayter et al. (2018) show that the links between graduate students and individuals
outside the university, and access to external resources are necessary in ensuring the
success of new ventures. Luckily, we are witnessing the birth of ecosystems for
collaborative research; open innovation, multiple project collaboration agreements,
multiple partner consortia, and other new forms of governance have received
increased attention from academia and the corporate world (Chinta & Sussan, 2018).
There is widespread recognition of the need for input reduced production to
reflect the issues of climate change and population growth (i.e., exogenous shocks),
an increasing awareness of environmental pollution and animal welfare (i.e., change
in demand), and of new technological abilities in biotechnical and process engineer-
ing (i.e., change in supply)—the combination of which fosters entrepreneurial
opportunities in food systems (Kuckertz et al., 2019).
Universities are the key elements in driving these transitions, education, and
collaboration initiatives. Understanding their many roles in providing opportunities
for possible entrepreneurs, whether through practical education or resource provi-
sion is critical for stakeholders wishing to stimulate entrepreneurial environments in
their institutions through academic and business collaborations, and for aspiring
entrepreneurs seeking a good fit of support for their nascent ventures.

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Chapter 3
Innovation and Entrepreneurial
Ecosystems: Structure, Boundaries,
and Dynamics

Abstract Recognizing the broader dimensions of entrepreneurial and innovation

activities, holistic and inclusive networked approaches pave the way to co-creation
activities that are essential for achieving sustainability in food systems. Recent
studies have started to deepen what are the critical enablers for creating thriving
entrepreneurial and innovation ecosystems. Networks that include firms, institutions,
and several other relevant stakeholders in knowledge spillovers enable to produce
more social and economic value through co-creation processes. However, due to the
unique complexity within ecosystems, there is no standardized framework or strat-
egy to develop entrepreneurial or innovation ecosystems effectively. In this chapter,
a synthesis of the structure, dynamics, and boundaries of innovation and entrepre-
neurial ecosystems is presented. In particular, the main differences between these
two concepts and the traditional ecosystem concept are provided and an overview of
the more well-established definitions and frameworks present in the business and
management literature offered. So, the following questions and many others will be
addressed: what are the critical factors that lead some ecosystems to success? What
the key actors? What dynamics characterize them? Answering these questions may
represent an effective solution to address sustainability in the multi-functionality of
food systems collectively. Therefore, how the heterogeneous elements and com-
plexity of entrepreneurial and innovation ecosystems can be applied in food system
sustainability initiatives will be finally discussed and critical action points for policy
and practice recommended.

Keywords Innovation ecosystems · Entrepreneurial ecosystems · Value

co-creation · Food systems · Sustainability

Co-authored by Canio Forliano—Department of Management, University of Turin, School of

Management and Economics, Turin, Italy
Department of Political Science and International relations, University of Palermo, Palermo,
Italy, e-mail: [Link]@[Link]
Co-authored by Alberto Bertello—Department of Management, University of Turin, School of
Management and Economics, Turin, Italy, e-mail: [Link]@[Link]

© Springer Nature Switzerland AG 2020 73

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
74 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

3.1 Introducing the Ecosystems Concept

Over the last few years, the concepts of systems and ecosystems have gained a surge
of interest as novel forms to describe the competitive environment (Jacobides,
Cennamo, & Gawer, 2018). Notably, Autio and Thomas (2014) analysed and
compared the differences between these two terms, concluding that ecosystems are
in their early stages and more studied in the innovation subdomain of the business
and management literature, whereas the concept of systems is well established and
developed among interdisciplinary scholars. In a more recent study, Hajikhani
(2017) came to the same conclusions, highlighting that while systems are used
21 times more than ecosystems, they contribute only twice the former to innovation
studies. Their analysis further revealed that the ecosystem concept covers more
various topics and occurs without consistency and interconnectivity of authors
than the system concept, thus implying higher diversity in the literature and evidenc-
ing the need for a more precise understanding of the term. In fact, as new ecosystems
pursue new trajectories and processes to transform or replace traditional methods,
they are often opposed by reluctant stakeholders and institutions (Adner & Kapoor,
2016).
The term “ecosystem” has emerged as an attractive metaphor to describe the
range of interactions and interdependencies that currently occur between multiple
institutions and stakeholders. Moore (1993) was the first to introduce the term in the
fields of business and economics, using it for describing the set of organizations and
consumers that interact around a central organization and contribute to its success.
Iansiti and Levien (2004) further built on this conceptualization and described
ecosystems as open networks of stakeholders whose activity impacts the central
organization activity and is reciprocally impacted by the same. In this sense,
ecosystems represent inclusive communities of both private and public institutions,
organizations, and individuals (Teece, 2007) and one of their essential characteristics
is that they empower coordination between subjects that would conversely be more
independent (Jacobides et al., 2018). The degree to which a system is made up of
relatively independent parts, namely parts that can be combined, separated, and
re-combined, is called modularity. Therefore, modularity characterizes more or less
every ecosystem and the interplays between its interdependent members. However,
if modularity creates the conditions for an ecosystem to emerge, its survival requires
a particular grade of coordination among its members. Notably, this coordination
must be present regardless of the presence of a central controlling actor. Subse-
quently, also a specific kind of complementarity will be necessary, referring to
members that reciprocally require each other for their functioning or maximizing
their performances.
The idea that organizations rarely operate in perfectly competitive markets, but
often act in network structures where they play complementary roles to co-create
value, represents a core foundation behind the notion of innovation and
3.2 Innovation Ecosystems 75

entrepreneurship. This new insight has gained importance amongst innovation and
entrepreneurship scholars, leading to the introduction of innovation and entrepre-
neurial ecosystems when adopted in their respective fields (Thomas, Sharapov, &
Autio, 2018). So, the remainder of this chapter will introduce the most cited
frameworks for both innovation and entrepreneurial ecosystems and provide the
guidelines for how to best tailor them to be integrated into the food system.

3.2 Innovation Ecosystems

Innovation ecosystems have been defined as a “network of interconnected organi-

zations, organized around a focal firm or a platform, and incorporating both produc-
tion and use side participants, and focusing on the development of new value
through innovation” (Autio & Thomas, 2014, 2016).
So, in order to stimulate value co-creation, the relationships in an ecosystem must
efficiently move resources and information (i.e., knowledge spillovers) around the
network. For what regards resources, it is possible to say that innovation ecosystems
are systemically characterised by value co-creation objectives that need to expressly
consider the complementary or conflicting role that resource providers can play
towards other members (Jacobides, Knudsen, & Augier, 2006). Subsequently, the
dynamics of value co-creation mean that opportunities provided by ecosystems are
not always equally distributed amongst their members (Adner & Kapoor, 2010;
Ceccagnoli, Forman, Huang, & Wu, 2012). Conversely, for what concerns informa-
tion, since it can be moved regardless of physical boundaries, value co-creation is
independent of the physical locations of the ecosystem institution or members
(Thomas et al., 2018). As a consequence, even if innovation ecosystems usually
are regionally located, they can be disseminated throughout the world. So, thanks to
the networks created by their members, shared problems and emerging societal
challenges (e.g., SDGs, food scarcity, food waste) can be addressed. In essence, an
innovation ecosystem operates regionally, but its significance and impact, due nature
of trade-offs within ecosystems, can have a global magnitude (Schiuma & Carlucci,
2018). The possibility of global dissemination is made possible by digital
affordances and spatial affordances. Digital affordances (e.g., communication tech-
nologies) allow a faster, more connected ecosystem members, thus facilitating
knowledge sharing. Spatial affordances, instead, serve more as illustrations of the
trans-disciplinarity of these type of ecosystems, since they are not limited to a given
industry sector or technological domain (Autio, Nambisan, Thomas, & Wright,
2018).
76 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

3.2.1 Differences Between Innovation Ecosystems and Other

Cluster Approaches

Innovation ecosystems engage in a set of complex networked relationships where

they combine their assets into coherent solutions, in the process of co-creating value
that would not be possible for single or isolated members. In innovation ecosystems,
the co-creation of value depends on investments in upcoming ventures, significant
knowledge exchanges, and spillovers, as well as governance mechanisms that keep
members becoming integrated into a single organization. Due to the interdependent
nature of ecosystem relationships, each innovation ecosystem member is symbiotic
to and co-evolves with other single members and institutions. Subsequently, each
member’s expected performance is tied to the expected outcomes of the ecosystem
as a whole, regardless of that individual member or institution’s power, or capital, in
the ecosystem (Thomas et al., 2018). This characteristic represents a shift from
traditional value creation, which has usually been founded on the provision of assets
and vertically integrated linear chains. Therefore, in traditional networked systems,
value is formed by the characteristics of network relationships and their adaptability
to customer needs and goals; assets can only create value when they are embedded
into consumers’ own value formation (Still, Lähteenmäki, & Seppänen, 2019). A
synthesis of the main characteristics of innovation ecosystems and their differences
as compared to other networking concepts is provided in Table 3.1. As can be
observed, even if they have traditionally been better addressed in the business and
management literature, the other networking concepts result in being less compre-
hensive than the innovation ecosystem concept.
Therefore, innovation ecosystems primarily consist of innovative firms, which
represent their key innovator actors, as well as end-users of the knowledge created
through member interactions. However, other members can be: (i) public institutions
and governments; (ii) research institutions and universities, which are considered to
be the main contributors to knowledge production; (iii) the financial institutions, that
facilitate innovations through ensuring funding; (iv) and all the other actors able
to stimulate cooperation, mobility, knowledge spillovers, and social interactions
(Romano, Passiante, Del Vecchio, & Secundo, 2014).

3.2.2 An Innovation Ecosystems Mapping Effort: The

Ecosystem Pie Model

For better understanding and modelling innovation ecosystems for both practical and
scholarly use, Talmar and colleagues (2018) developed a qualitative strategy map-
ping tool: the Ecosystem Pie Model (EPM) (Fig. 3.1). To do so, they integrated a
structuralist tradition (Adner, 2017; Hannah & Eisenhardt, 2018; Talmar, Walrave,
Podoynitsyna, Holmström, & Romme, 2018) with the approaches developed in
recent academic works on ecosystems and instrumentalizing the innovation
3.2 Innovation Ecosystems 77

Table 3.1 From clusters to innovation ecosystems

Input into the
entrepreneurial
Key actors Key concepts ecosystem approach Key outcome
Cluster Innovative Factor conditions; Talent, finance, National and
firms demand conditions; knowledge, physical regional compet-
related and supporting infrastructure (factor itiveness (i.e.,
industries; firm struc- conditions); market productivity of
ture, strategy and demand; support certain
rivalry services (e.g., related industries)
and supporting
industries)
Triple Government Interactions between Knowledge transfer Innovation
Helix firms and university, industry, and interdependence system
model universities and government, of three sectorial
innovation, actors
knowledge-based
society
Innovation Innovative Networks, inter- Knowledge, finance, Innovation
system firms and organizational learn- formal institutions,
National ing, system demand
Government
Innovation Innovative Co-innovation, adop- Interdependence of Value creation
ecosystem firms tion chain, shared actors involved in and capture by
value proposition innovation; global the firms in the
networks ecosystem; firm
survival
Source: O’Connor, Stam, Sussan, and Audretsch (2018)

ecosystem concept. The EPM distinguishes its elements and relationships at the
ecosystem level (EL) and the actor level (AL), which both interact between and
within ecosystem members.
The EPM uses elements of actor-based sectors and embedded circles representing
the specific characteristics of each actor. The circular shape of the EPM has two main
benefits. The first is that it enables a simultaneous detailed representation of ecosys-
tem and actor level properties. Secondly, it clearly displays the relationships that
transcend the immediate boundaries in the value chain. So, the EPM serves as a tool
to consider and integrate significant ecosystem properties such as interdependency,
complementarities, and alignment risks. The tool serves to empower stakeholders to
make informed decisions about their innovation strategies and helps them make
sense of the ecosystem as complex entities. For a complete list of guidelines for the
successful usage of the Pie model, please see Talmar et al. (2018).
Talmar et al. (2018) further suggest that the EPM can also deliver value to
ecosystem members and to external experts that seek to map and analyze ecosystems
for the evaluation of investment opportunity or developing research funding policies.
Furthermore, using the EPM to explore opportunities for common innovation
initiatives in efforts to guide potentially infamous conversations on topics such as
dependence, risk, or environmental challenges leads to the engagement of several
78 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

AL: 5. The extent to which the actor is

dependent on the success of the ecosystem.
Represented by retaining or coloring in the
EL: 2. Sub-section of the market that appropriate letter: L-low, M-medium, H-high
is targeted by the ecosystem’s value
proposition
DEPENDENCE
USER SEGMENT #1 EL: 3. The organizations, institutions,
ACTOR #1 communities and individuals that
AL: 1. Resources at the disposal of the RESOURCES are engaged with value creation
actor to be utilized for value creation and capture on the supply side of
within the ecosystem the ecosystem. Positioned clockwise
L toward end users
AL: 2. Activities performed in converting
resources into value additions toward ACTIVITIES
the ecosystem [...]
AL: 3. The unique productive M
contribution of the actor to VALUE L
the ecosystem ADDITION
AL: 4. The type, mechanism and H FILLING IN: Relationships
quantity of value captured by VALUE M between elements not
the actor from the ecosystem CAPTURE explained otherwise are
indicated with arrows
AL: 6. The potential inability
and unwillingness of the actor
RISK
H
[...]
to supply their productive
contribution to the ecosystem.
Represented by coloring in
the section: red-high, yellow-
medium, green-low ECOSYSTEM’S
VALUE PROPOSITION

FILLING IN: Actors are

color-coded based on
which sub-system (i.e.,
value chain) they
contribute to

EL:1. Intended value arising from FILLING IN: For sections other than
the system-level overarching Risk and Dependence, the input is
offering by the supply-side agents (most commonly) descriptive text.
in the ecosystem To enable rapid reorganizing, it is
suggested to use (one or more)
post-it note per section.

Fig. 3.1 The ecosystem pie model. Source: Talmar et al. (2018)

organizations in co-creation and collaborations. The characteristics of the EPM assist

in drafting a clear strategy for ecosystem performance. This is an essential consid-
eration regarding the use of EPM, since a significant topic of interest is ecosystem
strategy, i.e., how do firms change their behavior or attempt to influence the behavior
of others based on the analysis of their ecosystem setting (Adner, 2017; Dattée,
Alexy, & Autio, 2018; Hannah & Eisenhardt, 2018).
The EPM framework for ecosystem modeling is also thought to empower
researchers to study the topic of ecosystems in four novel ways:
(i) The main challenges in developing ecosystems strategy arise from the context
of the ecosystem, as represented by the interdependence of its structural
elements. The EPM explicitly considers the structural elements of ecosystems,
which paves the way for contextualizing scholarly inquiries into strategic
decision making in and around a particular ecosystem (Adner, 2017).
(ii) Scholars can employ the visual illustration of the EPM to create ecosystem
strategies as design interventions.
(iii) Researchers may use the EPM framework to represent different ecosystems
(e.g., innovation and entrepreneurial), which enables the comparability of
research input and output.
3.3 Entrepreneurial Ecosystems 79

(iv) By presenting research outcomes in the form of a synthesized visual model

accompanied by detailed and strategic implications, scholars can effectively
create value for organizations that can then be exchanged for greater future
entrepreneurial opportunities.

3.3 Entrepreneurial Ecosystems

In modern complex economies, it is even more challenging for companies to address

the entire value chain of specific products or services, since they are progressively
turning themselves into very specialized organizations (Appleyard & Chesbrough,
2017; Kapoor & Furr, 2015). Instead, they must depend on and seek collaborations
with other members of their ecosystem to engage in system-wide value proposition
and value creation initiatives; initiatives that materialize when diverse ecosystem
members combine their single contributions (Hannah & Eisenhardt, 2018). Thus, the
ecosystem concept has been associated with companies interdependent from each
other frequently. According to Teece (2007), ecosystems can be depicted as the
landscape in which all companies operate and that give shape to their dynamic
capabilities. As a consequence, for building sustainable competitive advantages,
they need to constantly keep an eye on them and be ready to react to them (Jacobides
et al., 2018).
Given this scenario, entrepreneurial ecosystems can consist of various compo-
nents, including tenured and experienced entrepreneurs, legal support systems, a
culture that condones failure, entrepreneurship centers, and access to finances
through business angels or venture capitalists (Isenberg, 2010). Therefore, they
can be seen as networks that refer to the human capital, financial and professional
resources, and other support systems that drive social and economic development in
specific geographic locations (Graham, 2014; Isenberg, 2010). So, several actors
come together and create an environment where also governing policies can encour-
age, protect, and stimulate entrepreneurship (Isenberg, 2010). For this reason,
researches on entrepreneurial ecosystems have been driven by the realization of
the importance of the institutional environment and the local context for the possible
effects on entrepreneurship (Autio, Kenney, Mustar, Siegel, & Wright, 2014; Levie,
2014; Pitelis, 2012).
However, differently from the established concept of district or cluster, an
entrepreneurial ecosystem emphasize its emergence around the possibility to exploit
some recognized entrepreneurial opportunities, strictly relying on business model
innovation, the continuous provision of human, financial, and technological
resources, and the presence of horizontal knowledge spillovers (Autio et al.,
2018). According to Tallman, Jenkins, Henry, and Pinch (2004), entrepreneurial
ecosystems can exactly be viewed as networks in which subjects concentrate their
efforts on developing and fostering knowledge. More specifically, entrepreneurial
ecosystems promote horizontal knowledge sharing practices among their members,
finalized, for example, in understanding how to innovate companies’ business
80 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

Fig. 3.2 Structural framework for entrepreneurial ecosystems. Source: Autio et al. (2018)

models properly, what entrepreneurial opportunities seize, and what businesses

expand (Autio et al., 2018). As said for what regards innovation ecosystems, the
combination of digital and spatial affordances further facilitates business model
innovation for entrepreneurial opportunity, discovery, and pursuit, which are also
characteristics of entrepreneurial ecosystems. Based on work conducted by Autio
et al. (2018) regarding digital and spatial, they propose a structural framework for
entrepreneurial ecosystems (Fig. 3.2).
Subsequently, a vast kind of industries, actors, and technologies can be involved.
That said, entrepreneurial ecosystems can be seen as essential drivers that usually:
(i) support and stimulate new venture creations, (ii) enable access to markets, (iii)
and offer human capital and financial assistance for entrepreneurs seeking to scale up
new businesses.
For what regards new ventures (e.g., start-ups), they emerge and grow not only
because of the individual characteristics of their founding entrepreneur(s) but also
because are located in networks of public and private members that nurture and help
them evolve through the developmental phases. The availability of resources and
entrepreneurial environment thus influences the formation and eventual trajectory of
new ventures, and if thriving, potentially the economy as a whole. Importantly, the
way that these resources are manifested and exploited, and how the entrepreneurial
culture develops within the ecosystem is unique to specific locations—there is no
universal model that can be employed to create and ensure the success of entrepre-
neurial ecosystems (Isenberg, 2010).
3.3 Entrepreneurial Ecosystems 81

Conversely, regarding access to markets, due to the heterogeneity of new ven-

tures and start-ups, and their anticipated effect magnitude and initial revenues,
having access to sustainable revenues at critical stages is an essential aspect of
every economy’s social and economic development (Foster et al., 2013). Entrepre-
neurial ecosystems with a larger and more complex depth of skilled members create
a more accommodating environment for the scaling of early-stage entrepreneurial
endeavors.
Furthermore, the complex interactions amongst ecosystem members drive social
and economic benefits by connecting aspiring entrepreneurs and new ventures with
potential funding sources (Radojevich-Kelley & Hoffman, 2012). Moreover, it helps
to accelerate the process for reaching key milestones, including raising required
venture capital, and eventual independence from the ecosystem by acquisition and
achievement of customer traction (Hallen, Bingham, & Cohen, 2014; Winston
Smith, Hannigan, & Gasiorowski, 2013). Moreover, some authors have also
suggested that entrepreneurs can reap higher benefits when embedded in multiple
entrepreneurial ecosystems by exploiting differences and complementarities
between ecosystems (Kulchina, 2016) and by overcoming resource scarcity in one
ecosystem by accessing the needed resources in another (Thomas et al., 2018).

3.3.1 The Emergence of Entrepreneurial Ecosystems

Due to those characteristics and functions of entrepreneurial ecosystems, it is no

wonder they are considered as vital elements to the success of entrepreneurial
activities (Acs, Autio, & Szerb, 2014). However, up to date, researches have mainly
posed their attention to individuating the key characteristics of thriving ecosystems.
For example, it is well known that the most famous ecosystem, Silicon Valley,
contains essential features that include a large stock of investors, professionals,
knowledge spillovers opportunities, and research centers (Bahrami & Evans,
1995). It has been found that a significant role is also played by lead users, a term
introduced by von Hippel (1986) to identify skilled and sophisticated consumers that
actively propose innovation to companies. However, studies have also detached the
critical attributes for the success of other famous ecosystems, i.e., those located in
Edinburgh (Spigel, 2016) or Tel Aviv (Klingler-Vidra, Kenney, & Breznitz, 2016).
So, they highlighted that to understand the phenomenon itself and its emergence
better, we should understand the interdependencies among their members and
attributes, rather than only taking an inventory of the latter (Auerswald, 2015;
Mack & Mayer, 2016).
In efforts to accurately theorize factors that affect the emergence of entrepreneur-
ial ecosystems, Roundy, Bradshaw, and Brockman (2018) highlighted the necessity
to deepen investigate entrepreneurial ecosystems at a micro-level, for what regards
individual entrepreneurs, and meso-level, concerning the enterprises themselves.
From their results, the authors identified three intertwined forces that let an entre-
preneurial ecosystem rise: (i) the intentionality and adaptive tensions of
82 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

entrepreneurs, (ii) the coherence of entrepreneurial activities, (iii) and the injections
of resources into the ecosystem. So, in the first stages, it is all linked to some
entrepreneurs’ willingness to start doing business differently (intentionality)
(Krueger Jr, Reilly, & Carsrud, 2000; Muñoz & Encinar, 2014: 323).
However, intentionality is not enough to let an entrepreneurial ecosystem arise.
Indeed, it is necessary that also a certain amount of resources is placed within that
specific area (e.g., human capital, funding, facilities). In this way, particularly
aspiring entrepreneurs will strive to access those resources for taking advantage of
the recognized favorable circumstances and start to trigger creative answers and
plans (adaptive tensions) (Lichtenstein, Carter, Dooley, & Gartner, 2007; McKelvey,
2004). Subsequently, this pressure to act will lead entrepreneurs to put their plans
into action. If the plan results successful, other entrepreneurs will start structuring
their business model for emulating it (Osterwalder, 2004). Conversely, if
uncoordinated efforts would result in not achieving the expected results, the process
that Minniti and Bygrave (2001) called entrepreneurial learning begins. Entrepre-
neurs start sharing information and experiences, reciprocally influencing their
behaviors and results, so that undesired outcomes become the trigger of unexpected
innovation (Petkova, 2009). As a consequence, in any case, activities will start being
more coordinated among those subjects (coherence of entrepreneurial activities),
stimulating the emergence of an entrepreneurial ecosystem.
Finally, the resulting recursive relations of the members and their reaction to the
internal and external forces that intervene at all levels, from individual to system
ones, will further structure the ecosystem (Spigel, 2016). For what regards external
or exogenous forces, particular attention has been posed to a continue provision of
resources (injections of resources into the ecosystem), which are able to influence
members’ behaviors and further stimulate coherence among them. For example,
companies located in a region where a particular technology is well developed could
be spurred to adopt the same technology if fuelled with the necessary resources to
implement it.

3.3.2 Limitations and Further Developments of Current

Studies

Given the above, it must be said that entrepreneurial ecosystems are not without their
own set of limitations. During a review of entrepreneurial ecosystem literature
Alvedalen and Boschma (2017) identified five main weaknesses: (i) a clear analyt-
ical framework that explains the cause and effects of entrepreneurial ecosystems
remains absent; (ii) the ways in which the proposed elements are connected and
interact with each other, and an outline of which interactions are most important are
not always clear; (iii) there is no clear explanation regarding what factors really
influence an entrepreneurial ecosystems structures and performances; (iv) there are
no studies that compare entrepreneurial ecosystems on a large scale, overcoming the
3.4 Structure of Innovation and Entrepreneurial Ecosystems 83

boundaries of a single case study, regionally located; (iv) entrepreneurial ecosystem

literature lacks of longitudinal studies that can address how ecosystems evolve
over time.
Moreover, Alvedalen and Boschma (2017) suggest the following streams on
which concentrating further researches on entrepreneurial ecosystems:
(i) At a macro-level studying institutional changes, since existing institutions need
to adapt themselves or new institutions need to be created for seizing the
opportunities provided by entrepreneurial ecosystems.
(ii) At a meso-level, studying what organizational elements may hinder institu-
tional changes and entrepreneurial ecosystems to emerge in certain regions.
(iii) At a micro-level, analyzing what subjects can trigger institutional changes and
under what conditions, what factors empower certain subjects to create new
companies or adapt to new institutions more successfully than others, and what
are the drivers that lead some regions to be a more fertile ground for ecosystems
to rise.

3.4 Structure of Innovation and Entrepreneurial

Ecosystems

3.4.1 Similarities

One overarching similarity between entrepreneurial and innovation ecosystems is

the fact they go beyond their internal perspectives and take advantage of the different
support sources from various institutions (e.g., those located on industrial and
governmental levels). Consequently, they both pave the way for inflows and out-
flows of external knowledge (Chesbrough, 2003; Scaringella & Radziwon, 2018).
Entrepreneurial and innovation ecosystems can both be described as complex
adaptive systems that share the following six properties: (i) self-organization,
(ii) open but distinct boundaries, (iii) complex components, (iv) non-linearity,
(v) adaptability, and (vi) sensitivity to initial conditions (Roundy et al., 2018).
Innovation and entrepreneurial ecosystem and their complexity have encouraged
many authors to develop conceptualizations of their existing and interacting
elements. A popular conceptualization of innovation ecosystems, for example,
includes the following core elements: (i) actors, (ii) infrastructure, (iii) regulations,
(iv) knowledge, and (v) ideas (Durst & Poutanen, 2013; Hwang & Horowitt, 2012;
Jackson, 2011).
(i) Actors: they include government, universities, industry, supportive institu-
tions, field experts, entrepreneurs, financial support systems, viable markets,
societies, and their (social and economic) relationships that play various roles
throughout the innovation ecosystems life.
84 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

(ii) Infrastructure: physical and technical conditions, as well as all the general
resources that are necessary to support the innovation ecosystem and the
developments occurring within it.
(iii) Regulations: including laws and rules that frame the innovation ecosystem
functioning and innovation environment.
(iv) Knowledge: regards existing supporting theoretical foundations, both tacit/
explicit and formal/informal, and specialized knowledge that are used, gener-
ated (eventually organized and managed), made available, and learned along
the innovation value chain.
(v) Ideas: these include intentional thoughts that trigger innovation actions and
around which the whole innovation ecosystems work.
Actors can perform several roles throughout the ecosystems’ life; this is in part
due to the many overlapping capabilities of members. Ecosystem actors may be
different in nature, internal processes, stages of evolution, and value systems. It is
through the heterogeneity of its members that ecosystems can be viewed as diverse
systems of systems. Even though these members are independent entities that
oftentimes come from diverse institutions, they still perform actions related to
sustaining the entire ecosystem. Moreover, they frequently do not limit themselves
to remain within the boundaries of their innovation initiatives, e.g., some members
help other members to create and evolve both directly and indirectly through system
‘trade-offs’ (Rabelo, Bernus, & Romero, 2015).
Innovation and entrepreneurial ecosystems have been defined differently across
the literature and this can be attributed to their transversal properties, which make
their concepts easily applicable in many different fields (e.g., the food system).
However, attempts to consolidate the shared characteristics of innovation and
entrepreneurial ecosystems have yielded results that identify seven common dimen-
sions of the two ecosystems (Scaringella & Radziwon, 2018).
1. A given territory with a unique atmosphere, an anchoring industry, and varying
sizes.
2. A set of shared values, such as trust, sense of community belonging, and mutual
understanding through traditions and culture.
3. A heterogeneous pool of stakeholders, such as corporations of varying sizes,
research institutions, universities, and government officials all positioned at
different stages of the food value chain.
4. A strong economic foundation based on localized economies, agglomeration
economies, transaction cost theory, localized spillovers, and economies of scale.
5. Social foundations based on co-existence, co-evolvement, collaboration, and
competition that emphasize the increasing importance of social and human
capital.
6. A core of knowledge of different natures (e.g., tacit vs. explicit), which circulates
well through knowledge sharing and spillovers, and is well absorbed through
practical education, and offers synergies.
7. Well-defined outcomes, which represent the catalysts of innovation and entrepre-
neurial initiatives and competitiveness and lead to economic growth, long-term
development, performance, and success.
3.4 Structure of Innovation and Entrepreneurial Ecosystems 85

In both innovation and entrepreneurial ecosystems, members develop significant

relationships anchored by interdependence. Interdependence offers synergetic inter-
actions between system members. When institutional ecosystem members establish
cooperation and have common interest for shared business objectives, the interde-
pendencies between them start to become more visible, and proper management and
risk mitigation strategies allow them to reduce uncertainty. Still, it is only through
the knowledge sharing and spillover aspects that the creation of innovative products
and services can be fostered. Ecosystem stakeholders are typically highly
interconnected. Partnerships often result from this interdependence and interconnec-
tedness, which lead to co-evolution and co-creation of value that no one member
would be able to create in isolation.

3.4.2 Differences

Surely, entrepreneurial and innovation ecosystems are not stand-alone concepts, and
other versions of ecosystems exist, however with slight variations in structure and
overall aims. In fact, from a systematic literature review of 104 articles and books,
Scaringella and Radziwon (2018) identified four main types of ecosystems with
slight, but nonetheless existing, differences: (i) business, (ii) entrepreneurial, (iii)
innovation, and (iv) knowledge ecosystems (Scaringella & Radziwon, 2018).
(i) Business Ecosystems: perhaps the oldest of the concepts, focuses on inter-
organization networks that are in close proximity to each other and on large
firms that assume the role of orchestrators. This ecosystem places heavy
emphasis on the business-related value creation processes that emerge due to
close collaborations between its many institutions. The emergence of entrepre-
neurial, innovation, and knowledge ecosystems represents a series of possible
substitutes to business ecosystems and future multi-directional developments.
(ii) Entrepreneurial Ecosystem: these ecosystems focus on a particular region or
country and highlight the importance of both governmental level actors and
entrepreneurs. Entrepreneurial ecosystems acknowledge the contributions and
impact of individual members as well as institutions on the economy. In order
to ensure that this contribution to the economy is successful, the support of
policy makers is crucial.
(iii) Innovation Ecosystem: these ecosystems are increasingly being associated
with the digital world. Innovative products and services are developed by
companies from diverse industries that are located in close (geographic or
cognitive) proximity to each other. The uncertainty associated with supply
and demand is higher in innovation ecosystems than in other cases.
(iv) Knowledge ecosystem: these bodies serve as bridges between the business
ecosystem and markets. It includes essential elements of collaboration and
knowledge exchange and acknowledges the value-creating intersection of the
business and academic sectors.
86 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

From their synthesis, Scaringella and Radziwon (2018) developed a list of

invariants, or ever-present elements in each ecosystem, to strengthen the foundations
of this growing field. The list of variants is outlined in Table 3.2.
In essence, detailed knowledge about the specificities of innovation and entre-
preneurial ecosystems should not be viewed as optional. It is crucial to understand
that success in one context does not guarantee success in another due to the
uniqueness of each ecosystem and environment in which it is located. For example,
replicating Silicon Valley and its successes in other environments has not worked
despite numerous attempts. However, detailed knowledge of specific elements and
their expected roles in guiding ecosystem relationships in the local or regional
environmental context is essential to creating adaptive networks that may later
evolve to ecosystems.
Gaining a deeper understanding of the contextual relationships within ecosystems
and best strategies to achieve beneficial results while avoiding those that do not is
more effective than attempting to replicate the “best functioning ecosystem”. Thus,
future research should investigate local entrepreneurial and business perspectives on
the role of institutions and policy makers in the process of ecosystem creation and
development (Scaringella & Radziwon, 2018).

3.4.3 Boundaries

As noted, the idea of ecosystems is complex, never static, and influenced by the
interactions of its members, which therefore raises questions regarding their bound-
ary conditions—what are the factors that determine the vertical and horizontal sector
scope and boundaries of an ecosystem? How do boundaries differ across different
geographic regions and sectors? What configurations of actors within place-based
ecosystems are most conducive to discovering and exploring opportunities?
Authors argue that boundary questions should also consider the relationship
between ecosystems themselves. For example, to what extent does knowledge
spillover across entrepreneurial and innovation ecosystems? How does the role of
digitalization vary depending on whether the outcomes of ecosystems are commer-
cial or social?
Ecosystems typically embrace many kinds of stakeholders, infrastructure, and
even other ecosystems, since there is no physical or organizational border, ecosys-
tems can embrace universities, private R&D institutions, funding agencies, and
industry partners.
Subsequently, entering and exiting the ecosystem can be dynamic and single
members may exit without even being noticed. Ecosystem boundaries are intrinsi-
cally ‘elastic’ and this means having general or less formal governance and perfor-
mance management models. It is posited that ecosystems manage themselves in an
organic manner rather than being managed by some central authority. Due to cultural
factors and implicit social rules, it is unlikely for formal governance to forcefully
coerce members and system behaviors (Rabelo et al., 2015).
Table 3.2 Invariants of the ecosystem approach
Invariants Business ecosystem Entrepreneurial ecosystem Innovation ecosystem Knowledge ecosystem
Territory Anchoring Platform as an anchor point Presence of an anchor
to the ecosystem tenant
Territorial size Close proximity; inherently The country or region Spatial proximity (in case of Close proximity
local innovative business ecosys-
tems) or/and virtual spaces
Industry Disruption of existing indus- Wide range of industries Technological clusters
tries and creation of new ones
Values Trust Trust Trust Trust
Belonging to a Virtual/Cocreation Mutual dependence on Collective sense of
community community exchange relationships belonging to a special
group
Mutual Understanding ones own Understanding as a key con-
understanding entrepreneurial cognitions trollability factor
Uncertainty Visible success reduce the Mitigation of interdepen-
reduction perception of risk dencies risks
Culture, history Culture impacts the ecosys- Promotion of culture of
& routines tem development innovation
3.4 Structure of Innovation and Entrepreneurial Ecosystems

Stakeholders Firms Internal organization Entrepreneurial firms embed- Firms embedded in networks Large firms with
networks ded in networks, established R&D depart-
interconnected companies ments, SMEs, and start-
ups
Networking Learning, connectivity, and Interaction between entrepre- Interdependence Collective learning
among firms mutually influencing neur and ecosystem Networking between
interactions residents
Other Complementors; a large Individuals and entrepreneur- Complementors, govern- The universities, public
stakeholders volume of innovating ial teams; social, institutional, ment organizations, funders, research organization
entities industrial, organizational, resource providers, standard
temporal and spatial networks
87

(continued)
Table 3.2 (continued)
88

Invariants Business ecosystem Entrepreneurial ecosystem Innovation ecosystem Knowledge ecosystem

setters, and complementary
innovators
Value chain Customers, suppliers, dis- Open-minded customers, spe- Customers, suppliers, Diversity of organiza-
tributors, outsourcing firms, cialized suppliers, service intermediaries tional forms
makers of related products providers, training institu-
or services, technology tions, and support
providers organizations
Governance Orchestrator ‘Anchor events’ as gover- Leading firm/ecosystem University or public
nance platform orchestrator/network research organization
orchestrator (PRO)
Economics Location Collective resources
economics
Localized Local spillovers
spillovers
Economies of Economies of scale Economies of scale and
scale scope
Social Economic and Economic progress stimula- Shared economic and social
non-economic tion, social-economic value
interactions
Collaboration Collaboration and competi- Private enterprises coexisting Simultaneous cooperation Knowledge-based R&D
versus tion resulting in cooperation in symbiotic relationships and competition collaboration
competition relationships; symbiosis
Workforce Job creation function Mobility of innovative entre- Mobility of personnel
preneurs; job creation
3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics
Knowledge Type of Protected patents Tacit and protected
knowledge
Knowledge Knowledge mobility New knowledge production Coordinated knowledge Make use of knowledge
dynamics through interaction flows: Purposive knowledge available in the region:
inflows and outflows Proximity to knowledge
generators
Synergies Synergies of innovation Synergistic relationships of
resources people, knowledge, and
resources
Outcomes Economic Value creation; performance GDP growth
enhancement
Innovation Innovation Radical innovation Innovation Innovation
Competitiveness Competitive advantage
through collaboration in
value network
Entrepreneurship Venture creation Cross-realm
transposition
Development Adaptation and evolution Co-creation and evolution, Co-creation
which are fostered by
3.4 Structure of Innovation and Entrepreneurial Ecosystems

policymakers and drives

innovation
Source: Scaringella and Radziwon (2018)
89
90 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

3.4.4 Personal and Systemic

Explorations of the emergence of ecosystems have noted challenges regarding the

ecosystem concept and its lingering interchangeability with the terms networks,
communities, and knowledge sharing platforms. However, most importantly,
they have also demonstrated that established ecosystem members have multiple
innovation relationships in different ecosystems and between them (Still et al.,
2019).
In order to ameliorate the vagueness between these concepts, Still et al. (2019)
provide engagement guidelines for both academics and practitioners. For academics,
they propose highlighting the elements of modularity, complementarity, and coor-
dination with a shared goal, and making them explicit in the descriptions of
ecosystems since they are considered the elements that separate ecosystems from
networks and communities (Still et al., 2019). For practitioners, they recommend
emphasizing the importance of understanding the need for those elements; however,
always complementing the ecosystem level approach with the needs of individual
actors. Therefore the development activities can be better designed, thus making the
ecosystem management more effective (Still et al., 2019).
Furthermore, the interdependency that defines ecosystem relationships can also
confine institutions and the introduction to new products and services. For example,
the launch or testing of new products can be delayed by the ecosystem itself if the
necessary complementary elements of the ecosystem are not readily available
(Dattée et al., 2018; Overholm, 2015).

3.4.5 Dynamics

As open social systems, innovation and entrepreneurial ecosystems enable dynamic

inflows and outflows of resources (e.g., funding, knowledge, members themselves,
technologies) and provide a shared institutional logic for the emergence of different
types of innovations (Vargo & Lusch, 2016; Vargo, Wieland, & Akaka, 2015).
The dynamics of ecosystems are analyzed by using ecological concepts such as
diversity, selection, related diversification, resilience, and adaptation (Auerswald &
Dani, 2017; Boschma, 2015). Ecosystems cannot be thought of as instruments for
decision-making and actions, but as specialized organizational spaces, tailored to
co-creation of values through collaboration. So, they constitute sophisticated pools
of members, assets, and linkages, generated by the collaborative activities of net-
works. This idea of ecosystem corresponds to findings in the literature on complex-
ity, viewing collaborative networks as complex adaptive systems that are inseparable
from their changing environment by definition.
Schiuma and Carlucci (2018) propose a research agenda for understanding how
to establish and develop strategic partnerships within innovation ecosystems, and
identify four fundamental dimensions that characterize the role and function mech-
anisms of successful collaborative relationships:
3.4 Structure of Innovation and Entrepreneurial Ecosystems 91

(i) the entrepreneurial learning network dynamics and the transformation patterns
that affect the development of entrepreneurial capital of ecosystems;
(ii) the role and features of the organizational units to support companies’ entre-
preneurial and innovative development;
(iii) the organizational models and factors that influence a company’s capacity to
establish successful partnerships and to develop entrepreneurial and innovation
capabilities;
(iv) the approaches, models, and tools that can support the design, implementation,
and assessment of partnerships and initiatives aimed to develop entrepreneurial
and innovative capabilities.
Furthermore, Hakala and colleagues (2019) apply a novel literature review
method, model-narrative, in order to systematically trace and reveal dominant
narratives from the existing literature on ecosystems in business studies. To date,
most literature on ecosystems resembles a knowledge base composed of competing
overarching stories with complex members engaging in even more complex relation-
ships. Based on their analysis, Hakala, O’Shea, Farny, and Luoto (2019) found
differences around key themes used to portray relationships in an ecosystem. They
then applied specific vocabularies to create intertwined characters and narrative
voices to communicate different roles in the ecosystem. Their results provided
further explanations between how the dynamic relationships between business,
innovation, and entrepreneurial ecosystems emerge (Hakala et al., 2019). The
method employed by Hakala et al. (2019) allowed for a more profound analysis of
simple data-driven themes and allowed for the analysis of the tone of entire research
streams, which revealed missing elements that could inform our ability to create
thriving ecosystems. A summary of the model-narratives, structured along the nine
identified conceptual elements of their narrative review, is presented below in
Table 3.3.

3.4.6 Change, Growth, and Performance

In addition to the aforementioned human elements, certain systemic elements also

have an impact on the way innovation ecosystems operate (Rabelo et al., 2015).
1. Interface: represents the channel to support the interactions between ecosystem
members and external actors, considering their usually significant heterogeneity.
2. Culture: refers to the mindset of people and organizations combined with
supporting and facilitating innovation initiatives and solving related problems.
3. Architectural Principles: refers to the way the innovation ecosystem elements
are combined and orchestrated; the culture element is also reflected here. The
innovation ecosystem dynamics make actors assume multiple but not fixed or
pre-defined roles in the different stages involved in the innovation ecosystem’s
lifecycle.
92 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

Table 3.3 Conceptual overview of innovation and entrepreneurial ecosystems

Model-narrative of
Model-narrative of Model-narrative of entrepreneurial
business ecosystem innovation ecosystem ecosystem
Thematic reading
Key Global competition, Collaboration, value Concentration, wealth
themes co-opetition; co-evolu- co-creation, customer- and job creation, locality,
tion, synergies, market facing solutions, plat- clusters, governance,
selection forms, keystones, hubs system components and
attributes
Scientific How can large companies How can keystone com- How to create wealth and
puzzle adapt strategy to fit an panies maintain health in employment for a defined
ecosystem concept? The the ecosystem? There is a geographic area? What
reason is changing cir- shared fate and elements can be
cumstances of industrial interdependence; this can influenced by regional
transformation reduce time-to-market for public policy?
innovations
Enstoried reading
Plot • Companies must real- • Big companies now • Regional actors (gov-
ize they are in a system— realize they are in a sys- ernments) must realize
they must adapt their tem—They are the key that public policy and
strategy and contrive to stones that can regulate other elements need to be
lead the system ecosystem health considered to create
• They can induce eco- • They can manage entrepreneurial ecosys-
system collaboration ecosystem collaboration tems
• Key purpose is to cre- • Key purpose is to cre- • They can create con-
ate connections ate innovations ditions for ecosystem
• Leader role is val- • Leader through plat- emergence and health
ued—leadership through form technology, key- • Regional actors lead
co-opetition. Impose stone but not a leader— • System may lack
value and supply network Co-create value and sup- governance
• A main company gov- ply network • Interaction of the ele-
erns the ecosystem • Maintain ecosystem ments (not people)
• Co-evolution health • Produces only win-
• Market (supply/ • Platform technology ners
demand) is part of the governs • Regional ecosystem
story • Co-evolution setup lists
• Winners and losers— • All can be winners
Predator seat prey • Operational assess-
• Strategy improvement ment tools
tools
Narrative Industrial transformation, US corporates 1990s and Regions needing
setting global competition where 2000s transformation
there is a need to collabo- Innovative customer
rate offering with collabora-
US corporates 1980s and tive arrangements
1990s between companies
Emplotted Leading company, other Leading companies, lead- Various actors or ele-
characters companies, markets, ing technologies, ments in the regional
demand side ‘complementors’ systems, ‘silicon valleys’
and ‘technology parks’
(continued)
3.4 Structure of Innovation and Entrepreneurial Ecosystems 93

Table 3.3 (continued)

Model-narrative of
Model-narrative of Model-narrative of entrepreneurial
business ecosystem innovation ecosystem ecosystem
Narrative Leading companies eco- Leading technologies Regional governance
voices system as a ‘deity’ Platform as a deity actors
Region as a deity
Moral Society finds ways to help Interdependence, integra- Proof and belief that such
lesson members of dying eco- tion, renewal systems exist
systems move to more We are connected outside We are not connected—
vital ones and stops of the organization to The system needs to be
supporting dying ones— serve and improve a created
Continuous renewal common technology
We are connected outside
of the organization to
serve the market
Rhetorical reading
Rhetorical Metaphors: Predators and Metaphors: Dominators, Metaphors: Few explicit
device prey, grasslands, savan- keystones, sea otters metaphors except the
nah, co-evolution general idea of ecology
and ecosystem
Rhetorical Authorization by leading Authorization by leading Authorization from
strategy companies technology (companies) benchmark regions
Slogan: Survival of fittest Slogan: Manage to win Slogan: Govern to create
in ecosystem with ecosystem the ecosystem
Source: Hakala et al. (2019)

Ecosystems can also be viewed through a model developed by Rabelo et al.

(2015) that illustrates the lifecycle phases and processes involved in building an
innovation ecosystem. This model highlights that although separate, the activities
within these processes may be circularly depending on one another. A description of
the phases individuated in the model follows.
• Strategy Formulation Phase. It consists of three main processes. First, strategy
definition, which (re)-identifies the innovation ecosystem’s mission, vision,
values, and strategic goals and performs feasibility analysis. Second strategy
planning, which defines action plans, milestones, critical success factors, and
key indicators for the innovation ecosystem to be built or that is already running.
Moreover, it outlines actions to ensure the preparedness of actors, mandates, and
overall plans and dedicates innovation ecosystem building or transformation
programs and projects. Third, strategy analysis, that refers to the variety of
strategic analyses informing the evaluation and feedback of the outcomes of the
two other processes.
• Project Phase. This process designs and prepares the underlying conditions
required for transforming an innovation ecosystem and involves two main pro-
cesses: ecosystem design and ecosystem preparedness. Ecosystem design defines
the ecosystems ‘architecture’, its components, types of actors, roles and
94 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

relationships, infrastructure requirements, governance model, operating and busi-

ness models, bylaws, ethics, and stimulates the attraction of other actors. Ecosys-
tem preparedness defines a plan of actions related to preparing the ecosystem
members, infrastructure, and laws and regulations to handle the ecosystem’s
requirements, along the future stages of evolution.
• Deployment Phase. This regards formally establishing the designed innovation
ecosystem, transforming specifications into infrastructures, and populating them
with real actors. This phase consists of four main processes—actor’s attraction &
marketing, actor’s recruiting, physical building, and ecosystem foundation.
Actors’ attraction & marketing designs and executes actions to disseminate
knowledge of the ecosystem to attract qualified actors. Actors’ recruiting aims
to attract new members according to preparedness directives and rules. Physical
building is the availability of suitable facilities to support the diverse types of
actions required throughout an innovation’s lifecycle, following the requirements
and guidelines indicated in the design sub-process. Ecosystem foundation refers
to the official organizational foundation of the ecosystem, when pertinent.
Depending on the deployment model and taxation laws as well as legal incentive
mechanisms, this can involve a legal or more formal establishment of the
innovation ecosystem, or, in other extreme cases, this may simply take the form
of an official ‘announcement’.
• Execution Phase. It can be defined as the set of processes involved in operating
the entire ecosystem and consists of two main processes: ecosystem operation and
ecosystem management. Ecosystem operation includes the activities involved in
creating and ensuring the success of the many innovation activities occurring
within the ecosystem. Ecosystem management can function on two levels. The
first is the strategic management of the ecosystem itself (e.g., identifying oppor-
tunities, threats, and issues, and initiating other relevant lifecycle processes as
above). The second is the tactical and operational management of the ecosys-
tem, which involves human resources, financial, organization, technological, and
governance issues. It is likely to be a delegated set of activities rather than being
consolidated into a central role performed by one particular institution or
member.
• Conclusion Phase. This phase holds the responsibility for handling issues that
significantly affect the continuation of the ecosystem’s life and also consists of
two main processes; ecosystem decommission and ecosystem disbanding. Eco-
system decommission refers to managing the entering and exiting of actors within
the ecosystem along with its developmental phases. Ecosystem disbanding refers
to a gradual exiting of members from the ecosystem due to strategic changes or
general disagreements.
• Sustenance Phase. This final phase is responsible for anticipating the future
evolution and viability of the ecosystem. This phase impacts and receives feed-
backs from all the other sub-processes. Ecosystem sustainability corresponds to
tactical and strategic management levels that all phases have when performing
their actions.
3.4 Structure of Innovation and Entrepreneurial Ecosystems 95

It is holistic approaches such as the one above that complete the view of the entire
ecosystem creation process and its life cycle. Models such as these may prove
helpful for stakeholders who desire to better plan and manage their time, allocate
resources, and manage the degree of complexity of actions in different stages of the
ecosystem creation. This can be helpful for anticipating points of higher risk of
failure and preventing the entire ecosystem from achieving an undesirable state
(Rabelo et al., 2015).
Adner (2012) introduces a list of recommendations to assist stakeholders in
creating and developing an ecosystem. They propose that (i) designing the ecosys-
tems ‘value blueprint’ (i.e., locations and links between ecosystem members),
(ii) foreseeing risks to value creations, (iii) determining the value of leadership and
followership roles in the ecosystem, (iv) timing of innovation introductions, and
(v) the dynamic reconfiguration of the ecosystem over time are the elements that
drive ecosystem success.
Most studies have focused on isolating entrepreneurial ecosystem components,
but few theories that embrace the complexity of entrepreneurial ecosystems exist to
date. To address this gap in ecosystem research, Roundy and colleagues posit that
entrepreneurial ecosystems can be more fully understood if they are examined
through a lens of complexity and conceptualized as complex adaptive systems.
Roundy et al. (2018) go on to propose three related forces that act as important
influencers to the emergence of entrepreneurial ecosystems—(i) intentionality of
entrepreneurs, (ii) coherence of entrepreneurial activities, and (iii) injections of
resources.
Recognizing the social and cultural dimensions’ involvement of entrepreneurial
activities has been accompanied by a shift of focus from studies of entrepreneurs and
ventures to the creation of (entrepreneurial) ecosystems, which includes the sets of
stakeholders, institutions, social networks, and cultural values that produce and
sustain entrepreneurial activity (Acs, Stam, Audretsch, & O’Connor, 2017;
Auerswald, 2015; Brown & Mason, 2017; Roundy et al., 2018; Stam, 2015).

3.4.7 Drivers

Building innovation ecosystems is a more complex task than building other envi-
ronments that are usually less open and more controlled (e.g., incubators, technology
and science parks, innovation habitats, and entrepreneurship centers) (Romero,
Rabelo, & Molina, 2012). When viewed as a whole, this organic task comprises
different and independent but interrelated activities that must be carefully undertaken
while considering different tangible and intangible factors. These activities (e.g.,
implicit or deliberate, emergent or planned, static or evolving, loosely or tightly
managed) span the innovation ecosystems life through all stages of its evolution
(Rabelo et al., 2015).
It is a shared vision, a clear mission statement, and an overarching unified sense
of direction are the elements that promote bonding among ecosystem members,
96 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

enable collaborations, and guide the ecosystem’s focus (Järvi, Almpanopoulou, &
Ritala, 2018).
In order to give more detail to the characteristics of the main actors, their
interactions, and cognitive mindsets within the ecosystems, Brown and Mason
(2017) proposed a taxonomy that features four main coordinative aspects of entre-
preneurial ecosystems: (i) entrepreneurial actors, (ii) entrepreneurial resource pro-
viders, (iii) entrepreneurial connectors, and (iv) entrepreneurial culture.
In essence, they highlight that when examining entrepreneurial ecosystems, it is
important to examine structure and agency simultaneously in order to appreciate the
full complexity of the dynamics of entrepreneurial activity in any given context
(Brown & Mason, 2017). Given the heterogeneity of ecosystems, a ‘one-size fits all’
policy or approach for developing different types of ecosystems remains absent from
the literature.
Regarding innovation ecosystems, specifically, based on a systematic review,
Dedehayir, Mäkinen, and Ortt (2018) propose several roles that are critical to
innovation ecosystem creation and classify them into four groups that are defined
by the specific activities they carry out during ecosystem birth—(i) leadership roles,
(ii) direct value creation roles, (iii) value creation support roles, (iv) entrepreneurial
ecosystem roles.
1. Leadership roles: It initiates, maintains, and develops ecosystem functionality.
Forges partnerships by creating networks provide the basis for market to function
by ensuring alignment between innovation and markets, helps create and capture
value by stimulating value appropriation, and as a dominator that conducts
mergers and acquisitions in related fields.
2. Direct value creation roles. They serve as a supplier of materials, technologies,
and services. Also as assemblers that provide products and services, then as
complementors who utilize the design of other ecosystem offerings, and users
who usually define a problem or need, and develop innovations under the
ecosystem leaders guidance.
3. Value creation support roles. These involve experts and champions. Experts
support primary value creators by generating knowledge from basic and applied
research, provide consultation and expertise, and encourage technology transfer
and commercialization. Champions support ecosystem construction by building
connections and alliances between members, interacting between partners and
sub-groups, and by providing access to local and non-local markets.
4. Entrepreneurial ecosystem roles. These roles have been sub-grouped into
entrepreneurs, sponsors, and regulators. Entrepreneurs start new ventures around
a vision by co-locating in a region with others and coordinating collaboration
between research and commercial partners. The sponsor supports the new venture
creation by giving resources to entrepreneurs and linking entrepreneurs to other
system actors. The regulator supports entrepreneurial activity and opens avenues
for ecosystem emergence by providing economic and political reform, and
loosening regularity restrictions.
3.4 Structure of Innovation and Entrepreneurial Ecosystems 97

These roles clearly assist in highlighting the implications for a range of stake-
holders (e.g., university, industry, and government partners) who are ultimately
concerned with the formation of innovation ecosystems to enhance economic wel-
fare (Dedehayir et al., 2018).

3.4.8 Challenges

The emergence of ecosystems is constrained by a host of institutional and system-

level barriers in the existing organizational field that inhibit the legitimacy,
resourcing, and growth of new initiatives. Furthermore, scholars have mostly
focused on entry barriers for single actors rather than on the dynamic counterforces
that prevent the emergence of whole ecosystems.
An empirical study by Almpanopoulou, Ritala, and Blomqvist (2019) analyzed
the institutional barriers for innovation ecosystem emergence and individuated four
ecosystem emergence barriers and related-field sustaining mechanisms.
1. Incumbent actor inertia. These are actors or stakeholders who are hesitant to
drive change; they adhere to traditional business logic and modus operandi, thus
sustaining the existing norms and industry cultures instead of stimulating inno-
vation and novel transitions. The concentration of influence with these traditional
closed and static networks also functions as an enabler for their bargaining power
and legitimacy.
2. Regulation and policy-making ambiguities. The length of time required by
policy makers and the policymaking environment reinforces ambiguities related
to policy vision and the actual action plan. The unhurried pace of policymaking,
also referred to shortsighted political view (e.g., election, or re-elections, of
political leaders after a brief amount of time).
3. Cognitive constraints for opportunity recognition. This deals with perceived
uncertainty over market opportunities, which makes it difficult to identify viable
entrepreneurial opportunities. The dispersion of necessary capabilities and
resources further creates constraints for collectively recognizing and exploiting
opportunities.
4. Institutional complexity. This involves system-level challenges with the
required system-level transitions being accepted by all segmented stakeholders.
For example, European and national climate or circular economy policies are
oftentimes broken down into smaller objectives, which further increases ecosys-
tem complexity. In the food industry, this could manifest as large corporations
investing in new fertilizers for crop growth, but coming at a higher cost to
farmers, therefore creating a rift between aims and best practices to achieve
them. The complexity of the food system can slow down the decision-making
process, and therefore slow down development as well.
Based on these barriers further highlight how the mutual reinforcement of
regulation, policymaking ambiguities, the inertia of incumbent actors, and cognitive
98 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

constraints for opportunity recognition inhibit innovation ecosystem emergence

(Almpanopoulou, Ritala, and Blomqvist 2019). Furthermore, the perceptions of
ecosystem members, the legitimacy of existing modus operandi (Markard, Wirth,
& Truffer, 2016; Suddaby, Bitektine, & Haack, 2017), and the stabilizing influence
of shared norms and culture provide barriers to the successful identification of
opportunities for business creation. Furthermore, cognitive constraints for opportu-
nity identification can also reinforce existing operating procedures and strengthen an
industry’s inability to engage in sustainability transitions (Almpanopoulou
et al., 2019).

3.5 Food Systems

For what specifically regards food systems, they can be effectively analyzed through
the five systems thinking principles proposed by Gharajedaghi (2011): (i) openness,
(ii) purposefulness, (iii) multi-dimensionality, (iv) emergent property,
and (v) counterintuitive behavior. Indeed, food systems can be described as dynamic
open systems (Pigford, Hickey, & Klerkx, 2018) that are influenced by several
external factors (e.g., social, economical, technological, political, environmental)
(openness), in which multiple actors (multi-dimensionality) operate for achieving
specific purposes (purposefulness). Notably, these purposes are all somehow related
to producing value along the food supply chain up to the final consumer
(De Bernardi, Bertello, Venuti, & Zardini, 2019; Lioutasa, Charatsarib, De Rosac,
& La Roccad, 2018). However, a high degree of uncertainty in every intentionally
generated action can lead to an undesired or opposite outcome (counterintuitive
behaviour). Thus, performances often depend more on the quality of the interactions
among actors rather than on the quality of the actors themselves (emergent property).
Furthermore, the infamously low-technological presence and a high degree of
complexity hamper both innovation processes and knowledge production in food
systems (Lioutasa et al., 2018). Moreover, the high degree of interdependence
among food system actors and a lack of control over their market environments
contribute to this complexity. Luckily, innovation and entrepreneurship are rapidly
emerging like the combination of evolving competencies and knowledge, leading to
new methods of resource integration among interrelated stakeholders of the dynamic
food system (De Bernardi, Bertello, & Venuti, 2019; Lioutasa et al., 2018). Recent
manifestations of entrepreneurship and innovation in the food system involve forms
of alternative methods for food production such as aquaponics, vertical farming,
urban agriculture, precision farming, and social and smart farming (Dell’Olio,
Hassink, & Vaandrager, 2017; Ingram, 2018; Junge, König, Villarroel, Komives,
& Jijakli, 2017; Muller et al., 2017; Orsini, Kahane, Nono-Womdim, & Gianquinto,
2013; Wolfert, Ge, Verdouw, & Bogaardt, 2017). However, individual startups and
standalone ventures that emerge from entrepreneurial and innovation activities are
seldom sufficient to tackle the sustainability and environmental issues threatening
3.6 Conclusion 99

the food system. Networked approaches to innovation and entrepreneurship are,

therefore, necessary in order to facilitate trans-disciplinary co-creations across food
systems (Hermans, Roep, & Klerkx, 2016; Pigford et al., 2018). Infact, well
designed and supportive innovation and entrepreneurship environments, as well as
the adoption of holistic and inclusive approaches to achieve sustainability pave the
way for a spectrum of possible solutions, including agroecology, place-based food
systems, and other social innovations (De Bernardi, Bertello, & Venuti, 2020; De
Bernardi, Forliano, Rotti, & Franco, 2019; Pigford et al., 2018).

3.6 Conclusion

As innovative as the concept of systems thinking to create entrepreneurial and

innovation ecosystems, future attempts to create sustainable solutions, especially
in food systems, should consider them as interlinked, and co-existing; one cannot
exist without the other. Stakeholders aiming to merge these two concepts should
consider lessons from previous explicit attempts to link entrepreneurial and innova-
tion ecosystems.
Like innovation and entrepreneurial ecosystems, food systems should also be
thought of as dynamic, open systems that operate in order to produce value. The
combination of innovation and entrepreneurship, emerge as the simultaneous evo-
lution of competencies and knowledge, and lead to new methods of resource
integration and exploitation while always considering the context in which these
transitions are planned to occur, thus sustaining the capacity of such systems
(Lioutasa et al., 2018).
Given the unique characteristics and specificities within the interrelations of
ecosystems, there is no standardized framework or strategy to effectively develop
entrepreneurial or innovation ecosystems (Audretsch, 2015; Brown & Mason,
2017).
Therefore, in order to address to complex and ubiquitous threatening food system
sustainability, it is imperative to design appropriate and culturally relevant systems
that can stimulate transitions and recommend key action points for policy and
practice (Pigford et al., 2018).
Innovation and entrepreneurial ecosystems may offer a useful umbrella concept
that is appropriate for the wider multi-functionality of food systems, with the
potential to better support the development of trans-disciplinary ecosystems
designed to realize the collective and integrated innovations in support for sustain-
ability. Systems thinking complements and advances the established foundation of
food system innovation toward more sustainable production and consumption
methods and practices.
The application of innovation and entrepreneurial ecosystem principles and
frameworks to food systems would expand food systems in three ways:
100 3 Innovation and Entrepreneurial Ecosystems: Structure, Boundaries, and Dynamics

1. Be more explicit on the power dynamics in innovation platforms or communities.

2. Include both human and non-human change agents across the innovation
ecosystem.
3. Be more cognizant of boundary crossing and potential trade-offs.
Food system innovation approaches might be opened to better include innovation
and entrepreneurial ecosystems as well. The existence of innovation and entrepre-
neurial ecosystems thus has the potential to broaden food systems by emphasizing
their role and power in shaping directionality in innovation platforms or communi-
ties that are connected to other networks. By highlighting the plurality of members
and the integral role of ecological catalysts of innovation, entrepreneurial and
innovation ecosystems offer umbrella terms that may guide sustainable transitions
in the food sector (e.g., by engaging with a variety of ecosystem members in other
agricultural landscapes or systems.
Agricultural, or food, innovation ecosystems approach may help design and
support the development of trans-boundary, inter-sectorial, innovation niches that
can realize more collective and integrated innovation to support sustainability
transitions and help enact mission-oriented food system policies.
The ecosystem concept enhances our understanding of complex interactions that
make up innovation and entrepreneurial ecosystems, as well as food systems.
Ecosystems thinking has the potential to provide novel ways of approaching struc-
ture, interaction, and exchanges among institutions that are dependent on one
another, and moves our focus toward analyzing the many relationships that operate
at the system level of organizations, technologies, products and customers (Hakala
et al., 2019).

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Chapter 4
Innovation for Future Proofing the Food
Ecosystem: Emerging Approaches

Abstract The European food ecosystem is not well-prepared for the looming future
global challenges. However through research and innovation, and the ensuing open
innovation activities, food ecosystems may become the perfect arena for combining
the knowledge specificities of its many actors, especially SMEs and startups in
efforts to create effective and sustainable transformations in the food ecosystem.
This chapter aims to present an up-to-date reflection on the dynamics and drivers of
innovation in food ecosystems and their related challenges in ensuring human health
and environmental sustainability. We discuss the concept of innovation specifically
in food ecosystems and present a synthesis of the current limitations and opportu-
nities to improve food ecosystem sustainability. We then discuss the implications
that foster regional innovation cultures within food ecosystems and present the main
areas in need for innovation in food ecosystems, as identified by diverse food
ecosystem members. Furthermore, we introduce examples of noteworthy food
startups that seek to drive sustainability either by changing consumer behavior, or
providing more efficient farming techniques. Finally, we briefly discuss the future
directions with food ecosystem research and innovation, and suggest the employ-
ment of both top-down and bottom-up approaches to identify areas in need of
transformation in food ecosystems.

Keywords Food innovation · Research and innovation · Open research and

innovation · Food startup · Multi-layered innovation

4.1 Introduction

The food ecosystem is one of the largest manufacturing sectors in the European
Union, it alone employs 2.24 million people, consists of about 289,000 companies,
and is characterized by €102 billion in exports and €71.9 billion in imports (Food
Drink Europe, 2017).
Due to its importance in maintaining a standard quality of daily living, and the
economic benefits (e.g., employment opportunities and investment) it provides to

© Springer Nature Switzerland AG 2020 105

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
106 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

European governments, efforts to maintain our food ecosystem and prepare it for
future challenges is a topic that cannot be ignored.
The European food ecosystem however is not well-prepared for the looming
future global challenges; its methods of producing, processing, transporting, con-
suming, and discarding food is not sustainable, especially if it is expected to provide
the projected growing populations with food nutrition and security (De Bernardi,
Bertello, & Venuti, 2019; De Bernardi, Bertello, & Venuti, 2020; Gill et al., 2018).
By 2050 food demand will increase by 60% and ‘future proofing’ (i.e. ensuring
resilience and sustainability) our food ecosystem proves to be a massive challenge.
Engaging in efforts toward sustainability will require collective
action (De Bernardi, Bertello, Venuti, & Zardini, 2019), and improved research
and innovation is considered an excellent place to start. This idea has been quickly
adopted by European policy makers, and is evidenced by the creation of ‘Food
2030’, which is the European Commission’s research and innovation policy blue-
print for transforming food ecosystems and places nutrition, circularity, climate
resilience, and innovation at the core of these possible transformations (European
Commission, 2018). Food 2030 aims to support scientific and technological break-
throughs to (i) reduce the rate of non-communicable diseases associated with
overwhelming food consumption; (ii) foster smart and resilient food ecosystems
that yield 50% less carbon emissions, and (iii) build public trust and involvement
between consumers and large food industries. Future proofing our food ecosystem
also constitutes ensuring economic growth and job creation, engaging in new
partnerships, empowering communities through practical education, and achieving
healthy and sustainable food access for all populations. In essence, efforts should be
directed to create a food ecosystem where people can monitor their food intake and
access foods according to their specific health and cultural needs, where farmers can
run their farms and cultivate necessary amounts of food without the use of harmful
chemical pesticides, where restaurants and food retailers can operate as usual while
reducing or eliminating their food waste output, and where no individual suffers
from malnutrition and its related effects (European Commission, 2018).
The current food ecosystem scenario (see Chap. 1) thus calls for an increased
focus on sustainability, and the creation of a food ecosystem that meets the needs
of current world populations while at the same time preparing for the needs of future
generations. Some authors argue that developing this sustainable food ecosystem
demands a multi-level approach that considers (i) the international, national, regional
and local legislature, (ii) the food production industry, (iii) public health and
preventive medicine, and (iv) communities, companies, schools and every days
citizens (Anderson et al., 2019).
Food nutrition and security, the cultivation of quality products, and access to diets
that provide optimal nutrition are all some of the key challenges for the future of our
food ecosystem. While our current methods of food production do meet the need of
providing access to healthy and nutritious food for much of the world’s population, it
still does not grant every individual equal access to food in terms of both quantity
and quality. Even though the dynamics and structures of the global food ecosystem
are complex, gaining a better understanding of how the variety of challenges
4.2 Innovation in Food Ecosystems 107

affecting our food ecosystem interact is fundamental for future sustainability efforts
and the resulting innovations and entrepreneurial initiatives that will drive its
transformation. Research and innovation, due to their ability to reorganize and
reallocate resources in novel ways so that they can be used more efficiently, are
considered as the ideal vehicles to transform our food ecosystem.

4.2 Innovation in Food Ecosystems

Innovation is often the result of the entrepreneur’s activities. Innovation can be

defined as the process of creating a new product, service, market, process, or
organization. Innovation can exist in degrees running from “new to the world”
(most innovative) to “new only to the individual” (least innovative). Accordingly,
based on proposed conceptualizations by previous authors we posit that entrepre-
neurship and innovation in the food ecosystem can be thought of as the place in
supply chains where individuals create, discover, and exploit market opportunities
through the creation and dissemination of new ventures related to food processes
(Aldrich & Cliff, 2003; Gries & Naudé, 2010).
Current discussions regarding innovation in food ecosystems usually contest the
overwhelming ‘top-down’ models of innovation, which are thought to be a signif-
icant limit for food ecosystem progress (Touzard, Temple, Goulet, Chiffoleau, &
Faure, 2018). Evidence suggests that instead of focusing on the ‘leaders’, we must
actively seek to involve the heterogeneous actors that make up the entirety of the
food ecosystem in the development and creation of innovations, in order to create a
food ecosystem that is more representative of the globalized populations, and based
on collective decision making (Von Hippel, 2005). Furthermore, certain research
streams posit that ‘agricultural entrepreneurs’ have weaker entrepreneurial capabil-
ities than in other sectors (Pindado & Sánchez, 2017), but nonetheless share a
number of characteristics with entrepreneurs in different fields, e.g., a personalized
motivation to commercialize products or services, thus evidencing the need to
integrate their efforts for more impactful results.
Innovation is often driven not by individual factors but systemic ones such as
policy changes (e.g., the ban of certain materials or processes), private industry
forces (e.g., increased investment in researching alternative protein products), public
health objectives (e.g., bringing to light current trends in community health such as
obesity), and individual or community level approaches that can later serve as
conduits for further collaboration between private and public sectors. Furthermore,
the Food and Agriculture Organization (FAO) define ‘food ecosystem innovation’ as
“the process whereby individuals or organizations bring new or existing products,
processes or ways of organization into use for the first time in a specific context in
order to increase effectiveness, competitiveness, resilience to shocks or environmen-
tal sustainability and thereby contribute to food security and nutrition, economic
development or sustainable natural resource management” (FAO, 2018 pg. 3).
Innovations are not restricted to those who employ disruptive technologies, but
108 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

also include social, organizational, institutional, or marketing processes to rearrange

resources and provide increased value for food ecosystems. Importantly, one type of
innovation that is central to food ecosystem transformation is the notion of social
innovation, which is usually delivered within the context of the non-profit sector by
social entrepreneurs, brings economic and social impact, and specifically, develops
sustainability models and new business models that cater to underprivileged com-
munities (Tataj, 2015).
Innovation is a system where institutions interact with their surrounding environ-
ment. However, the diverse nature of members that participate in these processes
as a whole may also be a limiting factor to effective information spillovers and
knowledge sharing between them. This can be attributed to fears of disclosing
protected information (e.g., intellectual property), lack of a clear understanding of
discipline specific goals (perhaps through the use of complicated nomenclature), and
conflicting interests in goals and objectives. Therefore creating and implementing a
culture of trust and open communication in food ecosystems may be more conducive
to open innovation and more effective than top-down strategies (Tataj, 2015).
Food ecosystem transformations should also be founded on a combination of
global and local knowledge, and the distribution of challenges and good practices.
The FAO (2018) recommends that in order to set up local systems for knowledge
creation and dissemination, clear and sustainable pathways for knowledge sharing
between core food ecosystem members and local and regional ‘knowledge pro-
viders’ (e.g., extension services, research institutes, laboratories, and knowledge
networks) must be created and promoted.

4.3 Open Innovation in Food Ecosystems

A food ecosystem can be described as an adaptive system that exhibits complex

dynamics (Ingram, 2011; Zhang et al., 2018), has a multi-actor, multi-function, and
multi-factor nature that shapes the way it evolves through its emerging complex
relationships.
Therefore, in order to transform a system as complex as the food ecosystem, we
must attempt to improve our understanding of the technological, political, economic,
and social dynamics that give it shape, and also successfully identify the leverage
points where entrepreneurship and innovations will be most effective (Gill et al.,
2018). Furthermore, various sources posit that the successful identification of these
leverage points will require a systems approach, one that illustrates the moving
and evolving roles of multiple actors, at various levels, along with different policy
fields (European Commisson, 2018). The notion of a holistic view of food systems
signifies taking into account both the horizontal (i.e., fields of action such as the
environment, health, infrastructure, and education) and vertical (i.e., the range of
stages of the food value chain) dimensions (Moragues et al., 2013). It is through the
employment of a systems approach that researchers and food ecosystem stakeholders
can appreciate the interrelated impacts (e.g., benefits and side effects) of research and
innovation initiatives, whether technological in nature or not, on other parts of the
4.3 Open Innovation in Food Ecosystems 109

food system and be able to introduce newer innovations that better reinforce benefits
across multiple segments of the food system.
These innovations and entrepreneurial endeavors should further capitalize on the
fundamental need to redesign production in food ecosystems, and seek to create
products and services that can potentially yield co-benefits across the food system;
e.g., for the environment and for health, simultaneously (Parsons & Hawkes, 2018).
Innovation and entrepreneurship are two distinct but intertwined components of
economic growth in the knowledge economy (Tataj, 2015). Specifically, innovation
is a social process of knowledge production and dissemination, during which human
creativity leads to translation of knowledge into shared and enriched capacities
(Tataj, 2015).
Food institutions and firms traditionally innovate by looking internally for new
ideas, technologies, products, and services that may grant them a sustainable advan-
tage. But by looking only inward, and ignoring the range of potential in the
immediate outside environment, firms miss out on ideas, knowledge, and technology
that resides outside of their institutional barriers. However, some firms are aware of
these boundaries and have shifted from a closed innovation strategy to an open
innovation strategy, a term originally introduced by Chesbrough (2003). The basic
idea behind open innovation is that institutions should combine internal and external
ideas and technologies when innovating. Specifically, as defined by Chesbrough,
“Open Innovation is the use of purposive inflows and outflows of knowledge to
accelerate internal innovation, and expand the markets for external use of innova-
tion, respectively” (Chesbrough, Vanhaverbeke, & West, 2006). It can be described
as a broad concept that is usually distinguished by inbound and outbound open
innovation activities.
Ramirez-Portilla, Cagno, and Zanatta-Alarcon (2016) investigated how the adop-
tion of open innovation influences activities driven by food ecosystem stakeholders
in order to complement a larger image of open innovation, and found that large
institutions in food ecosystems are not the only actors that propose and drive lasting
initiatives through open innovation. SMEs, non-profit foundations, collective com-
munity actions, startups, and individual consumers are also cited to catalyze signif-
icant transformations (Ramirez-Portilla et al., 2016). Furthermore, scholars posit that
collaborations under the umbrella of open innovation seem to be based on a
foundation of trust (Ramirez-Portilla et al., 2016). Based on their results, the authors
coin the term ‘open food’ as a label for food innovation that adopts an open
innovation approach. The authors define open food as a collective of initiatives
and practices empowered by small organizations, users, communities, and citizens
sharing a common objective of creating, adapting, capturing, adopting, and dissem-
inating food related value, knowledge, and innovations that may be leveraged by
for-profit actors (Ramirez-Portilla et al., 2016). Even though it is considered as a
low-tech and a ‘traditions bounded’ industry, food production and food ecosystems,
especially, have the power to innovate with its variety of internal and external
stakeholders (Sarkar & Costa, 2008). In fact, this inclusion of diverse stakeholders
has greatly increased in the last years due to the heterogeneous needs of consumers,
which have driven food firms to open up their innovation processes (Bigliardi &
Galati, 2013) from traditional innovation partnerships in the food industry
110 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

(Lazzarotti & Manzini, 2013) to more advanced innovation ecosystems (Bresciani,

2017; Saguy & Sirotinskaya, 2014; Santoro, Vrontis, & Pastore, 2017).
In essence, through research, innovation, and entrepreneurship and the ensuing
open innovation activities, food ecosystems become the perfect arena for combining
the knowledge specificities of its many actors, especially SMEs and startups in
efforts to create effective and sustainable transformations in the food ecosystem. In
order to achieve the best possible mix of innovation and inclusion Saguy and
Sirotinskaya (2014) offer certain recommendations, including practicing collabora-
tion and involvement of SMEs, new intellectual property models for complex
collaborations, and the creation of new innovation ecosystems within food that can
easily adapt to external demands.
To shed light on these initiatives, Gillebo and Hugo (2006) explored key the
characteristics and dynamics of ongoing regional innovation cultures within the food
sector, and found that a common denominator of the cases they analyzed is a strong
community of innovative practitioners that shape their activities around intentional
interactions, dialogue, and inquiry that revolves around long-term commitments.
They discuss four strategies to develop regional innovation cultures within food
ecosystems:
1. Build strategies for the activity of pioneering local and regional cultures of
practice.
2. Analyze their entrepreneurial uniqueness and social ecology.
3. Facilitate a broader co-involvement of institutional, market, and cultural
entrepreneurship.
4. Develop competency and cultures of inquiry linked to interdependent
entrepreneurship.
Furthermore, in a survey conducted by the research team at Food 2030 on
100 respondents from the areas of education and research, business, government,
non-governmental organizations, and civil society answered questions related to the
future of research and innovation breakthroughs, identifying the main areas of
interest for innovative action (Fernandez & Lazaro-Mojica, 2018).

4.4 Emerging Food Approaches

The current food system strongly needs transformative changes to address the
twenty-first century grand food challenges, among others: (i) population growth
and climate change; (ii) the degradation of public health due to unhealthy diets; (iii)
the pollution of our environment due to intensive food production and (iv) the over-
population of rural areas among other due to poor economic viability.
Innovative approaches are emerging to stimulate and to contribute to future-
proofing the food system, overcoming the grand challenges. These included new
breeding techniques for animals and plants either by generating new varieties of
plants, by crosslinking species, or by introducing new growth methodologies. Smart
farming techniques, which include developments in the increase of productivity and
4.4 Emerging Food Approaches 111

efficiency, using precise farming for planting seeds, watering, fertilizing, and
harvesting to get the best possible use of land are some of the most promising
transitions. Other promising products include the use of new agriculture techniques
such as hydroponics as a system of plant growth and development in controlled
environments, higher intelligence on crop rotation to enrich soil nutrients, and the
use of agro-ecology principles for improving local farming, and a reduction of
synthetic pesticides and fertilizers. These innovations have been identified as the
main drivers of changes in dietary habits including plant-based alternatives for meat
products, and a decrease in the overall consumption of nutritional “unhealthy”
ingredients such as sugar and salts. More recent approaches to tranform food
approaches include adopting a circular economy, which includes reuse of fresh
water supplies, as is the case with vertical gardens, repurposing of food waste in
order to create fertilizers or feed for animals, and even the use of edible insects based
on the consumption of non-used byproducts from the food industry. These examples
however are not exhaustive and present only a summary of findings from Food
2030’s survey results (Fernandez & Lazaro-Mojica, 2018). For a more detailed
summary of possible research and innovation breakthroughs as identified by Food
2030 see Table 4.1.
Finally, research has shown that citizens and end-users are perhaps some of the
most influential players in ensuring the success of emerging innovations. They are
the food ecosystem members who either adopt innovations or reject them by adapting
to current trends. In relation to this, Ramirez-Portilla et al. (2016) provide different
notions that can be considered a baseline for trends, and a breakdown of areas of
need in current food innovation projects in food ecosystems. Their categorization is
as follows:
• Fresh, local, and convenient:
– New ingredients
– Emerging regulations
– Foods on the go
– Proximity to customers
• Automated solutions:
– Food bots
– Advanced processing
– Waste and resource minimization
• Safety and Quality:
– Food authenticity and traceability
– Quality management across the supply chain
– Sanitation
• Supply Chains:
– Short product life cycles
– Intelligent packaging
– Sustainable sourcing
Table 4.1 Inventory of possible R&I breakthroughs
112

Domain R&I breakthrough Specific R&I breakthrough topics Impact Food 2030
The new approach Breeding new tech- – New varieties of animals and plants Plants: Increase of drought resistance, “less Climate,
of primary food niques and applications – New genetic methodologies and new applications water” resistance, more resilient varieties, nutrition
production and pest resistant or less fertilizers’ dependency
distribution Smart farming – Precision farming: Use of local data (e.g., apps, Higher quality, ensured food safety, better Climate,
terrain data, irrigation data, foliar growth) traceability, improved productivity, higher circularity
– Use of global data (e.g., web platforms, forecasts) efficiency, less fraud, lower costs and more
– Applied mechatronics benefits to a new era of higher sustainability
– Artificial intelligence applied of the agricultural ecosystem
Non-conventional pro- – Hydroponics Higher quality of crops, better use of Climate,
duction systems – Vertical agriculture resources and land, less “intensive” nutrition,
– Intelligent agriculture, use of waste streams, higher circularity
– Cropping sustainability of the agricultural ecosystem
– Agro-ecology
– Permaculture
– Organic awareness
– Urban farming
– Biodiversity
Reduction of impact of – New approaches to fertilizers Better footprint of production, better use of Innovation,
production enhances – New approaches to pesticides natural resources, less environmental climate
– New approaches to animal antibiotics impact
New value systems – Business model for the primary sector New policies and management of the Climate,
– Short value chains agricultural system towards a new food circularity,
– New models on developing countries (microcredits, revolution on the supply chain and use of innovation
crowd funding) resources for a more sustainable trade from
– Social innovation relating to food production and the first producer to the final consumer.
distribution, food coops, social markets etc. Thus taking into account the margins
gained on the process by middle-men and a
more balanced equity on the costs of
production
4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches
 New aquaculture – Advanced fish farms There is potential for a better exploitation Climate,
– New feeds of our seafood resources, from the feeding circularity
– New on sea production with lower impact on nature system to food safety and authenticity
An engaged and Empowered consumer – Innovation in social sciences Consumers from the point of view of Innovation,
healthy consumer – Living labs society can be part of the research and nutrition
– Optimized use of big databases innovation inputs into the food system.
– Informed consumer There is a space for innovative ways to
– Active and engaged consumer empower consumers in a supply driven
– Co-creation food chain
– Due diligence
– Value based food system
4.4 Emerging Food Approaches

– Domotics (technologies at home for preparation,

storing, menu selection, etc.)
Change of dietary – Awareness of healthy habits A healthier population with all the conse- Nutrition
habits – Reduction of targeted ingredients (salt, sugar, trans quences this enables: Less communicable
saturated fats) diseases, healthier growth and ageing of
– Reduction of targeted additives (clean label) individuals, a sustainable lifestyle. . .
New tools to improve – Personalized nutrition Further knowledge on human health and Nutrition
nutrition and health – Multi-Omics the tools available to measure and to
– Nutraceuticals influence an adequate nutrition and healthy
– Functional foods habits
– Human genome knowledge and application
New methods in – New models for education (e.g. learner cantered/ Society and new generations need to think Innovation
education personalized education, new approach to MOOCs— differently to achieve new solutions to the
Massive online open courses, do it yourself education, actual and future incoming challenges
problem solving learning—Participatory research)
– Awareness of food-system
– Innovation and entrepreneurial behavior
(e.g. innovation through Hackathons, MakerSpaces,
FabLabs, science shops)
– Guidance to start ups and SMEs, new models of
collaboration and impact
113

– Open research and open innovation concepts

(continued)
Table 4.1 (continued)
114

Domain R&I breakthrough Specific R&I breakthrough topics Impact Food 2030
The tools of a Logistics—New – Physical internet A new way of transferring materials from Innovation,
future proof food systems – Service “at the door at any time” one place to another globally would change circularity
system the way we understand trade and acquisi-
tion of goods in a rapid market
Smart traceability in the – Transparency and trust through the value chain Blockchain could allow a quick tracing of Circularity
food supply chain food products to their source for enhanced
food authenticity, therefore increasing
transparency and trust in the food value
chain
A novel approach to – New biotechnological tools The further exploitation of microbiota/ Innovation,
biotechnology – New applications microbiome knowledge can impact the way nutrition,
that foods are produced and the nutrients circularity
that they provide. The development of
biotechnological tools on the knowledge of
genome and its sequencing, opens the
possibility of new applications and
implementations. Some examples were the
conversion of biomass and residues into a
new range of new sub-products and ingre-
dients, the use of actual biorefineries to
separate protein and energy into protein
usable for humans, or the use of microalgae
to produce nutraceutic components without
impacting food agriculture
Information and com- – Full exploitation of big data Transversal to many sectors in the food Innovation
munication technolo- – Internet of things system, from the efficiency of industrial
gies (ICT) applied to – New sensors applied to multiple applications processes to new business models on the
food system – Digitalization of industry interaction with consumers
– Robotics
– Augmented reality
4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

– Artificial intelligence
 Food industry 4.0— – Mild processing More efficient processes in productivity Innovation,
Novel and efficient – Low input technologies and energy consumption, more environ- circularity,
food processing – New robotic applications mentally sustainable processes, less nutrition
– Nanotechnology production of waste, products of higher
– Integrated input-output responses nutritional quality
– 3D printing
– Preservation (IR, UV, radiowaves, pulsed electric
fields, high pressure treatment, osmosis, cold plasma)
– Filling (aseptic filling, clean room tech, super
cooling)
Sustainable packaging – New materials Higher sustainability of the food system, Circularity,
4.4 Emerging Food Approaches

– Biodegradable materials less environmental impact, better use of climate

– New recycling methods resources and waste streams
– Reduction of package
– New models in the food system
Diversity on the diet – New sources not fully exploited Exploring new ingredients allows a higher Climate,
– New protein sources diversity on use of resources, technological circularity,
– Full exploitation of algae applications and health impact on nutrition
– Full exploitation of insects consumers. Always from a sustainable
– Cultured meat perspective and environmental impact
perspective
The global food – Higher efficiency, better detection, global standardi- Food analysis is basic for the correct use Innovation
analysis zation, world food regulatory standards and interpretation of data. The importance
of the information output requires evolve-
ment for higher capacity and impact
A sustainable and Circularity in food – Reduction of waste (zero waste) Transversal to all value chain, the use of Circularity
dynamic value systems – New uses of waste waste streams has a greater impact on
based food system – New recycling business models efficiency and sustainability of the food
– New structure in food system system
Efficient use of – Efficient use of water Optimization of our processes from Circularity
resources – Efficient use of land agricultural input up to consumer behavior
– Efficient use of nutrients is relevant for the overall sustainability of
115

– Efficient use of energy the food system

(continued)
Table 4.1 (continued)
116

Domain R&I breakthrough Specific R&I breakthrough topics Impact Food 2030
Food for society – Community driven social innovations (City labs, How the society interacts with the food Innovation,
community based participatory research, citizen sci- system and how there is an overall aware- circularity
ence, urban cropping, urban beekeeping, rent a tree) ness on the impact of the power of small
– Innovative public procurement (meals in nurseries, individual actions and public policies is
schools, residences, senior people’s homes) relevant for a social innovation
– Social entrepreneurship breakthrough
– Awareness of waste in social context (homes,
schools, restaurants, take waste food at home)
– Trade norms (dismissed fruits by shape or form)
– Do it yourself
– Collaborative production
– The European cultural food heritage (maintaining the
local characteristics considering new options of geo-
graphic diversity)
Policy and manage- – Applying responsible research and innovation Optimization of our processes for knowl- Innovation
ment within the food – Improving the R&I network edge transfer, for implementation of
system – Public-private transfer knowledge, for a full public-private
– Impact of research and innovation collaboration, for better measurements
– Higher implementation of knowledge of impact
– Regional aspects of food system
– Food marketing and labeling (new approaches)
Source: Fit4Food2030 Towards Food 2030—Future proofing the European Food systems through Research&Innovation—Deliverable 4.1 (Fernandez & Lazaro-
Mojica, 2018) (Adapted)
4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches
4.5 Vertical Farms 117

Based on these conceptualizations that describe the major topic areas of interest
for interventions and their sub-categories that describe innovations in food ecosys-
tems, respectively, we present the following discussion of real examples of the most
trending and current food production innovations.

4.5 Vertical Farms

Gilbert Ellis Bailey was the first to define “vertical farming” in 1915 through his
book titled “Vertical Farming”. His main argument was that hydroponic farming1 in
a controlled and vertical environment would provide certain economic and environ-
mental benefits (Bailey, 1915). Furthermore, urban planners and food ecosystem
stakeholders propose that cities will be required to provide food ‘in house’ in order to
be able to adapt to the increasing urban population and its ensuing demands, and
avoid threatening food security and nutrition (Al-Kodmany, 2018a). Urban agricul-
ture has been put forth as a solution to these challenges as it consolidates food
production and consumption in a single location; in the case of urban areas where
fertile land is scarce and expensive, vertical farms seem like the hero we need.
With the expected increased in global population and its effect on urban cities, a
key emerging challenge is the question of how food will be transported into cities in
sufficient quantities to effectively nurture and maintain the health of dense
populations; it is here where the vertical farming models can provide an innovative
solution (Al-Kodmany, 2015; Al-Kodmany, 2018b; Corvalan, Hales, McMichael,
Butler, & McMichael, 2005).
Moreover, a few diverse yet specific cultivation techniques and technologies that
complement vertical farms’ success in ensuring food security in cities exist. The first
type regards the construction of tall vertical structures with several levels of seed
beds lined with artificial lights. Many cities across the world have embraced this
model, and in some instances re-structure industrial buildings to make them appro-
priate for food production activities (Despommier, 2013). Another type of vertical
farming uses rooftops of both residential and commercial buildings, and other city
structures, e.g., restaurants (Birkby, 2016; Thomaier et al., 2015).
Furthermore, vertical farms manifest in a couple of different ways, from simple
two-level or wall-mounted systems to occupying large warehouse spaces reaching
several stories high. However, one common denominator of all vertical farms is the
use of one of three soil-free systems for providing nutrients to plants, i.e. aeroponics,
aquaponics, and hydroponics. These high-technology processes reflect an important

1
Hydroponic farming is a method of growing plants without soil by instead using mineral nutrient
solutions in a water solvent.
118 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

shift in farming and food production processes, that offer timely and effective
methods for urban farming, while minimizing maintenance, and maximizing yield
(Al-Kodmany, 2018a).

4.5.1 Aeroponics

This indoor growing technique was developed by the National Aeronautical and
Space Administration (NASA) out of an interest to find efficient methods to grow
plants in outer space. Aeroponics can be defined as growing plants in an air or mist
environment with no soil and very little water (Al-Kodmany, 2018a; Birkby, 2016).
This technique is still rare in the vertical farming world, but has recently been
generating interest. An aeroponic system is the most efficient of the three techniques
for vertical farming, since it uses around 90% less water than even the most efficient
hydroponic system (Birkby, 2016). Plants grown in aeroponic systems also have
been evidenced to contain more vitamins and minerals, which make them healthier
and with an added nutritional value.
An aeroponic system is an enclosed air and water, nutrient rich, ecosystem that
fosters rapid plant growth with little water and direct sun, and does not require soil
(Al-Kodmany, 2018a). This technique uses mist or nutrient solutions instead of
water, so it does not require containers or trays to hold water.

4.5.2 Aquaponics

Aquaponic techniques can be seen as an upgrade on the hydroponic system (discussed

next), and is a bio-system that combines recycled aquaculture (e.g., fish farming) with
hydroponic plant production to create mutually beneficial interactions between the
plants and the fish (Birkby, 2016). It achieves this mutuality due to the nutrient-rich
waste from fish tanks that is used to simultaneously fertilize and irrigate (i.e., fertigate)
hydroponic seedbeds. The hydroponic seedbeds also serve as bio-filters that remove
unwanted chemicals and gases from the water. Fish are usually grown indoors, and
produce nutrient-rich waste that is re-used as a feed source for the plants in the system.
The plants therefore act as filters for the wastewater, which is then recycled back into
the fishponds. Some researchers even suggest that aquaponic techniques might in
themselves serve as a model for sustainable food production by achieving a true
model of the 3 R’s, i.e. reduce, reuse, and recycle (Al-Kodmany, 2018b; Graber &
Junge, 2009) and cite the following added benefits.
• Automatically cleans water for fish ecosystems.
• Provides plants with organic fertilizers that foster their healthy growth.
4.5 Vertical Farms 119

• Provides efficiency and circularity since the waste products of one biological
ecosystem serve as nutrients to the other.
• Recycles water since it is automatically re-used through biological filtration and
recirculation. A function that is crucial in drought-prone regions.
• Reduces and removes the need for chemical and artificial fertilizers.
• Results in a polyculture that increases biodiversity.
• May be an attractive business that generates two products, vegetables and fish,
from one ecosystem.
Finally, aquaponics is sometimes preferred over hydroponics (Al-Kodmany,
2018b). Nonetheless, it remains at experimental and pilot stages with limited
commercial success. This might be due to the fact that the technologies required
to build an aquaponic ecosystem are quite complex since they require the mutual
interdependence of two different agricultural ecosystems.

4.5.3 Hydroponics

The dominant technique employed in vertical farms, hydroponic systems grow

plants in nutrient solutions that are free of soil. The plant’s roots are sub-merged
in the solution, which is then monitored and circulated so make sure that the nutrient
solution ph is maintained (Birkby, 2016). This technique can be further defined as
‘the cultivation of plants in nutrient-enriched water, with or without the mechanical
support of an inert medium such as sand or gravel’ (Al-Kodmany, 2018a, p. 7). And
while the use of water as a method to grow crops is not exactly novel, its commercial
introduction is a recent phenomenon.
One of the main innovative elements of this technique is its potential to eliminate,
or reduce, soil related cultivation problems such as pesticides, fungus, and bacteria
that are found in the soil (García-Caro Briceño, 2018). Further, because this system
is closed, the nutrient solution is fully recycled, meaning significant water conser-
vation. Due to this, this method could be especially appropriate for water-scarce
regions. Furthermore, this method is free of animal manure, fertilizers, and pesticides
(Birkby, 2016; García-Caro Briceño, 2018). For a description of the top 3 techniques
for high-tech indoor farming please see Table 4.2.
These techniques, made possible by certain technologies, have raised vertical
farms to be considered a revolutionary approach to producing high quality and fresh
produce all year round, with minimal reliance on physical labor, adequate weather
conditions, fertile land, and high amounts of water use (Baudoin et al., 2013).
Vertical farming is a forward thinking approach that aims to ensure food sustain-
ability in cities by directly tackling the issue of food security in urban areas. As a
significant tool in the quest for sustainability, vertical farms are able to grow food
efficiently and sustainably.
One example of a current startup seeking to implement hydroponic technology is
‘Phytophonics’, which was founded to bring advanced crop production technology
120 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

Table 4.2 High tech indoor farming

Farming Common/applicable
method Key characteristics Major benefits technologies
Hydroponics Soil-less, uses Rapid plant growth; reduces Computerized and monitoring
water as the grow- and even eliminates soil- systems; cell phones, laptops,
ing medium related cultivation prob- and tablets; food growing
lems; decreases the use of apps; remote control systems
fertilizers and pesticides and software; automated
Aeroponics A variant of Includes those for hydro- racking, stacking systems,
hydroponics; it ponics, and the additional moving belts, and tall towers;
involves spraying benefit of using less water programmable LED lighting
the roots of plants systems; renewable energy
with mist or nutri- applications (e.g., solar
ent solutions panels); closed-loop systems,
Aquaponics It integrates Creates synergies between anaerobic digesters; program-
aquaculture (fish plants and fish; it uses the mable nutrient systems; cli-
farming) with nutrient-rich waste from mate control, HVAC systems;
hydroponics fish tanks to ‘fergitate’ water recirculating and
hydroponic seedbeds; the recycling systems; rainwater
seedbeds filter the water for collectors; insect-killing sys-
the fish tems; robots.

Source: Al-Kodmany (2018a)

to the food ecosystem by introducing new technology that is highly productive,

efficient, and resilient to climate change. The startup was founded in 2016 and has
turned their original vision for the future of agriculture into a reality. They have
currently developed, tested, and trialed a deep-water culture growing system for
tomatoes. In 2008, the company raised enough funding worth of investment to test
their hydroponic system as an ‘all in one’ greenhouse. The company grows plants
from transplant into crop, and works with growing tomatoes, pepper, medical
cannabis, cucumbers, and strawberries among others. Furthermore, their state of
the art technology offers a high return on investment, rapid deployability, and
automated nutrient system (Phytoponics, 2018).

4.6 Short Food Supply Chains

Recently, short food supply chains (SFSCs), the creation of local and regional food
ecosystems, and efforts to reconnect consumers with food producers have gained
international attention from both researchers and policy makers (Kneafsey et al.,
2008; Marsden, Banks, & Bristow, 2000). The European Union’s rural development
regulation (1305/2013), for instance, outlines a number of measures to promote
SFSCs with the main aim of enhancing farmer’s incomes and thereby helping to
support rural economies (European Commission, 2013; Schmutz, Kneafsey, Kay,
Doernberg, & Zasada, 2018). SFSCs as legally defined by Reg. (1302/2013) are
4.6 Short Food Supply Chains 121

expected to be able to reach the goals and objectives of ‘sustainable agriculture’

through the reduction of transportation costs and the resulting reduction in CO2
emissions, and promotion of biodiversity, e.g., products are recognized as ‘local’ by
consumers. (Canfora, 2016). Considering their role in reaching certain levels of
environmental protection, it is not surprising that interest in SFSCs is growing in the
European Union and other national member-state legislations.
However, current reservations about the economic relevance of SFSCs are ever
present. This relates to the consideration of costs associated with small-scale pro-
ductions when compared to the traditional quantitative mass production and large
food producers, especially when taking into account the relative advantages of
economies of scale, as well as the costs associated with producing products in
specific geographic regions that are inadequate for growing certain products.
For instance, large food retailers have been slow to adopt direct-to-consumer
distribution, something that is slowly beginning to change (CB Insights, 2018).
Large food retailers such as Coca-Cola and General Mills do not operate their own
point of sale, and have traditionally relied on large retailers to sell their products.
With the emergence of e-commerce, many of these large industries turn to online
retailers such as Amazon to get their products to customers.
However these retailers and distributors often invest in smaller and private labels,
thus becoming competitors, and not collaborators with food giants. This is made
more evident since many of the companies retailers invest in are usually SMEs
and startups, which offer direct-to-customer purchasing options almost by default.
Moving to direct-to-consumer business models, large food companies would grant
themselves more control over their image with customers, and the representation of
their products. They might also further their personal relationship with customers
thus achieving higher ‘buy in’ for future innovations and products (CB Insights,
2018).
Furthermore, some authors argue that a narrow view of supply chains focused on
economic advantage must be assessed against the evaluation of both social and
environmental benefits that might come from reducing the physical distance from
farm to fork, maintaining farm activities in local areas, and connecting to consumers
(Canfora, 2016). For example, by simply evidencing the potentially significant
reduction in CO2 emissions, we can see that SFSCs have a positive effect on public
goods, with clear environmental benefits when compared to the traditional, econom-
ically comfortable, long supply chains.
Furthermore, in a study conducted by Schmutz et al. (2018), the researchers
employed a participatory Sustainability Impact Assessment (SIA) in which local
food ecosystem stakeholders were asked to rank the perceived impacts of five
diverse urban SFSCs over the traditional food supply system, e.g., mass production,
supermarkets as large retailers, and standardized food products. From their analysis,
they identified that stakeholders perceive SFSCs as generally out-performing more
mainstream, traditional, global food supply chains (Schmutz et al., 2018).
This might be due to the many benefits that that SFSCs provide to the many
challenges affecting our food ecosystem. Through SFSCs, consumers will have
access to food and produce that is fresh and of a higher quality and nutritional
122 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

value. With SFSCs food ecosystem stakeholders and consumers can support jobs in
their local region, their local environmental resilience, and food ecosystem member
cohesion for increased impact when pursuing common goals. For producers, SFSCs
enable a more equal remuneration through increased and personalized price control
(Staes & Heubuch, 2019). One example of a successful SFSC network, is the Gasap-
network in Brussels, where about 4000 community members have established direct
and long-term relationships with around 30 small-scale farmers, thus yielding a
stable and equal economical basis for sustainable food production (Christophe,
2013).
Due to many environmental and social benefits generated by SFSCs, it is no
wonder that a growing number of startups and new ventures seek to reduce the
distance in supply chains between farmers, retailers, and consumers. These efforts
include traceability technologies, robotics, environmental sensing and tracking tech-
nologies, and logistics.
One major example of a successful startup that promotes SFSCs is “NinjaCart”,
originally a hyper-local grocery delivery platform in 2015; it is now India’s largest
B2B2 fresh produce supply chain company. With their technologies and user centric
solutions they have disrupted the way produce is delivered to people’s plates,
thereby improving the lives of producers, businesses, and consumers in a meaningful
way (NinjaCart, 2019). NinjaCart’s short-term target is to build a food distribution
network of a million retailers, restaurants, and food service providers in the next
3 years, while their long-term target is to ensure that safe and healthy food is
affordable and accessible for millions of people in India.
Their ‘Eureka!” moment occurred when they identified a large consumer demand
for an online fruits-and-vegetables-only marketplace, however the supply side from
farmers and retailers was too fragmented to accommodate the demand, this proved
problematic for both customers and farmers. For small retailers, problems regarding
complex procurement processes and proper management of quality, hygiene, price,
logistics and customer understanding were a main challenge. For farmers, unfair
prices, high food wastes due to a mismatch in supply and demand and lower incomes
were the biggest barrier. Therefore, NinaJaCart created their agri-tech platform in
efforts to build reliable, cost-effective, and high-speed infrastructure, thus enabling
retailers and merchants to source fresh produce directly from farmers.
Their premise is to solve the inefficiencies in the food supply chain through their
state-of-the-art supply chain innovation, while adding value to stakeholders and
changing the way fresh food reaches consumer plates in regards to quality, afford-
ability, and accessibility.
Through their business model, NinjaCart is perfectly positioned to assist farmers
get better prices and handle the consistent consumer demand, and to help retailers
source fresh vegetables at competitive prices directly from farmers. They are able
to do this successfully at a lower cost, faster speeds, and larger scales using an

2
Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a
commercial transaction with another.
4.7 Precision Agriculture 123

integrated supply chain that is powered by technology, data science, and a logistics
network.
Since its inception, NinjaCart has disrupted the way fruits and vegetables move
from farms to consumers. In essence, they source fruits and vegetables from farmers
from over 20 different Indian states, and deliver these to over 17,000 local small
retailers and restaurants across 7 major cities, everyday in less than 12 h. Their
focus is to make the Ninjacart innovation more accessible and leverage their
strengths to innovate for new product categories and customer segments while
solving complex supply chain problems. Importantly their technology enabled
supply chain, with an always-connected logistics network helps them lower costs,
and increase speeds of food delivery thus reduce waste. For example, its model of
delivering food in less than 12 h comes at half the cost of those from traditional
market, with less than 1% food waste. Traditional supply chains take more than 12 h
to deliver products to retailers, on average, and food waste with this method is more
than 30% (LinkedIn, 2019).

4.7 Precision Agriculture

Like many other facets of daily life, agriculture and food ecosystems have also gone
through a technological evolution. Technology has become an indispensible part
of doing business for every farmer, and food producer. This is evident in recent
technique adopted by farmers to improve their production outputs. Precision agri-
culture (PA), or precision farming, for example, comprises a set of technologies that
combines sensors, information systems, enhanced machinery, and informed man-
agement to optimize production by accounting for variability and uncertainties
within food ecosystems (Gebbers & Adamchuk, 2010). Precision agriculture (PA),
satellite farming, or site-specific crop management (SSCM) is a crop management
concept that is based on observing, measuring, and responding to inter and intra-field
variability in crops, this technique has been increasing in recent years and reports
suggest that precision agriculture is projected to grow into a $43.4 billion industry by
2025 (Business Wire, 2017).
Initially used as a tool to adapt fertilizer distribution to varying soil conditions
across farming fields, PA has gone through some evolutions in its employment, such
as automatic guidance of agricultural vehicles, autonomous machinery and cultiva-
tion processes, product traceability, on-farm research, and new software and tech-
nologies for the overall management of food production systems (Gebbers &
Adamchuk, 2010). Perhaps one of the simplest ways to explain PA is by thinking
of it as any activity that makes farming processes more accurate, controlled, and
precise when it comes to growing crops or raising livestock. Key technologies used
for this approach include GPS guidance, control systems, sensors, robotics, drones,
autonomous farming vehicles, GPS-based soil sampling, automated hardware,
telematics, and other software.
124 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

PA first emerged in the 1990’s with the introduction of GPS guidance for farm
tractors. The adoption of this GPS guidance is now so globally widespread that it is
probably the most common used type of PA today.
John Deere was the first to adopt this technology employing GPS location data
from satellites. A GPS-connected controller in a farm tractor automatically steers
itself based on the coordinates of a field. This automated steering of farm vehicles
thus reduces steering errors by human drivers, and therefore avoids overlap on the
field. This in turn results in less wasted seeds, fertilizers, fuel, and time. Reducing the
amount of natural resources that go waste, and resulting in less wasted fertile seeds,
fuel, fertilizer, and time (Schmaltz, 2017).
A current startup that provides PA services to farmers is known as “xFarm”.
xFarm is comprised of farmers who provide first hand advise about the challenges
and complexities of managing a company. xFarm can be considered a collaboration
between farmers and computer and electronic engineering to empower farmers to be
able to employ the best available technologies and achieve adaptability in the global
food ecosystem. xFarm was born from the collaborative experiences of farmers who
struggled to solve their farm managing challenges, and technicians who managed to
create technological solutions for farmer’s challenges.
xFarm is a software that helps farmers improve data management through a
digital log of field activities and creating all the necessary documents to track their
activities and ensure their products are yielding the best possible output. The team at
xFarm aims to make modern technologies easy to use, and help farmers manage their
personal data and their field data; xFarm’s software records all activities and prepares
the crops on farmer’s fields. Farmers can then manage this data from their computer,
tablet, or smartphone.
Once farmers collect their data on their mobile device, they can then analyze it to
improve the efficiency of their farming procedures. Farmers are also empowered to
identify areas to be corrected or improved. xFarm helps farmers estimate and prepare
their stock, and helps them manage their required reports by authorities and certifi-
cation bodies. Furthermore, the real-time data provided by xFarm includes current
field work, which is displayed on farmer’s mobile devices while they are physically
on the field, this provides them with a live feed of their activities, which can indicate
to farmers what needs to be done based on the soil and based on their physical
location. With xFarm farmers can also manage other features such as entrances and
exits in stocks, and get alerts for when farming equipment is in need of maintenance.
In essence, xFarm assists farmers in managing their land and crop output, operates a
software that is compatible with computer desktops and mobile devices, works with
arable crops, vegetables, and fruits, functions in fields and land registries creating
maps, lists of tasks, stocks, crops, and equipment and safety. Furthermore the data
provided by xFarm can indicate a farmer’s compatibility for certain certifications
(xFarm, 2019).
4.8 Bio-Fertilizers 125

4.8 Bio-Fertilizers

Much of the increases in food production have been a direct result of the increased
use of chemical fertilizers and pesticides, however this increase in greater production
of food has some side effects as well. Some fertilizing chemicals are expensive, and
reduce microbial activity in agricultural soils and accumulate in the food chain,
thereby posing potential harmful effects for humans. Along with many of the
transitions in food systems, shifting way from chemical fertilizers and exploring
more sustainable solutions is a key issue in achieving overall food ecosystem
sustainability.
One possible solution for this transition is bio-fertilizers, which consists of plant
bi-products, organic matter, and microorganisms, and are natural, organic, biode-
gradable, eco-friendly and cost effective (Bhardwaj, Ansari, Sahoo, & Tuteja, 2014).
Furthermore, bio-fertilizers are composed of microbes that are essential because they
produce nutrients that are necessary for plant growth (e.g., nitrogen, phosphorus, and
potassium), and other chemicals that are crucial for plant growth (e.g., auxins &
cytokinins). Biofertilizers also help to improve the physical properties, fertility, and
productivity of soil, thus decreasing or removing the need for chemical fertilizers
while simultaneously producing expected crop yields. Hence, bio-fertilizers are a
powerful vehicle for sustainable food ecosystems (Win, Barone, Secundo, & Fu,
2018).
Furthermore, the European Consortium of the Organic-Based Fertilizer Industry
(ECOFI) is the representative body of European producers of organic fertilizers.
ECOFI members operate in many European countries and also export to, and engage
in interactions with, other non-EU regions such as the Mediterranean and the Middle
East. Collectively, ECOFI memberships make up about 60% of the European market
in organic-based fertilizers, which is worth about 250 million Euros (ECOFI, 2019).
Furthermore, ECOFI categorizes bio-fertilizers and defines them as follows:
• Organic fertilizer: A fertilizer whose main function is to provide nutrients under
organic forms from organic materials of plant and/or animal origin.
• Organo-mineral fertilizer: a complex fertilizer obtained by industrial
co-formulation of one or more inorganic fertilizers with one or more organic
fertilizers and/or organic soil improvers into solid forms (with the exception of
dry mixes) or liquids.
• Organic soil improver: a soil improver containing carbonaceous materials of
plant and/or animal origin, whose main function is to maintain or increase the soil
organic matter content.
A novel startup that has truly harnessed the power of bio-fertilizers is ‘Mama
Organa’ from North Macedonia. This startup focuses on creating organic fertilizers
from food waste, essentially cleaning the planet and feeding people (F6S, 2019). It is
a company that was formed to collect food waste by adding value to it, produce
organic fertilizers in order to help farmers in growing healthy and clean food, and
126 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

also provide job opportunities for socially excluded single mothers (European
Commission, 2019). Furthermore, Mama Organa was awarded the ‘Best Job Growth
Startup’ prize at the ‘StartUp Europe Awards’, thus highlighting the importance of
engaging in sustainable initiatives while simultaneously providing job opportunities
and economic growth.
Another related yet different venture is ‘InnovaFeed’. InnovaFeed is a pioneer in
the production of high-quality protein, oil, and fertilizers from insect farms that are
then used for animal feed and aquaculture. It is a biotech company that produces a
new source of protein from insects, and has raised a whopping €55 million since its
launch in 2016, and hopes to reach a production capacity of more then 10,000 tons
per years before their international launch in 2022. Their model is based on tech-
nology that allows them to place the insect at the heart of the food ecosystem and
restore its natural place in their smaller ecosystem; they give it its function of
recycling nutrients to then feed fish, birds or small mammals.
Given the imminent and fast-growing world population, InnovaFeed’s activities
respond swiftly and competitively to an increase in protein demands, with simulta-
neously contributing to developing more sustainable food ecosystems, in this case
especially through the improvement of quality aquaculture (InnovaFeed, 2019).

4.9 Meat Alternatives

Traditionally, meat has been considered an important component of a healthy diet,

as socially accepted and desirable, and as an indicator of societal development
(Biesalski, 2005). Animal-sourced foods are rich in nutrients and provide us with
an array of high quality proteins, essential fatty acids, and vitamins and minerals that
are present in lower quantities in plant based foods. However, the massive produc-
tion and consumption of meat at global levels has ignited relevant concerns about
the natural resources required, resulting pollution, and GHG emissions (Steinfeld
et al., 2006) and biodiversity loss (Machovina, Feeley, & Ripple, 2015). Further-
more, the current amounts of meat production by agriculture and consumption by
individuals not only exceed the dietary protein requirements, but also are actually
unsustainable (van der Weele, Feindt, van der Goot, van Mierlo, & van Boekel,
2019). This unsustainability of meat production is a result of a mix of current
production methods such as the inefficient use of resources per protein consumed
(Tilman, Balzer, Hill, & Befort, 2011) and the large amounts of GHG emissions
from animal production, which have also ignited efforts to reduce meat consumption
(Gill, Feliciano, Macdiarmid, & Smith, 2015).
Furthermore, raising livestock has an enormous environmental footprint as it
contributes to land and water degradation, biodiversity loss, acid rain, and defores-
tation. However, this environmental impact is most evident in climate change, with
livestock contributing to 18% of GHG emissions worldwide (FAO, 2019); more
GHG emissions than ships, planes, cars, and all other forms of transportation taken
4.10 Waste Reduction 127

together (Pimentel & Pimentel, 2003). Therefore, driving reductions in the con-
sumption of meat products and animal products in general is essential if we are
to meet the sustainable food systems and the SDGs. Meat production is quite
inefficient, and this is especially true for red meat. For example, the production of
a kilogram of beef requires 25 kg of grain, and roughly about 15,000 L of water
(Pimentel & Pimentel, 2003). The inefficiency that characterizes meat production is
also evident when it comes to land use, since around 30% of the Earth’s land is
current occupied for livestock farming (Pimentel & Pimentel, 2003).
These severe environmental challenges with meat production and consumption
however do not have to seem bleak, since they provide an array of opportunities for
innovation and entrepreneurial endeavors.
For example, “[Link]” produces plant-based meat alternatives that are mostly
made from soybean proteins, water, and pea protein. [Link] offers its customers
wide option of products, ranging from meals that are ‘ready to cook’ to meals that are
‘ready to eat’; and all made with sustainable plant based meat alternatives. Further-
more, [Link] ensures their products are full of iron and B12, high in protein, have a
longer shelf-life than real meat to help reduce waste, and uses 90% less plastic to
package ([Link], 2019).
Furthermore, ‘The Meatless Farm Co’ was founded in 2016 to help people reduce
their meat consumption. Since then the company has developed plant-based mince
and burger patties that best replicate the taste and texture of meat. This startup
created these products with the goal of helping people reduce their meat consump-
tion and ease the process of adopting more plant based products. The mince and
burgers are high in protein, a great source of fiber, and vegan friendly. ‘The Meatless
Farm Co’ is a British company that has been met with success in outside market such
as the United Arab Emirates (UAE), Canada, China, and Europe. Finally, it is easy to
use; consumers must only follow the cooking instructions included in the packaging
and can also be included into regular meals (TMF, 2019).

4.10 Waste Reduction

Food ecosystem stakeholders are increasingly becoming aware of the issues related
to food waste, and are also recognizing their potential and responsibility in
preventing it. For example, research shows that most Europeans identify an individ-
ual responsibility when it comes to methods of reducing food waste, with 63%
stating that improved food related processes in terms of shopping and budgeting
food items would help reduce waste (Romani, Grappi, Bagozzi, & Barone, 2018). It
is no secret that food waste is a major global challenge, and therefore innovative
efforts are needed to tackle it.
‘Too Good to Go’ is an innovative app that allows users to do their share in
reducing food waste, while at the same time getting access to healthy and nutritious
food and supporting local businesses. Too Good to Go is an innovative app that lets
128 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

everyone do their bit to reduce waste, while also getting delicious food and
supporting local businesses. The businesses get to reduce their waste and also
have potential new customers try out their food. Both contribute to a better environ-
ment. Too Good To Go is an app that functions as a marketplace that connects
businesses with surplus food to regular consumers who want to ‘rescue’ this food.
Customers order this surplus food at a discounted price and then collect it from
the participating stores in a pre-set collection window. Customers have to simply
choose which store (from existing app members) they would like to rescue from,
place and pay for their order, and then go to allotted collection window and show
their in-app receipt to the staff in the store or restaurant of interest (TooGoodtoGo,
2019).
‘Wasteless’ on the other hand is the world’s first machine learning approach with
real-time tracking for grocery stores that seeks to offer customers dynamic pricing
based on when a product is set to expire. This results in reduced food waste and
increased revenue by enabling adjusted pricing. To reduce waste and optimize
revenue, the Wasteless’ pricing engine employs a branch of machine learning that
enables the engine to adapt quickly to how consumers respond to adjusted pricing,
thus being able to identify the optimal discount policy. With the current advances
in technological know-how and products, supermarkets cannot be left behind.
Wasteless takes the most advanced machine learning, forecasting, and analytical
techniques, and applies them to brick and mortar or online stores. With Wasteless,
business owners and entrepreneurs will be able to manage their business inventory
the smart way, always having control over their supply, inventory, and pricing
(Wasteless, 2019).

4.11 Health and Wellbeing

Unfortunately, the current global challenges posed by our food ecosystem are
not limited to environmental consequences as these transcend boundaries into the
actual well-being of individuals. While food ecosystems have been designed to
ensure food access and availability for all, there are still some issues with doing
this equally; this is evidenced by the co-existing alarming rates of obesity and wide
availability of processed foods, and severe undernourishment and limited access to
basic dietary needs such as fresh produce and fresh drinking water (Shamsuzzoha,
Rasheduzzaman, & Ghosh, 2018). With the projected population growth by 2050,
increased demands for food, changes in dietary habits due to availability of
resources, or increased consumer information will create new challenges to provide
universal access to nutritious and high quality food, while avoiding negative trade-
offs in environmental, economic, or social arenas (Lindgren et al., 2018).
The 2017 Global Nutrition Report detailed the health and well being crisis
associated with food ecosystems, and highlights that it is especially prominent in
4.11 Health and Wellbeing 129

the Asia Pacific region. Furthermore, 155 million children under the age of 5 are
current stunted and malnutrition costs amount to about $3.5 trillion every year.
Interestingly enough, around 3.4 million people die every year due to overweight
and obesity (Aid Forum, 2018).
Furthermore, increased food options and a saturation of food availability might
make it difficult for individuals to choose the healthier option, and many opt out for
the ‘easy choice’, which in the end might be detrimental to their health. For this
reason, startups focusing on maintaining and improving human health and well-
being are mostly focusing on providing personalized nutrition guidance.
One example of such a startup can be found in an Irish biotech company which
was founded in 2014, ‘Nuritas’. Nuritas combines artificial intelligence and geno-
mics to discover peptides, i.e. molecules in food and food by products, that can be
repurposed by scientific teams and used in supplements and new drugs. To date, the
startup has recused a €30 million in investments. Nuritas states that it can find
peptides 10 times faster and 500 times more accurately than existing methods, and
does so at a lower cost. It has developed and patented health-improving innovations
that can address a wide range of health challenges ranging from inflammation,
to diabetes, and even Methicillin-Resistant Staphylococcus Aureus (MRSA). Fur-
thermore, Nuritas states their goal as a global ambition to improve the lives of
billions of people (Irish Times, 2018; Nuritas, 2019).
Furthermore, ‘myDNAhealth’ is a startup that combines science, human behav-
ior, and technology to facilitate a shift from a ‘one-size-fits-all’ approach to diets to a
personalized nutritional approach aimed at preventing health problems and improv-
ing life expectancy (myDNAhealth, 2019). To do this, customers complete a
DNA-type test, which helps them take advantage of their inherited strengths while
overcoming their limitations. Upon completion of tests by customers, the company
then provides customers with 16 reports with risk scores and explanations, person-
alized wellness guide and tips, methods to increase nutritional intake based on their
genetic make-up, and provides lifestyle suggestions to improve overall wellness and
performance. The multivariate algorithms provided by myDNAhealth provides
personalized recommendations, including nutrient values, from a database of 2.5
million recipes designed to reduce risk of disease (myDNAhealth, 2019).
Finally, ‘FoodSay’ is a free of charge dietician app. A real-time food
consumption-learning platform that provides recommendation for the most nutri-
tionally appropriate and goal specific food depending on the time of day, season, and
activity levels. FoodSay works in three easy steps, (i) users initially input their
allergies, diet plan goals and receive diet recommendations almost immediately,
(ii) then populate their food diary by ordering food via FoodSay, and (iii) FoodSay
then suggests best meal options based on locations and diet profile. FoodSay aims to
gradually help each user easily follow a diet plan without any pressure and with all
their diet goals in consideration. The first version of prototype is also available at:
[Link] (FoodSay, 2019).
130 4 Innovation for Future Proofing the Food Ecosystem: Emerging Approaches

4.12 Conclusion

The recent emergence of the knowledge economy, which includes intangibility, high
level of interactions, and increasing importance of organizational innovation in
global value chains, has triggered important shifts from traditional food production
models. Food ecosystems are slowly moving from quantitative and economy
focused production, to smarter agricultural processes that are designed to ensure
the maintenance of the food ecosystem itself. However, these transitions have also
highlighted significant system limitations on innovation themselves.
In traditional linear models of innovation, science was always thought to be the
originating point of innovation. However, the recently emerging chain like, and
circular, model of innovation emphasizes that science is an element of the innovation
process and not necessarily the context in which innovation originates. For example,
increased attention is being given to farmers as entrepreneurs, since they are the
individuals who directly come in contact with crops, animal, and sometimes con-
sumers, it would be them to hold key insights to innovative solutions for food
ecosystems transformation.
The essence of systems thinking and open innovation considers the interaction
among elements. This perspective thus illustrates the innovation process of knowl-
edge production, turning knowledge into practice, and dissemination as occurring
within a non-hierarchical, dynamic, and open environment where many kinds of
knowledge spillovers occur, which are then harnessed by entrepreneurial talent to
create valuable innovations for societies (Tataj, 2015).
The importance of research and innovation for sustainable developments in food
ecosystems is evident, and the proposed research and innovation frameworks them-
selves can serve as guides to identify specific problem areas that are in particular need
for sustainable transformation. Specifically, the intervention points that emerged from
Food 2030’s survey, serve as important indicators for researchers and entrepreneurs
seeking to create impactful innovations toward sustainability. One reason for this is
that those topics emerged from a systemic representation of food stakeholders, and
not from personal preferences of institutions or individual members. These trans-
formations in production should be based on a mix of bottom-up and top-down
approaches, with innovations being led by farmers and citizen demand, but at the
same time accompanied by more influential actors from the food supply chain such as
industry, food processing sites, and retailers (Meynard et al., 2017).
Even strict research streams that often identify issues in one area oftentimes fail
to see appreciate their relationships and interdependencies with other related or
unrelated topics.
As originally proposed by Gill et al. (2018), the next logical step to effectively
engage research and innovation activities in food ecosystems, is for researchers
themselves to realize that research and innovation itself is in need of a systems
approach (Gill et al., 2018). This, however, remains a challenge since private sector
investment in such integrated and holistic research and innovation approaches remains
modest and fragmented, this fact outlines the need for strategies that trigger a double
transformation, both in food ecosystems and in R&I approaches (Gill et al., 2018).
References 131

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Chapter 5
Entrepreneurial Food Ecosystem:
Strategic Driver to Boost Resilience
and Sustainability

Abstract Food is connected to a variety of fields such as agriculture, environment,

energy, health, education, infrastructure, and urban planning to name a few. Given
the threats of population growth, climate change, and the waning health of our
natural resource base, broadening our R&I methods to be more systems-based,
and building public-private partnerships around shared interests and objectives are
two key approaches that can be employed to address challenges to food ecosystem
resiliency and sustainability. A better understanding of the linkages between food
ecosystem sustainability (and consequently food ecosystem sustainability transi-
tions) and food security is necessary to achieve ‘future proof’ food ecosystems.
However, R&I efforts have failed to adequately respond to the urgent and system
wide challenges that threaten food sustainability. A reason for this includes the fact
that much like linear ideas of food systems, R&I streams too suffer from compart-
mentalization. Furthermore, the engagement of all stakeholders, shifting mindsets
and approaches from mainstream linear models toward holistic approaches, and
involving public and independent R&I could be an appropriate response to chal-
lenges regarding food ecosystems’ complexity, and address the dominant and
established pathways that are difficult to transform. In this chapter we introduce
the concept of Responsible Research and Innovation (RRI) as the adequate vehicle
for holistically assessing food ecosystems and innovations toward sustainability
while truly considering potential trade-offs from proposed innovations.

Keywords Entrepreneurship center · Knowledge spillover · Entrepreneurship ·

Higher education institution · Innovation

5.1 Introduction

In order to tackle the ever-present and multifaceted societal challenges, and contribute
to the achievement of the Sustainable Development Goals (SDGs) it is essential, once
food ecosystems are created, to make them “future proof”, i.e. resilient, sustainable,
responsible, diverse, competitive, and inclusive (European Commission, 2018). The
main outcome of the food system has traditionally been to achieve food and

© Springer Nature Switzerland AG 2020 135

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
136 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

nutritional security, and only relatively recently has our global food system been
challenged to achieve this task while simultaneously considering and protecting the
Earth’s natural resources. However, even though food availability and access are the
main goals of food systems, about half of the global population remains affected by
food insecurity and the triple burden of malnutrition, all while food systems continue
to be one of the main contributors to the degradation of natural resources—two
factors that are clear symptoms of the inadequacy of current processes.
‘Sustainability’ has recently become a ‘buzzword’ amongst researchers and
scholars, as it has been catapulted into everyday discussions by worldwide media,
politicians, and general public opinions (Bertoni et al., 2018). This increased global
attention to sustainable initiatives and increased awareness of the potential future
damages associated with ‘business as usual’ have led to a convergence of efforts by
communities in attempts to identify effective strategies that are capable of promoting
sustainable development (e.g., short food supply chains, insects as proteins, and
sustainable or edible plastic packaging) (Akhtar & Isman, 2018; Bertoni et al., 2018;
Dankhade, Kazi, & Gophane, 2018; De Bernardi & Tirabeni, 2018).
Recent findings from a recent systematic review aimed to yield greater insight
into the state of research on the sustainability of agro-food transitions suggest that
in order to become ‘future proof’, food systems must (i) venture beyond their
traditional segments to foster trans-disciplinary and multi-institutional collabora-
tions, and (ii) integrate their varied sustainability transitions regarding food security,
nutritional interests, and environmental protection into consolidated regional, com-
munity, or organizational goals (El Bilali, 2019). Unfortunately, when it comes to
food and sustainability, food security and nutrition and their relationships with
sustainability transitions remains a scant topic in research literature (El Bilali, 2019).
The European Commission’s Food 2030 Expert Group describes the food system
as follows: ‘The food system incorporates all elements and activities that relate
to food production, processing, distribution, preparation, and consumption, as well
as its disposal. This includes the environment, people, processes, infrastructure,
institutions, and the effects of their activities on our society, economy, landscape,
and climate’ (Gill et al., 2018, p. 2). In essence, ‘food system’ refers to the actors
within the food supply chain, and their interactions with each other and overall
system activities, as well as between environmental, economic, and technical dimen-
sions (Rundgren, 2016). These conceptualizations of food systems provide a novel
point of view, one that appreciates their complexity beyond traditional and seg-
mented linear production-focused or consumption-focused models. Furthermore, in
adopting this holistic view, it is clear to see the overlap in the literature regarding the
use of the term ‘system’ or ‘ecosystem’ to describe the processes related to bringing
food from ‘farm to fork’. For consistency purposes, we consider ‘food systems’ the
physical structures of food supply chains (e.g., stakeholders, institutions, farms,
retailers, producers, etc.), and posit that these systems evolve into an ‘ecosystem’
when the interdependent relationships between members, and systems themselves,
are recognized as drivers of overall system procedures, culture, and transformation.
Throughout the rest of the chapter we employ the term ‘food ecosystem’ when
discussing food supply chain processes.
5.2 Beyond Linearity in Food Supply Chains: Systems Thinking 137

Holistic views of food ecosystems provide several benefits, especially since

traditional models have been evidenced as unsustainable and inadequate in driving
the transformational capacity of a system, mainly due to the fact that current
segmented approaches result in a range of heterogeneous sustainability initiatives
(e.g., depending on the sector) that are usually conducted by members in isolation,
and are therefore characterized by a narrow scope of solutions and limited research
and innovation (R&I) agendas (FEC, 2018).
Bertoni et al. (2018) also demonstrate that the path towards sustainable develop-
ment is related to environmental protection. They further suggest that a combination
of agricultural policies aimed at protecting and preserving the environment and
innovation along the agri-food chain, in concurrence with consumer engagement
towards ameliorating environmental issues can play an important role in achieving
sustainability objectives (Bertoni et al., 2018). Finally, even though research efforts
to understand and achieve sustainability have skyrocketed in the recent years
(Fischer et al., 2015), field experts acknowledge that research alone is not enough
as successful transitions also require the translation of research into practice in order
to effectively stimulate innovations for sustainability and change consumer behavior
patterns to truly deliver social impact (Tataj, 2015). This of course, requires a more
thorough understanding of the interactions and dynamics between the individual and
institutional stakeholders found in food ecosystems, and the provision of evidence
based guidance for stimulating positive change with desired outcomes (FAO, 2018).

5.2 Beyond Linearity in Food Supply Chains: Systems

Thinking

When it comes to sustainability, our food system is plagued with multi-faceted

challenges (De Bernardi, Bertello, & Venuti, 2019; De Bernardi, Bertello, Venuti,
& Zardini, 2019). For example, the industrial approach to food production and its
resulting food surplus in many communities have caused a reduction of the per-
ceived value of food as a highly critical and important product; this is evidenced by
the ominous fact that about one-third of global food goes to waste (FAO, 2019).
Even more alarming, global population growth, and changes in dietary patterns
require an increase in overall food production of more than 60% to feed the ten
billion projected world inhabitants by 2050 (Alexandratos & Bruinsma, 2012).
Furthermore, highly fragmented food supply chains, and unbalanced trading prac-
tices put limits on the potential for efficiency gains and advances in food systems that
could build consumer trust and promote disruptive innovations (EIT Food Strategic
Agenda, 2019). These multi-faceted barriers to food sustainability, coupled with the
global challenges outlined by the SDGs and their individual connections to the
overall food ecosystem (Rockström & Sukhdev, 2016) illustrate why systems’
thinking, in multiple domains, is an important and necessary approach for sustain-
able food production and consumption.
138 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

We know that when we seek to tackle global challenges, they must be considered
along with their accompanying causes, consequences, and benefits, and we must
keep in mind that every single one of these challenges cannot be solved in isolation.
This remains a troublesome scenario since the current segregated components and
processes of the food ecosystem directly impede its members from engaging with
each other, and thus limits its potential for achieving sustainability.
On a global scale, innovation and entrepreneurship have emerged as two prom-
inent vehicles to drive transformations in food ecosystems (De Bernardi, Bertello, &
Venuti, 2020; Vrontis, Bresciani, & Giacosa, 2016). However, in the case of the
European Union, food ecosystems are characterized by low entrepreneurial engage-
ment; this is reflected by a low share of representation, i.e. 2.6%, of food and
agricultural startups among all European startups from various industries (EIT
Food Strategic Agenda, 2019). This reluctant nature of food ecosystem stakeholders
when it comes to adopting innovations (e.g., new technologies and procedures)
should be interpreted as a challenge to scholars and field experts to attempt to shift
stakeholder mind-sets in order to develop a common culture that fosters entrepre-
neurial and innovative spirits for trans-disciplinary collaborations.
The well documented interdependencies between food production and consump-
tion procedures, environmental degradation, climate change, and unequal concen-
tration of research in specific food areas provide the perfect recipe for additional and
intricate challenges such as increased inequalities along socio-economic status
(SES), caused mainly by increased stressors for farmers, disconnect between rural
and urban areas, and conflicts related to natural resources (Gill et al., 2018). The
many interdependencies, e.g., feedback loops, synergies, and trade-offs, not only
between ecosystem members but also between the food ecosystem and other societal
systems (e.g., technology and health ecosystems), can oftentimes lead to undesired
side effects when specific interventions or innovations are introduced to particular
sectors (Gill et al., 2018).
Therefore, not only do the traditional food production systems of ‘make, use, and
dispose’ pose severe challenges to environmental sustainability and food security
and nutrition, but their very nature, which remains significantly divided, poses
significant challenges to current R&I efforts. The idea of food ecosystems as holistic
organisms has yet to experience widespread adoption, and a segmented view of the
food scenario from a research perspective, will produce segmented results.
The well-known need to transform the current nature of food systems has shifted
to an urgent and active call to arms from food system members (Caron et al., 2018).
Specifically, for the creation of holistic approaches that allow for the identification of
inter-sectorial and individual power imbalances, that are inclusive of all stake-
holders, and seek to involve even the most vulnerable members to shape innovations
and interventions for the improvement of food systems (Gill et al., 2018).
A positive step in the right direction is the existing element of novelty that is
inherent in conversations about food ecosystems; discussing ecosystems in itself, is
quite novel since it is has recently been adopted as a metaphor for agricultural
systems and their complex network of satellite systems that make the food system
function as an organic whole (e.g., farmers, retail, processing, health systems,
5.2 Beyond Linearity in Food Supply Chains: Systems Thinking 139

environmental systems, and waste management). One principle that can be easily
identified in food ecosystems is that they are essentially a collection, or network, of
heterogeneous subsystems that are themselves heavily institutionalized (e.g., even
though food and health ecosystems are interdependent, they often have little to do
with each other in practice). When we discuss the notion of food ecosystems, the
idea is to consider all of the moving parts and consolidate them, for example, not
looking at excessive food access as a factor for obesity and lower health outcomes,
without also taking into account where the food is produced and how it is delivered
to consumers (e.g., short or extended supply chains). Ecosystems thinking also
means producing food to be economically viable and environmentally sustainable,
while also considering the people who will be purchasing, consuming, and disposing
the food. Many attempts have been made to illustrate this complex process, and
naturally, most depictions end up adopting a simplified and linear approach in their
processes. One such example of a simplified linear representation of the food
ecosystem is shown in Fig. 5.1.
Even in more complex depictions, however, the evident ‘researcher’ tendency is
to try and make sense of complexity by breaking the whole system into smaller parts
(Broerse, 2018).
As suggested by the research team at Food 2030, a more detailed way to look at
food systems is through a lens of multi-functionality. Food ecosystems consist of
heterogeneous factors, multiple levels, and a selection of diverse members that must
be considered as moving parts of a larger whole, and as a system of complex
dynamics. These dynamics, when not coordinated, result in trade-offs and synergies
that are difficult to understand. It is a useful notion for authors and experts to

precision
farming
processed bioplastics
3D foods
printing

FOOD PRODUCTION PROCESSING PACKAGING

FOOD the way food is produced and

SYSTEMS how it affects our health,

WASTE STREAMS

wellbeing and the environment

HEALTHY PEOPLE DISTRIBUTION LOGISTICS

Fig. 5.1 Diagram of food system simplified. Source: Food 2030

140 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

appreciate that the complex dynamics of food systems, specifically, are far from
being understood. As stated by a leading member of the Food 2030 research team,
‘we can increase our understanding of the complexity, but we cannot truly under-
stand it, it is too complex’ (Broerse, 2018).

5.3 Resilience and Sustainability in Food Ecosystem

Resilience can be defined as the emergent characteristic of a system that encom-

passes the ability to absorb internal and external shocks and to adapt and transform in
response to, and in anticipation of, these shocks (Béné, Newsham, Davies, Ulrichs,
& Godfrey‐Wood, 2014). Resilience, even though related to sustainability, is dis-
tinguished by its specific association with adaptation and transformation (Doherty,
Ensor, Heron, & Prado, 2019; Folke et al., 2010). Based on these conceptualizations
of resilience, we can conclude that its functionality depends on three distinct
abilities, i.e. (i) absorptive capacity (enabling system persistence), (ii) adaptive
capacity (enabling incremental system adjustments), and (iii) transformative capac-
ity (enabling profound systems change by intentionally crossing thresholds).
When discussing resilience, scholars typically distinguish between ‘engineering’
and ‘ecological’ perspectives (Holling, 1996; Marchese et al., 2018; Walker &
Cooper, 2018). In this chapter, we adopt the ecological perspective, which is rooted
in the study of living systems, and is usually understood as complex, nonlinear, and
adaptive. This concept of resilience has quickly infiltrated many areas of the social
sciences, becoming a key concept in fields such as finance, banking, psychology,
development, corporate strategy, education, public health, and now ecosystem
management (Walker & Cooper, 2018). Through this view, the notion that a system
has a single and static state is discarded and replaced with the idea that multiple
interactions with complex natures are constantly transforming the ecosystem. For
example, a natural lake may function as both a productive resource for fishing and
cultivating certain plants, or may develop into a turbulent environment due to over-
fishing or uncontrolled nutrient runoff from farming.
When it comes to food ecosystems, resilience regards the amount of system
shocks (internal and external) that can be absorbed before it is forced to change
structures and functions. One example of current shocks to the food ecosystem
includes the waning availability of natural resources, these excessive pressures
have caused disturbances that are not linear, and involve many segments simulta-
neously trespassing the many thresholds, thus leading to a need for system wide
transformation into a new and viable state. The social-ecological perspective of
resilience is inherent of significant analytical potential, since a resilient social-
ecological system has greater capacity to avoid unwelcome surprises and trade-
offs resulting from external disturbances, and therefore has a greater capacity and
increased certainty to continue to provide its intended goods and services that
support quality of life; e.g., food ecosystems providing healthy and nutritious
foods for all global communities (Doherty et al., 2019; Walker et al., 2006).
5.3 Resilience and Sustainability in Food Ecosystem 141

Resilience and sustainability appear as interchangeable concepts in the literature,

but some authors discuss that it is more accurate to describe resilience as a required
but insufficient condition for sustainability (Domptail & Easdale, 2013; Leach,
Scoones, & Stirling, 2010). Resilience has thus been described as an essential
means to promote sustainability, given that it implies a specific system’s capacity
to continue functioning in its intended way, over time, despite external or internal
shocks (Tendall et al., 2015). Thus contributing to the evidence that resilience can
serve as a vector to achieve sustainability. As argued by authors, efforts to achieve
resilience toward sustainability should be adaptive and flexible, and open to knowl-
edge sources from outside of the immediate ecosystem members in order to avoid
‘lock-ins’ (Leach et al., 2010). In this sense, a system’s ability to adapt is central to
resilience since this is a quality that truly reflects the learning aspects, and knowledge
sharing behaviors of a system (Fait, Scorrano, Mastroleo, Cillo, & Scuotto,
2019; Robinson & Berkes, 2011).
In our case, the ecological perspective of resilience removes the idea that a food
ecosystem has a single, normal state, and is replaced with the notion of continuous
equilibrium as an ever-present component between ecosystem members and ‘regime
shifts’ (Doherty et al., 2019).
This equilibrium further highlights the importance of adopting systems approach
to engaging in resilience initiatives, especially in the food ecosystem. Integrating the
countless food ecosystem functions, its accompanying environmental factors, inter-
actions, and stress-related responses requires a systems approach to effectively
address the context dependency of resilience in agricultural landscapes (Brock
et al., 2018).

5.3.1 Barriers to Resilience

Barriers to resilience can be considered the existing consequences of mismatches

between implicit an explicit food ecosystem stakeholder aims, and the structural,
institutional, and informal obstacles (e.g., culture and behaviors) that impede their
success.
Community engagement is not an easy task, and researchers have proposed
Responsible Research and Innovation (RRI) in order to drive the sustainability
agenda forward. RRI is an uncertain and somewhat unpredictable process that is
value-based, and therefore allows for controversial debates about differences in
individual values regarding food ecosystems. RRI suggests that some innovations
will be more successful than others, namely the ‘responsible ones’. The task of
identifying which innovations will be successful is difficult in any type of ecosys-
tem, especially when there is some uncertainty as to what exactly a ‘responsible
innovation’ is, and who will be the stakeholders that get to determine this. This
promotes questions on various levels of food ecosystems. Even though new avenues
for food ecosystem transformation are being explored, we still witness gaps between
RRI and how research funding in food ecosystems conceives innovation (Khan
142 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

et al., 2016). There are a number of significant barriers both at governmental and
organizational levels to fully disseminate RRI. These mostly relate to conflicting
priorities and incentives agendas, but also simply to the lack of adequate resources to
engage in RRI in food research and innovation (Martinuzzi, Blok, Brem, Stahl, &
Schönherr, 2018).
In food ecosystems, attention is often directed to the potential for uncertainty,
change, and cross-scale interactions (e.g., between geographic, institutional, or
temporal scales). Under these circumstances, interventions can yield unanticipated
results and impacts that occur in areas beyond their immediate intended application.
This failure of ‘command and control’ approaches to provide predictable responses
in the management of real, complex food ecosystems has in part driven research and
policy agendas toward holistically assessing ecosystem resilience through systems
thinking and RRI. Relational dimensions must also consider truly assessing the
extent to which ecosystem members consider the needs and goals of others, includ-
ing aspects such as trust, norms, and members’ obligations and expectations (Fang,
Tsai, & Lin, 2010; Tötterman & Sten, 2005).
Another well-documented barrier to achieving resilience in food ecosystems
regards the uncertainty of starting a new venture or innovative business. As previ-
ously stated, entrepreneurs are the drivers of innovation who, in the food ecosystem
context, face the challenge of coordinating a complex network of stakeholders while
attending to individual and collective business uncertainties (York & Venkataraman,
2010). From an analysis of five longitudinal, inductive, in-depth case studies of
startups and their innovation ecosystems, it was demonstrated that the current
methods employed by entrepreneurs in these cases to cope with uncertainties go
beyond the mainstream approaches to manage uncertainties, which are mostly
individualistic in nature (De Vasconcelos Gomes, Salerno, Phaal, & Probert,
2018). Furthermore, this study revealed three aspects that characterize how entre-
preneurs cope with uncertainties at the innovation ecosystem level. First, entrepre-
neurs initially focus on their own, individual, uncertainties, and entrepreneurs decide
to consider uncertainties that affect the entire ecosystem partners when facing
specific contingencies (e.g., achieving right market sales, difficulties with product
performance, low investor willingness to invest in new technologies and products).
Second, by engaging in uncertainty management in isolation (e.g., not paying mind
to ecosystem partners), entrepreneurs themselves may contribute to the dissemina-
tion of uncertainties throughout the ecosystem to other individual members. Finally,
similar behavior patterns were observed among the entrepreneurs that do engage in
managing collective uncertainties, which are summarized in the following process:
(i) Identifying collective uncertainties that affect many ecosystem members,
(ii) building bridges between ecosystem uncertainties, and (iii) engaging in strategic
action to mitigate these uncertainties through collective learning and instilling
common goals (De Vasconcelos Gomes et al., 2018).
De Vasconcelos Gomes et al. (2018) further describe this process as the ‘bridging
uncertainties processes’, and posit that this building of bridges occurs when entre-
preneurs connect the many perceived uncertainties, into a collective uncertainty,
even though individual ecosystem members may perceive this uncertainty
5.4 Holistic Innovation and Entrepreneurship 143

differently. Finally, they conclude by suggesting that forming this collective view of
uncertainty involves a high degree of exploration processes from entrepreneurs.
Much like knowledge, individual uncertainties may spillover throughout innovation
ecosystems and evolve into collective uncertainties that affect more than one eco-
system actor or sector; therefore by keeping procedures at business as usual, and
failing to adopt a holistic mind-set, entrepreneurs themselves may be contributors to
the propagation of uncertainties in innovation ecosystems.
Successful ecosystem members know best how to use the structure and the
culture to their own advantage. The ones that lose out are the ones who don’t
know how to use the culture and structure. In a ‘Darwinistic’ sense, this also ensures
resilience, and stability in the system, because the actors that stand out the most are
likely to want to keep this culture and structure as it is because they stand to benefit
from it.

5.4 Holistic Innovation and Entrepreneurship

Food ecosystem stakeholders have increasingly begun to stimulate transitions

through R&I, but for some reason, the available initiatives have yet to yield the
desired results. So what, or why, is this happening? To answer this question, we turn
to the model of ‘Diffusion of Innovations’ that analyzes factors that influence the
diffusion of an innovation (Greenhalgh, Robert, Macfarlane, Bate, & Kyriakidou,
2004). Some researchers suggest that this has to do with our traditional and linear
approach to R&I, which is still the dominating method in most Western societies.
These traditional approaches state that we can solve problems by breaking them into
small parts (Lovett & Forbus, 2017). Even in highly rigorous research environments
professional scholars engage in this linear type of problem solving, moving system-
atically from beginning to end, they begin with a grand challenge, then break it up
into small parts, analyze the segments, and bring the fragmented solutions to the
implementation phase, e.g. intervention, innovation, or policy, etc.
This approach, as identified by the Diffusion of Innovations theory, is viewed as
the main contributor to reluctance in new innovation adoption from food ecosystem
members. The adopters of innovations must be able to identify the perceived
advantage, must be convinced through being able to try the product or service, be
able to observe its simplicity and possible added value, and should be able to assess
the innovation’s compatibility to the environmental contexts and culture. The subject
of compatibility is key for product adoption and can only be fully considered through
a multi and trans-disciplinary perspective. Consumers want to identify what the
relative advantage is when compared to other existing products, e.g., is the innova-
tion in line with the contextual culture, values, and behaviors. Systems thinking
helps developers assess if innovations fit with the manner consumers perceive
things, the way the environment is structured, and the way expected consumers
engage in diurnal activities.
144 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

The idea of adapting innovations to fit current behaviors is also a tricky discus-

sion, since in order to tackle the global challenges to sustainability, we must aim to
change producer and consumer behavior. Therefore, many of the innovations that
are needed to reduce the threat of global challenges, are by nature incompatible with
our current modus operandi, this means that the most effective innovations and their
interventions will naturally face a lot of resistance from proponents of the current
method of doing things (Broerse, 2018).
This points to a clear divide between what R&I propose to what society and
policy require on two different levels. The first divide happens within industries
when divisions or compartmentalization of challenges occur (e.g., tackling
overfishing only at fisheries and fishing locations without consider the amount of
sea food waste generated at large retailers or distributors). The second occurs
between society and science, the combination of which leads to an implementation
gap—which in the case of startups is referred to as the ‘death valley’, where
innovative products and services fail to achieve market attraction. This second divide
is recognizable throughout R&I in many sectors and is not specific to food
ecosystems.
The European Commission’s Food 2030 framework is the EU’s R&I policy
response to the growing international policy developments including the Sustainable
Development Goals. It aims to find solutions to the challenges facing our current
food systems such as climate change, limited resources, high levels of waste, and the
triple threat of malnutrition (i.e., undernourishment, micro-nutrient deficiencies,
and over nutrition) through R&I (Gill et al., 2018). Furthermore, it is built on the
four key Food and Nutrition Security (FNS) priorities, i.e., (i) nutrition, (ii) climate,
(iii) circularity, and (iv) innovation, and treats these priorities as necessary for EU
food systems to become ‘future proof’, i.e., sustainable, resilient, responsible,
competitive, diverse, and inclusive.
This integrated approach that considers the synergies between these four research
areas further recognizes that, much like food ecosystems themselves, the traditional
‘linear’ R&I which studies properties of subsystems individually (e.g., consumer
behavior, crop yields, animal safety) blindly assumes that improving conditions in
one specific sector will lead to ecosystem wide benefits. This approach is of course
limited due to the fact they fail to attribute sufficient consideration to the trade-offs,
externalities, uncertainties, and systemic feedback loops (Zhang et al., 2018).
Currently, the R&I landscape is quite fragmented as academic disciplines and
their researcher are often segmented into different colleges, which are then further
broken down into discipline specific specialties, e.g., schools of medicine which
further segment into pediatrics or internal medicine, and law schools which then
further break down into criminal law or human rights laws. Innovations discovered
and created by these highly specialized research teams have been able to successfully
deal with individual compartmentalized challenges facing our food ecosystem, but
have oftentimes neglected an integrated perspective, the active involvement of
citizens, Civil Society Organizations (CSOs), and less influential food ecosystem
members such as farmers and consumers (FEC, 2018; Gill et al., 2018).
5.5 Systems Thinking for Food System Transformation 145

Furthermore, academic incentive structures and R&I funding programs often give
increased attention to food production-oriented research (SCAR, 2018), while the
support for employing multi and trans-disciplinary approaches fails to gain equal
momentum (FEC, 2018).
As previously mentioned, there is no ‘one size fits all’ approach to ensuring
sustainable food ecosystem transformation; recommendations however suggest that
researchers must seek to stimulate collaborations and adapt their practices based on
the local makeup of their region, while always keeping in mind the convergence of
regional and global priorities (Caron et al., 2018).
Although scholars agree that a food ecosystem transformation perspective should
frame and guide the sustainable transitions, such a perspective is the exception rather
than the rule in the field (El Bilali, 2019). Current R&I strategies are not equipped to
deal with the persistent food system complexity, which leads researchers to ask what
is needed?
Based on a speech by Broerse (2018), what is needed is to realize that we too need
to change our thinking, as researchers and scientists, from traditional ways to
systems thinking.

5.5 Systems Thinking for Food System Transformation

‘Systems thinking’ should be employed not only for effective business creations
through entrepreneurship, but also as a guiding principle towards R&I for food
ecosystem transformation. When it comes to R&I, systems thinking is described as a
subjective process that focuses on recognizing the interconnection between parts of a
system, then synthesizing them into a unified view of the whole (Broerse, 2018).
Furthermore, when analyzing food system sustainability education (FSSE),
Valley and colleagues identified systems thinking, multi-inter- and trans-disciplinary
use of experimental learning approaches, and participation in collective action pro-
jects as central themes within SSE signature pedagogy (i.e., the educational practices
and disciplinary assumptions about that educational process are a relatively new
phenomenon) (Valley, Wittman, Jordan, Ahmed, & Galt, 2018). These findings are
backed by Hartmann and Siegrist (2017), who posit that in order to achieve more
sustainable behavior, consumers and citizens need to have better knowledge about
the environmental consequences of their food behavior.
Therefore systems thinking also means that when we try to develop new products
and services, these must be research based and able to comprehend the system in
which, and how, the intervention needs to function. Understanding the system will
also help us anticipate the synergies and the trade-offs so that if we are going to try to
and drive changes in one part of the system, we can predict where other inevitable
changes will also occur (Woods, 2011). Taken together, this signifies that R&I
cannot be fully effective if researchers cannot fully anticipate emerging trade-offs
within food ecosystems. The turbulent nature of food ecosystems requires research
146 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

approaches to also become more fluid and be ready to adapt to environmental

conditions, which is difficult because most scientific disciplines instill strict pro-
tocols, where willingly changing research elements throughout the research process
directly questions the quality and integrity of the research (Casadevall & Fang,
2016).
R&I in food ecosystems must therefore transition in order appreciate sets of
problems, not attempt to break them apart, and look at the entirety of members
and their interactions that might contribute to current challenges. This may begin
with including food ecosystem and local community stakeholders at the beginning of
research processes, considering them as consultants to inform the ongoing research
processes, and therefore support the translation of emerging research results into
practice and viable business creations that will be adopted by consumers and be
considered market successes.
A holistic approach to R&I naturally encompasses the inclusion of every member
of the ecosystem, and the European Commission provides the following five sug-
gestions towards fostering inclusiveness in food ecosystems by 2030; (i) identify
the best ways to integrate and innovate across various R&I disciplines, such as
economics, finance, arts and social sciences, ecology, education, health, digital
sciences, and connect them with traditional knowledge, (ii) frame connections within
a multiple-objective mission-type approaches that lead to innovation-driven and
socially relevant solution, (iii) provide place-based solutions in local settings and
actions, offering integration and innovation capacity from a technical, institutional,
and social viewpoint, (iv) promote stakeholder engagement across cultures and
different innovation streams, and provide open spaces for collective intelligence,
information and participation, transparency and accountability, mediation or arbi-
tration, trade-offs and progress toward convergence, and (v) integrate technical
innovation along with social and organizational innovation to systemically address
challenges in the food system (European Commission, 2018). Figure 5.2 provides an
illustration of this holistic approach to viewing food ecosystems, is a more complex
depiction than previously demonstrated, and highlights all the ecosystem actors and
segments that must be considered when embarking on R&I initiatives.
Furthermore, diversity has been cited as being more sustainable than homogene-
ity, and with Europe being an extremely diverse place in terms of culture, terrain, and
business, efforts to maintain diversity must also be carefully assessed. Some action
steps to ensuring this include (i) the development of more pluralistic and diverse
European R&I programs that provide equal opportunities and representation for all
members, (ii) business strategies in public and private business sectors that favor
culturally relevant product and raw material diversification over the long-standing
traditional methods, (iii) understanding the mechanisms and role of diversity, what
are the policies and norms that can make diversity models more practical in global
competition, and (v) explore and apply diversity across all related policies regarding
food systems and their processes (European Commission, 2018).
For quite some time, researchers and field experts have acknowledged the need to
transform our food ecosystem since it no longer fulfills its main goal of providing
5.5 Systems Thinking for Food System Transformation 147

Fig. 5.2 Holistic model of food ecosystems. Source: [Link] (2019)

food security and nutrition, and it is currently threatened with persistent and emerg-
ing problems. Since R&I is usually the ‘go to’ method to improving the food system,
we can assume in order to help food ecosystems become more systemic, then R&I
must become more systemic as well. Therefore highlighting the need for a double
transition.
When we look at the food ecosystem and the amount of funding that is invested
from private sources to fund its research we see that it is fairly low. The main sources
of funding for academic research comes in the form of open calls in many European
countries (e.g., Horizon 2020). This process is problematic since national calls for
research funding are considered a ‘bottom-up’ process where researchers and appli-
cations are mainly judged on academic excellence. One important fact to remember
in this scenario is that excellence does not equal relevance, meaning that no matter
how state-of-the-art or innovative a solution might be, if it is not connected to
consumers and their overall needs then the solution will most likely fail (Broerse,
2018).
148 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

5.6 Responsible Research and Innovation (RRI) and Food

Systems

R&I have provided people with the ability to alter ecosystems, the Earth’s climate,
and drive new technologies that improve everyday life. However, in parallel to the
large positive impacts on human well-being and quality of life, R&I sometimes
create new risks and ethical dilemmas. R&I as an instrument to solve the most
pressing challenges with our food ecosystem is nothing new, this concept has been
historically tasked with providing solutions to a spectrum of challenges (Cash et al.,
2003; Godfray et al., 2010). However, up to date we have mostly witnessed
innovations that, even though may be effective at resolving challenges in one area,
oftentimes worsen problems in other areas (e.g., trade-offs). Perhaps due to a more
interconnected society by way of emerging communication technologies (e.g., social
network sites, email, cellphones, instant messaging, etc.), we are increasingly
confronted with greater side effects that affect not only other parts of the food
ecosystem itself, but also other ecosystems in general (e.g., health, transportation,
employment).
Throughout the past years, many efforts have been proposed in attempts to reduce
the distance between scientific research (e.g. R&I) and societies. Some of these
efforts then culminated in the European-wide approach in Horizon 2020 called
Responsible Research and Innovation (RRI). RRI seeks to bring issues related to
research and innovation to light, to anticipate their unintended effects, and to include
society in discussions about how R&I can help create a more sustainable food
ecosystem.
RRI has emerged as the key framework for science and technology governance in
addressing the limited attention to societal impact, and the lack of involvement of
civil society in the R&I process. The concept outlines the need for mutual exchanges
by which food ecosystem members become responsive to each other in the very
early stages of the innovation process, and together facilitate the creation of ethically
acceptable and sustainable innovation (Khan et al., 2016).
RRI is considered a dynamic, repetitious process where all stakeholders involved
in the R&I practice become mutually responsive and share responsibility for the
outcomes and process of R&I. RRI activities aim to unite the wide range of diverse
actors and processes involved in R&I, and align them towards desirable, sustainable,
and acceptable future outcomes (Ingram, 2011). The unification of different fields
and areas of research is what paves the way for RRI, when research streams become
inclusive, transparent, inter-sectorial, multi-stakeholder, multi-factorial, interdisci-
plinary, and trans-disciplinary; clearly moving R&I beyond the traditional linear
models toward adopting a circular approach (Gill et al., 2018).
RRI means that every member of the food ecosystem works together during the
entire R&I process to best align both processes and outcomes with the values, needs,
and expectations of society (Von Schomberg, 2013). Thus, RRI helps us ask two
very important questions; what type of innovations and what kind of economic or
environmental conditions do we want? And who is the ‘we’ (Zwart, Landeweerd, &
5.6 Responsible Research and Innovation (RRI) and Food Systems 149

Van Rooij, 2014)? In practice, RRI is implemented as a package that includes multi-
actor and public engagement in R&I, enables easier access to scientific results, and
stimulates strategic actions on thematic issues, i.e. public engagement, open access,
gender ethics, and science education (European Commission, 2018b).
Furthermore, a recent study titled “A Report on Responsible Research and
Innovation” summarized the five main points characterizing RRI (Sutcliffe, 2011),
and described them as follows:
1. The deliberate focus of research and the products of innovation to achieve a social
or environmental benefit.
2. The consistent, ongoing involvement of society, from beginning to end of the
innovation process, including the public and non-governmental groups, who are
themselves mindful of the public good.
3. Assessing and effectively prioritizing social, ethical and environmental impacts,
risks and opportunities, both now and in the future, alongside the technical and
commercial impact.
4. Where supervision mechanisms are better able to anticipate and manage problems
and opportunities and to adapt and respond quickly to changing knowledge and
circumstances.
5. Where openness and transparency are an integral component of the research and
innovation process.
Furthermore, a concept that is essential to RRI is open science and open innova-
tion (see Chaps. 4 and 5). Open science and open innovation seek to make scientific
research, data collection and dissemination accessible to other scholars at various
levels of society to better facilitate collaborations. It encompasses the full spectrum
of practices to make knowledge sharing and communication easier. In the context of
food and nutritional security, open science entails the development and implemen-
tation of ‘open access’ data infrastructures to allow different stakeholders to benefit
from the ‘big data revolution’ in responsible ways. With the increasing access to
large amounts of data regarding everyday topics involving individuals and institu-
tions, open science is a critical component of RRI.
By adopting RRI and open innovation approaches, progress toward solutions of
the grand societal challenges, e.g., SDGs and food security and nutrition, are
expected to accelerate. Achieving a holistic system therefore implies the involve-
ment of a wide variety of stakeholders and experts in the R&I processes. Being more
responsible in R&I, and achieving RRI in food ecosystems means that they will
become:
1. Diverse and Inclusive: Involve a wide range of actors that engage in R&I
practice, deliberation, and decision-making to yield more useful knowledge.
2. Anticipative and Reflective: Envision impacts and acknowledges the underlying
assumptions, values, and motives to understand how R&I will shape the future,
which can happen through two main ways. The first, open and transparent—
communication in significant ways through methods, results, and a community
effect to enable public dialogue. The second—to be able to fully modify
150 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

traditional ways of thought or behaviors, and adapt overarching structures to

evolving contexts, knowledge, and perspectives. Finally, RRI calls for specific
attention to R&I activities to public engagement, gender equality, ethics, science
education, and open science.
Given these two characteristics of RRI, one can see how it is quite an interesting
approach to combine with ‘systems thinking’. When adopting a combination of
systems thinking and RRI approaches to R&I, one can more easily visualize all the
stakeholders and dimensions that must be involved in the research process when
truly adopting a systems approach (Gill et al., 2018).
It has been documented that the scientific knowledge and human capital neces-
sary for developing innovative food products and services can be found internally
through R&D or externally via collaboration with other firms in the food, or related
systems (Sarkar & Costa, 2008). Unfortunately, cooperation and co-creation are not
quite common in food ecosystems as in other sectors; this is in part due to the
preference of confidentiality to protect new product formulations (Tanguy, 2016).
However, this overprotection of intellectual property directly evidences how food
ecosystem members may willingly ignore vital talent sources and thereby limit their
innovation and entrepreneurial potential. Recent endeavors to ameliorate these
challenges have resulted in researchers and field experts stimulating interactions
between universities and food ecosystem members, since these interactions are
considered an important element for product innovation (see Chap. 2).
However, the very nature of food ecosystem makes the initiation of these
interactions a difficult concept. The food sector is composed of many SMEs,
which naturally have fewer scientific and technological resources than large institu-
tions. And while larger institutions have an increased capacity to launch product
innovation due to their increased ability to invest in research and development
(R&D) and capture knowledge they are known as ‘late adopters’ of innovative
technologies and processes, and the food industry is general is classified as a low
tech-sector (Lin, 2017; Triguero, Moreno-Mondéjar, & Davia, 2013). Therefore, a
major remaining challenge is to improve our understanding of how, depending on
their size, food institutions mobilize the scientific knowledge needed to innovate
(Lascialfari, Magrini, & Triboulet, 2019). Studying the co-evolution of food con-
sumption and agricultural production is crucial if we want to assess the impact of
their contributions to food ecosystem transitions. Public, or community, support is
also required to encourage these kinds of connections between the upstream and the
downstream of value chains (Lascialfari et al., 2019).
The desire to achieve sustainable food systems supposes that stakeholders (e.g.,
researchers, farmers, manufacturers, and consumers) show a great degree of crea-
tivity, and open up to the possibilities of departing from traditional research and
innovation practices (Meynard et al., 2017). Basically, the need to increase the
effectiveness of R&I in food ecosystems requires much more than just empowering
food system stakeholders with specialized skills, and more than the usual forms of
coordination between major players, or trend setters, in the ecosystem (Meynard
et al., 2017).
5.6 Responsible Research and Innovation (RRI) and Food Systems 151

In one of the first steps toward this agenda, Dunning, Bloom, and Creamer (2015)
explored the possibilities for creating synergies between mainstream food systems
with local food systems, by pairing localized procurement and distribution centers
with mainstream super-market industry infrastructure to increase food system resil-
iency (Dunning et al., 2015). They undertook this initiative with the premise that
mutually beneficial interactions to local food markets is one way to make food
ecosystems more diverse, and allows them to function at multiple levels, thus
enhancing ecological and community resilience (King, 2008). In their specific
study, Dunning et al. (2015) were successful in demonstrating that researchers and
scholars can leverage existing consumer demands for ‘local food’ as a strength to
form partnerships between bigger industries and smaller retailers to drive effective
change.
This seminal work to create public-private partnerships could be seen as a model
for stimulating relationships amongst big and small food ecosystem members. Given
the rapidly changing climatic conditions, increasing the diversification of production
areas, products, and improving local and regional self-sufficiency can serve as
effective antidotes to the growing challenges in key areas that could disrupt food
supply chains, nutrition, and security as a whole. In the case of Dunning et al. (2015)
they found that maintaining connections to a national distribution system may help
smaller industries strengthen and supplement local food ecosystem during times of
crises (Dunning et al., 2015).
These findings share complementarities with other works in the literature that
evidence that efforts to mobilize science and technology for sustainability are more
likely to be effective when they manage boundaries between knowledge and practice
in ways that simultaneously enhance the salience, credibility, and legitimacy of the
information they produce (Cash et al., 2003). Essentially, when food ecosystems
apply a variety of institutional mechanisms that facilitate communication, transla-
tion, and mediation across boundaries is when they become effective actors toward
sustainability.
Finally, there is a consensus among scholars that R&I regarding food need to be
conducted in a holistic manner in order to capture the multiple activities, interac-
tions, and outcomes associated with its production, exchange, consumption and
governance (Ericksen, 2008; Gregory, Ingram, & Brklacich, 2005; Horton et al.,
2017). This task however is much easier ‘said than done’ given the complexity of the
food ecosystem and the various ways it interacts with other global ecosystems.
The migration from thinking about food systems as linear production machines to
multi-faceted food ecosystems makes it easier to consider the entire ‘value chain’
from inputs, to primary production (e.g., agriculture, aquaculture, and fisheries),
harvesting, processing, packaging, and waste management. This change in percep-
tion also considers more complex food ecosystem outputs than just the production
of sufficient amounts of food for global populations, and adds the component of
sustainability in all of its activities. To become future proof, food ecosystems need to
become more resilient and be ready to function with the challenges posed by climate
change, environmental sustainability of food production and consumption, nutrition
related diseases, and trade and policy issues at the EU level that might interplay and
152 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

affect their processes. A holistic food ecosystem approach can thus help leaders to
more effectively organize discussions regarding how to make food systems more
resilient and readily adaptable, and ensures that all the necessary stakeholders are
engaged in these discussions.
Especially with food ecosystems, researchers must be diverse and inclusive in
order to increase their capacity to reflect on activities and anticipate trade-offs.
Ecosystems require diverse teams in order to tackle their complexity, and need to
be open and transparent in order to effectively interact well, receive new knowledge
as inputs, and deliver appropriate and tailored outputs.

5.7 Multi-level Innovation and Entrepreneurship

The overall literature on sustainability transitions emphasizes the importance and

significance of radical innovations in a systemic perspective (Lachman, 2013).
Innovations are deemed radical based on their degree of knowledge that must be
understood by consumers and any associated learning barriers (Kline & Rosenberg,
1986). In acknowledging the fact that they are needed to reach sustainability goals,
radical innovations have been analyzed through a combination of tangible and
intangible factors such as technology, scientific knowledge, values, and practices
(Rip & Kemp, 1998). In line with systems thinking, multiple dimensions of radical
innovations have been found: i.e., (i) technological uncertainty (the degree to which
the technology used in the innovative undertaking is not well developed or under-
stood in by the scientific community), (ii) technological inexperience (a lack in the
required technological experience and knowledge), (iii) business experience (the
degree to which the firm lacks required business experience and knowledge, as is
the case with many startups), and (iv) the technology development costs (Green,
Gavin, & Aiman-Smith, 1995).
One of the most popular frameworks used by transition scholars is the Multi-
Level Perspective (MLP) approach (Geels, 2014). The MLP is based on three levels
(i) socio-technical landscape, (ii) socio-technical regime, and (iii) niche innovations.
If we imagine the MLP as a top-down perspective, we find the socio-technical
landscape that includes the socio-political context, environmental problems, demo-
graphics, and other global tendencies. The socio-technical regime is comprised of all
the rules and behaviors that are responsible for the system’s stability and reproduc-
tion. The niche innovations are at the bottom, and are grassroots for alternative
socio-technical systems. These niches are composed of external actors, who are able
to introduce new knowledge, and mobilize new skills that lead to more radical
innovations, while the existing socio-technical system is locked-in to an incremental
and linear innovation pathway (Rip & Kemp, 1998).
At the landscape level, we find the larger, or ‘eco’, trends, economic changes, and
changes in the environment that put pressure on the regime to change. The niche
level, on the other hand, is the level of experimentation; where actors, within the
regime or outside actors experiment with new ways of working.
5.8 Conclusions 153

As proposed by Geels (2011), an important implication of MLP is that it moves

beyond simple causality in transitions. With MLP, there is no single cause or driver,
instead there are processes in multiple dimensions and at different levels which link
up with, and reinforce each other. In a study conducted by Lascialfari et al. (2019)
they combined literature from innovation emergence studies and built comprehen-
sive guidelines to explore the multiple aspects of innovations. By combining MLP
principles and insights from innovative transitions the authors drafted a group of six
relevant questions that help us better understand the multiple dimension influencing
innovation; (i) market/user preferences and culture, (ii) scientific knowledge, (iii)
technology, (iv) industry infrastructure and networks, (v) policy-institutions, and
(vi) niche innovations. Niche innovation refers specifically to niche actors in order to
better understand their interactions, since MLP considers that they are the main
drivers of radical innovations (Lascialfari et al., 2019). Finally the authors conclude
by discussing that even though innovative products and services are launched by
both incumbent and niche firms, the most radical innovations came from new small
firms (e.g., startups). Furthermore, they demonstrate that product innovation is
strongly influenced by consumer trends, with the most prominent example being
the increased availability of vegetarian and flexitarian diets, the substitution between
vegetable and animal proteins, and other tendencies toward more functional and
health products to meet specific demands such as low-carb or gluten-free diets
(Lascialfari et al., 2019). Most importantly however, they propose that still too
few links exist between food system areas to foster sustainable transitions for the
food ecosystem.
It can be considered common knowledge that every ecosystem has a regime; a
dominant culture, structure, and practices that are shared by most members, but
nonetheless remains unstable even though it is resilient and likes to remain
unchanged. However a static nature of an ecosystem is not truly possible, due to
the ever-evolving nature of ecosystems themselves, and the individual member
interactions that shape this nature (Broerse, 2018).

5.8 Conclusions

When thinking about food in the context of food ecosystems, we can see that food is
connected to a variety of fields such as agriculture, environment, energy, health,
education, infrastructure, and planning (Gill et al., 2018). Given the threats of
population growth, climate change, and the waning health of our natural resource
base, broadening our R&I methods to be more systems-based and building public-
private partnerships around shared interests and objectives are two key approaches
that can be employed to address challenges to food ecosystem resiliency and
sustainability (Dunning et al., 2015). Improving the adaptability to ever-changing
environmental contexts, and the overall sustainability of food are also viewed as
endeavors that can be accomplished without losing ground on the advantages
provided with the current food production procedures. Selective engagement and
154 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

strategic partnerships with large and smaller food businesses is one promising
avenue to build stronger food ecosystems (Dunning et al., 2015). In fact, the food
policy councils (FPCs) are argued to play a decisive role in strengthening urban-rural
linkages, which is recognized as a key factor for promoting future-proof food
ecosystems (Fattibene, Maci, & Santini, 2019).
As stated by Gill et al. (2018), systemic efforts to transform the food system need
to take into account all three constituent elements of the food system (e.g., food
environment, consumer behavior, and food supply chains), and must emphasize the
need to re-connect a diversity of actors. Efforts have been made to develop toolkits
and frameworks to help cities in their transformations toward more sustainable food
systems, such as the City Region Food System Indicator Framework, by applying a
‘whole food system approach’ (FAO & RUAF). Sustainable food systems can be
achieved through support for a systemic and integrated vision of technological,
institutional, and social innovations, social inclusion, and wide stakeholder engage-
ment, and specifically, future R&I initiatives need to be designed and implemented
in this context. Reconnecting people to food systems needs evidence-based
approaches that recognize the link between healthy diets and environmental sustain-
ability (European Commission, 2018). The 2030 Agenda for Sustainable Develop-
ment clearly shows that transition towards sustainable food systems is crucial to
achieving sustainable development (El Bilali, 2019).
A better understanding of the linkages between food ecosystem sustainability
(and consequently food ecosystem sustainability transitions) and food security is
necessary to achieve ‘future proof’ food ecosystems. Any transition in food ecosys-
tems, e.g. moving beyond efficiency-oriented and demand restraint narratives toward
distribution of locally harvested foods, should strive to achieve sustainable food
security and improved nutrition as its final outcome.
Large food organizations and institutions need to encourage a culture of collab-
oration, teamwork, and knowledge sharing (Tataj, 2015). Only through openness in
innovation and knowledge can R&I anticipate and assess the potential implications
and societal expectations with the aim of designing inclusive and sustainable R&I.
The discussed need for a systems approach, with specific attention to the relation-
ships within food ecosystems, encompasses also the need for R&I to support this
transformation. Furthermore, most R&I efforts have failed to adequately respond to
the urgent and system wide challenges that threaten food sustainability. A reason for
this includes the fact that much like linear ideas of food systems, R&I streams too
suffer from compartmentalization, as we can clearly see in the divide between
disciplines such as health, law, and engineering; each is a science that often times
is segregated into specific schools, which are further broken down into sub-topics
that make up the whole of the science (e.g., public health, occupational therapy,
psychology, criminal law, human rights law, civil engineering, and chemical engi-
neering to name a few).
Due to this divide between disciplines, those that do not actively seek out
interdepartmental and multidisciplinary collaborations will produce R&I results
that do not adequately appreciate the interconnectedness of the different parts of
the food ecosystem. For example, much of the R&I produced by the European Union
5.8 Conclusions 155

is directed toward production processes and ensuring food security (i.e., quantitative
food production). Furthermore, the Standing Committee on Agricultural Research
(SCAR) conducted a qualitative and quantitative mapping of food related policies
and food systems related to public R&I funds in EU member states, and found that
overall R&I input for the food system is low, and there are not enough projects
related to food consumption, household food waste, distribution methods, or their
interaction with production processes, and food security (SCAR, 2018). From their
assessment they go on to conclude that in order to achieve food systems transfor-
mation, there is an urgent need to directly engage consumers, citizens, and economic
actors to a greater extent, given their central role (SCAR, 2018).
Furthermore as recommended by Gill and colleagues, the engagement of all
stakeholders, shifting mindsets and approaches from mainstream linear models
toward holistic approaches, and involving public and independent R&I could be
an appropriate response to challenges regarding food ecosystems’ complexity, and
address the dominant and established pathways that are difficult to transform (Gill
et al., 2018). Finally, during the Research and Innovation for Food and Nutrition
Security, a high-level conference held at the Agricultural University of Plovdiv
under the auspices of the Bulgarian Presidency of the Council of the European
Union, it was agreed that supporting sustainable and nutritious diets, would guar-
antee a healthier future by decreasing the risk of chronic, non-infectious diseases,
while assuring the sustainable use of resources and respecting planetary boundaries
(European Commission, 2018). They go on to conclude that R&I initiatives should
be better aligned since most initiatives that seek to address the challenges in food
systems are largely conducted in a scattered manner and usually under a sector-
oriented focus. They close with the following suggested actions: (i) Support Food
2030 R&I—through a multi-objective, cross-scale, inter- and trans-disciplinary,
systemic, and integrated multi-stakeholder vision, (ii) Address the SDGs with a
mission type approach, while simultaneously meeting human needs, respecting
planetary boundaries, and attempting to close gaps between theoretical constructs
and place-based projects, (iii) Provide evidence-based explanations for the associa-
tions between healthy diets and environmental sustainability, (iv) connect agricul-
tural production with food manufacturing and consumer health through open
innovation approaches, and (v) to provide a better understanding of the complexity
of food systems, determine co-benefits, and how to reduce unwanted trade-offs.
Resilience in food systems, and in general, revolves around standing up to change
(e.g., climate, technological, and societal) and mobilizing the correct stakeholders to
understand the trade-offs, and applying the best governance models to overcome
eventual shocks (European Commission, 2018). Resilience and food security is a
complex issue that encompasses many vantage points and therefore must be
embraced and applied throughout a wide range of ecosystem levels including cities
and rural communities. This obviously includes aspects such as the role of cities in
food systems transformation and innovation, the potential of new technologies,
providing food from marine ecosystems, and the importance of international
co-creation with neighboring regions (i.e., North Africa and the Balkans). However,
resilience in food will also require a multi-faceted approach including individuating
156 5 Entrepreneurial Food Ecosystem: Strategic Driver to Boost Resilience. . .

the best methods to integrate technical, social, and industrial innovation to address
resiliency issues, redesign the specific type of R&I programs needed to re-orient our
food ecosystems, and create networks, communities, or governance structures that
attract new actors and that are trans-disciplinary in order to cultivate new knowledge
on sustainable initiatives. Furthermore, closing the knowledge gap between science
providers and consumers by means of ensuring equal communication and transpar-
ency are viewed as key for ensuring food system resilience (European Commission,
2018a).

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Chapter 6
Startups and Knowledge Sharing
in Ecosystems: Incumbents and New
Ventures

The value of an idea lies in the using of it.

Thomas A. Edison

Abstract The daily challenges that are created by our global food systems are in
need of novel solutions that cannot be found within established companies or large
organizations. Efforts to transition food systems toward more sustainable processes
and behaviors have usually been executed via a top-down approach through legis-
lations or by introducing new products or services, albeit without consumer engage-
ment. These efforts have yielded unremarkable results, and thus new bottom-up, or
consumer centered and collaborative efforts are warranted. A startup is a newly
emerged and fast-growing business seeking to meet the marketplace by developing a
business model around an innovative idea. The projects pursued by startups are very
risky, so their survival rates are quite low. However, the startups that survive and
succeed may have large economic impacts. In this chapter we discuss how food
startups engage with larger food companies to deliver increased value to consumers
and ameliorate societal issues. We further provide a sort of ‘route map’ for startup
founders to prepare to get their innovations to market. Finally, research streams have
identified that neither investigating entrepreneurs and their psychological character-
istics, nor investigating the contextual elements surrounding startups and entrepre-
neurs provide a clear explanation for successful development of startups. Based on
these findings we suggest that future research seeking to explain the startup journey
should analyze both individual entrepreneurial characteristics, as well as the con-
textual environment where they operate.

Keywords Food startup · Knowledge sharing · Market research · Startup phases ·

Value creation

© Springer Nature Switzerland AG 2020 161

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
162 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

6.1 Introduction

Global food ecosystems put a never-ending strain on the planet. Food production and
consumption, for example, contribute to 19–29% of global greenhouse gas (GHG)
emissions (Vermeulen, Campbell, & Ingram, 2012). Providing food and nutritional
security requires a considerable amount of resources such as fertile land, energy, and
fresh water supplies, all while the total surface of arable land is constantly shrinking.
Our current food systems, due to growing populations and increased technologies to
enhance human connectivity, are in desperate need of a transformation to make sure
it utilizes Earth’s resources not for simply producing sufficient amounts of food, but
also for making products and services that provide meaningful value to communi-
ties’ everyday lives, while simultaneously reducing the strain on, and protecting the
planet’s resources. Therefore, it is clear that food ecosystems are in need of more
than just better production and consumption practices, they also require innovations
that increase the appreciation of the food that has been produced. Many problems
and challenges exist in achieving this overarching goal, and this is evidenced by the
Food and Agriculture Organization (FAO) that reports that one-third of all globally
food produced gets lost through expiration or wasted by consumers (FAO, 2019).
In addition to the environmental challenges posed by food ecosystems, the World
Health Organization (WHO) cites a tripled increase in obesity since 1975. In 2016,
for example, 39% of adults over the age of 18 were overweight and 13% were obese
(WHO, 2018). This is alarming since obesity is linked to a range of associated health
problems, from cardiovascular disease, to diabetes and cancer, to the actual physical
immobility of individuals (Forhan & Gill, 2013). Interestingly, while the availability
of food and caloric intake is no longer an issue for most societies, quality nutrition is.
Research suggests a link between traditional modus operandi of food ecosystems
that aims to provide access to food to all populations, sometimes through highly
processed foods that can cause adverse health outcomes due to the existing levels of
sugar, salt, and fat (Cordain et al., 2005)
Furthermore, the negative impacts of our food ecosystem are not limited to
natural resource degradation and nutritional health. With its complex interdepen-
dencies, a wide range of social issues emerge from food ecosystems, such as low pay
and forced labor, low acceptability of new innovation (e.g., GMOs, meat substitutes,
insects as food), gender inequality, and many more (Taub, Minch-Dixon, & Gridley,
2019). In essence, the food ecosystem does not need any new businesses, but more
sustainable food businesses either through innovative redesigns of incumbent food
sector businesses, or by introducing new ventures (startups) to that provide novel
products and services to ameliorate problems.
One avenue that merits exploration is that of ‘agri-FoodTech’, which is the
emergent sector “exploring how technology can be leveraged to improve efficiency
and sustainability in designing, producing, choosing, delivering & enjoying food”;
basically, this represents all the innovations, mostly driven by startups, that aim to
improve the food ecosystem with a final goal of making it more sustainable. This
model of innovation that harnesses the flexibility and adaptability of young
6.1 Introduction 163

businesses and startups is a promising sector for future global economies. For
example, in 2018 alone, around 16 billion Euros were invested in Agri-FoodTech
companies across 1450 deals, overall representing a 40% increase compared to 2017
(AgFunder, 2019). In European food ecosystems, some of the biggest supporters of
Agri-FoodTech were the UK and France, with around 300 million and 290 million
Euros raised in 2018.
Many authors posit that there is a misconception that innovation automatically
translates to technology, and that some sort of digital aspects must be involved to be
truly innovative. In reality, innovation can happen anywhere, with little or no
technology or including very intricate digital systems (Tataj, 2015). Due to this
lay-mans perspective of startups, for the rest of the text the term startup is used a
representation of the range of startups in the food ecosystem, ranging from those
high on technological aspects and digitization, to those with traditional business
models that are organized in innovative ways.
Product innovation is a complex process as several innovations are often
implemented together, involving new products, processes, marketing approaches,
organizational methods, and internal or external network interactions (OECD, 2018).
With the organizational evolution, triggered by diversification of markets and
increasing unpredictability of consumer demands, the mass model was replaced by
flexible models (Cohen & Zysman, 1987). These new flexible models were manifested
by different approaches, such as mass-customization, craftsmanship model, and
dynamic flexibility. These new approaches to production, not based on mass quantity
but on personal consumer preference led to an eventual decentralization of large
companies, and the rise in importance of small companies and startups as critical
agents of innovation (Tataj, 2015).
As the global ecosystem is projected to reach a worth of over 700 billion Euros by
2020 new perspectives and emerging solutions are needed, and startups have
emerged as the driving forces of the upcoming future. Innovative ideas might already
exist, but often it’s startups that create viable business models for these ideas. For
example, meat replacements, initiatives to reduce food waste, food safety, techno-
logical innovations and personal nutrition plans; all of which are innovation that
provide marked benefits to food ecosystems (Foodware, 2019).
Entrepreneurship has often been described as the glue behind knowledge tri-
angles (i.e. research, education, and innovation), and the driver of innovations.
Innovations introduced by entrepreneurs usually begin with an idea, and their
business creation process begins when they take the necessary steps to eventually
raise a startup into a small and medium enterprise (SME).
In public policy and economy, entrepreneurship is referred to as a sector of small
and medium-sized companies (Tataj, 2015). EUROSTAT further defines SMEs as
“businesses with less than 250 employees, with a total turnover not exceeding
50 million Euro, or a balance sheet total not exceeding 43 million Euro, and that
are independent” (EUROSTAT, 2003). Furthermore, there are actually a small
number of highly successful entrepreneurs, and most businesses remain small even
after surviving the ‘valley of death’, i.e. the time between when a startup receives
initial funding to when it is adopted by consumers and begins generating revenues
164 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

that are sufficient enough to cover its own costs and be self-sustaining (Tataj, 2015).
This reluctance in consumer adoption is most often attributed to a disconnect
between the value that is proposed by new innovations and what consumers actually
want (De Jong, Gillert, & Stock, 2018).
However, consumer buy-in for economic benefit should not be the end goal of
startups, but an essential component in their business creation process. For exam-
ple, startup founders should seek customers that can serve as consultants and
validate their ideas at the earliest stage of development possible. As Lynde
(2018) states—“The greatest learning is derived from solving real problems with
real customers—that’s the foundation of any great innovation.” Much like most
initiatives that adopt systems change, there is also no one formula to provide the
adequate type of support for startups, however, some authors have put forth sugges-
tions for effective support systems based on their developmental stage—(i) early,
(ii) mid-stage, and (iii) advanced (Taub et al., 2019).
(i) Early Stage:
(a) Online tools: Guides to help startups develop their business models.
(b) Legal and accounting support: Economical, or budget friendly, accounting
support to help new startups get registered and establish accounting
practices.
(c) Hackathons: Network of events across Europe to help aspiring entrepre-
neurs find solutions to pressing challenges in the food ecosystem.
(d) Mentors and Networks: A process of online and offline interactions where
entrepreneurs meet individuals who are key to their development.
(e) Entrepreneurial Training: Practical training for startups to help them
develop the necessary skills to be successful.
(ii) Mid Stage:
(a) Innovation Grants: Funding that startups need in order to get their new
products or services to market.
(b) Co-working spaces in offices, farms, and factories: Places like these help
entrepreneurs develop their businesses surrounded by stimulating
environments.
(c) Demo Days: A series of events where startups and their members can
present their business idea and meet stakeholders from their industry of
interest (e.g., investors, industry partners).
(d) Incubators: Developmental programs for startups with a durations of a few
weeks that grants entrepreneurs the tools, resources, knowhow, and net-
works to test their idea with potential customers.
(iii) Advance Stage:
(a) Accelerator Networks: Programs that help startups grow and disrupt the
food system. Here, entrepreneurs meet with industry professionals who
help fix any possible issues and attempt to design startups to perfection.
Usually the best performing startups throughout this process earn prize
money as funding.
6.2 Knowledge into Practice 165

(b) Business Services: A portfolio of business services to help European

startups grow including access to large networks of investors.
(c) Specialized industry networks: In our case, in food ecosystems, the Rising
Food Star program can be a great example. It is a network of agri-food
startups in Europe that can participate in large-scale, and European funded
innovation projects with larger governing bodies (e.g., EIT Food).
The importance of food startups and the great positive impact they can provide to
food ecosystems is becoming increasingly known at the European level. One
example of this realization is the creation of European Institute of Innovation &
Technology (EIT) Food; a consortium of food system stakeholders who, in 2019 is
projected to invest 56.4 million Euros in innovative food projects, which is an
increase of 44% compared to 2018. The EIT has set goals such as making the
food chain more sustainable, improving customer confidence and informing cus-
tomers about making healthier choices. The belief that startups play an important
role in achieving these goals is clear (Foodware, 2019).

6.2 Knowledge into Practice

Applying science and implementing both incremental improvements and break-

through technology has played a vital role as a driving force behind innovation
and startups (Tataj, 2015).
Lascialfari, Magrini, and Triboulet (2019) indicate that innovative products can
be launched both by incumbent and niche firms, but that the most radical innovations
come from new small firms (Lascialfari et al., 2019). SMEs and startups form a
significant component of a country’s economy due to their potential to help
amelioratee issues such as poverty, income inequality and unemployment (Ayyagari,
Demirguc-Kunt, & Maksimovic, 2011). It is not uncommon for SMEs to create
relationships with others as a way to achieve greater value creation with limited
strain on their resources—a process referred to as co-opetition (Mitev, de Vaujany,
Laniray, Bohas, & Fabbri, 2019). This process occurs when competitors, or units of
competing organizations, become partners in strategic alliances united by the spec-
ifications and purpose of a project in which they have mutually agreed to participate.
This tangible and tacit knowledge constitutes their value in their respective ecosys-
tem and protects their interests.
It is no longer an individual company, but interdisciplinary collaborations that
hold the element of competitiveness in industries; oftentimes linked by a number of
multi-party contractual agreements limited to achieving a particular objective over a
specified period of time. Due to this, young entrepreneurs should do as much
diligence and research on potential investors and partners, as they are doing on
them (Lynde, 2018). Thus assisting entrepreneurs in aligning themselves and their
startups with larger organizations that share the same mission, values, and beliefs
and can therefore more fittingly assist the startup’s evolution.
166 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

Furthermore, the relationships that entrepreneurs engage in with investors may be

some of the most important relationships they will build throughout the startup
creation cycle; mainly due to the financial capital they can provide. Without capital
that accepts the risk of investing in innovation, there is little chance that new
knowledge turns into innovative businesses (Tataj, 2015).
The food ecosystem and its associated challenges call for knowledge sharing
practices to enhance businesses’ performance. Knowledge sharing has been
evidenced to be influenced to a great deal by outcome expectation, e.g., personal
and community expectations, and three forms of dimensions of social exchange;
(i) structural, (ii) relational, and (iii) cognitive (Fait, Scorrano, Mastroleo, Cillo, &
Scuotto, 2019). These findings further highlight the importance of aligned company
and startup values for knowledge sharing, and also evidence that knowledge sharing
is facilitated when stakeholders perceive that a personal or communal benefit will
arise from the interaction.

6.3 Startups and High Growth Firms (HGFs)

Not all entrepreneurs approach their ventures in the same way, and important
distinctions have been made between ventures that interact with the entrepreneurial
ecosystem in terms of their speed of development, namely high growth firms (HGFs)
and more traditional startups.
The organization for Economic Co-operation and Development defines HGFs as
‘enterprises with average annualized growth greater than 20% per annum, over a
3 year period (OECD, 2018); therefore the main characteristic of HGFs, as its name
states, is rapid growth (Fuentelsaz, Maícas, & Mata, 2018). Furthermore, a distinc-
tive feature of HGFs is their innovative capability. A major difference between
HGFs and traditional startups is the importance given to innovation for their growth
(Coad & Rao, 2008). Furthermore, Frederiksen (2018) identifies six characteristics
of HGF’s that other startups should consider adopting, in summary he suggests that
HGFs:
1. Conduct systemic, structured research at least annually to understand target
market and consumers.
2. Tend to be specialized:
(a) Offering specialized services.
(b) Focusing on specific industries and business issues.
3. Invest significantly in marketing undertaking a variety of tactics and strategies.
4. “Productize” their services.
5. Target new markets.
6. Invest in the training and development of their personnel.
The journey for startups from idea to viable business is anything but straightfor-
ward, and entrepreneurs are encouraged to adopt systems thinking in order to
6.3 Startups and High Growth Firms (HGFs) 167

effectively appraise the different contextual elements found throughout each phase
of their development (Taub et al., 2019).
“Creating your business is not an easy endeavor, if it was then everyone would do
it”. Due to this simple truth, entrepreneurs are encouraged to work on something that
they are passionate about, instead of going for the ‘low-hanging’ fruit in search of any
market opportunity. Research shows that entrepreneurs who think solely about the
long-term financial gain, will eventually burn out and will not endure the many
setbacks and re-designs that are innate of entrepreneurial endeavors. Due to these
factors, two recommendations are proposed for young entrepreneurs wanting to
‘startup’ (Taub et al., 2019).
1. Creating a startup is time intensive. Much of the entrepreneur’s time is spent on
activities such as sales, marketing, customer service, networking, business strat-
egy development, and other administrative tasks. So even when a startup aims to
ameliorate a problem the entrepreneur is passionate about, they should be cau-
tious and prepared to spend a lot of time on tasks that might seem secondary, but
in reality are the foundation for the success of their idea. As a business owner,
entrepreneurs must get comfortable with being uncomfortable and willing to
embrace uncertainty.
2. Its important for entrepreneurs to be personally invested in what they do, but field
experts caution against falling in love with their own idea. Holding any original
idea to such a high esteem prevents entrepreneurs from accepting constructive
feedback and making any necessary adjustments to their idea. Entrepreneurs are
encouraged to get feedback as early as possible, and listen to consumer feedback
without taking any possible negative comments personally.
At the initial phase of creating a startup, entrepreneurs are recommended to equip
themselves with as much knowledge as possible (Politis, 2008). Entrepreneurs
should aim to understand what waits them and have some understanding on general
business concepts (Table 6.1). Importantly, besides diving into the literature, another
method to generate knowledge about the field and their startup idea itself is to talk to
as many as people about the startup and its goals. Many entrepreneurs might feel the
need for secrecy regarding their idea, but one thing to keep in mind is that most
people do not understand ‘business’, and there is quite some variation between
having an idea an actually executing it. Finally, starting a business requires many
disciplines, and as the founders of startups entrepreneurs need to be informed, or at
least understand the following concepts.
Furthermore, creating a startup and giving rise to a viable business is a complex
process filled with a plethora of uncertainties. With this in mind, entrepreneurs are
encouraged to consider whether their startup development should be a solo task
(Table 6.2), or something that requires co-founders.
Finally, when working with partners, it is important to reflect and clarify if both
founders are equally committed to the success of the startup, what is the dynamic
between the founders, and do they have complementary skills?
Creating a sustainable business and transforming the food system is a difficult
task. An undertaking that is not only necessary to meet the needs of future
168 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

Table 6.1 Business concepts 101

Strategy: This refers to determining how your company will achieve its objectives and vision for
the next few years. It’s essential to plan how you will do things
Accounting: This is the process of keeping financial accounts and recording transactions in your
business such as what goes in (revenue) and what goes out (expenses)
Financing: The process of obtaining or providing capital (i.e.: money) to fund business activities
Sales: The backbone of any business. Without sales, you cannot have revenue and turn a profit,
meaning you cannot survive
Marketing: The process of promoting and selling products and services. This includes disciplines
like advertising, PR, and pricing strategies
Operations: Refers to functions relating to how products and services are made, like managing
your supply chain and logistics
Human resources: Refers to people management, taking care of your team
Return on investment (ROI): This refers to how much benefit is derived as a result of an
investment. This tends to refer to a financial return, though it can refer to wider returns
(environmental, social) in the case of sustainable companies. Investors will be looking to
understand what kind of return they can expect if they invest in your business
Supply and demand: Every market is composed of a supply side and a demand side. The supply
side consists of sellers, people or businesses selling products and services, and the demand side
refers to buyers, people (consumers) or businesses buying products and services. As an entre-
preneur, you should see yourself on the supply side as it’s what you sell that will determine your
business’s success. You’ll of course be on the demand side too as you buy products and services
from others in your value chain
Competitive advantage: What makes your product or service stand out against the competition. It
may be price related (e.g.: you stand out because you are cheaper than your competitors) or may
refer to a certain attribute or condition that means what you offer is superior
Source: Taub et al. (2019)

Table 6.2 Solo and partnered—what’s in it for me?

Solo entrepreneur Partnered entrepreneur
Potential for less startup costs (fewer More likely to have a broader range of skills and
salaries, fewer people to support) experiences (which can only be a good thing)
Allows you to set your vision by your- Less likely to head in the wrong direction as you can
self, and you make all the decisions bounce ideas off each-other and act as sounding boards
Less potential for conflict (well none as You get to share the stress, the costs and responsibility,
long as you’re by yourself), BUT. . . BUT. . .
It can get very lonely and carrying all Conflicts can happen and having a co-founder is very
the responsibility yourself is daunting much like being in a relationship (or a marriage) and
takes a lot of work
Investors often refuse to back solo
founders and prefer backing teams
Source: Taub et al. (2019)

generations, but one that also has many economic advantages. This requires a
holistic approach that considers environmental and social impacts, throughout
every aspect of the business’ activities. However, this holistic approach must be
adopted with caution, especially for early stage startups.
6.4 Aligning Solutions to Consumer Needs 169

Due to the limited capital, startups face barriers that are quite significant in
addressing the entirety of possible trade-offs from their value proposition, and
therefore will need to make some compromises regarding the trade-offs that it
seeks to ameliorate. Sustainability issues are often seen as the product of a whole
system that does not work properly, and startups must resist the temptation to fix
them all; startups are only a small player in a much bigger game (Taub et al., 2019).
SMEs, especially startups, cannot solve every problem from their very beginning.
These small companies should have clear and specific vision of the value they
propose for sustainability and ameliorating societal challenges, and always adjust
this vision to their business capabilities.
Doing things differently (e.g., employing individuals from different backgrounds,
introducing new types of packaging, or new production processes) requires a lot of
patience and grit. Entrepreneurs naturally challenge traditional embedded business
processes, which means they will experience some resistance from markets when
they introduce their startups. This is another reason why startups should find
equilibrium between ameliorating global challenges and their current capacities.
They are encouraged to identify a core mission, focus on the core mission, and
build capacities to consider trade-offs throughout the startup’s development.

6.4 Aligning Solutions to Consumer Needs

Once entrepreneurs have identified the market or social problem, and proposed their
solution, its time to understand whether their proposed idea is fit to tackle the
problems its intended to. After this step, entrepreneurs should identify if potential
consumers will actually buy their product or pay for their service. Creating a perfect
solution to a problem is great, but will be futile if no one is willing to pay for the
product. Entrepreneurs are encouraged to identify if their ideas will work before
engaging in the practical business creation processes (e.g., attaining funding, joining
incubators and accelerators); success rates will seldom reach 100%, but entrepre-
neurs can increase the chances for their startup’s success through various research
streams, namely feasibility studies (Guerrero, Rialp, & Urbano, 2008; Lehmann,
1989; Sudrajat, Rahman, Sianturi, & Vendy, 2016).
Feasibility studies aim to assess whether an idea is feasible and in entrepreneur-
ship, helps entrepreneurs write solid business plans for their startups (Arain,
Campbell, Cooper, & Lancaster, 2010). It is quite common for feasibility studies
to continue throughout the developmental stages of a startup as they adapt to local
contexts and further develop their product or service. The information gathered
during this process can be categorized into different sections looking at the market,
technical, commercial, and financial and organizational feasibility (Taub et al.,
2019). More in detail, there are three main strategies for feasibility research, which
include (i) market research, (ii) competitive landscape, and (iii) SWOT assessment.
In the following section, these terms are explored with greater detail.
170 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

6.4.1 Market Research

Whether a startup is in its initial stages, or the entrepreneurs are making changes to
an existing product or service, or if an established firm is looking to develop a new
product, market research will need to be conducted at a certain point. Market
research, in essence, helps entrepreneurs make informed decisions about their
startups by helping them understand the current market they are working in (e.g.,
gaining contextual insight). Having a clear understanding of the current market
forces enables entrepreneurs to better align their product or service and marketing
strategies to customer needs, and to better prepare pitching strategies to convince
investors and other professionals to join or support their venture. Market researches
could be classified by primary or secondary as well as qualitative or quantitative.
Primary market research is information that the entrepreneur gathers for them-
selves by interviewing stakeholders, or observing the behavior patterns of a target
customer group to draw conclusions. Secondary market research relates to informa-
tion gathered from existing literature sources, such as research articles, publications,
books, and market reports. These two types of market research approaches thus yield
one important question, is one more effective than the other?
The answer is no. Entrepreneurs should strive to collect both types of documents
for their market research. Direct information and insights from leaders in the industry
is quite valuable, but secondary information also helps to illustrate the context of the
overall system that the entrepreneur is probably unlikely to be able to gather on their
own (Chandler & Lyon, 2001).
Qualitative research focuses on how and why people think and feel about a topic,
while quantitative research delivers facts and figures about how people relate to the
topic; both provide great benefits to startups, especially in the food industry. Food,
perhaps due to its strong cultural ties, invokes strong emotions in people (Desmet &
Schifferstein, 2008). In this case, qualitative research is the perfect vehicle to
understanding why some individuals make certain choices or feel a certain way
around food (e.g., consumption, buying habits, spending) and how they perceive
certain food innovations (e.g., disgust at 3D printed food, or reluctance to eat
alternative proteins). One major limitation to qualitative research however is
response bias, in which people’s actual behaviors differ from their intentions, and
their reported behaviors or attitudes (Paulhus, 1991). For instance, individuals may
report choosing a more eco-friendly brand over another due to ethical implications,
unconsciously however they may actually choose the product due to economic
benefits or taste preferences. On the other hand, quantitative research is data driven,
and is conducted through questionnaires, surveys, and psychometric instruments.
This approach also falls victim to limitations regarding response bias but is much
more data driven, therefore specific statistical methods can be applied to reduce bias
or untrue responses. Despite its data driven nature, quantitative research can still be
used to understand certain consumer behaviors, and in addition, the probability of
adopting or rejecting a new product or service.
6.4 Aligning Solutions to Consumer Needs 171

6.4.2 Competitive Landscape

Competitive landscape is often considered a sub-component of market research. It

offers insights into what potential competitors are doing as far as business creation
and innovation. This information is crucial to gaining an understanding of what
threats competitors may pose to a startup, what key takeaway messages they might
have to improve performance, and how new ventures can learn from their mistakes
and do things differently. This type of analysis is mostly conducted qualitatively
with secondary materials (i.e., by finding information that is publicly available).
Furthermore, some recommendations for conducting competitive analysis are as
follows, (i) aim to find the top ten performing companies; this number may be
adjusted based on personal, or contextual, needs, and (ii) once the companies have
been identified, begin to gather information about them. The type of information
gathered will vary according to the business, product, or service in question, but in
general, entrepreneurs are advised to investigate the following competitor dimen-
sions (Taub et al., 2019):
• Product/service: What is their product or service(s)? How are they different, or
better, regarding price, and design, and how much of the market share do they
have?
• Business Model: How does their business model differ? Are there gaps in their
business models or possible areas where they can improve?
• Marketing: How do they communicate with consumers, and in what way? Do
they engage in open communication with consumers through digital technologies
(e.g., Facebook, email, reviews etc.)? Do these feedback loops inform their
business practices? What is their relationship with the media, are they often
promoted?
• Organization: Who is on their team, managing bodies, and who are their
advisors? Where are they located, and how does their location compare to other
markets in launching successful startups?
A solid understanding of market competitors will help entrepreneurs develop
their own company’s competitive advantage, and set them on a path that is distinct
from that of their competitors, which is particularly important in a crowded market
since in entrepreneurship and innovation, invisibility is not a superpower.

6.4.3 SWOT Analysis

SWOT (i.e., Strengths, Opportunities, Weaknesses, and Threats) is a strategic

analysis that looks at the strengths, weaknesses, opportunities, and threats to the
entity being studied. This method is not limited to startups, or entrepreneurship for
that matter, and can be used throughout the lifetime of any organization, or project,
as a useful tool to navigate competitor strategies in order to stay competitive, or to
inform entrepreneurs when its time to engage in practical business creation.
172 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

Fig. 6.1 SWOT analysis

grid output—food system
example. Source: Author’s
elaboration

Strengths and weaknesses are factors the entrepreneur can directly control since
they are internal to the startup, while opportunities and threats are external factors of
the environment the startup operates in, and out of the entrepreneur’s control. SWOT
results are usually depicted as a grid with four quadrants that is quite simple to
interpret (Fig. 6.1)—each quadrant, or dimension, can be interpreted as follows.
• Strengths: Lets the entrepreneur know if they have a strong competitive advan-
tage over others in the industry. Are you the first or one of the first to bring this
type of product or service to market?
• Weaknesses: Helps entrepreneurs identify if there obvious gaps or limitations in
their organization? For example, a startup around ‘food tech’ would require
someone relevant in technical knowledge. Also helps assess if there is a lack of
funding for the venture.
• Opportunities: Functions to help entrepreneurs identify market trends they can
capitalize on e.g., a growth in vegetarianism can lead to developing of plant based
products in addition to original value creation. This also helps entrepreneurs
assess changes in legislation and determine if certain changes will support or
hinder their vision.
• Threats: This lets the startup team assess if their idea can be replicable by other
competitors, e.g., flavored sweeteners to avoid sugar has both a business model
and product that can be easily copied. Also helps identify environmental threats
that might impact business, e.g., if legislation is introduced that prohibits giving
away food due to safety reasons, a startup that re-distributes food for waste
control will find itself in trouble.
When trying to figure out whether startup will work, there is no substitute for
actually trying it out and seeing how it does in real markets, with real people. This
may seem like an unrealistic goal as products and services need funding to be
developed and this is usually granted once startups have proven a concept.
6.5 From Ideas to Business Models and Business Plans 173

6.5 From Ideas to Business Models and Business Plans

Once entrepreneurs determine they have a viable startup and decide to go through
the practical process of development (e.g., attaining funding, joining incubators and
accelerators) they have to begin to draft a strategy to make it self-sustaining, ergo
how can they make profit from it; basically entrepreneurs need to figure out what
their business model is (Taub et al., 2019).
In order to create their business model, startup members must figure who their
customer is, what problem they are trying to solve, what their cost structure is, and
what profits they would like to cultivate from the services rendered. A useful
instrument for startups is the business model canvas (BMC) (Osterwalder & Pigneur,
2012). It is a user-friendly visual template that is divided into nine sections that cover
all elements of a business model. Important to note is that some versions of the BMC
contain 11 sections, which is due to the addition of ‘eco-social costs’ and ‘eco-social
benefits’ dimensions. Therefore, in addition to economic criteria, this new version of
the model also focuses on ecological and social consequences of the business
activities (CASE, 2018), and aims at maximizing positive and avoiding negative
impacts on society and nature. By adopting this new version of the BMC, sustain-
ability is automatically integrated into the core business processes. The BMC in
general is an excellent starting point when trying to illustrate the inputs and outputs
of a potential business. It helps entrepreneurs focus, have clarity on key parts of the
business, and is easily adaptable since business models naturally and continually
evolve (Osterwalder & Pigneur, 2012). Once a startup’s business model is laid out,
the process of writing a business plan begins. In this next section we discuss the
processes and strategies to creating a business strategy, for further details regarding
the BMC and its properties see Chap. 7.

6.5.1 Writing a Business Plan

One of the main functions of writing a successful business plan is to use it as a tool to
help generate interest from potential investors or partners (Chen, Yao, & Kotha,
2009). Business plans are not usually shared among other stakeholders, but it more
so acts like a guide for entrepreneurs to use as a basis for pitches, presentations, and
other communications regarding the startup and its activities (Chen et al., 2009).
Business plans should also be adapted, not changed however, depending on who the
entrepreneur presents it to, i.e., for investors one might emphasize the possible return
of investments, while for scholars or governmental agents one might shift the empha-
sis to possible opportunities for university collaboration and scientific advance and, or
savings in healthcare costs respectively. Even though, to some, writing a business plan
may seem like a daunting task, entrepreneurs should see it as an opportunity to
organize the processes of their startup, to illustrate its goals and objectives, long
term vision, and the mechanisms that will employed to achieve these goals.
174 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

Not surprisingly, due to the complex and ever-changing nature of business

creation, there is no one exact method to write a business plan but critical compo-
nents that should be included have been identified (Taub et al., 2019), these
components are expanded on in the following section.
In essence, a business plan is about nicely illustrating the startup’s vision for the
future, but it is also about showing any existing traction, experience, and successes
that may support a business’ effective evolution. Throughout the remainder of this
section, we present a brief overview of the individual components of how to draft a
solid business plan.

6.5.2 Company Overview: ‘About Us’

This section is sometimes referred to as an executive summary. Usually it is the first

thing stakeholders and consumers read about a startup, therefore is of the essence to
make it as impactful and concise as possible, while always remembering to sell the
bigger picture. For example, if a startup’s aim is to provide a personalized shopping
experience via an app, the positive impact in the food ecosystem should come across
as part of the business plan. In this part of the business plan, it is also a good idea to
display the startup’s vision and values. The unique element of your startup should be
key in this section, without mentioning other competitors.

6.5.3 Product or Service Offered

In the business plan, entrepreneurs should clearly illustrate what their product or
service their startup is introducing to the market. They should also draft creative
ways to demonstrate how this unique startup stands out, and what the unique selling
points (USPs) are.

6.5.4 Target Market, Customers, and Competition

This section should highlight the market research previously conducted; basically, a
greater understanding of the market translates to greater chances of success. In
conveying an understanding of the market, entrepreneurs should be careful to
demonstrate a mastery of the following three aspects of their venture:
• Market: Entrepreneurs are urged to share key insights regarding the size of the
market they are going to try to enter, how the specific market is projected to grow,
and any important contextual factors that are relevant for their startup. Lastly,
entrepreneurs need to show an understanding of how their startup fits in the
overall environment.
6.5 From Ideas to Business Models and Business Plans 175

• Customers: An essential dimension of any business’ success is knowing who

their customer is, and understanding the drivers that lead them to pay for their
specific products or services. Finally, this section of the business plan should
demonstrate the need that the startup is meeting, or a pain point they are
addressing for possible interested stakeholders.
• Competition: In order to grant a competitive element to the business plan,
entrepreneurs must understand the ‘ins and outs’ of their relevant competitors.
This is the section where entrepreneurs should highlight their competitors, and
clearly indicate how their startup distinguishes itself, such as lower prices, higher
quality, company values, and marketing, to name a few.

6.5.5 Sales and Marketing Strategies

In this section entrepreneurs should aim to explain how they plan to reach markets
and attract customers, and should include the following information:
• Overview of the startup brand: This section will set the overall tone of the
business plan and the startup, therefore giving readers a first ‘taste’ of your startup
brand. This is a good place to also include detail on the startup mission, values,
and how consumers should perceive the brand.
• Sales strategy: This section should outline the route-to-market strategy, i.e., sales
process and communication channels, the startups pricing strategy, and any
existing market traction.
• Marketing strategy: This is linked with the sales strategy, but focuses more on
how entrepreneurs will disseminate information about their startup and what
marketing strategies will achieve the best possible dissemination (e.g., public
relations, social media, digital marketing, TV commercials, etc.)

6.5.6 Operations

This section varies depending on the type of business being considered but should
include an overview of the startup’s operational plan. Basically, here entrepreneurs
should discuss any support systems that are needed in order to bring their startup to
markets. This can include information such as locations needed where product
development is expected to happen, the human capital needed to perform the startup
functions, e.g. technical expertise, engineering, and psychology for consumer behav-
ior, manufacturing process, and packaging if it is applicable. In this section, entre-
preneurs should also discuss any legal considerations in making their startup
successful.
176 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

6.5.7 The Startup Team

An essential component of a startup’s success is the team behind it. In this section
entrepreneurs should provide an overview of their team’s core skills and back-
grounds, highlighting their complementarities and multi-disciplinarity, if any. Entre-
preneurs should also mention mentors and outside consultants who have been, and
will continue to be involved in the startup’s growth.

6.5.8 The Financial Plan

In this section it is important to outline how much the expected business activities
will cost, and how much revenue it is expected to generate. This section can be
further broken down into different components (Taub et al., 2019) as follows:
• Profit & Loss (P&L): Is a financial statement that summarizes the revenues,
costs, and expenses incurred during a specified period. A solid business plan
should include a forecast of P&L for the next 5 years.
• Balance sheet: This is a statement of assets, liabilities, and capital of a business or
institution at a specific point in time, it details the balance of the income and
expenditure over the preceding period.
• Cashflow statement: A document that displays cash entering and leaving the
business over a given period of time which is broken down into operating,
financing, and investment processes. If the main goal of the current entrepreneur
is to raise funds, then it is recommended that they outline the sum of investment
needed, and how it will be distributed over a specified period of time.
When considering business plans, it is interesting that usually they are not
followed as originally and thoroughly planned out. In order to stay competitive in
ever-changing markets, startups and businesses must also be ready to change along
with the external environment, and thus, so must their business plans. What potential
investors and other stakeholders look for business plans is that the entrepreneur has
holistically considered the business, and has a concrete understanding of the market,
the core business proposition and processes, and that the startup and the entrepre-
neur are able to adapt as the startup grows into a business or as external factors
demand it.
Financial plans can be considered one of the most important components of
business plans, and when properly written, show that there is an economically viable
business model behind and a startup or entrepreneurial idea. The financial plan
should consist of three parts, (i) a profit and loss statement, (ii) a balance sheet and
(iii) cashflow statement. Financial plans should also never cover both short-term and
long-term perspectives, in this case, two different financial plans should be consid-
ered. Short-term business plans should be presented on a month period, while long-
term plans can think up to 5 years ahead. Furthermore, the entrepreneur needs
6.6 Digitalization as a Driver for Entrepreneurial Ecosystems and. . . 177

specific type of information before beginning to draft a business plan, namely

information on direct costs of developing goods or services; fixed operating costs,
such as employees, marketing, and office space rentals; capital costs which include
investments in machinery, development; the startup’s product or service pricing, and
payment modes; company objectives regarding sales targets and margin expecta-
tions; and sales forecast.
Finally we would like to highlight that this is only an overview of the processes
and components necessary to crate a financial plan. For more information on specific
funding schemes and opportunities for new ventures see Chap. 9.

6.6 Digitalization as a Driver for Entrepreneurial

Ecosystems and Business Creation: Fact or Fiction

Entrepreneurial ecosystems are distinguished from other forms of regional networks

or communities due their relative lack of confinement to specific industries and
technologies, by their processes in supporting the emergence of startups, by the way
they combine and leverage spatial and digital affordances, and by their shared
experiential knowledge base on business model innovation.
Moreover, the bulk of the research on entrepreneurial ecosystems has, arguably,
failed to recognize the most fundamental driver of the phenomenon—that of digita-
lization (Malecki, 2018).
New business ventures are an extremely heterogeneous collection of, nascent, or
upcoming businesses. When it comes to levels of technology intensity, food startups
comprise ‘low-technology’ service ventures (e.g., street food vendors, food trucks,
and small scale farmers), to low-to-medium tech manufacturing SMEs, to the ‘high-
technology’ new ventures that focus on transforming R&I advances into new
commercialized products and services (e.g. high growth firms) (Autio, Nambisan,
Thomas, & Wright, 2018). These high-tech, or digital, startups can be found in many
diverse sectors, and are usually distinguished by their ability to harness digital
affordances brought about by advances in digital technologies and improvements
in infrastructures for business model innovation (see Chap. 8), which translates into
four distinctive characteristics of digital startups.
1. In addition to harnessing general-purpose technology, digital startups are for the
most part technology and industry agnostic, meaning they are not limited to a
specific sector and can design business models to target customers in virtually any
sector (Basu & Fernald, 2007).
2. They tend to emphasize service and business model innovation instead of
technology-push, product, or process as the key source of opportunities for
startups. Business model innovation refers to the novel design to coordinate
and leverage interactions for value co-creation, and can be defined as the ‘imple-
mentation of non-trivial changes to at least two business model elements resulting
178 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

in a business model configuration that is new to the organization’s industry and

market’ (Bock & George, 2017).
3. They leverage ecosystem architecture as a source of competitive advantage.
4. They harness the structural malleability afforded by digital technologies to
support exponential scalability.
Therefore, the ability to harness digital affordances makes digital startups unique
from more traditional business creation initiatives. This means that digital startups
operate under a distinctive operational logic, one that draws on distinctive manage-
rial recipes for innovative business model design (Autio & Cao, 2019).
Furthermore, Autio and Cao (2019) argue that a fundamental driver of entrepre-
neurial ecosystems is digitalization. Therefore it can be assumed that entrepreneurial
ecosystems represent a novel and unique type of a regional network that facilitates
the creation of digital startups. They define digital startups as ‘new ventures that
harness digital affordances for business model innovation.’ These findings are
supported by other studies that suggest that entrepreneurial ecosystems are ulti-
mately driven and enabled by advances in digital technologies and infrastructures
and the related process of digitalization (Autio et al., 2018), or the socio-technical
process of integrating digitalization techniques to broader social and institutional
contexts that render digital technologies infrastructural (Tilson, Lyytinen, &
Sørensen, 2010).
At the same time, the researchers stated that entrepreneurial ecosystems also
specialize in facilitating the startup and scale-up of new entrepreneurial ventures
through the combination of digital affordances (i.e., potentialities to either per-
form existing functions in novel ways or perform entirely novel functions). Such
digital affordances are important to highlight because they shape the locus of
entrepreneurial opportunities, as well as effective practices to pursue such oppor-
tunities. Being able to successfully harness digital affordances allows new ven-
tures to dramatically lower their startup costs, enabling them to adopt an iterative,
experimentation-driven approach to their business model design; an approach that
differs drastically from the traditional, linear and plan-oriented approach to new
venture creation (Ewens, Nanda, & Rhodes-Kropf, 2018; Romme, 2003).
Attempts to shed light on the concept of entrepreneurial and innovation ecosys-
tems have generally emphasized descriptions and best practice lessons, rather than
their prediction power based on theoretical causation (e.g., success of startups,
possible trade offs with innovation activities). Entrepreneurial ecosystems have
emerged as a response to opportunities provided by digitalization to facilitate digital
startups, by cultivating generic business process knowledge, and providing a munif-
icent resource community.
In essence, the very nature of ecosystems facilitates the emergence of startups,
with their distinctive structural elements, such as new venture accelerators,
co-working spaces, incubators, and venture challenges (Autio et al., 2018).
6.7 Startups and Innovation Ecosystems: Do They Work? 179

6.7 Startups and Innovation Ecosystems: Do They Work?

Audretsch and Feldman (2004) describe that one of the greatest insights to innova-
tion is that geography and location matter, and that a long tradition of observing the
low effectiveness of innovation processes within the boundaries of the firm with
disregard for the spatial context has paved the way for the integration of spatial
context when analyzing firms. Mainstream literature also shared this belief and
considers geographic location, specifically proximity, to be a driver of innovation
(Letaifa & Rabeau, 2013). Theories as to why location and context matter include
that the concentration of firms improves innovation and output efficiency and
facilitates access to needed resources; a highly competitive environment can encour-
age firms to be proactive and quickly build needed competencies (Porter & Porter,
1998), and knowledge spillovers are especially effective when geographic distances
are lessened (Singh, 2005). Specifically, proximity based networks of startups and
entrepreneurs create a critical mass of local knowledge, human capital, and resources
used by new ventures and established firms to gain competitive advantages
(Carayannis, Popescu, Sipp, & Stewart, 2006).
Most newly created businesses struggle to survive beyond the first 5 years of
operation, and higher than usual survival rates have been attributed to a well-
organized entrepreneurial ecosystem. Even though a clear-cut definition of entrepre-
neurial ecosystems is still missing from the literature, some models have been
proposed to illustrate their complexity. One of these models distinguished four of
their distinctive elements, (i) the ecosystem community, (ii) resource dynamics, (iii)
knowledge spillovers, and (iv) general framework conditions. Furthermore Autio
and Cao (2019) suggest four common elements of entrepreneurial ecosystems that
are featured in existing definitions and propose the following four-point structural
model:
1. Regional (rather than national) focus.
2. Emphasis on new firm creation.
3. Emphasis on multi-laterality and interdependencies across ecosystem stakeholders.
4. Emphasis on system-level welfare benefits.
Entrepreneurial ecosystems are, in essence, regional communities of stakeholders
organized around the new startup creation process.
Entrepreneurial ecosystems offer entrepreneurs a range of services, network out-
lets, and state-of-the-art support systems. However, it’s not quite clear if the simple
availability of such resources and support systems directly translate to an entrepre-
neur’s proficiency in harnessing benefits from the ecosystem (Cruz, Rosekranz, &
Giliberti, 2019).
According to an article on ‘How to Start an Entrepreneurial Revolution’, entre-
preneurs are most successful when they have access to the human, financial, and
professional resources they need (Isenberg, 2010). However, even more important
are the government policies that help encourage and safeguard entrepreneurs, as well
180 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

as the support networks of fellow entrepreneurs and experienced business leaders, or

mentors, who may be able to provide personalized guidance on ameliorating some of
the challenges they are facing, especially if these mentors themselves have experi-
enced similar obstacles previously (Isenberg, 2010).
Unfortunately, some research streams have demonstrated that simply creating
opportunities to raise funds, network with other entrepreneurs, and receive person-
alized feedback from seasoned entrepreneurs is not enough to support successful
startups (Isenberg, 2014). This leads us to a narrower questions of, what kind of
services do startups need, and at what phase can these services yield strong and
sustainable startups and ecosystems?
Cruz et al. (2019) posit that collaborating with other startups, and the ability to
engage in knowledge sharing with experienced food ecosystem institutions, practical
training, and transparent access to resources are among the elements that render
ecosystems productive for startups. In this case, authors agree that the idea of
ecosystems is a necessary, but insufficient condition for success (Cruz et al.,
2019). One important aspect for collaborations with other ecosystem startups is
that it must be the startup founders themselves, the entrepreneurs, to take the
initiative and connect with the networks they belong to through indirect or direct
connections. However, there are still many young startup teams, who do not invest
the time to seek the necessary support to reduce costs, provide seed funding, and
access crucial knowledge pools (Cruz et al., 2019).
Furthermore, based on the structural model proposed by Autio and Cao (2019),
we can conclude that entrepreneurial ecosystems are, in essence, regional networks
of stakeholders organized around the new venture startup process.
Innovation ecosystem on the other hand may include technology parks, incuba-
tors, universities, and others, to achieve a high density of startups that is equipped
with social capital to help its members evolve (Bandera & Thomas, 2018). Social
capital in entrepreneurship and its endeavors has been broadly acknowledged (Stam,
Arzlanian, & Elfring, 2014; Westlund & Adam, 2010). Innovation ecosystems have
become popular notion that describes the networked and systemic nature of innova-
tion, and focuses on innovation activities and the important interactions and inter-
dependencies amongst its member (Ritala & Almpanopoulou, 2017).
One common context in which entrepreneurship and social capital encounter each
other is that of the innovation ecosystem. Innovation ecosystems support startups in
their development process by serving as conduits for an effective and holistic
support network (Tötterman & Sten, 2005). An innovation ecosystem is defined
by the complex relationships formed between actors, whose objective is to enable
technology development and innovation thereby growing the economy and creating
jobs (Jackson, 2011).
Like entrepreneurial ecosystems, innovation ecosystems also lack a central def-
inition, but a few common features have been identified throughout. A first com-
monality is the availability of research and commercial resources. A second common
feature is that entities in an ecosystem are geographically localized, and focus on a
few overlapping industries (e.g. climate change, food ecosystems, water supplies).
6.7 Startups and Innovation Ecosystems: Do They Work? 181

Innovation ecosystems attract new ventures and aspiring entrepreneurs with

resources such as lower cost facilities, business services, and opportunities for
collaboration.
Due to the importance allocated to social capital, Bandera and Thomas (2018)
conducted a study that analyzed access to social capital, its use, and startup success.
From their analysis, they found that the availability of social capital did not correlate
to startup survival, but that the startups that actively use social capital by collabo-
rating with other system members (e.g., universities, large industries) significantly
outperform startups that do not. Furthermore, they highlight that the availability of
social capital in an ecosystem does not correlate with the utilization of social capital
by startups in that ecosystem. Dense ecosystems composed of numerous talents can
offer many benefits as far as resources, networking, and expertise, but this does not
guarantee that aspiring entrepreneurs and startups will capitalize on those benefits
(Bandera & Thomas, 2018).
In other words, even though entrepreneurial ecosystems may offer a range of
services, and innovation ecosystems offer access to large pools social capital, it is the
entrepreneurs driving the startups who hold the decisive power engage in these
activities, and will do so regardless of where they are, whereas those who choose not
to engage will on average produce mediocre, if any, impacts, and will remain
reluctant to new processes. Finally, Bandera and Thomas (2018) find a strong
positive relationship between the utilization of social capital and startup survival,
more so among high-tech firms than among low-tech firms.
Furthermore, Stuart and Sorenson (2003) suggest that even though a large
percentage of entrepreneurs prefer to establish startups in entrepreneurial or
innovation ecosystems, the most productive new ventures are not located in
regional clusters, and posit that this may be due to the highly competitive envi-
ronment that exists in geographically concentrated networks. They further go on to
discuss that the benefits from ecosystem clustering may disappear as new ventures
create direct networks of their own, thus expanding the geographic reach of a
startups firm’s social network. This argument is supported by Schwartz (2013)
who reveals that startup survival is statistically significantly better among compa-
nies that never participated in an incubator, or other type of designed ecosystem
service.
Entrepreneurs may, or may not, have the specialized skills or the required social
competence (i.e. the ability to engage in effective interactions with other ecosystem
members) needed to capitalize from the present conditions of the ecosystems (Baron
& Markman, 2000; Battisti & McAdam, 2012). Entrepreneurs may also be blinded
by personal biases which may give them an unrealistic boost of confidence or control
over their startup; they convince themselves that they can draw no additional benefit
from networking with the ecosystem (Baluku, Kikooma, & Kibanja, 2016; De
Carolis & Saparito, 2006; Koellinger, Minniti, & Schade, 2007). Importantly,
Baluku et al. (2016) also support the notion that both startup capital and the
psychological capital of the entrepreneur are significant predictors for entrepreneur-
ial success; however, psychological capital is the better predictor.
182 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

6.8 Your Startup, Your Brand

A strong brand focuses on providing a better and more recognizable solution than
competitors can offer. Through the delivery of its unique value proposition, a brand
grows its consumer market and benefits from the word of mouth of loyal con-
sumers; these statements remain true even with all the emerging digital technologies
to promote products and services through different avenues. Creating a viable and
recognizable brand is not about using the newest digital methods, but about using
human capital such as creativity to leverage own, paid, and earned channels to
reach, convert, and retain customers. In the age of technology, the traditional
promotional mix (i.e., promotion, advertising, public relations, and personal con-
tacts) continues to provide optimal results (Meng-Mei, 2019). A brand can be
considered as the expectations, memories, relationships, and personal experiences
with a company, that, when looked at holistically, can explain a customer’s decision
to choose one product or service over another. In the context of entrepreneurs and
startups, brand reflects what they stand for, and lets markets and customers know
the company values, even if a company is not directly interfaced with customers.
The initial mission, vision, and values identified in the business planning phase play
an important role in how entrepreneurs build their business. When starting a
business, it’s very easy to get distracted by different opportunities and challenges.
Therefore having a strong mission and vision early on will act as a compass and
help guide strategic business decisions. Defining value and vision early on also help
startups engage with future employees and overall consumer markets (Taub et al.,
2019).
• Mission: A mission statement expresses why a business exists; it states their
purpose and lays out the impact they want to achieve. A company providing
technology to reduce water usage on agricultural land could, for example, state its
mission as follows: “We exist to increase water efficiency on farms to benefit
farming communities in the developing world”. An easy way to start putting
together your mission statement is to start with “we exist to. . . .”.
• Vision: This defines the startups idea for the future focusing more on long-term
aspirations and the wider context of its mission. In this example, the company’s
vision statement could be: “Our vision is to create sustainable farming practices
and contribute to the development of a better and more environmentally friendly
food system.”
• Values: Similarly to the mission and the vision, startups’ values matter as they
guide how to build the business and the type of company culture it creates.
Company values should come from the founders and what is important to them.
These terms are not easy to express, therefore young entrepreneurs are encour-
aged to look at the companies they are loyal to for examples.
6.8 Your Startup, Your Brand 183

6.8.1 Brand Positioning

One of the first steps in developing a viable brand and marketing strategy is figuring
out who the startup’s target customers are specifically, and how the startup will
differentiate itself from its competitors in doing so. Consumers respond more posi-
tively to personalized messages rather than to generic ones, so it’s important for
startups to have a clear understanding of their brand positioning and develop strategies
to exploit it. Companies are generally more likely to be successful if they create a
niche rather than try to please everybody. When trying to figure out their brand
positioning, entrepreneurs are encouraged to ask themselves the following questions:
• What customer segments exist within the market my startup operates in?
• Which of those customer segments is most likely to respond positively to our
value proposition?
• How are competitors in this market positioning themselves, e.g. which customer
segments are they trying to attain?
• How will we distinguish ourselves from the competition, especially if we’re
going after the same customer segments?
When we think about brand positioning, entrepreneurs should have a clear idea of
the impression, or brand perception, their customers should have of their brand.
Furthermore, brand statements can be structured in a number of ways as long as it
answers the key points addressed in the questions above.

6.8.2 Sustainability and Brand Creation

As widely noted in the literature, sustainable food systems have gained the attention
of many food ecosystem members, from farmers, to retailers, to consumers. There-
fore the companies that are able to embed sustainability from the very beginning of
their creation can achieve a number of relative advantages.
1. Consumers Care: Studies increasingly show that consumers want to choose
products that are positive for the environment and society (at least when they’re
asked about it). A 2017 Unilever global consumer study found an over “$1 trillion
market opportunity for brands that can effectively and transparently market the
sustainability of their wares” (SB, 2019).
2. Business customers care: The EU requires large companies to report on the
social and environmental impact of their activities. Therefore, most companies
have sustainability targets to meet so they are increasingly looking to work with
suppliers and partners who can help them fulfill these; an optimal opportunity for
startups.
3. Positive differentiation in marketplaces: Positive impact provides a marketing
advantage that can help startups stand out from competition, especially against
more established businesses. The greater the positive impact from startups, the
184 6 Startups and Knowledge Sharing in Ecosystems: Incumbents and New Ventures

greater the media attention will be, thus shedding light on the startups’ processes
and helping generate interest from local communities. Sustainability can also help
startups create loyalty as they help others contribute to initiatives they care about,
or consider important.
4. Attracting a motivated and committed team: Consumers like working with and
being part of businesses that are mission driven. Recent surveys show, for
example, that millennials prefer companies who strive for more than just ROI
and that sustainability and environmental regard is a key motivator when they
look for work (Taub et al., 2019).
5. It’s a market reality: The growing threats to natural resources signifies that if
startups and companies can exist and function in more efficient and sustainable
ways, they will be less vulnerable to market forces that affect daily operations.

6.9 Conclusion

The importance of food startups and what they can do for the food industry is
becoming increasingly known.
No matter the motivation for entrepreneurs, the SME sector in Europe has been
generating more jobs than large enterprises, and innovation-driven SMEs are
engines of growth and job creation.
First, when policy makers refer to the ecosystems concept they invariably pre-fix
the term with the term ‘startup’ (Schreiber & Pinelli, 2013). This could be labeled the
‘startup monoculture’ (Brown & Mason, 2017). This can be damaging for several
reasons. It ignores the fact that the needs of firms change as they evolve (Brown &
Mason, 2017).
Slapping the ‘startup’ in front of many new initiatives is quite attractive, but field
experts should keep in mind that a startup is just the initial phase of venture creation.
They should offer transfer officers to help them grow, and now face the too big for
the pond scenario.
Within the sustainability context, competitive companies may be happy to share
information. It makes sense, as the motivation behind these companies is to create
positive change in the world and so knowledge sharing benefits a greater cause
(Taub et al., 2019). Although literature tends to assume that geographic proximity is
a driver of innovation understanding why some startups utilize the social capital
available to them while others do not is an important question. The answer will
undoubtedly lie in part within the personality traits of the individual entrepreneur.
For example, researchers have used the Five Factor model of personality traits
(openness to experience, conscientiousness, extraversion, agreeableness, and neu-
roticism) to model entrepreneurs and the performance of their firms. Several of these
personality traits influence not only an entrepreneur’s willingness to interact with
others but also the willingness of others to interact with her/him (Bandera &
Thomas, 2018).
References 185

For food startups that want to innovate faster, it is crucial to keep up with current
markets. Working together with other innovate food startups can ensure that,
together, startups can innovate a lot quicker by assisting each other with risk
management and therefore reducing single liabilities.
Furthermore, collaborations with larger companies can also provide immense
benefits for the companies and the startups. In this case, startups provide innovative
ideas to improve procedures of larger companies, and larger companies very often
have the resources to invest in these ideas and to produce new knowledge. Therefore,
larger companies work as funders for startup’s innovative solutions that can later on
be implemented at a large company scale; therefore truly driving a food ecosystems
transformation toward sustainability.
Literature streams have reported that focusing on the psychology of entrepreneurs
alone is not enough to assess their entrepreneurial success, and the provision of
resources for business creation does not signify that they will be exploited or utilized
by entrepreneurs to startup enhancement. Based on the literature, we propose that
future studies of entrepreneurs and their propensity to engage in open communica-
tion with regional support systems should investigate both individual entrepreneurial
characteristics, and environmental conditions in order to gain a more holistic picture
of the startup creation, development, and overall success in market strategies.

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Chapter 7
Innovative and Sustainable Food Business
Models

Abstract Companies are called upon to solve the great challenges of the new
millennium. The food sector, from this point of view, plays a strategic role. Poverty,
malnutrition, hunger, climate change, and social inequalities are just some of the
trends which the agri-food sector has to cope with. The digital transformation that
companies will need to embrace to survive requires new ways of creating, thinking,
and working with technology-driven tools to provide value for their businesses and
customers. Digitization, whether it pertains to new technologies, the analysis of
big data or the development of on-line and spatial applications, can contribute to
achieving systemic food production transformation in a way that aligns the sector
more closely with contemporary sustainability and health challenges. Digital tech-
niques are leading established companies to renew and innovate their business
models by connecting producers to consumers, setting up innovative marketing
channels, and improving logistics. Artificial intelligence for smart farming, preci-
sion and urban farming, data management for waste-less, blockchain for supply
chain traceability and auditability are just some of the disruptive technologies which
have been adopting by both start-ups and an increasing number of established
companies, redefining their business models. This chapter aims to analyse how
these new paradigms are impacting the food sector by providing examples from the
real world.

Keywords Business model · Food industry · Business model innovation · Grand

challenges · Sustainability

Co-authored by Canio Forliano—Department of Management, University of Turin, School of

Management and Economics, Turin, Italy
Department of Political Science and International relations, University of Palermo, Palermo,
Italy, e-mail: [Link]@[Link]
Co-authored by Mattia Franco—Department of Management, University of Turin, Turin, Italy,
e-mail: [Link]@[Link]

© Springer Nature Switzerland AG 2020 189

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
190 7 Innovative and Sustainable Food Business Models

7.1 Introduction

Research on business models has drawn the attention of a vast number of

scholars over the last decades. However, there is still no general agreement among
researchers on the theoretical definition of this construct (Evans et al., 2017). The
concept of business model commonly refers to the architecture for how a firm does
business (Foss & Saebi, 2018), and, more specifically, how it creates, delivers,
and captures value (Magretta, 2002; Teece, 2010). For this reason, this chapter
will first present a summary of the main definitions of business models that are
most established in the scientific literature. Next, the reflection will move to the
concept of innovative and sustainable business models, with a particular focus on the
disruptive changes that both the sustainability and the circular economy paradigms
have brought in recent years. In doing so, the most recent changes which have been
emerging in the competitive landscape will be taken into consideration (Nielsen
et al., 2018). The final part of the chapter will focus on several practical examples of
sustainable business model innovation in the food system. As a consequence,
possible future scenarios will be analyzed, reflecting on how they can guarantee
the food sector to prosper in compliance with new governmental guidelines and
modern consumers’ needs, that are both increasingly oriented towards giving atten-
tion to the sustainability paradigm.

7.2 Business Model

Scholars have not provided a generally accepted definition of business model so

far. This absence can be well reassumed through Porter’s word (2001, p. 73), when
he stated that “the definition of a business model is murky at best”. In particular,
there are at least two different problems that may hinder providing a unique and
shared definition of business model.
First, to date, practitioner insights have played an essential role in forming and
developing the field through frameworks and definitions (Petrovic, Kittl, & Teksten,
2001; Timmers, 1998). Consequently, they have developed business model con-
cepts that are very specific to each analyzed scenario and that have been used in
practice as a means to capture the underlying architecture regarding how a company
does business (Foss & Saebi, 2018).
Second, researches on business models have been addressed from different
domains, contributing to the fuzziness of this term. For what concerns the main
disciplines that have paid attention to the concept of business model so far, they are
mainly related to e-business, information systems, strategy, innovation, entrepreneur-
ship, management, and economics (Chesbrough, 2006; Chesbrough & Rosenbloom,
2002; Osterwalder & Pigneur, 2010; Porter, 2001; Teece, 2010; Zott & Amit, 2010).
Nevertheless, differences can also be linked to national cultural characteristics. In
fact, according to de Reuver, Bouwman, and Haaker (2013), American and European
7.2 Business Model 191

scholars have different approaches to business model research. Indeed, while Amer-
icans are more concentrated on classifying business models and their relationship
with open innovation, Europeans focus on causal modeling and design approaches. In
his review of the scholarly literature, Lambert (2015) as well revealed that empirically
grounded taxonomies of business models are still limited and characterized by
classification schemes with no explicit criteria.
The remainder of this paragraph will present an evolution of the main researches
and definitions regarding the business model concept. Research on business
models started during the late 1990s and the early 2000s in some famous studies
(Mahadevan, 2000; Slywotzky, 1996; Timmers, 1998; Weill & Vitale, 2001), even if
similar concepts had already appeared in the previous Drucker’s “theory of busi-
ness” (Drucker, 1994). However, one of the first definitions of business model can be
traced back to Slywotzky (1996), who described a business model as a mix of
decisions related to customer selection, creation of utility for customers, and profits
capturing. Conversely, Timmers (1998) pointed out a broader and generic definition
of business model, differentiating it from a more marketing-focused model and
considering it as a “representation of a firm’s underlying core logic and strategic
choices for creating and capturing value in a value network”. This definition also
influenced those from Mahadevan (2000) and Weill and Vitale (2001). Mayo and
Brown (1999) and Stewart and Zhao (2000), instead, turned their attention to the
achievement of sustainable financial competitiveness. Finally, moving away from
the strategic dimension of a business model, in her famous definition Magretta
(2002) stressed the relationship among its various components. In doing so, she
stated that a business model has to satisfy two conditions: it must have a sound logic
(i.e., who customers are and what they value) and it has to focus on how firms can
make money by providing customers that value. By the way, the organizational
entity of business models is not clear since some of the definitions above mentioned
were referring to the firm level while others to the network level.
In that regard and due to its comprehensiveness, Chesbrough and Rosenbloom’s
(2002) definition still represents one of the reference points of the literature on
business models. More precisely, the authors intended business models as the
enablers to convert technologies into economic outcomes. Indeed, they argued that
“firms need to understand the cognitive role of the business model, to commercialize
[the] technology in ways that will allow firms to capture value from their technology
investments” (Chesbrough & Rosenbloom, 2002, p. 532). Moreover, this definition
identifies several attributes of a business model that enable firms to articulate their
value proposition, identify their market segments, define the best structure of the
value chain, estimate the potential profit, recognize the position of the value network,
and develop a competitive strategy. Another famous definition of business model,
mainly centered on its components and the relationship among them, came from
Osterwalder and Pigneur (2010), who described the business model as the rationale
of how an organization creates, delivers, and captures value. However, to be
effective, it must identify nine building blocks: (i) customer segments; (ii) value
propositions; (iii) channels; (iv) customer relationships; (v) revenue streams; (vi) key
resources; (vii) key activities; (viii) key partnerships; (ix) cost structure.
192 7 Innovative and Sustainable Food Business Models

Four years later his study with Rosenbloom, Chesbrough (2006) stated that
business models perform two main functions: value creation and value capture.
The former was referred to a series of activities regarding new products or services
in such a way that there is net value created throughout these various activities.
Value capture, instead, was referred to as seizing value from a portion of those
activities for the firm developing the model. In the two following years, another well-
established definition of business model will be released. Firstly, Rasmussen (2007)
defined a business model as the way through which firms assume: (i) what compet-
itive strategy adopt, deciding what products (services) offer to the market and how
much ask for selling (providing) them, as well as identifying their production costs;
(ii) through what value proposition differentiate themselves from other firms; (iii)
how integrate their own value chain with those of other firms that are involved in the
same value network. Secondly, Richardson (2008), after an in-depth analysis of the
previous literature, pointed out a framework that integrates all the already
established ideas about business models in a logical structure. Notably, in this
structure the key components are the value proposition (in terms of the offer and
the target customer segment), the value creation and delivery systems, and the value
capture system. Thirdly, according to Teece (2010), the essence of a business model
regards how enterprises deliver value to customers, convince customers to pay for
that value, and convert the received payments to profit.
In any case, over the years, the concept of business model has begun to increas-
ingly consider not only the aspects related to value created by companies, but also
to shared value. Therefore, in their work Zott and Amit (2010) conceptualized a
company’s business model as a system of interrelated activities that transcend the
focal firm and its boundaries. In this case, firms are called to weave together different
activities that are performed by the company itself or by its suppliers, partners, and
customers to co-create shared value. The concept of value, however, remained too
vague in many studies and most of the authors have not clearly explained the
meaning of “value” or “customer value”, making the comprehension of their defi-
nition too abstract. Table 7.1 shows the main definitions of a business model that can
be found in the literature.

7.3 Business Model Innovation

The concept of business model has been further challenged by the emergence of two
major factors that have radically changed the competitive landscape (Nielsen et al.,
2018): the advent of the digital era and the globalization of markets, two phenomena
that are strongly related to each other. For example, stating that great technologies
are becoming ever more rapidly commoditized, Chesbrough (2007) reflects on the
role of new technologies in enhancing companies’ performances. Moreover, the
global economy is leading companies to transform manufacturing processes, supply
chains, marketing tools, governance mechanisms, and organizational strategies to
compete internationally, which has become a necessity for companies’ survival
7.3 Business Model Innovation 193

Table 7.1 Definitions of a business model

Source Definition
Slywotzky (1996) [Business model refers to] “the totality of how a company selects its
customers, defines and differentiates it offerings, defines the tasks it
will perform itself and those it will outsource, configures its resources,
goes to market, creates utility for customers and captures profits.”
Timmers (1998) [Business model stands for] “architecture of the product, service, and
information flows, including a description of the various business
actors and their roles, the potential benefits for the various business
actors; a description of the sources of revenues.” (p. 4)
Porter (2001) “The definition of a business model is murky at best. Most often, it
seems to refer to a loose conception of how a company does business
and generates revenue. Yet simply having a business model is an
exceedingly low bar to set for building a company. Generating revenue
is a far cry from creating economic value.” (p. 73)
Chesbrough and The business model is “the heuristic logic that connects technical
Rosenbloom (2002) potential with the realization of economic value.” (p. 529) “The busi-
ness model provides a coherent framework that takes technological
characteristics and potentials as inputs and converts them through
customers and markets into economic outputs.” (p. 532)
Magretta (2002) “Business models are stories that explain how the enterprises work [. . .]
Business models describe, as a system, how the pieces of a business fit
together, but they don’t factor in one critical dimension of performance:
competition” [. . .] “A good business model has to satisfy two condi-
tions. It must have a good logic—who the customers are, what they
value, and how the company can make money by providing them that
value. Second, the business model must generate profits.”
Osterwalder (2004) “A conceptual tool that contains a set of elements and their relation-
ships and allows expressing the business logic of a specific firm. It is a
description of the value a company offers to one or several segments of
customers and the architecture of the firm and its network of partners
for creating, marketing and delivering this value and relationship
capital, to generate a profitable and sustainable revenue stream.”
Chesbrough (2007) “The business model is a useful framework to link ideas and technol-
ogies to economic outcomes” [. . .] “It also has value in understanding
how companies of all sizes can convert technological potential
(e.g. products, feasibility, and performance) into economic value (price
and profits)” [. . .] “Every company has a business model, whether that
model is articulated or not.”
Richardson (2008) A business model is “a conceptual framework that helps to link the
firm’s strategy, or theory of how to compete, to its activities, or
execution of the strategy. The business model framework can help to
think strategically about the details of the way the firm does business.”
(p. 135) “The three major components of the framework the value
proposition, the value creation and delivery system, and value captured
reflect the logic of strategic thinking about value. The essence of
strategy is to create superior value for customers and capture a greater
amount of that value than competitors.” (p. 138)
Skarzynski and “The business model is a conceptual framework for identifying how a
Gibson (2008) company creates, delivers, and extracts value. It typically includes a
whole set of integrated components, all of which can be looked on as
opportunities for innovation and competitive advantage.”
(continued)
194 7 Innovative and Sustainable Food Business Models

Table 7.1 (continued)

Source Definition
Teece (2010) “A business model articulates the logic, the data and other evidence that
support a value proposition for the customer, and a viable structure of
revenues and costs for the enterprise delivering that value.” (p. 179)
Zott and Amit (2010) “We conceptualize a firm’s business model as a system of
interdependent activities that transcends the focal firm and spans its
boundaries. The activity system enables the firm, in concert with its
partners, to create value and also to appropriate a share of that value
[and is defined by] design elements—content, structure, and gover-
nance—that describe the architecture of an activity system; and design
themes.”
Wirtz, Pistoia, Ullrich, “A business model is a simplified and aggregated representation of
and Göttel (2016) the relevant activities of a company. It describes how marketable
information, products and/or services are generated by means of a
company’s value-added component. In addition to the architecture of
value creation, strategic as well as customer and market components are
taken into consideration, in order to achieve the superordinate goal of
generating, or rather, securing the competitive advantage. To fulfil this
latter purpose, a current business model should always be critically
regarded from a dynamic perspective, thus within the consciousness
that there may be the need for business model evolution or business
model innovation, due to internal or external changes over time.”
(p. 41)
Massa, Tucci, and “A business model is a description of an organization and how that
Afuah (2017) organization functions in achieving its goals (e.g., profitability, growth,
social impact, . . .).” (p. 73)
Müller, Buliga, and “The present paper defines business model as a sum of the value
Voigt (2018) creation mechanisms, value offer, and value capture mechanisms.”
Source: Authors’ elaboration

(Onetti, Zucchella, Jones, & McDougall-Covin, 2012). Together with the expansion
of their customer base by entering new markets, companies have been increasingly
required also to develop appropriate information systems to gather and analyze data
of their potential and actual customers (Gnizy, 2019). In this regard, several famous
companies (e.g., Amazon, Netflix, Walmart), independently from offering tradi-
tional physical services or virtual ones, are taking advantage of business analytics
to meet their customers’ needs.
Those changes led scholars to stop considering business models as a given
picture. For instance, Demil and Lecocq (2010) highlighted that business models
should be analyzed in a dynamic way, capturing innovation and changes in organi-
zations and, consequently, within their business models. In a similar vein,
Chesbrough’s thought (2010) that for companies innovating their business model
is much more important than adopting innovative technologies. Moreover, Amit and
Zott (2012) found that, whereas most of the innovations and cost savings have
already been achieved, companies would receive the main benefits of innovating
their business models. Nowadays, innovation must regard the whole business
7.3 Business Model Innovation 195

models rather than providing just new products and processes or performing orga-
nizational changes since product quality and production scale do not necessarily
represent a competitive advantage anymore (Vrontis, Bresciani, & Giacosa, 2016).
Therefore, companies should focus their efforts on where the competition does not
act at all, but they keep showing a stronger shared sense of how to innovate
technology rather than their business models. Some examples of industries that
have somewhat disrupted the traditional ways of doing business by adopting agile
technology-based businesses (Nielsen et al., 2018) are Uber (transportation), Airbnb
(accommodation), Spotify (music), Amazon (retail), Skype (telecommunications),
Just Eat (food).
Considering the above, the main literature that has analyzed business model
innovation will now be presented, even if this concept, such as the business model

Table 7.2 Business model innovation definitions

Source Definition
Mitchell and Bruckner “By business model innovation, we mean business model replace-
Coles (2004) ments that provide product or service offerings to customers and
end-users that were not previously available. We also refer to the
process of developing these novel replacements as business model
innovation.” (p. 17)
Lindgardt, Reeves, Stalk “Innovation becomes BMI [business model innovation] when two or
Jr., and Deimler (2012) more elements of a business model are reinvented to deliver value in a
new way. [. . .] BMI can provide companies a way to break out of
intense competition, under which product or process innovations are
easily imitated.” (p. 2)
Romero and Molina “Business models as definers of the value creation priorities in an
(2009) organisation should be continuously reviewed in response to actual
and possible changes in the perceived market conditions and evolve
the enterprise strategy as the business environment and customers’
needs change.” (p. 3)
Johnson (2010) “[Seizing the white space] calls for the ability to innovate something
more core than the core, to innovate the very theory of the business
itself. I call that process business model innovation.” (p. 13). “Business
model innovation is an iterative journey.” (p. 114)
Björkdahl and Holmén “Business model innovation refers to a new integrated logic of how the
(2013) firm creates value for its customers or users and how it captures value,
and is the implementation of a business model that is new to the firm.”
Geissdoerfer, Bocken, “Business model innovation describes either a process of transforma-
and Hultink (2016) tion from one business model to another within incumbent companies
or after mergers and acquisitions, or the creation of entirely new
business models in start-ups.” (p. 1220)
Bouwman, de Reuver, “Business model innovation as a change in a company’s business
and Nikou (2017) model that is new to the firm and results in observable changes in its
practices towards customers and partners.”
Foss and Saebi (2017) “We define BMI [business model innovation] as designed, novel,
nontrivial changes to the key elements of a firm’s business model
and/or the architecture linking these elements.”
Source: Authors’ elaboration
196 7 Innovative and Sustainable Food Business Models

one, is still not so clear. Table 7.2 collects some of the main definitions of business
model innovation that can be found in the literature. Many authors described
business model innovation as a process (Foss & Saebi, 2017; Schallmo & Brecht,
2010) to develop a new business model (Björkdahl & Holmén, 2013; Foss & Saebi,
2017) or an entire industry (Santos, Spector, & Van der Heyden, 2009; Schallmo &
Brecht, 2010). Notably, it can be referred to “incremental changes in individual
components of business models, [an] extension of the existing business model, [the]
introduction of parallel business models, right through to disruption of the business
model, which may potentially entail replacing the existing model with a fundamen-
tally different one” (Khanagha, Volberda, & Oshri, 2014, p. 324). Moreover, Nielsen
and Lund (2018) highlighted the importance of scalability in business model inno-
vation. According to main findings of their research: (i) scalable business models are
flexible and turn new resources into increasing returns; (ii) scalability often involves
connecting strategic partners to a company’s value proposition; and (iii) one key is to
find smart ways to leverage the resources of partners.
The concept of business model innovation can be seen as the result of the
resources and the capabilities which are available within the respective company
(Teece, 2008). Firms can be sustainable over time if they successfully adapt to the
environment in which they are nested. The company’s dynamic capabilities repre-
sent, in this case, the proper perspective to understand how firms can cope with
volatile environments. According to Schweizer (2005, p. 6), a “dynamic capability
can be considered as the ability to seize new opportunities and to change the existing
business model by reconfiguring the value chain constellation and protecting knowl-
edge assets, competences and [the access to] complementary assets and technologies
in order to achieve sustainable competitive advantage”. Many recent studies adopted
dynamic capabilities frameworks to explain business model innovation triggered by
digitalization. Rachinger, Rauter, Müller, Vorraber, and Schirgi (2018), for instance,
framed a conceptual setting based on the business logic triangle (Osterwalder &
Pigneur, 2002). In their analysis of companies from the automotive and media
industry, they found that the perceived available options for business model inno-
vation by digitalization are determined by the firm’s value proposition and the
position in the value network itself, as well as the position in the value network.
Another empirical evidence of business model innovation is provided by Amit and
Zott (2012) with the Apple case from the real world. Apple became famous for the
innovative production of hardware and software and, particularly, personal com-
puters. Nevertheless, through the creation of the iPod and its associated software
(iTunes), some years later they introduced a legal online music download service
that has represented a radical innovation of the company’s business model. In doing
so, Apple has been the first computer company that included music distribution as a
linked activity to the development of the iPod’s hardware and software. In this way,
Apple transformed its business model including an ongoing relationship with its
customers, who consequently obtained an ongoing and shared value from using
Apple devices and software. Hence, the process of innovation extended from the
product to the overall business model.
7.4 Business Model Innovation for Sustainability 197

7.4 Business Model Innovation for Sustainability

Sustainability issues, like social imbalances (Hart & Dowell, 2011), climate change
(Reid & Toffel, 2009), and environmental matters (Seuring & Müller, 2008), are
increasingly asking to redesign modern economic systems, realizing a transition
toward the sustainability paradigm. Since they control the majority of both resources
and capabilities, companies are considered central actors to address these issues
(Porter & Kramer, 2011) and “important and necessary social change agents”
(Aguilera, Rupp, Williams, & Ganapathi, 2007, p. 857). Therefore, they have been
innovating their business models in a more sustainable and socially responsible way
since the introduction of the United Nations Global Compact in 1999. The Global
Compact represents a non-binding framework that states ten principles in the areas of
human rights, labor, environment, and anti-corruption and asks companies to give
evidence of both their economic and non-economic value creation processes in their
reports. With the purpose of spreading the same message to more actors than just
companies, in 2015 the United Nations General Assembly also released a set of
17 Sustainable Development Goals (e.g., no poverty, zero hungry, climate action,
decent work, economic growth). Moreover, the recent global crises have questioned
the impact of existing corporate business models on the sustainability of the global
economy and society (Schaltegger, Lüdeke-Freund, & Hansen, 2016). Therefore,
policy makers, practitioners, and scholars have been reconsidering the contribution
of firms to sustainable development.
According to the definition given by Lüdeke-Freund (2010, p. 23), a sustainable
business model is “a business model that creates competitive advantage through
superior customer value and contributes to the sustainable development of the
company and society”. The core of a sustainable business is still thus linked to
create, deliver, and capture economic value (Osterwalder & Pigneur, 2010; Teece,
2010; Zott & Amit, 2010), but including social and environmental values as well
(Boons, Montalvo, Quist, & Wagner, 2013; Schaltegger, Lüdeke-Freund, & Hansen,
2012; Stubbs & Cocklin, 2008; Yang, Evans, Vladimirova, & Rana, 2017). Built
upon Bocken, Short, Rana, and Evans (2014) and Lüdeke-Freund, Massa, Bocken,
Brent, and Musango (2016), Ritala, Huotari, Bocken, Albareda, and Puumalainen
(2018) have identified some of the main archetypes that characterize environmental
and social issues in business models. The environmentally oriented archetypes
which have been found are maximizing material and energy efficiency, closing
resource loops, and substituting with renewables and natural processes. The
socially-oriented archetypes, instead, are delivering functionality rather than owner-
ship, adopting a stewardship role, and encouraging sufficiency. As argued by Zollo,
Cennamo, and Neumann (2013), a business that just predicates on the hunt for an
immediate profit actually ends up hurting its capacity to create both economic and
non-economic value for the long term. Thus, nowadays, companies need to take into
consideration both long-term value creation and systemic thinking as drivers of
success (Stubbs & Higgins, 2018). As a result, if business model innovation can
provide companies higher yields than just innovating their products or processes
198 7 Innovative and Sustainable Food Business Models

(Chesbrough, 2007; Lindgardt et al., 2012), adopting a sustainable business model

could also help companies to better-facing risks (Choi & Wang, 2009) and catch
more value co-creation opportunities (De Bernardi, Forliano, Rotti, & Franco,
2019; Nidumolu, Prahalad, & Rangaswami, 2009; Porter & Kramer, 2011; Tukker
& Tischner, 2006). The adoption of sustainable business models was also encour-
aged by Laurence D. Fink, chairman and chief executive officer at the world’s
biggest investor BlackRock. Indeed, in January 2018, in his annual letter sent to
CEOs of the S&P 500, he stated that “Society is demanding that companies, both
public and private, serve a social purpose. To prosper over time, every company
must not only deliver financial performance but also show how it makes a positive
contribution to society”. In any case, since progressing towards sustainability
requires more than just adopting new and innovative technologies (Girotra &
Netessine, 2013), achieving this paradigm can represent a difficult task for some
companies. Therefore, business model innovation can represent an effective solution
to align internal rewarding mechanisms to leverage sustainability (Rashid, Asif,
Krajnik, & Nicolescu, 2013). This led to the concept of sustainable business
model innovation (Boons & Lüdeke-Freund, 2013; Schaltegger et al., 2012; Yang
et al., 2017), whose implementation can follow two different approaches according
to Inigo, Albareda, and Ritala (2017). The first one, preferred by well established,
large companies, is called “evolutionary approach” and is based on adjusting value
creation for responding to environmental changes, gradually incorporating sustain-
ability objectives in the market. Conversely, the second approach, most suitable for
novel companies or spin-offs, is called “radical approach” and is based on introduc-
ing a completely new value proposition either to match a new sustainability chal-
lenge or to tackle an issue in a radically novel manner.
For what concerns the value concept linked to sustainable business model
innovation, Yang et al. (2017) have highlighted the necessity to enlarge the tradi-
tional perspectives of value proposition, value capture, value creation, and value
delivery by introducing the concept of value uncaptured. This new perspective
allows a more comprehensive understanding of value to promote sustainability,
focusing not just on “how”, “what” and “with whom” the value is shared, but also
“how much” and “to what extent” the value is shared. Particularly, the paper
develops four specific forms of value uncaptured: value surplus, value absence,
value missed, and value destroyed.
Tables 7.3 and 7.4 show the main definitions of sustainable business models and
sustainable business model innovations in the literature.

7.5 Circular Business Models

It is estimated that around nine billion people will leave on Earth by 2050 and this
will require three times more resources than the one that is actually consumed
(Godfray et al., 2010). However, in current linear economic systems, ruled by the
“make-use-dispose” model (Stahel, 2016), approximately 80% of those resources
7.5 Circular Business Models 199

Table 7.3 Sustainable business model definitions

Source Definition
Stubbs and A sustainable business model is “a model where sustainability concepts shape
Cocklin (2008) the driving force of the firm and its decision making [so that] the dominant
neoclassical model of the firm is transformed, rather than supplemented, by
social and environmental priorities.” (p. 103)
Lüdeke-Freund “A business model that creates competitive advantage through superior
(2010) customer value and contributes to the sustainable development of the com-
pany and society.”
Garetti and Taisch Sustainable business models “have a global market perspective, taking into
(2012) account the development of new industrialised countries as well as the need
for more sustainable products and services.” (p. 88)
Bocken, Short, “Sustainable business models seek to go beyond delivering economic value
Rana, and Evans and include a consideration of other forms of value for a broader range of
(2013) stakeholders.” (p. 484)
Boons and A sustainable business model is different from a conventional one through
Lüdeke-Freund four propositions, “(1) The value proposition provides measurable ecological
(2013) and/or social value in concert with economic value [. . .] (2) The supply chain
involves suppliers who take responsibility towards their own as well as the
focal company’s stakeholders [. . .] (3) The customer interface motivates
customers to take responsibility for their consumption as well as for the focal
company’s stakeholders. [. . .] (4) The financial model reflects an appropriate
distribution of economic costs and benefits among actors involved in the
business model and accounts for the company’s ecological and social
impacts.” (p. 13)
Wells (2013) A business model for sustainability “would assists in the achievement of
sustainability [by] following major principles [. . .] for sustainability”, which
Wells defines as (1) resource efficiency, (2) social relevance, (3) localisation
and engagement, (4) longevity, (5) ethical sourcing, and (6) work enrichment.
(p. 65)
Schaltegger et al. A business model for sustainability helps describing, analysing, managing,
(2016) and communicating (i) a company’s sustainable value proposition to its
customers, and all other stakeholders, (ii) how it creates and delivers this
value, (iii) and how it captures economic value while maintaining or
regenerating natural, social, and economic capital beyond its organizational
boundaries
Upward and Jones A (strongly) sustainable business model “is the definition by which an
(2016) enterprise determines the appropriate inputs, resource flows, and value
decisions and its role in ecosystems, [in a way that] sustainability measures
[which] are those indicators that assess the outputs and effects of business
model decisions [. . .] might be claimed as successfully sustainable.” (p. 98)
Abdelkafi and Sustainable business models, “incorporate sustainability as an integral part of
Täuscher (2016) the company’s value proposition and value creation logic. As such, [Business
models for Sustainability] provide value to the customer and to the natural
environment and/or society.” (p. 75)
Geissdoerfer et al. “We define a sustainable business model as a simplified representation of the
(2016) elements, the interrelation between these elements, and the interactions with
its stakeholders that an organisational unit uses to create, deliver, capture, and
exchange sustainable value for, and in collaboration with, a broad range of
stakeholders.” (p. 1219)
(continued)
200 7 Innovative and Sustainable Food Business Models

Table 7.3 (continued)

Source Definition
Evans et al. Sustainable business models are described with five propositions:
(2017) “(1) Sustainable value incorporates economic, social and environmental
benefits conceptualised as value forms. (2) Sustainable business models
require a system of sustainable value flows among multiple stakeholders
including the natural environment and society as primary stakeholders.
(3) Sustainable business models require a value network with a new purpose,
design and governance. (4) Sustainable business models require a systemic
consideration of stakeholder interests and responsibilities for mutual value
creation. (5) Internalizing externalities through product-service systems
enables innovation towards sustainable business models.” (p. 5)
Source: Authors’ elaboration

become waste just after the first use and that percentage rises to 99% within
6 months (Sempels & Hoffmann, 2013). A stronger sensitivity towards these issues,
a change in people’s attitude toward consumption, and the existence of enabling
technology conditions have led to the introduction of new models with specific
additional characteristics. These models have assumed the following labels:
product-service systems, green business models, and circular business models
(Bocken et al., 2014; Linder & Williander, 2017; Reim, Parida, & Örtqvist,
2015). Circular business models do not only aim to create sustainable value, but
they also employ a proactive multi-stakeholder management (Geissdoerfer et al.,
2018; Pieroni, McAloone, & Pigosso, 2019), adopting a long-term perspective
majorly oriented to (i) close, (ii) slow, (iii) intensify, (iv) dematerialise, (v) and
narrow resource loops (Tunn, Bocken, van den Hende, & Schoormans, 2019).
Closing a loop means that “the goods of today are the resources of tomorrow at
yesterday’s prices” (Stahel, 2013, p. 55) since produced waste can be reintegrated
into companies’ supply chains through reuse or recycle. For example, Biochair, a
biofuel produced from beer production scraps, or Rise Flour, a flour made from
wasted grains with more nutraceutical properties than traditional ones. Slowing,
instead, regards extending products’ life cycles, reducing the amount of produced
waste and, consequently, reducing costs connected to inventory, transportation, and
distribution activities (e.g. Cambridge Crops, which has developed a natural coating
for extending food freshness). With the term intensifying a loop, it is intended
that products are transformed into services, according to people’s reduced interest
in possessing a specific good rather than using it (Ellen MacArthur Foundation,
2014). Several examples can be found within the so-called sharing economy
phenomenon (e.g., cars or bikes sharing, video and audio broadcasting, clothes
rentals). Dematerialise means that digital resources are preferred to their physical
alternatives, which requires both technological and cultural changes in the way
products or services are produced and consumed. Finally, narrowing concerns
improving products or companies’ internal or external processes, so that the used
resources (energy, water, raw materials, packages, stock areas, transportation needs,
etc.) can be reduced, as well as the consequent produced emissions and wastes.
7.5 Circular Business Models 201

Table 7.4 Sustainable business model innovation definitions

Source Definition
Boons and Lüdeke- “Sustainable business model innovation is understood as the adaption of
Freund (2013) the business model to overcome barriers within the company and its
environment to market sustainable process, product, or service innova-
tions.” (p. 13)
Casadesus-Masanell “Business model innovation refers to the search for new logics of the firm
and Zhu (2013) and new ways to create and capture value for its stakeholders; it focuses
primarily on finding new ways to generate revenues and define value
propositions for customers, suppliers, and partners.” (p. 464)
Loorbach and Sustainable business model innovation describes businesses’ “searching
Wijsman (2013) for ways to deal with unpredictable [. . .] wider societal changes and
sustainability issues.” (p. 20)
Girotra and “A sustainable business is not only achieved through innovation in tech-
Netessine (2013) nologies, products or services, but also through BMI, namely a different
approach to value creation.”
Bocken et al. (2014) “Business model innovations for sustainability are defined as: Innovations
that create significant positive and/or significantly reduced negative
impacts for the environment and/or society, through changes in the way
the organisation and its value-network create, deliver value and capture
value (i.e. create economic value) or change their value propositions.”
(p. 44)
Geissdoerfer et al. “Sustainable business innovation processes specifically aim at incorpo-
(2016) rating sustainable value and pro-active management of a broad range of
stakeholders into the business model.” (p. 1220)
Roome and Louche Sustainable business model innovation describes the “processes through
(2016) which [. . .] new business models are developed by businesses and their
managers [. . .] how companies revise and transform their business model
in order to contribute to sustainable development.” (p. 12)
Schaltegger Sustainable business model innovation describes the creation of “modified
et al. (2016) and completely new business models [that] can help develop integrative
and competitive solutions by either radically reducing negative and/or
creating positive external effects for the natural environment and society.”
(p. 3)
Yang, Evans, “Sustainable business model innovation can be more easily achieved by
Vladimirova, and identifying the value uncaptured in current business models, and then
Rana (2016) turning this new understanding of the current business into value oppor-
tunities that can lead to new business models with higher sustainable
value.” (p. 2)
Baldassarre, “The sustainable business model innovation approach aims at achieving
Calabretta, Bocken, sustainability objectives by generating economic value. In this context,
and Jaskiewicz the development of a sustainable value proposition—that is, an offering
(2017) addressing a sustainability problem, creating shared value for a network of
stakeholders—is central. User-driven-innovations is an approach to busi-
ness innovation that can help overcome some key challenges in the
development of sustainable value propositions.”
Geissdoerfer, “[. . .] incorporate pro-active multi-stakeholder management, the creation
Vladimirova, and of monetary and non-monetary value for a broad range of stakeholders,
Evans (2018) and hold a long-term perspective.”
Source: Authors’ elaboration
202 7 Innovative and Sustainable Food Business Models

Furthermore, regarding the circular business model, relevant is the study of

Heyes, Sharmina, Mendoza, Gallego-Schmid, and Azapagic (2018), who applied
the principles of the circular economy to the nine building blocks of the business
model canvas theorized by Osterwalder and Pigneur (2010). Moreover, Todeschini,
Cortimiglia, Callegaro-de-Menezes, and Ghezzi (2017) stressed the need to develop
value propositions that can reduce environmental impacts. They conducted eight
case studies on start-ups, identifying the concept of “born sustainable”, which
drives entrepreneurs in accomplishing the circular economy goals by designing
sustainable value propositions. Geissdoerfer et al. (2018) proposed further research
on sustainability-oriented and circular economy-oriented business models by
highlighting that these kinds of business models are not always able to capture the
full potential of sustainability. Some circular economy-oriented business model, for
instance, may generate negative secondary effects. For example, Andersen (2007)
focused his attention also on the costs that are linked to building circular systems,
rather than just their related benefits, while Allwood (2014) pointed out the technical
impossibility of closing some resources’ loops. Indeed, in some instances, it could be
required more energy to recycle materials than acquiring them in traditional ways. In
addition to that, some other scholars (Murray, Skene, & Haynes, 2017) stated that
the circular economy has brought considerable attention to some sustainability
aspects, especially the environmental ones, overlooking the social sustainability
dimension.

7.6 Business Modelling: Tools for Designing New Business

Models

Over the last years, the technological advances and the grand challenges that the
food sector is called to face are providing ideas for the creation of new and disruptive
start-ups. These start-ups need the support of a framework that allows giving
architecture to their business idea. One of the most successful tools which have
been recently developed is the so-called Business Model Canvas (Osterwalder &
Pigneur, 2010). This framework is composed of nine building blocks (Fig. 7.1)
which enable companies answering to the following questions:
– Customer segments: for whom are we creating value? Who are our most impor-
tant customers?
– Value propositions: what value do we deliver to the customer? Which one of our
customer’s problems are we helping to solve? Which customer needs are we
satisfying? What bundles of products and services are we offering to each
customer segment?
– Channels: through which channels do our customer segments want to be reached?
How are we reaching them now? How are our channels integrated? Which ones
work best? Which ones are most cost-efficient? How are we integrating them with
customer routines?
7.6 Business Modelling: Tools for Designing New Business Models 203

Key Partnerships Key Activities Value Proposition Customer Relationship Customer Segments

Key Resources Channels

Cost Structure Revenue Streams

Fig. 7.1 Business model canvas. Source: Based on Osterwalder and Pigneur (2010)

– Customer relationships: what type of relationship does each of our customer

segments expect us to establish and maintain with them? Which ones have we
established? How costly are they? How are they integrated with the rest of our
business model?
– Revenue streams: for what value are our customers willing to pay? For what do
they currently pay? How are they currently paying? How would they prefer to
pay? How much does each revenue stream contribute to overall revenues?
– Key resources: what key resources do our value propositions require? Our
distribution channels? Customer relationships? Revenue streams?
– Key activities: what key activities do our value propositions require? Our distri-
bution channels? Customer relationships? Revenue streams?
– Key partnerships: who are our key partners? Who are our key suppliers? Which
key resources are we acquiring from partners? Which key activities do partners
perform?
– Cost structure: what are the most important costs inherent in our business model?
Which key resources are most expensive? Which key activities are the most
expensive?
Due to the complexity of identifying some of the blocks that constitute the
business model canvas for some companies, especially start-ups, this framework
has been revisited by numerous scholars. For instance, Maurya (2012) theorized the
lean canvas (Fig. 7.2), which is built upon the nine blocks concept of the traditional
business model canvas, but with some of those building blocks that have been
modified in order to suit the needs and purposes of a lean start-up. Each of these
blocks is shortly described below:
204 7 Innovative and Sustainable Food Business Models

Key Partnerships Key Activities Value Proposition Customer Relationship Customer Segments

Problem Solution Unfair

Advantage

Key Resources Channels

Key Metrics

Cost Structure Revenue Streams

Fig. 7.2 Lean business model canvas. Source: Based on Maurya (2012)

– Problem: each customer segment you are thinking to work with will have a set of
problems that need to be solved. Therefore, for a start-up could be easier
identifying those problems and assess if the project is worthwhile, rather than
recognizing its key partners in the early-life stages.
– Customer Segments: once a problem has been identified, a specific customer
segment that experiences it should come up into the mind. So, those two
dimensions can be viewed as intrinsically connected—without having a customer
segment in mind problems cannot be addressed, and vice versa.
– Solution: the identified problem will need to be addressed and, eventually,
overcome by the company. Therefore, even if key activities are still not well
structured or difficult to be identified, the solution the company is going to
provide to its customers should be clear since the beginning of its activities.
The solution cannot be found in an office. It instead requires going out in the
streets, interviewing customers, asking them questions, and interiorizing those
learnings.
– Value Proposition: the value proposition is the core of the canvas, representing
the company’s promise of value that is intended to be delivered and the primary
reason why a customer would buy a product or service. Thus, start-ups need to
understand what differentiates them from other companies.
– Channels: channels represent the ways the customer segment will be reached. In
the initial phase, it is crucial to think more about learning than scaling and,
consequently, choosing channels that can provide information and feed-backs
or allow direct contact with the customer segment.
7.6 Business Modelling: Tools for Designing New Business Models 205

– Revenue Streams: despite some products or services can be offered for free in
order to gain traction—being careful to not affect their perceived value—it is
imperative to have one principal revenue stream and eventually to build other
secondary ones.
– Cost Structure: identifying the cost structure means understanding which ele-
ments are burdening it more than others or recognizing the company’s cost
centers. Some of the following questions could help to do that: how much will
it cost to build the landing page? What is the burn rate of the firm? What are the
total monthly running costs? How much will it cost to interview the customer
segment? How much do market research papers cost? And so on.
– Key Metrics: every business, no matter what industry or size, will have some key
metrics that are used to monitor performance. The best way to help with this is to
visualize a funnel top-down that flows from the large open top, through multiple
stages to the narrow end.
– Unfair Advantage: if relationships with customers cannot be already set-up, the
company needs to at least own an unfair advantage compared to its competitors.
A real unfair advantage is something that cannot be easily copied or bought by
competitors (e.g., insider information, a dream team, significant networks effects,
the right “expert” endorsement).
The business model canvas has also been reviewed in view of the social and
environmental concerns that characterize companies nowadays. Changes in the
context surrounding companies lead in fact to the reconfiguration of the instruments
to design the start-up business models. As a consequence, the nine building blocks of
the traditional canvas have been recently enriched by two additional blocks, respec-
tively referring to social and environmental costs and benefits (Fig. 7.3).
In conclusion, it is presented the circular business model (Fig. 7.4), developed by
Planing (2015) on the basis of the hierarchical model originally theorized by Stahel
and Reday-Mulvey (1981). Indeed, even if scholars still do not agree on what
elements should be part of a circular business model, it is generally accepted that
the hierarchical order of those elements exists and represent one of the key factors of
such a business model. Starting from the circle IV, the model takes into account
material processors that can recoup every raw material from a product whose
operating life has ended. Even if this means perfectly closing the resource loop
associated with that specific product, this represents the most expensive activity in
terms of required resources and technologies. Then, in circle III, processes that
enable manufacturers to reconfigure products or upgrade some of their components
with better ones are considered. These processes are referred to as narrowing a
resource loop, but it is necessary that the remanufacturing process requires fewer
resources than the traditional production one for respecting the sustainability para-
digm. Subsequently, activities that can be performed by sellers and service providers
are assessed, since circle II contemplates dematerializing products, affecting their
delivery, turning them into services or extending their life-cycle. These activities are
respectively connected to what has been called: dematerializing, intensifying, and
slowing resources’ loop. In this regard, products could additionally be reconditioned
206 7 Innovative and Sustainable Food Business Models

Key Partnerships Key Activities Value Proposition Customer Relationship Customer Segments

Key Resources Channels

Cost Structure Revenue Streams

Social & Environmental Cost Social &Environmental Benefit

Fig. 7.3 Sustainable business model canvas. Source: Based on Joyce and Paquin (2016)

or sold-back to different, more price-sensitive, customer segments. Finally, the

tighter circle contemplates what customers can realize through their consumption
habits to achieve circularity, for example preferring long-lasting products or con-
suming them in a more efficient way. So, in circle I activities that are able to slow
loops are considered again. It must be highlighted that this circle also includes the
activities that can be conducted requiring the lower amount of resources, respecting
the above-mentioned hierarchical order of factors composing the model. Addition-
ally, the hierarchy can also be observed in the efforts that are required to adapt a
business model in order to go up from circle I to circle IV. In this vein, for example,
Lewandowski (2016) added to the traditional framework developed by Osterwalder
and Pigneur another block, referred to as the adoption factors. The adoption factors
are those reasons that can hinder companies from turning their business model from
linearity to circularity and that should be prevented (Ellen MacArthur Foundation,
2015; Scott, 2013). They can concern both internal and external factors, where the
former are connected to various organizational capabilities (e.g., human, knowledge,
and intellectual resources), procedures, and tools to design business models and
assessment systems. Conversely, the latter refers to (i) technological possibilities;
(ii) laws and political incentives; (iii) socio-cultural issues, such as consumer attitude
7.7 Business Models in the Food Sector: Where Are We Going? 207

Fig. 7.4 Circular business model. Source: Planing (2015), adapted from Ellen MacArthur
Foundation (2014) and Stahel and Reday-Mulvey (1981)

and public opinion); (iv) and economic forces, like the expected market demand or
difficulties encountered by other companies.

7.7 Business Models in the Food Sector: Where Are We

Going?

The growing concern towards sustainability-related aspects and the technological

progress of the whole society are changing the competitive landscape, leading
companies to explicitly address social and environmental issues and to adapt
and (or) innovate their business models. Food companies are no exception
(De Bernardi, Bertello, Venuti, & Zardini, 2019; De Bernardi & Tirabeni, 2018)
since they also are called to face many grand challenges for years to come. The
generally increasing attention to sustainability has been spurred by the adoption of
the 17 Sustainable Development Goals (SDGs) by all the Members of the United
Nations in 2015 as well (De Bernardi, Venuti, & Bertello, 2019). In fact, nowadays,
they still represent the heart of the 2030 Agenda for Sustainable Development. For
what regards food and nutrition security, in 2015 also the European Commission
208 7 Innovative and Sustainable Food Business Models

released his research and innovation policy. In this way, it answered to the interna-
tional policy developments of those years (SDGs and the COP21 commitments),
identifying the following priorities: nutrition for sustainable and healthy diets,
climate-smart and environmentally sustainable food systems, the circularity of
food systems, and innovation and empowerment of communities. Not facing those
challenges could have relevant consequences. In the next sections, it will be
presented the major paradigms and innovations that have been redefining the food
sector in recent years.

7.7.1 Food-Tech

The use of technology in the food sector (food-tech) has allowed new ventures to
meet the expectations of the society in a more efficient way than before. So, it
has increasingly offered the opportunity to consider new solutions for achieving
sustainable goals such as human health, climate change, constraints on natural
resources, and animal welfare.1 The food sector, for example, is increasingly looking
for nutritional solutions tailored to specific diseases: currently, in fact, seven of eight
major risk factors for premature death are linked to the way we eat, drink and
exercise. Non-communicable diseases and obesity account for 63% of all annual
deaths and are related to eating habits (European Commission, 2018). Companies
are developing strategies to deliver nutrition advice tailored to the individuals’
biological readouts (e.g., DNA, microbiome, neuroscience). Moreover, an increased
number of mobile applications aim nowadays to provide specific diets for diseases
such as diabetes and Alzheimer. MySugr,2 for instance, founded in 2012 in Vienna
(Austria), is currently one of the most famous apps in the world for diabetes patients;
this start-up makes it easier both for the patient and the healthcare staff to manage the
disease. The main features of this app are: customized screen for every user; blood
sugar charts presented clearly and with an eye-catching design; daily, weekly, and
monthly analysis of blood service values; exciting challenges for achieving personal
goals; motivational feedbacks.
An increasing orientation towards the grand challenges of the new century has also
led several companies (e.g., Beyond Meat, Impossible Foods, Moving Mountains) to
base their business models on the production of plant-based meat, contributing to
growing issues attributed to livestock production. For example, Beyond Meat3 states
that producing their burgers requires 99% less water, 93% land, and 50% energy than
producing a beef burger, with 90% fewer greenhouse gas emissions.
But, besides these kinds of product/service innovations, the fourth industrial
revolution has opened up even greater opportunities for firms, in terms of process

1
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2
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3
[Link]
7.7 Business Models in the Food Sector: Where Are We Going? 209

efficiency, cost reduction, productivity improvements, and in the rethinking of

products and services for addressing new market needs (Bagnoli, Massaro, Bravin,
& Vignotto, 2018). The Industry 4.0 phenomenon has in fact let untouched no
industries (Bresciani, Ferraris, & Del Giudice, 2018; Bunn, Savage, & Holloway,
2002; De Bernardi, Bertello, & Shams, 2019; Rachinger et al., 2018) and technol-
ogies such as cloud computing, mobile computing, 3D printing and big-data analyt-
ics can represent a powerful tool in this regard (Bagnoli et al., 2018). However, the
revolution will allow a radical competitive repositioning of the food system only if
the opportunities offered by the enabling technologies of Industry 4.0 will be
exploited to design new business models (Chesbrough, 2007).
In particular, the blockchain has attracted the attention of both scholars and
practitioners. This new technology, in fact, allows overcoming the traditional certi-
fication mechanisms by tracking real-time information whose truthfulness is
guaranteed by the participation of all the actors in the food chain (Perboli, Musso,
& Rosano, 2018; Tirabeni, De Bernardi, Forliano, & Franco, 2019). The blockchain
technology has already been applied by both large companies and start-ups operating
in the food sector. For example, the French multinational retailer Carrefour has used
it for the Auvergne chicken product line. Thanks to the blockchain, consumers can
find out how each animal has been bred (e.g., what feed has been used, if antibiotic
treatments have been adopted or not), where and by what farmer, where it was
slaughtered, and so on. Barilla, on the other hand, has entered into a partnership with
IBM as regards the basil product, in order to certify the quality level of the product
and its sustainability-related aspects, providing consumers all data concerning cul-
tivation, such as irrigation and treatments (i.e., pesticides), as well as reducing costs
for wasted goods. Similarly, the Ambrosus start-up,4 headquartered in Zug (Swit-
zerland), has adopted both blockchain and Internet of Things (IoT) technologies to
centralize information whereas different actors of the supply chain can keep
retaining its ownership and assigning specific access rights to it. Thus, IoT sensors
automatically collect environmental, positioning, and quality assurance data, which
feeds a blockchain-based database that stores information in a leakage-proof manner,
dispatching it only to specific actors when and where it is necessary. In this sense,
blockchain seems very suitable to match the needs of each actor constituting a
specific supply chain. Indeed, early stages actors would like to limit the amount of
shared data to the minimum necessary for gaining the next actor’s trust. Conversely,
end actors would like to have full transparency about products coming from the early
stages of the supply chain.
Another interesting example of technology applied to the food sector and specif-
ically artificial intelligence is that of Wasteless.5 This start-up, founded in Israel in
2018, aims at reducing the big problem of food waste. Indeed, through its proprietary
machine-learning pricing engine, Wasteless can price products in real-time based on
a series of dynamic variables that include the expiration date, shelf capacity, regional

4
[Link]
5
[Link]
210 7 Innovative and Sustainable Food Business Models

factors, brand strength, on-shelf competition, and more. Prices are displayed on
electronic shelf labels or online checkouts, where consumers can see the product’s
regular price as well as a discounted price for a specific expiration date. In this way,
food levels on the shelf and in stock are continuously monitored and costs related to
both wastes or out-of-stock situations are reduced.

7.7.2 Agri-Tech

Agriculture is an activity that, since its origins, has been linked to technology
improvements in order to be performed more efficiently. Moreover, it has always
requested to deal with managing knowledge and information. Taking note of climate
or seasonal changes and how to deal with them, understanding the differences
between each acreage, thinking about how to improve one crop’s production and
quality level are just a few examples. Digital transformation has been slow in
touching the agricultural world, but nowadays also this sector is living a revolution
in key 4.0. As a consequence, Smart Agrifood, Smart Agri-business, Agri-tech are
all terms that mean nothing more than the use of the latest technologies in the
agricultural sector (Garba, 2019), from IoT or robotics in the field to the use of
blockchain or big data. For example, through detailed photographs of the field, taken
with satellite technologies or drones, it is possible to verify the state of the vigor of
each area composing it. In this way, specific fertilization or harvest plans can be
prepared and productions characterized by homogeneous quality levels obtained.
The same result can be achieved through sensors and algorithms capable of identi-
fying which is the most suitable harvest day based on different biological or
chemical properties of the crops. Further automation can be found in those cases
in which autonomously guided agricultural machines are used, capable of
interpreting the aforesaid cartographic maps and operating within them through
GPS systems and sensors. All those technologies represent an ally of the modern
farmer in realizing the so-called “precision farming”, a series of techniques aimed at
increasing and stabilizing the quality of the yield and contributing to conduct
agricultural activities in a more sustainably, also incurring lower costs (Ivanov,
Bhargava, & Donnelly, 2015).
The Italian start-up Agricolus,6 for instance, offers several services mainly related
to optimizing agronomic processes for supporting farmers and other agricultural
operators and enabling them to make data-driven decisions. This activity can be
performed through modern data collection and analysis technologies aimed at
enhancing precision farming. In this sense, the start-up has developed a cloud
ecosystem able to support decisions that fit with the specific needs of each crop
and can be integrated with agricultural machines. Moreover, satellite imagery’s
analysis can provide vigor and water stress indices or alert for pests and diseases

6
[Link]
7.7 Business Models in the Food Sector: Where Are We Going? 211

that could affect crops. As a consequence, the overall quality of the yield and
product’s traceability can be improved, and the economic and environmental impact
of the agricultural activity constrained. Since using those advanced technologies
requires specific expertise and know-how, the company has also launched an
Academy for professionals and students that want to use innovative tools in their
daily work activity and understand how to manage vast amounts of data and
information.
Conversely, for what regards the use of blockchain in the Agri-tech sector, the
example of the start-up EzLab7 is provided. The company, founded in 2014 in Padua
(Italy), has begun using smart contracts and big-data technologies, based on the
paradigm of the blockchain, in order to vehicle wine information to consumers.
Notably, this information, linked to the traceability and sustainability of raw mate-
rials, the composition of wines, and the processes that have affected them throughout
the production and distribution chains cannot be counterfeited. In this way, tradi-
tional models based on web protocols or RFID technologies have been overcome
and the company expects to apply blockchain and big-data analytics also to other
Agri-tech sectors in the future.

7.7.3 Food Digital Platform

The increasing attention towards sustainability aspects has led to the enhancement of
novel forms of food production, distribution, and consumption aimed at shortening
the food supply chain (De Bernardi, Bertello, & Venuti, 2020; Murdoch, Marsden, &
Banks, 2000; Renting, Marsden, & Banks, 2003). Moreover, pursuing sustainable
development has required companies to adopt a systemic approach, starting to
cooperate with various subjects throughout their value chain, from suppliers to
final consumers (De Bernardi, Bertello, & Venuti, 2019). In this regard, the tradi-
tional food system, characterized by a centralized, dependent, competitive, and
dominating nature, has been challenged by food systems based on decentralized,
independent, community-focused, and sustainable business models (Blay-Palmer
et al., 2018). Social embeddedness, trust, transparency, and sense of togetherness
have become core concepts along the food value chain (Hendrickson & Heffernan,
2002; Kirwan, 2004). An emergent food digital platform which is based on the
concept of the short food supply chain is the Food Assembly (De Bernardi, Bertello,
& Venuti, 2019). The Food Assembly’s platform was first created in France in 2010
and spread across Europe, reaching almost 1300 entities in 2018.8 It facilitates direct
exchanges between local producers and consumer communities that find themselves
creating small temporary local markets. Farmers sell directly to Food Assembly’s
members and pay a 20% tax-free fee. There are no intermediaries: it is a direct sale.

7
[Link]
8
[Link]
212 7 Innovative and Sustainable Food Business Models

Every producer fixes price freely because only they can know how much the product
is worth. The Food Assembly model allows obtaining transparency and trust
maintaining service costs moderate. Another example of digital food platform is
Forward Fooding,9 a company headquartered in London but active on a global level.
Forward Fooding represents the first platform for enhancing collaboration among
entrepreneurs of food and beverage sectors with their relevant partners that has been
ever created. Spurring them to share data with other actors of the network, Forward
Fooding aims at helping those companies to implement more sustainable business
models, adopting technologically innovative solutions, and addressing some of the
issues that currently affect actual food systems through collective data intelligence
activities.

7.7.4 Urban Food

A recent report published by the Ellen MacArthur Foundation (2019) estimated that
for every dollar spent on the current wasteful and polluting food production system,
two further dollars need to be spent in terms of health and environmental costs. The
transition towards a more sustainable system started since the introduction of the
United Nations Global Compact in 1999, which also cities had the opportunity to
join from a few years later in order to contribute addressing the so-called urban food
challenge. In fact, the United Nations estimates that from the 21 megacities existing
in 2015, by 2030 there will be at least 43 worldwide and by 2050 more than
two-thirds of the human beings will populate cities (United Nations, 2018). Mega-
cities represent urban areas in which live more than ten million people and this
phenomenon will leverage cities’ food demand to 80% out of the total. Conse-
quently, huge amounts of food and waste will have to be managed. A company that
has made the fight against food waste its mission is Too Good To Go.10 The business
model of this company, founded in the UK in 2016, is simple but effective at the
same time: restaurants, supermarkets, and hotels have to throw away a lot of fresh
and edible food at the end of the day. Thus, instead of wasting it, they use it to
prepare some mystery bags. Consumers can thus find the restaurants or the other
shops via the geolocation feature on the app and buy that food at lower prices.
Payment is made through the app, through which the customer receives a proof of
purchase that they must show upon pick-up of the meal. Too Good To Go offers a
win-win situation between people and businesses who otherwise would not interact,
reducing the serious problem of food waste.
For what concerns cities, in recent years they have increasingly started to develop
urban food strategies mainly aimed at achieving three objectives (European
Commission, 2017; Olsson et al., 2016). First, enhancing food security and nutrition.

9
[Link]
10
[Link]
7.7 Business Models in the Food Sector: Where Are We Going? 213

Second, promoting the economic development of urban and peri-urban areas, which
can be defined as cities’ extents that also involve peripheries and lands with discon-
tinuous buildings and a minimum density of 40 people/ha (Loibl, Piorr, & Revetz,
2011). Third, protecting and restoring local ecosystems, as well as reducing their
impact on climatic changes. However, a lot can be done in this direction since actual
economic systems are often still based on long food chains. Conversely, shortening
them could help reducing regional food provision’s vulnerability and the necessity to
rely on the global food system (Morgan, 2015). In addition to this, urban strategies
have great power in educating people towards sustainability issues, connected with
both ecological and social dimensions of the food processes and cultural aspects
linked to food’s place of origin. Providing as an example an Italian city, the
Municipality of Milan had developed a new way of thinking about the food system
starting from 2006. As a consequence, together with Fondazione Cariplo, it first
launched a public consultation that involved city departments, universities, busi-
nesses, and other organizations. Secondly, it established a food policy office and its
strategic and comprehensive approach to managing local food challenges, which has
led the city to host the Universal Exposition in 2015 and embrace the circularity
paradigm. Indeed, through the initiative, called Milan Food Policy, the Municipality
has, for example: (i) launched, together with other partners, a food waste hub for
collecting and distributing unused food from private canteens and supermarkets;
(ii) implemented systems for giving value to organic waste; (iii) improved the
logistics for collecting surplus food from private and commercial properties and
generate biogas from organic waste; (iv) introduced fiscal measures to encourage
food donations to food banks and charities; (v) promoted initiatives in school and
through media for raise people awareness about food waste and distributed doggy
bags to let students take over left food from schools’ canteens.

7.7.5 Food on Demand

The different business models which have been emerging in the food sector result
from the combination of opportunities that have been enabled not just by techno-
logical evolution. Indeed, also consumers’ needs have changed over time and market
players have tried to occupy the spaces created by those emerging changes (The
European House – Ambrosetti, 2019). The first emergent kind of business model is
the so-called Just-in-Time Online Delivery, also called Food on Demand. Food on
Demand is characterized by two big differences from the classic home delivery
service: (i) the contact channel between the service provider and the consumer is a
web portal or, much more often, a smartphone app; (ii) the provider of the service
is, in almost all cases, a third party who divide the meal producer from the end
consumer. There are two main typologies of business models based on the concept
of Food on Demand. The first one is based on an actor who simply makes available
its platform, usually a food delivery app, aggregating restaurants and intermediating
between them and end customers (e.g., Just Eat, Delivery Hero, Foodpanda,
GrubHub). The second possible business model is the one in which the dispenser
214 7 Innovative and Sustainable Food Business Models

simultaneously performs the activities of collecting orders via an app and delivering
food to customers at home through its fleet of riders (e.g., Deliveroo, Uber Eats,
Glovo). Moreover, in the Food on Demand model, the dispenser can also take care of
the food preparation part, thus covering the entire value chain. One company that has
recently implemented this kind of activity is the American restaurant
chain Domino’s Pizza. Indeed, alongside its several physical worldwide stores, the
company has launched a website and a smartphone app through which customized
orders can be made and the food delivery state tracked.
Another innovative business model that characterizes this new era for food is the
Food Subscription Delivery. Therefore, some companies offer the customer the
opportunity to sign up for their service, establishing the frequency of the delivery
and what products receiving according to each one’s needs. These services are
oriented to those customers who prefer home-made solutions and research the
genuineness of raw materials so that having the possibility to cook their meals
independently but using high-quality ingredients (e.g., My Cooking Box) or having
ready-to-eat meals (e.g., Freshly, Nestor, MealPro). However, these features can also
be complemented by the desire to minimize the effort and time required for routine
activities such as choosing and purchasing ingredients or providing healthy meals to
people that cannot perform those activities autonomously, such as elders or invalid
people.

7.8 Conclusion

The ferment characterizing the food sector nowadays is leading to the creation of
start-ups exploiting market opportunities by developing new products, new pro-
cesses, and new business models. Usually, these start-ups adopt disruptive technol-
ogies allowing to change the logic of running a business: from the product design
to make it smarter, from managing its entire life cycle, to supply and sub-supply
relationships for ensuring real-time processing; from production processes that are
managed as cyber-physical spaces, to logistics and storage systems (Bagnoli et al.,
2018). An increasing number of start-ups, for instance, is focusing on food trace-
ability, healthiness and safety, and customer satisfaction through customized prod-
ucts and services which are technology-centered.
The enormous creativity and innovation of those start-ups are changing the
pre-existing business models, leading incumbent companies to question their
established models. Internal research and development conducted by large compa-
nies may no longer be sufficient in the years to come. The most suitable solutions
are oriented to cooperation and networking, involving large companies and small
and dynamic start-ups within innovation ecosystems that are based on multiple
partnerships with external research institutions, consulting companies, and univer-
sities. A virtuous example of this trend is that of the Italian company Barilla, which
has created an incubator that allows them to exploit the innovative ideas that are
developed by external actors. The recent explosion of incubators leads to two
References 215

possible future scenarios: a scenario of continuous struggle that would benefit no one
or a collaborative scenario in which different actors are inserted in cross-fertilization
contexts that would favor the creation of synergies. This last solution would also
help the food sector to leave behind the concept of slow-growing that has charac-
terized it for decades and to encourage, at the same time, social and environmental
development.

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Chapter 8
Funding Innovation and Entrepreneurship

Abstract Innovation is generally recognized as one of the key drivers, if not the
main one, for the economic growth and development of a country. Policy-makers are
responsible for creating the conditions in which innovation and technology can
develop and make a difference, especially in advanced economies. This chapter
addresses the main sources of funding for entrepreneurs and start-ups. We will
discuss the financial constraints, or the financing gap, that affects the start-ups and
small-medium enterprises (SMEs), with a focus on the early stages. Moreover, the
chapter will provide an overview of Venture Capital and Corporate Venture Capital,
as they are the organizations, which provide finance to innovative firms that are the
most crucial and game-changing in the life of a young company. Finally, we will
explain who Venture Capitalists and Corporate Venture Capitalists are, how they
operate, how they are structured, and what their main goals are.

Keywords Venture capital · Corporate venture capital · Open innovation · Startups ·

Investment cycle

8.1 Introduction

Investments in innovation drive the technological change of a country and therefore

affect the country’s ability to foster a positive environment for innovation and its
long-term growth. In a more connected, knowledge-based, and global world, where
the access to sourcing of services and technologies is virtually open and borderless,
the most developed economies are more and more dependent on the need to secure
the necessary practical skill levels and knowledge for maintaining a technological
advantage and prevailing against other economies (Battisti, Miglietta, Nirino, &
Villasalero Diaz, 2019; Ferraris, Santoro, & Bresciani, 2017; Gualandri &
Venturelli, 2008; Vrgovic, Vidicki, Glassman, & Walton, 2012).

Co-authored by Luca Morandi—Indaco Venture Partners, Milano, Italy, e-mail: morandi.

luca@[Link]

© Springer Nature Switzerland AG 2020 223

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
224 8 Funding Innovation and Entrepreneurship

This ‘attitude was one of the driving forces, for instance, that after the end of
World War II caused a massive amount of US public spending poured into the
research sector. However, the war was not really over, the Korean War and the Cold
War would break out shortly after and the US government could not afford to lose
ground on the quest for supremacy.
The trigger event took place on 4 October 1957 when a small 58 cm diameter
polished metal sphere with four radio antennas to broadcast radio pulsed was
launched from a remote location of southern Kazakhstan into an elliptical low
Earth orbit by a country once portrayed as a “third-world backwater with a bellicose
foreign policy” (Blank, 2009). That small sphere was the Sputnik, the first man
device in space, and it was launched by the Soviet Union from the Baikonur
Cosmodrome in Kazakhstan.
Traumatized by the belief that the country was sliding behind the Soviet Union on
innovation, the US created a new government agency to spurt innovation by funding
new companies. The innovation industry, thus, picked up in 1958, when the Small
Business Investment Company (SBIC) Act was approved and, according to Mark
Heesen, former President of the National Venture Capital Association “a significant
boost was given to the industry with the passage of the Small Business Investment
Act.” “The SBIC guaranteed that for every dollar a bank or a financial institution
invested in a new company, the US government would invest three dollars, so for
every dollar that a fund invested, it would have four dollars to invest” (Blank, 2009).
The SBIC was a national initiative. However, some big companies such as Bank of
America, Firemans Fund, and American Express set up their SBIC fund in Northern
California to invest in the emerging microwave and new semiconductor start-ups
with premises located south of San Francisco; 60 years down the road, everybody on
Earth is aware of the incredible innovation ecosystem, which is now called Silicon
Valley.
In the last years, the new venture ecosystem has been radically changed and
reshaped by the emergence of alternative sources of early-stage finance opportuni-
ties, including incubators, accelerators, science and technology parks, university-
affiliated seed funds, corporate seed funds, business angels, and both equity and
debt-based crowdfunding platforms. At the same time, large financial institutions
that have traditionally invested in late-stage and mature companies have increasingly
diversified their investment portfolios to “get into the venture game”. In some cases,
they made it through the traditional closed-end funds model, while in other cases
through direct investments and co-investments alongside the closed-end funds
(Bonini & Capizzi, 2019, p. 137).
Financing and supporting innovation and entrepreneurship, as already mentioned,
has direct impacts on the long term ability of a country to position itself before
the other countries when it comes to technological change, therefore achieving
high economical competitive advantage. However, measuring the short to medium
term impact of policies adopted by policy makers is not always an easy task to
accomplish.
The financing activity of innovation involves a vast number of heterogeneous
actors who are dependent on the following main features (Brown, Fazzari, &
Petersen, 2009; Hall & Lerner, 2010; Kerr & Nanda, 2015):
8.1 Introduction 225

(i) The development stage of the idea that is intended to be financed. For
instance, a research project would rather be more attractive for a Technology
Transfer fund or a University linked investment vehicle than to a Growth
Capital Fund, which usually deploys its money on more, advanced and devel-
oped projects, which are typically post-seed and early-stage phases.
(ii) The geography where innovation takes place. In a more developed and
vibrant innovation ecosystem, there would be a wider number and type of
financers able to cover and provide finance to the broad and long journey that
is inherent in the innovation process, such as business angels, venture capital
funds, and corporate venture capitals. As opposed to that, a less developed
ecosystem would be mostly composed of government-backed investment vehi-
cles, companies, and universities as the main stimulators of innovation
processes.
(iii) The type of innovation that is intended to finance. Innovation in biotech, for
instance, is mostly supported by the investments coming from corporate ven-
ture capital arms of big pharma companies and industry-focused investment
funds.
Several publications and studies have examined the impact of innovation on the
growth of a country by analyzing the impact of venture capital investment on firms’
performances. The main conclusions are that venture capital funds provide a boost to
the performance of a company not only by the mere supply of finance, but also by the
enhancement of professionalism of firms’ management which is caused by the
expertise, services, and knowledge that venture capital funds bring to the companies
(Gualandri & Venturelli, 2008).
This emphasizes the importance of the role of venture capitalists and their
possible funding streams in the food sector, which is leaving behind the concept
of a slow-growing sector (Hou & Mohnen, 2013; Rama, 2008) by actively engaging
in the creation and growth of innovative startups.
The advisory firm PwC conducted a study designed to investigate the perfor-
mance of a sample of 500 portfolio companies of Venture Capital and Private Equity
funds over a 10-year period, i.e., from 2007 to 2017 (PwC, 2019). The outcome of
the study shows than when it comes to financials (e.g., revenues, and earnings before
interest, text, depreciation, and amortization—namely EBITDA) and employment
rate growth, portfolio companies backed by a Venture Capital and Private Equity
funds have much higher performances when compared to the national figures (e.g.,
GDP) and other similar Italian companies.
With regards to revenues, companies backed by Venture Capital funds experi-
enced a 7.1% Compound Annual Growth Rate (CAGR)% growth compared to the
national benchmark of a low single-digit 2.0%. When it comes to EBITDA, the same
companies grew by 5.6% CAGR% compared to the country average, which was
rather negative (0.5%).
The same trend applies to the employment growth, which for venture capital and
private equity-backed companies grew by almost 5% (4.8%) CAGR compared to the
negative national average of (0.1%).
226 8 Funding Innovation and Entrepreneurship

In this chapter, we discuss the financial constraints, or the financing gap, that
affect startups and small-medium enterprises (SMEs), and in general every innova-
tive firm or project which are intended for finance and the different sources of
financing for each stage of development of the innovative process.
This chapter will then be focused and provide a complete description of two of the
main dimensions that play a leading role in financing innovative firms, Venture
Capital funds and Corporate Venture Capital. Moreover, it will provide an overview
of who they are, how they operate, how they are structured, and their primary goals.

8.2 The Supply of Finance

As previously discussed, the sources of finance for innovative firms are broad and
involve a large number of organizations and parties depending on multiple factors,
namely the development stage of the idea, the geography where the innovative firm
raises the money, and the type of innovation underlying the innovative firms. Worth
remembering here is that given the complexity of the innovation process and the
possible type of innovations that may occur at the end of the process, we should use
conventions and simplify the type of innovations into three main categories (Aber-
nathy & Clark, 1985; Chesbrough, 2010; Drucker, 2002):
• innovation of the product: the development of a new product or service, which
encompasses improvements on various features (technical, materials, application,
etc.);
• innovation of the process: the changes in the way a product or a service is built,
including changes in the equipment and the technology used in manufacturing;
• innovation of the business model: “enhancing advantage and value creation by
making simultaneous—and mutually supportive—changes both to an organiza-
tion’s value proposition to customers and to its underlying operating model.”
(BCG, 2019). In disruptive and rapidly changing times, this type of innovation
could be even more important and lasting than the first two.
Innovative firms are built on the concept of fostering innovation and growth.
However most of the time, innovation, growth potential, and the vision behind these
ventures may not be easily understood. In fact, by definition, innovation is some-
thing that was not present before. So, requires an entrepreneurial attitude and, in
general, the ability to discover the potential of a product, a macro trend, or a
specific technology. This attempt to foster innovation and disrupt the traditional
economics mechanism and business models, was defined by professor Clayton
Christensen from the Harvard Business School in the early ‘90s as one of the key
features that differentiate start-ups from established firms, as the latter would have
too much to lose from the innovation. This is the reason why, for instance, the
traditional book retailing industry was disrupted by a young start-up, Amazon, rather
than by other long-competing traditional retailers (Damodaran, 2010).
8.2 The Supply of Finance 227

The risk associated with innovation processes creates hurdles also for traditional
financial institution firms when it comes to evaluating a potential investment in a
young venture or startup. Indeed, these companies have no or limited history, small
revenues (if any), negative cash flows, and are strictly dependent on equity to
survive. Therefore traditional evaluating models such as Discounted Cash Flow
(DCF) may not be totally appropriate and should definitely be adopted carefully.
So, several adjustments are suggested, as typically terminal value, would represent
unusual high percentages of the total firm value (e.g., 80%–90%) or even more of
enterprise value.
The main reason why innovative firms have negative cash flows or, in general,
operate in a constant cash constraint environment lies in the fact that most of the time
the product or service they are willing to sell is usually not market-ready. Conse-
quently, it does not generate cash and this creates a financing gap that could be
covered, in theory, in two ways (Caselli & Negri, 2018; Schwert, 2018):
• borrowed capital;
• equity capital.
In an ideal world, with no market failures such as information asymmetry, moral
hazard, and adverse selection, the banking system and other providers of interest-
bearing debt would provide the financial resources needed to develop innovative
firms. In practice, though, this scenario is not applicable, if not in rare cases of late-
stage venture deals, where a venture-debt component is considered. The main reason
why the traditional banking system is reluctant to provide financing to innovative
firms or startups is related to significant information asymmetry involved, which
creates challenges in defining an effective pricing policy of the debt associated.
Innovative firms are risky and the degree of uncertainty concerning the return on
investment, and the probability of failure are both very high. While equity investors
would benefit from the upsides, traditional lenders would set fixed interest rates.
Moreover, for the reasons explained before, they would either decide not to grant
any loan or to grant a loan with such high interest rates, thus rendering conditions
that would be deemed unacceptable by new ventures and startups (Gualandri &
Venturelli, 2008).
Innovative firms have a high level of envisaged profitability and an equivalent
high level of execution risk; later in this chapter we will see, in fact, that only a
handful of <20% of innovative firms survive the startup process and become mature
enterprises. This example highlights why equity capital is more suitable for this time
of investments, since it is less expensive and better suited for the contextual startup
circumstances compared to borrowed capital.
Figure 8.1 illustrates the main sources of finance for innovative firms across their
lifecycles, from the outset of the idea throughout the middle stages of development
to maturity. As mentioned before, each stage of development of the company
involves specific institutions or organizations able to provide finance to the firms.
Every mature company has somehow experienced five phases throughout its
lifecycle: (i) idea, (ii) startup, (iii) development, (iv) growth, and (v) maturity
(Ndou, Secundo, Schiuma, & Passiante, 2018). There is in fact one additional
 228

Stage Idea Start-up Development Growth Maturity

Private Equity
Banks
Late stage Venture Capital Public market
Expansion/Growth funds
Early stage Venture Capital Corporate Venture Capital
Corporate Venture Capital Family Offices
Family&Friends Business Angels
Grants Family Offices
Own savings Accelerators
Competitions Business Angels

Cash flows
Challenges Seed funds
TechHubs
Incubators
Universities

Time
Valley of death

Investment Pre-seed Micro-seed/Seed Early stage Later stage Buy-out/IPO

Fig. 8.1 The investment cycle. Source: Adapted from Cardullo (1999)
8 Funding Innovation and Entrepreneurship
8.2 The Supply of Finance 229

phase of the business lifecycle of a company, the decline, which will not be taken
into consideration either in this chapter or in the remainder of this book. Indeed, it is
focused on the innovative processes and, therefore, on the earlier phases of a
company, which lead to its maturity. However, we will provide a high-level descrip-
tion of the last phase of a firm; in this phase, the company approaches its final stage
as revenues and margins (and thus cash flows) begin to decline slowly. During the
decline phase, a company typically has two to options: (i) shut down, or (ii) adapt to
the changing environment and modify its strategy (e.g., business model, market
approach, product features).
During their lifecycle, companies encounter several types of external financial
support involving many types of organizations and institutions as their lifecycles
progress, here are the main ones divided by stage.
• Idea. This is the development stage with the highest mortality rate. It is improper
here to consider it an innovative firm; most of the time innovation is mostly
related to a research project or embryonic ideas of a company. The riskiness
associated with these types of projects makes them the perfect candidate to be
financed by universities, competitions, and, most likely, own finance. The type of
finance provided here is called pre-seed.
• Startup. Here, the innovative project starts to be defined. Family and friends, as
well as business angels, are the ideal sources of finance as they will more likely
provide finance to support the entrepreneurs rather than the project. Therefore,
personal contacts would play a crucial role. However, also public finance, such as
grants and institutional money coming from accelerators or seed funds, would
play a relevant role. Public measures will also create indirect support to the start-
up since they often provide tax relief and other tax benefits to investors. The type
of finance provided here is called micro seed/seed.
• Development. This might be considered as the most delicate phase, as the
company has now been established, people work at the firm, but the product or
the service might not be market-ready and thus cash flows are still negative.
Venture Capital and Corporate Venture Capital are the ideal source of finance
here as they will not only provide smart money but also will bring knowledge,
professionality, and network. Moreover, most of all, they will cause the company
and the entrepreneurs to switch their mindset towards a more managerial attitude
compared to earlier stages. Public measures might also provide some sort of
indirect support with the creation of the so defined matching funds, investment
vehicles backed by the government which basically invest the same amount of
money (match) that another qualified investor has invested in the startup in order
to generate a leverage effect. Family offices and business angels invest in this
stage too. The type of finance provided here is called early-stage capital.
• Growth. This phase can be considered independent of public intervention as it is
likely that the company is already selling its product or service; cash position has
reached its equilibrium or, in some cases, the company generates positive cash
flows. Venture Capital (especially Late Stage Venture Capital) and Corporate
Venture Capital still represent the best option to finance the growth of innovative
firms. Alternative funds such as the growth/expansion capital funds, otherwise
230 8 Funding Innovation and Entrepreneurship

defined also early-stage Private Equity funds invest in this stage too. The type of
finance provided here is called later-stage capital.
• Maturity. In this final stage, the company has reached its maturity. Cash flows are
positive and the Year Over Year (YoY) revenue growth begins to decelerate as
the company has already exploited most of the growth alternatives. In this case,
there are two options, IPO (Initial Public Offering) and Buy-out, which in some
cases could be explored simultaneously. In fact, in this case, entrepreneurs and, in
general, shareholders of the company seek to maximize their return of investment
and therefore they test two alternative options in parallel in a process called dual-
track and decide at the end which of the two suits best in terms of reliability and
pricing of the company. The type of finance involved or provided here is both the
IPO or Buy-out.

8.3 Venture Capital

A Venture Capital (VC) fund is an investment vehicle that provides equity financing
to companies in their early stages of development. Generally, this is done through a
share capital increase, with the objective to support the growth of the company and
eventually sell its shares, or the entire company, benefiting from the difference
between the amount invested and the amount cashed-in at the exit (Caselli &
Negri, 2018; Gladstone & Gladstone, 2004).
VC is part of the broader Private Equity industry and could be divided into two
groups which are classified by the type of target company where the VC invests.
• Early Stage. Typically, the VC that operates in this segment invests in post-seed
and early-stage companies. The type of risk associated with this investment is
very high, as the rate of mortality is high. Usually VC funds invest directly in the
shareholding capital of the company through a shareholders’ capital increase.
However, there are alternative options for financing in this stage, such as con-
vertible notes and comparable structure, which are essentially loans that investors
provide to the company that could be converted into equity in case of a trigger
event. Notably, most of the time, this event is the next funding round or a specific
commercial milestone, the accomplishment of which would give the investor the
right, but not the obligation, to convert its loan into the equity of the firm.
• Late Stage. This type of fund invests in companies, which have already over-
come the valley of death. They have a proper management team leading the
company, the product or service (excluding biotech or some med-tech company)
is definitely market-ready, and indeed, the company is already making revenues.
In this case, funds invest in equity directly as the company as already accom-
plished the main milestones typical of earlier stages and require finance to provide
a boost to the development of the company. Sometimes expansion capital is also
considered part of the Late Stage venturing activity. However, this type of
financing is mostly seen in more mature companies and does not necessarily
need to be invested in innovative firms.
8.3 Venture Capital 231

Table 8.1 Life cycle phases and types of operation

Type of Shareholding
Stage investment acquired Leverage Risk Rationale Goal
Startup Micro-seed/ Minority/ None Very Idea fine Proof of concept
seed majority high tuning
Development Early stage High Business Industrialization/
creation first market test
Growth Later stage Minority High/ Scale up Revenues ramp-up/
medium internationalization/
M&A
Source: Adapted from Gervasoni and Sattin (2015)

Table 8.1 summarizes some of the main characteristics of the investment in

innovative firms sorted by stage of intervention and, thus, type of investment.
It is clear that neither Early Stage funds, which invest in start-up and development
stage, nor Later Stage funds make use of financing leverage in order to perform the
investment. On the contrary, they invest their finances (i.e., their private equity)
directly in the company, or in some cases, to buy residual shares in a secondary
transaction from some small shareholder willing to sell. Leverage is, instead, heavily
used by Buy-Out funds, which usually borrow money from banks or other financial
institutions which lend them the finances (called acquisition financing facility) to
buy-out the target company, in addition to their private equity. Most of the time, a
typical buy-out deal will be structured with 70% financial resources needed to buy
the company provided by the banks, while the remaining 30% will come from the
funds; the acquisition financing is then transferred to the acquired company.
The debt gets repaid over time by the company and therefore, without considering
any development of the company acquired, i.e. acquired and sold at the same price.
This simple and clear structure will be sufficient for the Buy-out fund to make a good
return on investment since, at exit, its shareholding capital will have a greater value
since the company would have already partially repaid its debt. From this, the
resulting equity/debt structure could be, for instance, 50%–50%, which will allow
the Buy-out fund to make roughly 1.7 Cash-on-Cash (CoC) multiple on its
investment.
This structure could be used in case the company has reached its maturity stage
with positive cash flows. Indeed, it will be able to repay the acquisition financing
facility and reduce the total amount of debt in the company. Conversely, that is not
the case in Early Stage or Later Stage transactions, where companies live in a
structural equity gap.
This short example and comparison between Buy-Out funds and VC funds was
provided in order to understand the complexity and the difficulty of venture capital.
In fact, they need to both make careful choices in identifying the right target
companies and pick up the most promising ones that will allow them to make the
expected CoC multiple returns.
The activity of a Venture Capital fund is quite broad and difficult to classify.
However there are four stages throughout the lifespan of a VC, which are common
232 8 Funding Innovation and Entrepreneurship

for every structure (Drover, Busenitz et al., 2017; Drover, Wood, & Zacharakis,
2017; Ruhnka & Young, 1987):
(a) Fundraising. It is most commonly used for startups, whereas funds could be
somehow defined as a startup too. As we can see from Sect. 8.3.1 of this chapter,
the VC funds invest the finance provided by other investors, typically Fund-of-
Funds, High Networth Individual Funds (HNWI), Family Office, Pension
Funds, and Banks, to name a few. Therefore, before starting their typical activity,
they will need to raise money from external parties. This could be a time-
consuming activity, which on average, could last approximately 1 year and a
half and is divided into a few steps, or closings, where the incremental amount of
finances are committed to the VC funds. The most important one is the first
closing, which is the minimum amount of capital needed for the fund activity to
start. Example: A VC fund starts its fundraising activity with a target raise of
€100 M and the first close of €30 M, this means that before reaching €30 M, the
activity of the fund cannot start.
(b) Deal screening. This is a crucial phase of any fund, also private equity. How-
ever, given what we said before, VC funds must act more carefully in identifying
the right target companies. During this activity, the investment team of the fund
screen and evaluate a large number of potential candidates (likely, for a medium
size fund, around 600–800 per year) for being a portfolio company. On average,
out of the total targets evaluated, only a handful of them receive the investment,
with an impressive low “success rate” figure of 1–2% of companies that get
funded by the VC fund. Part of the evaluation process includes also the due
diligence phase, where the investment teams, together with external consultants
(e.g., business consultants, law firms, financial consultant, etc.) conduct a thor-
ough investigation on multiple aspects of the company such as market potential,
product/service distinctiveness, financial strength of the business plan, and any
potential issues with the law of fiscal authorities, etc., with the objective to
confirm the initial idea of the company, or opposed to that, sufficient elements to
pull back from the transaction.
(c) Investment decision and portfolio management. Once the due diligence phase is
completed, the investment team members will manage deal structuring and will
define and negotiate the terms and conditions of the investment with the innova-
tive firms’ founders and shareholders. Once the investment is made, the second
most crucial activity of a fund begins, the portfolio management; this phase
involves the value creation, or destruction, of the portfolio companies. Typically
this activity is carried out both through a formal support, since most of the time
investment team members sit on the Board of Directors of the portfolio compa-
nies, and through informal support, hence a constant backing, support, and
teamwork with the management of the companies in order to create an effective
strategy for the company, challenge and review the business plans, provide
support on business development and people management, lead on subsequent
financing rounds. This type of support is called Hands on Approach, which is
very common in the VC industry, so much so that in some cases, especially with
super-early stage companies, this could also be called company building.
8.3 Venture Capital 233

(d) Exit. In this phase, the investment team is fully focused on extracting the value
from the investment made years earlier. There are essentially three types of exit:
(i) Initial Public Offering, (ii) Acquisition (both from a Private Equity and a
Company), or (iii) Liquidation. In the first two types of exit, VC funds make a
profit or recover the investment made (1.0x CoC multiple), while with the latter
it is unlikely that the funds will ever get their investment back. It is rather more
common that, in this case, the funds will be required to pour more money into the
company. Contrary to popular perception, successful exits play only a minor role
out of the total portfolio companies as only ~20% of them create profit for the
fund (the VC Funnel, reported later); however, that 20% can compensate and
outmatch the other 80% failures.
In order to be effective, flexible, and quick, every VC fund is organized following
a pre-defined general framework of clear rules, guidelines, and roles within which
the different bodies of the fund will act with certain level of freedom. There are four
pillars under which every fund is structured:
(a) structure: defines how and when capital will be deployed at fund level;
(b) investment strategy: defines where, how and how much, the fund will invest;
(c) corporate governance: defines the decision process and bodies involved;
(d) alignment of interest: defines the type of engagement and incentives of fund
bodies.

8.3.1 Structure

The Venture Capital fund is the vehicle through which the investments in the
portfolio companies are made. Funds are usually structured as closed-end funds
(difference between closed-end fund and other alternative structures will be
discussed in coming sections) with a typical maturity of 10 years and is organised
with the characteristic GP/LP layout.
(a) GP (General Partner): a fund manager, or team of people, that manage an
investment. A GP can manage more than one fund at once and also in different
asset classes, such as venture capital, private equity, private debt, infrastructure,
and so on. GP also invests an amount of money (1–2% of fund capital) acquiring
fund units in order to share with the LPs the same risk-reward. The GP charges a
management fee every year to the Limited Partners (LPs) in order to support the
fund activity (e.g., people, staff functions, rent). Moreover, in order to be
encouraged to overperform, it receives a certain percentage (usually 20%) of
the surplus above the hurdle rate of the fund, the so called carried interest
(discussed in further detail in the coming sections).
(b) LP (Limited Partner): the legal status of an investor in an investment fund, which
has limited rights and obligations and does not interfere with the management of
the investments or portfolio companies. LPs acquire units of the fund by
234 8 Funding Innovation and Entrepreneurship

committing to an investment in the fund until the drawdown. As a return,

they will receive the hurdle rate (although not given for granted), which
is the minimum cumulative interest rate (5–6% in venture capital, 8–9% in
private equity) that the GP envisions the single fund will make. In case
overperformances triggered the carried interest, they will receive, on top of the
returns gained with the hurdle rate, also the surplus in returns, net of carried
interest.
There are also other features which define the structure of a fund:
(a) Closed-end vs. Open-end. The closed-end structures envision an initial capital
injection or commitment from investors, which is defined in value. Therefore,
there is no possibility to increase the amount of money managed and it is
unlikely that any change in investor (LPs) composition will occur. An open-
end structure, instead, envisions various capital injections over the life span of
the vehicle, which may also differ in terms of amount. As opposed to the closed-
end structures, in the open-end structure multiple cash injections occur over time
and new LPs are allowed to come in.
(b) Capital usage. There is a basic difference between funds with allocated capital
and funds which use a capital call in order to draw down the amount needed for
the investments. In allocated capital structures, LPs provide the whole amount of
money required by the fund at the incorporation date. In capital call structures,
investors provide the committed amount of money to the fund upon a call from
the fund managers.
(c) Duration. There are funds limited in time, where at the time of capital commit-
ment from LPs is defined by how long the fund will last and how the lifespan
of the fund will be divided. Typically, it is split in three phases: (i) Investment
period (usually 4–5 years), when the investments in portfolio companies are
made; (ii) Management period (usually 5–6 years), when the value creation and
subsequent exit of portfolio companies happens; and (iii) Grace period
(usually 2–3 years), a potential extension of the fund duration in case there
remaining companies in the portfolio of the fund. As opposed to that, in the
unlimited structures, GP/LP do not define any specific deadline or timeframe
that the fund activity should be compliant with. This structure, defined evergreen
funds, provides more freedom and is less common compared with the first ones.
Funds limited in time are, in general, preferred by LPs because they enable them
to see the real returns from the investment activity within a pre-defined time
(Gualandri & Venturelli, 2008).

8.3.2 Investment Strategy

The investment strategy of a fund defines the perimeter within which the investment
team will act with independence.
8.3 Venture Capital 235

A clear and well set out investment strategy could increase the effectiveness and
flexibility of the decision process, easing the deal origination and execution as well
as the management of the portfolio companies (Bernstein, Giroud, & Townsend,
2016; Drover, Wood et al. 2017).
According to best practices, an investment strategy must set out to define few
clear elements in order to keep the fund’s structure and investment team focused and
aware of the mission (Gladstone & Gladstone, 2004; Ruhnka & Young, 1987).
Usually, the investment strategy of a fund defines five fundamental characteristics.
(a) Ticket size. The amount of money that can be allocated to a single investment, for
instance, as the first investment in a portfolio company, as well as the cumulative
investments made in the same portfolio company as fund managers (and risk
allocation standards) want to avoid risk concentration.
(b) Type of investment. It defines the adoptable investment strategy in a company
such as investment in equity, shareholder’s loan, convertible notes, listed stock,
and so on. In fact, investment funds, especially in venture capital, not only invest
in equity but also in other types of securities, which allows mitigating the risk
and/or increasing the benefit in case of upsides. For instance, it is quite common
in seed or early-stage investments to subscribe to a convertible note first, instead
of an equity investment. This note, which is basically a convertible loan, allows
the fund to convert the loan into equity at the following financing round at a
discount compared to a pre-money valuation of the round itself and, thus,
receiving shares at a lower implicit valuation.
(c) Stage. It defines the stage of the company where the fund is allowed to invest,
such as seed, early-stage, or late-stage venture capital investments. An invest-
ment fund could also have multiple investment strategies within the same asset
class (e.g., private equity vs. venture capital) in order to mitigate and diversify
the risk associated with one specific investment strategy. So, for example, a
venture capital fund could invest at the same time, and with specific limits, up to
75% in late-stage venture and up to 25% in seed investment.
(d) Scope. This characteristic applies both to a geographical and an industrial scope.
In fact, a fund could have an investment strategy which is industry agnostic, so
that it can make investment in every industry possible. As opposed to that, a fund
could also have a focalized investment strategy in a single industrial field, such as
life science, food, and agro-tech. This classification also applies to the geograph-
ical scope which could be either home country-focused, or could have a broader
scope, however, excluding the few global investment funds; it is more common to
have an investment strategy with an overhang on the home country with the
possibility to make investments also outside the country up to certain limits.
(e) Role. Defines basically how the fund will (or would like to) act during the
investment round between (i) a leading role and (ii) a follower role. In fact,
venture capital deals, as opposed to traditional buy-out private equity deals,
mostly take place as a co-investment, or syndication, with other investment
funds. Therefore, every deal has a deal leader and a deal follower. For
instance, leading the round not only means investing the majority of the round
but also getting better deal conditions or specific governance rights.
236 8 Funding Innovation and Entrepreneurship

8.3.3 Corporate Governance

From the organizational point of view, the corporate governance of an investment

fund is quite complex and articulate, and many independent funds at international
levels adopt a structure composed of four different corporate bodies.
(a) Board of Directors (BoD). This body works at a GP level and should be
composed of executive and non-executive members with an appropriate balance
of skills, experience, and knowledge. BoD is responsible for setting the strategic
goal of the investment company (GP) and provide a strong link with the LPs. Its
main responsibility, though, is to take care and be responsible for the approval
process of the investment, add-ons, and divestment.
(b) Investment team. It is the most important body of an investment fund structure,
as it is responsible for creating value or destroying it for the LPs. Composed of
operative members with investment experience, complementary skills, and
background. It is responsible for the investment activity and portfolio manage-
ment of the fund, including deal screening, deal structuring, portfolio monitor-
ing, and business development and fundraising.
(c) Investment committee. This body cooperates and assists the investment team as it
provides guidance on the evaluation of the investments, integrate investment
teams with specific skills, and knowledge and provide network opportunities.
It is made of external and independent members; however, important LPs,
which have made significant investments in the fund, could also nominate
some members.
(d) Advisory board. This is a discretionary body composed of external members
appointed, usually, by the most important LPs or anchor investors. It verifies the
coherence between the investments made and the investment strategy of the fund
and also assesses any potential conflict of interest.
From the authorization process point of view, the key role, as mentioned earlier, is
played by the BoD (or sometimes the executive committee, a body nominated by the
BoD standing for it) which also have the legal responsibility of approving or not
approving any investment transaction and any transaction on the portfolio.
In this regard, the investment team, in order to minimize the possibility that the
BoD rejects an investment proposal, presents the same proposal to the Investment
Committee in the first place, which should provide an initial qualitative filter and
support in refining the investment proposal.
As showed in Fig. 8.2, which provides an overview of how a typical investment
process is structured, the investment team is involved in every single step of the
deal process, from deal flow screening until the exit. The BoD and the Investment
Committee, instead, are involved only in the review of the process and in the
approval of the operations structured and outlined by the Investment Team.
The way decisions are adopted in investment funds represent only the final
process of screening and evaluation of several investment opportunities where
only a handful of around 1–2% receive their first investment. Going forward, once
 Rejected
The Investment
8.3 Venture Capital

Team submit the

deal to the
Aer the approval of Rejected
Investment
Committee for a non the Investment
binding approval Committee the deal
Approved is proposed to the
Board of Directors
for definive
approval Approved

Advancement Advancement Advancement

Key Players Involved Investment Investment Board of

in the decision flow Team Committee Directors

Fig. 8.2 Investment process. Source: Own elaboration

237
238 8 Funding Innovation and Entrepreneurship

Round 1 Round 2 Round 3 >Round 4 Total

Exits
make returns to the Fund 12% 6% 3% 1% 22%

Self-sustaining
no failure but no returns 36% 8% 8% 5% 58%

Dead
fail completely 12% 3% 3% 2% 20%

Round
A Round
B Round
>Round
target screening

C
D
1-2%
receives the
investment
funnel 40% 23% 9% 1%

Fig. 8.3 The startup funding cone. Source: Own elaboration

the company receives its first institutional investment round (typically a seed round),
the natural selection process of startups gets even tougher with very small numbers.
Roughly only 20% of the portfolio companies of venture capital funds managed to
raise their third or fourth round, which could correspond to a robust Series C or D
round. This is alternatively known as the Startup Funding Cone, as shown in
Fig. 8.3.
Before receiving any investment, and this applies not only to the first seed
institutional investment but also to later-stage investment, a very disciplined and
somehow rigid selection process takes place, that is why only 1–2% of the analyzed
companies receive the investment. In this stage, investment teams, supported by
external advisors, carry out analysis and audits on multiple aspects, namely the most
important ones are:
(a) Market and business due diligence. It provides a better understanding of the risk
and potential of both the product and service of the company and the specific
market in which the company operates and how it is positioned compared to
competitors, both current and potential. This analysis will also help perform
stress tests and challenges to the original business plans presented by the
company.
(b) Financial and fiscal due diligence. It assesses the truthfulness of past financial
figures and also provides support in assessing the likelihood of future figures. It
helps to identify potential financial and fiscal issues regarding actions taken
before the investment by the management team of the company.
8.4 Corporate Venture Capital 239

(c) Legal due diligence. As well as the financial due diligence, it assesses the
potential issues of a legal nature that may affect the company and the business,
and therefore, might have an impact also on the valuation of the company.
(d) Environmental due diligence. This has the same goal as legal due diligence but
takes into consideration environmental regulations and legislation that may have
an impact on the company business.

8.3.4 Alignment of Interest: Carried Interest

The alignment of interest between the LPs and the other bodies involved in the
management of a fund is a fundamental pillar of the structure of closed-end GP/LP
structures as it creates a strong connection and alignment between the interest of the
LPs and the GP (for instance the investment team). Wealth creation is primarily
derived from an extra performance fee (carried interest), which is distributed to the
GP only in case of returns to LPs above a certain minimum return rate (hurdle rate)
to LPs that GP was committed to.
Basically, at the outset of the lifespan of the fund, GP invests a portion of the total
size of the fund. In general, 1–2%, which is thus subscribed by both the GP and the
LPs acting as investors in the fund. However, the units of the fund acquired by the
GP committing to the investment have similarities to the mechanics of the preferred
shares in public companies, for instance. In case the total capital gain of the fund
reached and outmatched the hurdle rate, the extra gain is shared by GP and LPs
disproportionately in favor of the GP. Generally it follows the 80/20 ratio, which
means that in this case, although GP has invested in 1% of the fund, in case of
an extra return, it receives 20% of the capital gain above the hurdle rate.
In order to align the interest between the LPs, GP, and other relevant bodies of an
investment fund, carried interest is also subscribed not only by members of the
investment teams but also by members of the investment committee as a further
incentive.

8.4 Corporate Venture Capital

Corporate Venture Capital (CVC) is the set of activities aimed at fostering innova-
tion both outside and inside the same company promoting corporate venturing
activities. It allows corporations to rapidly adapt and respond to changes in the
markets by acquiring a better point of view on the potential opportunities and
uncommon understanding of the potential threats (Chesbrough, 2002; Dushnitsky
& Lenox, 2005).
In the literature there several definitions of Corporate Venture Capital definitions
exist, but since corporations are more complex and heterogeneous compared to
240 8 Funding Innovation and Entrepreneurship

investment funds, it is difficult to find one single definition that could be used a true
representation of the phenomenon.
However, there are two definitions provided by the British Venture Capital
Association and one by Professor Henry Chesbrough that includes most of the
possible variations:
• BVCA: “Corporate Venture Capital is a form of equity investment that has
evolved greatly since its emergence around 40 years ago. It is a ‘catchall’
name used to describe a wide variety of forms of equity investment exercised by
corporations. At the most basic level, Corporate Venture Capital describes an
equity investment made by a corporation or its investment entity into a high
growth potential, privately held business” (BVCA, 2012).
• Professor Henry Chesbrough: “Corporate Venture Capital is the term used to
describe the investment of corporate funds directly in external start-up compa-
nies. Our definition excludes investments made through an external fund man-
aged by a third party, even if the investment vehicle is funded by and specifically
designed to meet the objectives of a single investment company. It also excludes
investments that fall under the more generic rubric of “corporate venturing”, for
example, the funding of a new internal venture that, while distinct from a
company’s core definition and granted some organizational autonomy, remain
legally part of the company. Our definition does include, however, investments
made in startups that a company has already spun off as independent business”
(Chesbrough, 2002).
Over the last years, the number of corporate venture capitals launched by
corporations has increased rapidly. As a consequence, the corporate venture capital
funding surged reaching its all-time high in 2018 with global activity of over 2700
deals and approximately $53Bn funding, corresponding to a 2.6 and 5.3 increase
respectively compared to 2013 figures.
Corporations are facing a big challenge to hunt for growth as mature markets are
facing slower economic growth, while the middle class in developed geographies is
shrinking. In this context, corporate venture capital represents an alternative and
effective way to pursue growth compared to traditional ways. Traditionally, in fact,
companies pursued growth essentially in the following two ways:
• Organic growth. It refers to the expansion of companies’ operations and
financial figures leveraging internal resources, mostly driven by R&D and busi-
ness development departments. Except for biotech and pharma companies, it
usually produces slow, but solid and constant, growth rates. It has a slow adaptive
capabilities and low flexibility.
• Inorganic growth. It includes the broader mergers & acquisitions type of activity
such as acquisition, divestment, and joint venture. Inorganic growth represents
the quickest way to provide an immediate boost to revenues and (at least in the
medium-long term) margins. However, it requires a high level of competences
and mindsets within the company and requires a high degree of capital in order to
be effective. Given the nature of the transaction, it is preferable to handle one
8.4 Corporate Venture Capital 241

transaction at the time and also consider post-merger integration activities in the
plan. In fact, most of the failures in the acquisition are attributable to bad planning
vis-à-vis the crucial post-deal phase which, in some cases, fails in creating the
synergies (e.g., commercial, cost, scope) which were the basis for the investment
rationale before the transaction took place.
In this context, corporate venture capital represents a valuable trade-off between
the flexibility required to explore potential external growth opportunities and the
adaptability to the core business of the company and its structure. Corporate venture
capital allows also reducing the risk of investing in one single business at the time.
In fact, the best practice of investment in corporate venture requires the corporation
to make multiple investments in start-ups in order to reach an effective risk
diversification.
As opposed to the traditional venture capital’s objective of reaching an above-
market financial return, corporate venture capital typically pursues, through three
different models, two main objectives in various shades between the two:
• Strategic goals. They allow the company to generate revenue and margins, bring
innovation through the development of new products or processes, enter into new
markets or consolidate its position within the current ones. A corporate venture
capital mainly focused on strategic goals will create effective synergies between
the mother company and the invested company providing management skills and
other types of expertise.
• Financial goals. They achieve financial returns, which put the corporate venture
capital closer to the traditional target of venture capital. However, instead of
reaching above the market results, in general, corporate venture capital set lower
return targets, which are above the company’s cost of capital. Worth noticing that
the financial returns are, anyway, used as a driver of sustainability of the strategic
objectives.
As previously mentioned, based on an analysis provided by the British Venture
Capital Association (see Table 8.2), it is possible to identify three different models
used by corporate venture capital with various balances between control and risk.
The adoption of one model instead of another by a company is influenced by
corporate’s needs and long-term goals:
• Model 1—Corporate Direct Investment: direct investment by the corporate into
startups without the incorporation of an ad-hoc investment vehicle; the activity is
carried out by a cross-functional internal team.
• Model 2—Internal Dedicated Fund: benefits from a greater degree of indepen-
dence in the decision-making process, although it is a totally captive vehicle. In
this case, the activity is carried out by a dedicated team composed of professionals
coming from the company and professionals coming from external environments,
mostly from venture capital and private equity.
• Model 3—External Fund: in this case, the company acts like a Limited Partner;
the activity is carried out entirely by the investment team of the venture capital
where the corporate has decided to invest. Depending on the type and amount of
242 8 Funding Innovation and Entrepreneurship

Table 8.2 The corporate venture capital models

Corporate/direct Corporate/direct Corporate/direct
investment investment investment
Balance sheet Balance sheet Balance sheet
Purpose Gain direct business and Emerging business and Investing with primary
technology experience in technology with more financial goal with tight
emerging areas autonomy for step out relationship with financ-
options ing parent company
Structure Direct investment funding Corporate acts ad LP in a GP external firm; LP cor-
each deal, closely related captive fund. Greater fund porate investor. Potential
to business divisions and autonomy. ad-hoc conditions with
future opportunities corporate
Success Measurements of direct Primarily financial with a Predominantly ROI
measure strategic inputs level of strategic exposure
HR Internal employees Mixture of external VC Experienced venture
professionals and internal capital professionals and
corporate talent secondees from corporate
Managerial High Medium Low
effort
Capital Medium High Low
intensity
Innovation Low Medium High
potential
Source: BVCA (2012)

investment of the company in the venture capital, in some cases companies are
granted with a co-investment right. So, it will enable the company to invest
alongside the venture capital, when the venture capital decides to invest in a
startup. It is also common to establish a deal-flow sharing type of relationship
between the venture capital and the corporation.

8.5 Conclusions

When talking about innovation and innovative firms, we usually think about the
stereotype of the young entrepreneurs, or ‘startupper’ if you will, funding a company
in the backyard garage, raising an outrageous amount of funding by investors and
eventually going public through an IPO.
As opposed to this stereotype, innovation is a long and struggling process, which
starts with an idea taking shape inch by inch with effort, sweat, few fancy moments,
and a lot of work.
This journey is surrounded by many organizations and persons that support the
innovative firms in this journey not only by providing capital, but also especially in
the early stages of development, with knowledge, guidance, and access to networks.
References 243

Among the major and more effective ways to raise capital, there are two that stand
out: Venture Capital and Corporate Venture Capital. Both venture capital and
corporate venture capital were born as an answer to two specific threats, the first
being the Soviet Union, and the need to adapt quickly to market needs and demands
as the second.

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Chapter 9
A European Food Ecosystem: The EIT
Food Case Study

Abstract This chapter aims to present the traits and key success factors of the
“European Institute of Innovation and Technology” (EIT), analyzing the “EIT Food”
case. To highlight EIT Food’s strategic position as orchestrator and catalyzer of
innovation, knowledge, and business creation, the case study uses the lens of the
“quadruple helix model innovation”. EIT Food’s mission, vision, strategies, objec-
tives, values, and activities are finalized to foster and drive the challenges of the
European food innovation ecosystem. The case study gives evidence on the role that
a territorial innovation ecosystem can play to develop a culture of innovation and
entrepreneurship, enabling the transition from a knowledge economy to a knowledge
society, namely from a triple to a quadruple helix model.
With a social mission and trusted multi-stakeholder independent community that
is coming together to solve the challenges of the food system, triggering innovative
bottom-up activities, EIT Food drives the shift towards an ecosystem perspective
and fosters a sense of “collective stewardship” toward social, environmental, and
economic sustainability. The entrepreneurial spirit and participatory approach of all
the heterogeneous actors are increasingly being cultivated through open innovation
methodologies and open innovation spaces to improve human health, access to
quality food, and address the main challenges of the food system. EIT Food
innovation ecosystem business model is people-centric and resource-smart based
and finalized to stimulate connections and partnerships between consumers, citizens,
businesses, startups, research institutions, students, and food supply chain stake-
holders throughout Europe. The case study focuses on the key elements that char-
acterize EIT Food, and hence, untangle under what conditions it shapes and
influences economic, technological, and societal thinking within its ecosystem.

Keywords Food innovation ecosystem · EIT food · Quadruple Helix · Value

network · Knowledge society

Co-authored by Andy Zynga—EIT Food, Heverlee, Belgium, e-mail: [Link]@[Link]

© Springer Nature Switzerland AG 2020 245

P. De Bernardi, D. Azucar, Innovation in Food Ecosystems, Contributions to
Management Science, [Link]
246 9 A European Food Ecosystem: The EIT Food Case Study

9.1 Introduction: The European Institute of Innovation

and Technology (EIT)

In the last years, the concept of innovation ecosystem has increasingly gained
ground in the literature on strategy, innovation, and entrepreneurship. A set of
definitions and concepts have been developed by scholars in different contexts, by
using innovation ecosystem with different labels and, in some cases, with different
meanings and purposes: digital innovation ecosystem (Rao & Jimenez, 2011), hub
ecosystems (Nambisan & Baron, 2013), open innovation ecosystem (Chesbrough
et al., 2014), platform-based ecosystem (Gawer, 2014).
Gomes, Facin, Salerno, and Ikenami (2018), performing a systematic analysis of
the different concepts of innovation ecosystems, characterized a construct with the
following features: an innovation ecosystem, composed of interconnected and
interdependent networked actors, which includes the focal entity, customers, sup-
pliers, complementary innovators, and other agents as regulators, is set for the
co-creation of value (Gomes et al., 2018). This definition implies that partners and
members face cooperation and competition in the innovation ecosystem, which: i)
has a lifecycle, ii) follows a co-evolution process, and iii) creates an ecosystem
common good which consists in the creation of value for the society.
In an innovation ecosystem, innovation and entrepreneurship are two distinct but
intertwined strategic drivers of economic growth in the knowledge economy (Tataj,
2015). Nonetheless, to fruitfully implement innovation processes in the economy it
is now indispensable engage the public as a new and relevant contributor to
innovation, giving architecture to new ways of dialogue and collaboration to moving
the ecosystem to the knowledge society (Carayannis & Campbell, 2012; Owen,
Macnaghten, & Stilgoe, 2012; Stilgoe, Lock, & Wilsdon, 2014).
When considering highly innovative environments (e.g., Silicon Valley, Tel
Aviv, and Cambridge Massachusetts), innovation and entrepreneurship appear as
ever-present and continuous information exchange and knowledge sharing make
such innovation ecosystems flourish. An innovation ecosystem consists of a group of
different actors and dynamic processes, which together produce solutions to face
grand challenges (Oksanen & Hautamäki, 2014). The dynamic process that makes
such innovation ecosystems develop, depends on the entities sustaining such a
process usually called either animators, facilitators or orchestrators, but also on the
strong involvement of greater public since i) it can help resolve major challenges,
producing more welcome innovations, and ii) it is ethically fair to give a chance to
civil society gain greater access to and influence over the innovation process and its
results (Carayannis & Campbell, 2009).
Therefore, the emergence of a certain innovation ecosystem depends on: i) a
leading public institution committed to develop a territory and attract the necessary
resources; ii) a harmonic business sector where established large companies and new
start-ups specialize and cooperate under value chains and clusters, from local
markets permeable to product innovations and connected to global networks; and
iii) a risk-taking entrepreneurial culture which accepts facing major challenges and is
9.1 Introduction: The European Institute of Innovation and Technology (EIT) 247

open to change and evolution through the ability of nurturing its human capital.
Moreover, other enabling factors include the dynamic interaction and “cross-fertil-
ization” between business and academia, academia and government, government
and business, organizations and individuals, as well as services supporting knowl-
edge transfer and developing innovation networks.
In this context, the European Institute of Innovation and Technology (EIT) could
be presented as an innovative ecosystem. It has a status of a European Union Agency
(EC 294/2008) with a key mission to establish and fund a new type of pan-European
innovation network that brings together research, education, and innovation. As
highlighted by scholars, the nature of collaborative partnerships and the way part-
nership networks function have a marked improvement over single actors seeking to
create social and economic value in isolation. As stated by Tataj (2015), in order to
enable the collective capacity to develop new products and services to the market, it
is necessary to understand networked environments that are conducive to
innovation.
A main structure for innovation networks is known as the Knowledge Triangle,
composed of education, business creation and innovation, and engaging people as
active partners of change. Entrepreneurship is viewed as the glue for the Knowledge
Triangle since it acts as a catalyst for value creation not only by integrating the
network but also by creating synergies between the three remaining components.
The Knowledge Triangle can be interpreted as a multidimensional dynamic con-
struct which has marked a shift from: i) intellectual property-based research to open
innovation; ii) university to education to learning environments with a strong peer-
to-peer learning component; and iii) innovation within homogenous sectors to cross-
sector innovation in collaboration with trans-disciplinary social, creative, and pro-
cess networks (Tataj, 2015). In this vein, due to its properties of driving economic
and social innovations, the Knowledge Triangle was used as the conceptual frame-
work for the creation of the European Institute of Innovation and Technology (EIT)
and its accompanying Knowledge and Innovation Communities (KICs) (EIT,
2019a).
The European Institute of Innovation and Technology (EIT) is a European
collaborative project created by the European Union to strengthen Europe’s innova-
tive capabilities and stimulate innovation by integrating businesses, universities, and
research institutions. This integration of key innovation partners has been coined
“Innovation Communities”, and EIT has specifically-designed Innovation Commu-
nities that seek to find solutions to specific global challenges including, among
others, climate change, sustainable energy, digital advancements, health innova-
tions, smart mobility, and food solutions for a sustainable world.
Since its inception in 2008, EIT has become the EU’s largest innovation ecosys-
tem, which through the coordinated initiatives of its many members, the EIT
communities, provides a range of support activities designed to ignite entrepreneur-
ship and innovation. The key strategic initiatives are: i) education programs that
encompass technical and entrepreneurial training; ii) business creation and startup
acceleration services; iii) the ability to participate in, and create, innovation driven
research projects, and iv) communication and dissemination of researches and best
248 9 A European Food Ecosystem: The EIT Food Case Study

practices as well as public engagement. Through these initiatives, EIT facilitates the
introduction of innovative products and services to viable markets, assists aspiring
entrepreneurs and everyday community members in identifying entrepreneurial
opportunities, and, most importantly, combines ideas from a collection of industry
and academic members to give European markets a competitive advantage.
The EIT mission can be divided into two components (EIT, 2018):
1. to contribute to the competitiveness of Europe, its social, environmental and
economical sustainable growth and job creation by promoting and strengthening
synergies and cooperation among businesses, education institutions, and research
organizations;
2. to create favorable environments for creative thoughts and to enable world-class
innovation and entrepreneurship to thrive in Europe.
The EIT model established over 50 innovation hubs and over 640 products across
Europe, raised over 890 Million Euros in external capital through supported ven-
tures, created over 6100 jobs in European markets, educated over 1700 Master and
PhD students, and supported the creation of over 1250 startups (EIT, 2019b).
Furthermore, EIT activities are guided by a set of six pre-established community
values, which describe the philosophy as to how business should be conducted by
institutional and individual members. These values reflect EIT’s joint vision and
mission statements and are meant to serve as a guide for all communications and
decision-making processes (EIT, 2019b). The EIT values and a short description are
listed below.
1. Inspiring: inspire entrepreneurs and innovators to create solutions for pressing
challenges by stimulating knowledge and experience sharing.
2. Passionate: integrate Europe’s innovators to foster a better and more sustainable
future—both economically and socially.
3. Engaging: display commitment, innovativeness, and result-orientation when
engaging with stakeholders, aim to accelerate venture creation processes and
work with stakeholders to bring ideas to markets.
4. Open: cultivate openness, transparency, and interactions among stakeholders and
community members; support the development of future innovation and stimulate
knowledge sharing and co-creation among stakeholders.
5. Dynamic: assist innovators and entrepreneurs harness their potential by engaging
them with enthusiasm, creativity, and energy—presenting the KIC as dynamic
and flexible.
6. Excellent: willingness to achieve excellence in activities through professional,
efficient, and results-oriented approaches.
There is abundant literature highlighting that action is needed to overcome the
fragmented European innovation and research landscape, and transform the tradi-
tional segmented methods of “business as usual” (Gill et al., 2018). EIT brings
together leading members (i.e., businesses, universities, research institutions, and
communities) from specific industries or challenge areas (e.g., food, climate, health,
manufacturing, and digital) and integrates them to create the knowledge triangle as a
9.1 Introduction: The European Institute of Innovation and Technology (EIT) 249

means to form dynamic trans-disciplinary partnerships that focus on finding solu-

tions to specific global challenges.

9.1.1 Knowledge and Innovation Communities (KICs)

Innovation Communities are agglomerations that strengthen cooperation among

businesses (e.g., large corporations and small and medium enterprises—SMEs),
research centers, and university partners who integrate their activities and resources
in order to collectively create an environment that is supportive of entrepreneurship
and innovation, where a collection of creative thoughts drives successful innova-
tions (De Bernardi, Bertello, & Forliano, 2019). These communities provide access
to human capital, intellectual capital, knowledge, financial resources, and new
markets in order to (i) train a new generation of entrepreneurs who can later
(ii) develop innovative products and services to (iii) drive the change in the main
European strategic sectors.
The EIT innovation communities are dynamic and creative partnerships that
harness European innovation and entrepreneurship in areas with high innovation
potential. The innovation communities carry out activities that are relevant to the
entire innovation chain, i.e., training and education programs, fostering transitions
from research to market with startup incubators and accelerators, and creating
innovation projects (European Commission, 2019).
These activities are set out in individual Framework Partnership Agreements
(FPAs) and Specific Grant Agreements (SGA) signed with the Innovation Commu-
nities. The FPAs establishes long-term cooperation and sets out its terms and
conditions as well as the general terms and conditions, rights and obligations
applicable to the specific grants that may be awarded by the EIT for actions under
the Framework Partnership Agreement, which is entered into for a period of 7 years
(European Commission, 2019).
EIT, as an institution, has the responsibility to guide and orchestrate these
activities and establish common strategies, but it is the individual communities
that must adopt and apply these processes into practice, in a manner that is culturally
relevant, ethically acceptable, and economically viable based on the norms of their
specific locations. Sustainable products and services, new entrepreneurs and other
forms of human and intellectual capital, company revenue, and increased job
availability have emerged as a result of the innovation communities’ activities,
thus providing concrete evidence of the effectiveness of Europe’s largest innovation
network.
To date, EIT has successfully established eight innovation communities, formally
named “Knowledge Innovation Communities” (KICs) (Fig. 9.1).
Each KIC is set up as a legal entity and appointed a CEO who oversees its
operations. KICs are awarded a high degree of autonomy to define their legal status,
organizational culture, and modus operandi. They have also been designed for
250 9 A European Food Ecosystem: The EIT Food Case Study

Fig. 9.1 Knowledge and innovation communities. Source: EIT (2019c)

adaptability, to be able to react in effective and flexible ways to their specific

challenges and changing environments.
For the remainder of this chapter, and in line with the objectives of this book, we
focus on EIT’s Food KIC, and provide insight for three distinct audiences—indi-
viduals seeking to engage in entrepreneurial activities in the food system, members
(individual or institutional) of the Food KIC, and entities wishing to recreate similar
initiatives in their local environment. For individuals, we hope that this analysis will
assist them in identifying entrepreneurial opportunities for action as well as for
access to engage in innovative and entrepreneurial activities in the food system.
Our aim for individual members and institutions is to illustrate best methods and
effective practices to engage in trans-disciplinary collaborations, with bottom-up and
participatory approaches, to tackle food system challenges. Finally, for entities, we
hope that this case study can clearly define the concepts and elements that lead to
successful collaborations and holistic involvement of all ecosystem members.

9.2 EIT Food: Pan-European Food Network

EIT Food, one of the KICs of EIT, is Europe’s leading food innovation and
entrepreneurship initiative, working to make the European food system more sus-
tainable, healthy, and trusted by consumers and communities (Gebruers, 2017). It is
a pan-European consortium that seeks to catalyze the global transformation on how
food is innovated, produced, and valued by the whole society.
EIT Food has been described as a “people-centric” and “research-smart” vehicle
for transforming the European food system and a driver for consumer confidence and
for improving global health (EIT Food, 2016). It brings together a strong and
complementary group of world-class multinational enterprises, leading SMEs, tier-
1 scientific institutions, not-for-profit organizations, and social entrepreneurs cover-
ing the complete food value chain as well as neighboring industries. In a perfect
quadruple helix innovation dimension, EIT Food could be considered as a “multi-
layered, multi-modal, multi-nodal and multi-lateral system, encompassing mutually
complementary and reinforcing innovation networks and knowledge clusters
consisting of human and intellectual capital, shaped by social capital and
9.2 EIT Food: Pan-European Food Network 251

underpinned by financial capital” (Carayannis & Campbell, 2009, 2010;

Leydesdorff & Etzkowitz, 2003; Volpe, Friedl, Cavallini, & Soldi, 2016).
It is composed of world-class members involved in dynamically intertwined
processes of co-opetition, co-evolution, and co-specialization within and across
regional and sectoral innovation ecosystems (Carayannis, Goletsis, & Grigoroudis,
2017). Seeking collaboration with and leveraging expertise from all relevant stake-
holders and partners on local (network partners), regional (associations), European
(other European bodies), as well as global level (global network partners), the
network is currently composed of over 50 partners from across 13 European coun-
tries (Table 9.1 and Fig. 9.2).
EIT Food members comprise food system giants such as Nestlé, PepsiCo, and
Givaudan, Puratos, Siemens, John Deere, and Colruyt Group. These industry mem-
bers are then complemented by a selection of leading universities and scientific
partners such as KU Leuven, University of Cambridge, TU Munich, University of
Turin, and the University of Warsaw, among others. This consortium also includes
the ‘Rising Food Stars’ Association, which has a history of supporting top-notch
European agri-food tech startups (Gebruers, 2017).
The members are orchestrated by EIT Food to transform the current food system,
stimulating connections and partnerships between businesses, startups, research
institutions, universities, and food supply chain stakeholders throughout Europe,
but also with a strong public engagement strategy addressed to the whole civil
society. Furthermore, it supports innovation and entrepreneurship to generate com-
mon sustainable initiatives to feed future generations by improving human health,
access to quality food, and overall ameliorate challenges related to the environment.
Together, the members offer a wide range of services to support entrepreneurial
approaches such as innovation competitions (e.g., Foodathons), funds for startups
during different growth phases, educational activities such as online courses, sum-
mer schools and seminars (e.g., Digital Food Supply Chains, and Sustainability for
Entrepreneurs), full-immersion entrepreneurship training (e.g., The Global Food
Venture Program; Innovator Fellowship), and regional support for areas with
unremarkable histories of innovation activities (RIS countries). In its role as a food
ecosystem focal entity, EIT does not navigate the innovation and entrepreneurship
field in an ad-hoc manner. Instead, it is guided by a common mission to promote
shared vision and collaboration amongst its members, focusing on smart
co-existence and cross-fertilization of activities within the knowledge triangle,
leading to new connectivity with the consumer.

9.2.1 EIT Food Co-location Centers

EIT Food is headquartered in Leuven, Belgium, and is further supported by five

Co-Location Centers that are designed to stimulate innovation, develop human
capital, and encourage consumer involvement at the regional level. Co-Location
Centers (CLCs) function as separate legal entities across Europe, and are located in
Table 9.1 List of member countries and partners by country
252

Country Higher education Research institution Business industry Non-governmental (Other)

Belgium KU Leuven—Leuven Food Sci- Colruyt Group, Rising Food Stars
ence and Nutrition Research Edingensesteenweg 196, 1500 HeadquartersCountry: Belgium
Centre Halle, Belgium
Puratos NV
Industrialaan 25, B-1702 Groot-
Bijgaarden, Belgium
EUFIC
Rue Joseph Stevens 7, 1000
Brussels, Belgium
Finland University of Helsinki VTT Valio
P.O. Box 53 (Fabianinkatu 32), P.O. Box 1000, FI-02044, VTT, Meijeritie 4, 00370 Helsinki,
FI-00014 University of Helsinki, Finland FinlandNorth-East
Helsinki, Finland
France DANONE Research
Rd 128, Avenue de le Vauve
91767 Palaiseau—France
Eurofins NDSC
Chimie Alimentaire Rue Pierre
Adolphe Bobierre 44323
NANTES CEDEX 3 FRANCE
Groupe SEB
112, chemin du Moulin Carron,
69134 Ecully, France
ROQUETTE
1 rue de la Haute Loge, 62136
Lestrem, France
SODEXO
255 quai de la bataille de Stalin-
grad, 92166 Issy-les-Moulineaux
Cedex, France
9 A European Food Ecosystem: The EIT Food Case Study
Germany University of Hohenheim DIL German Institute of Food DOEHLER
Hohenheim Research Center for Technologies Office Brussels, Riedstrasse, 64295 Darmstadt,
Bioeconomy, Wollgrasweg Rue du Luxembourg 47-51, Germany
43, 70599 Stuttgart, Germany B-1050 Brussels, Belgium John Deere GmbH & Co. KG,
Technical University of Munich, Fraunhofer IVV, Giggenhauser European Technology Innovation
Arcisstr. 21, 80333 Munich, Str. 35, 85354 Freising, Center, Strassburger Allee
Germany Germany 3, 67657 Kaiserslautern,
Germany
HERBSTREITH & FOX KG
Turnstrasse 37, 75305
Neuenbuerg, Germany
SIEMENS
Otto-Hahn-Ring 6, 81739
Munich, Germany
BOSCH
9.2 EIT Food: Pan-European Food Network

Stuttgarter Str. 130, D 71301

Waiblingen, Germany
Iceland MATIS OHF
Vinlandsleid 12, 113 Reykjavik,
Iceland
Ireland ABP Food Group
14 Castle Street, Ardee, County
Louth, IrelandNorth-West
Israel TECHNION, Israel Institute of ALGATECHNOLOGIES
Technology Kibbutz Ketura, D.N. Hevel Eilot,
Biotechnology & Food Engineer- 88840, Israel
ing Department, Technion, Israel Strauss Group
Institute of Technology, Haifa 49 Hasivim St., POB 194, Petah
3200000, Israel Tikva 4959504, Israel
(continued)
253
Table 9.1 (continued)
254

Country Higher education Research institution Business industry Non-governmental (Other)

Italy University of Turin AIA
Via Verdi 8, 10124 Torino, Via Tomassetti 9, 00161 Rome,
ItalySouth ItalySouth
Barilla
Via Mantova, 166 | 43122 Parma |
Italy
The DSM
Netherlands Alexander Fleminglaan 1, 2613
AX Delft, Netherlands
KOPPERT
P.O. Box 155, 2650 AD Berkel en
Rodenrijs, The Netherlands
PLANT LAB
Veemarktkade 8a, 5222 AE ‘s-
Hertogenbosch, The Netherlands
Poland University of Warsaw Office of IARFR PAS MASPEX
University Advancement, 10 Tuwima Str., 10-748 Olsztyn, Ul. Legionów 37, 34-100
Krakowskie Przedmieście 26/28, Poland Wadowice, Poland
00-927 Warsaw, Poland
Spain Universidad Autonoma de AZTI ACESUR
Madrid Parque Tecnológico de Bizkaia, Carretera de la Carolina, Km
Einstein 3, E-28049 Madrid, Astondo bidea. Edif. 29, 23220—Vilches (Jaen), Spain
Spain 609, 48160—Derio (Bizkaia), Angulas Aguinaga
Spain Laskibar 5, 20271 Irura,
CSIC SpainSouth
c/Serrano 113, E-28006 Madrid, Grupo AN S. Coop
Spain Campo de Tajonar s/n, 31192
Tajonar (Navarre), Spain
9 A European Food Ecosystem: The EIT Food Case Study
Switzerland EPFL (Ecole Polytechnique Nestlé Research Center Vers- BÜHLER AG
Federale de Lausanne) chez-les- Blanc, Lausanne Gupfenstrasse 5, CG-9240 Uzwil,
Station 13, 1015 Lausanne, 26, Switzerland, CH-1000 Switzerland
Switzerland Givaudan Suisse SA
ETH Zürich 8310 Kemptthal, Switzerland
Schmelzbergstrasse 9, CH-8092
Zürich, Switzerland
United Queen’s University Belfast Quadram PepsiCo Inc. Agrimetrics
Kingdom Northern Ireland Technology Norwich Research Park, Colney International, Beaumont Park Lawes Open Innovation Centre,
Centre, Queen’s University of Lane, Norwich NR4 7UA, Technical Centre, Leicester, LE4 Rothamsted Research,
Belfast, Cloreen Park, Belfast BT9 United Kingdom 1ET, UK Harpenden AL5 2JQ, United
5HN, United Kingdom Waitrose Kingdom
University of Cambridge Doncastle Road RG12 8YA,
Department of Plant Sciences, Bracknell, United Kingdom
Downing Street, Cambridge CB2
9.2 EIT Food: Pan-European Food Network

3EA, UK
University of Reading
Whiteknights, Reading, Berk-
shire, RG6 6UR, United Kingdom
Source: Own elaboration based on [Link]
255
256 9 A European Food Ecosystem: The EIT Food Case Study

Fig. 9.2 Visual cloud of EIT food members. Source: EIT Food (2018)

Leuven, Madrid, Munich, Reading, and Warsaw (EIT Food, 2018). They are defined
by their functional or geographical aspects, in order to best provide the proximity
and local context to stimulate sustainable innovations in the food system best. The
resulting CLC locations and their partners represent an assortment of the well-
balanced and complementary university, research, and industry partners.
These CLCs ensure the local co-financing and knowledge transfer from one
region to another, and thus reduce the risk of developing redundant projects, in
different locations, levels, or with a different set of partners. The CLCs and the
countries they comprise are as follows (Fig. 9.3):
1. Leuven, Belgium—includes partners from the Belgium France, and Switzerland.
2. Madrid, Spain—includes partners from Spain, Italy, and Israel.
3. Munich, Germany—includes partners from Germany and the Netherlands.
4. Reading, U.K.—includes partners from the UK, Ireland, and Iceland.
5. Warsaw, Poland—includes partners from Eastern Europe and Nordic countries.
EIT Food has developed mid and long-term goals with clear deliverables and
expected impact through a total funding volume of more than 1.5 billion Euros in the
7 years (EIT Food, 2018) (Fig. 9.4).

9.3 EIT Food Vision, Mission, Strategy, Values and Goals

“The Food I Value—Attitudes Transformed”. The EIT Food vision is to catapult

Europe to the center of a global transformation in food system innovation brewing
9.3 EIT Food Vision, Mission, Strategy, Values and Goals 257

Fig. 9.3 EIT food co-location centers. Source: EIT Food (2018)

values for society (Gebruers, 2017). EIT Food will foster a sense of “collective
stewardship” in which industry, government, science and education commit to
support individuals in their right to enjoy a sustainable, safe and healthy diet.
Specifically, EIT Food actively engages the society in the food transformation
processes to improve nutrition outcomes, increase security, transparency, traceabil-
ity, and resource efficiency, fostering consumer and community trust in food systems
(EIT Food, 2019a).
In order to drive these transformations, EIT Food developed demand-tailored
programs that are specifically designed to support its value-based “P E O P L E”
approach: Participation of citizens, Education and entrepreneurial support, Openness
to the world, Performance through excellence and implementation of the results,
258 9 A European Food Ecosystem: The EIT Food Case Study

Fig. 9.4 EIT food estimated budget. Source: EIT Food (2018)

Leveraging SMEs’ innovation capability, and Enduring approach to ensure the

sustainability of EIT Food (EIT Food, 2018).
“The Food that Connects Us—Food System Transformed”. EIT Food mission is
to catalyze the transformation of the food sector by building, managing, and
empowering a sustainable and trusted multi-stakeholder community, by following
an integrated seed-to-fork approach, with the engagement of consumers in the
process of change, driven by the development of digital technologies (EIT Food,
2018). It aims to achieve its mission by:
• creating and scaling-up agri-food start-ups, to unlock the potential and compet-
itiveness of small and medium-sized enterprises;
• developing talents and leaders to transform the food system, boosting skills and
entrepreneurial mindsets;
• launching new innovative products and ingredients to make the food system
resource-efficient, secure, transparent and trustful as well as to deliver healthier
and more sustainable food;
• engaging citizens, communities, and civil society so that they can become agents
of change.
In order to guide and evaluate its contribution to the food ecosystem challenges, EIT
Food has defined six strategic objectives, some of which are further broken down
into smaller “SMART” goals:
1. overcome low consumer trust: support Europeans in the transition towards a
smart food system that is inclusive and trusted, for example through the EIT Food
Barometer and the dataset of Trust Tracker that assess consumer’s trust in the
food system and its products as well as the awareness of, and perceptions towards,
healthy and sustainable diets;
2. create consumer-valued food for healthier nutrition: enable individuals to
make informed and affordable personal nutrition choices, providing long-lasting
and cost-effective solutions for public health in relation to genetic predisposition,
9.3 EIT Food Vision, Mission, Strategy, Values and Goals 259

age, dietary restrictions, lifestyle, and environmental factors. For example, EIT
Food supports consumers in becoming central drivers in a shared food economy
through the concept of My Food, My Nutrition, My Health, developing person-
alized consumer interfaces and support platforms, via novel monitoring devices,
narrowing the gap between people’s best intentions and actual food intake.
Moreover, it promotes educational programs for personalized nutrition coaching,
retailer-assisted food shopping, and meal preparation;
3. build a consumer-centric connected food system: develop a digital food supply
network with consumers and industry to improve safety, real-time traceability,
quality and sustainability of ingredients, developing and integrating on-site
diagnostic and sensor technologies (e.g., smart labeling and blockchain technol-
ogy). These technologies allow to identify potential threats and alert stakeholders,
especially retailers across the whole food system, and enable auditability as a
pan-European surveillance and alert system from food fraud or unintended
contamination (De Bernardi, Forliano, Rotti, & Franco, 2019; Tirabeni, De
Bernardi, Forliano, & Franco, 2019). An example of some initiatives centered
on the consumers are: EIT Food Assistant, Your Fork2Farm, The Web of Food,
The Zero Waste Agenda, MyFoodPortal, EIT Food Trust Barometer, and EIT
Food Ambassadors;
4. enhance sustainability through resource stewardship: develop solutions to
transform the traditional “produce-use-dispose” model into a circular
bio-economy, targeting reductions in food waste, energy, and water consumption
across the supply chain, including logistics, last-mile delivery, and consumption.
EIT Food initiatives include the development of new food manufacturing pro-
cesses with quality standards and guidelines for zero waste by a cascade
approach, diversifying the use of raw materials, reducing microbial/chemical
contamination risks, and engaging the consumer via new home devices to
enhance energy efficiency and recycling and to reduce food miles. Evolving
from a linear to a circular food system will encourage consumers to participate
in the food system again and create local food communities, mainly since it is
expected that in 2050 the 80% of food will be consumed in cities, giving citizens
the power to revolutionize the food system;
5. educate to engage, innovate, and advance: provide ‘food system’ skills for
students, academics, entrepreneurs and professionals through advanced training
programs and open online courses addressing specific skill gaps. This strategic
objective is finalized to spark a new generation of European pioneers and
business entrepreneurs by fostering entrepreneurial culture and mindset through
education and training programs. Summer schools, training workshops,
boot camps, etc. are designed with industrial-academic co-mentorship activities
for multidisciplinary teams. For example, it has been created EIT-branded certi-
fication programs for students and professionals to provide them with key food
systems knowledge and new technological competences.
6. catalyze food entrepreneurship and innovation: foster innovation at all stages
of business creation. For example, EIT Food provides entrepreneurs and start-ups
with Food expert networks, infrastructures (pilot plants, equipment, incubation
260 9 A European Food Ecosystem: The EIT Food Case Study

space, etc.), and finance to catalyze entrepreneurial collaboration and sustainable

growth. Furthermore, it provides a KIC breeding ground for start-up creation and
cross-disciplinary SME partnerships, offering expertise/mentoring on infrastruc-
ture, patenting/licensing, and human resources as well as encouraging R&D
activities.
EIT Food is a fundamental player in the European innovation landscape and has
positioned itself as an important contributor to forthcoming European initiatives by
closing the gap between applied research and its possible market applications.
Specifically, it aims to capitalize on the results of previous European projects (e.g.,
Horizon 2020) and focuses on further developing these results, bringing them to
markets as new products or services. EIT envisions the creation of close synergies
through its member’s cooperation in order to manage more efficiently resources
under co-creation, co-sharing, and cross-fertilization approaches. To achieve this
and make significant progress on their six strategic objectives, EIT food has
established a Policy Council, with specific advisory roles (EIT Food, 2018).
In addition to key players from the food system, Directorate Generals (DGs) such
as DG RTD (Research and Innovation), DG EAC (Education and Culture), and DG
AGRI (Agricultural and Rural Development) also participate in designing the
activities of EIT Food. Currently, EIT Food has developed a powerful collaboration
with DG RTD to develop a consistent path from research to go-to-market strategies
related to the Food 2030 program, which was launched by the European Commis-
sion in 2017 (EIT Food, 2018). To highlight this, EIT is a part of the coordination
action of DG RTD to work with the Commission on the implementation of the Food
2030 policy.
EIT Food partnerships venture beyond the knowledge triangle of education,
business creation, and innovation, and include consumer engagement for increased
effectiveness. Communication serves as the element that connects the dimensions of
the knowledge triangle and, thus, establishes activities within EIT Food’s four key
learning pillars (Fig. 9.5) to tackle the aforementioned challenges of the European
food system.
In essence, to improve the entrepreneurial capacity and culture of the entire food
system, and unchain the potential of SMEs, EIT Food programs are finalized to
accelerate innovation, creating jobs, yielding economic benefits for businesses and
environmental benefits for natural resources, thereby increasing Europe’s competi-
tiveness (Gebruers, 2017). Specifically, EIT Food purpose over a 7 years span is to:
1. establish 86 startups, and support the development of 533 additional startups,
attracting a total of 191.6 million Euros;
2. educate over 400 students from EIT’s Master’s programs and have 285,000
participants enrolled in their educational programs;
3. bring to market 398 new or improved products, services, and processes by 2024;
4. engage 147,000 participants in the annual Food Trust Tracker.
9.4 EIT Food Strategic Pillars and Business Areas 261

INNOVATION

COMMUNICATION

CONSUMER
CENTRICITY

BUSINESS EDUCATION
CREATION

Fig. 9.5 Four pillars of EIT food. Source: EIT Food (2019b)

9.4 EIT Food Strategic Pillars and Business Areas

In order to achieve their strategic objectives and purposes, EIT Food depends on and
constructs innovation initiatives based on the four foundational pillars: i) Education,
ii) Innovation, iii) Entrepreneurship & Business Creation, and iv) Communication &
Public Engagement (Fig. 9.5).
Building on the initial conceptualization of the “knowledge triangle” (i.e., inno-
vation, education, and business creation), EIT Food adds a component of “commu-
nication”, thus giving it an advantage as a consumer-centered approach that engages
everyday European citizens and provides them with the opportunity to become
agents of change for their food system.
Many scholars (Powell, Packalen, & Whittington, 2010) analyzing the Critical
success factors (CSFs) in developing knowledge ecosystems considered as central,
two features and one mechanism: 1) a diversity of organizational forms; 2) the
presence of an anchor tenant, and 3) the mechanism of cross-realm transposition.
All these CSFs are part of the activities managed by EIT Food. Specifically, the
presence of multiple actors such as universities, public research organizations,
entrepreneurial firms, established companies, and start-ups, as well as the presence
of an activity leader for each project proposal, increases the innovative capacity of
the ecosystems (Baptista, 1998). At the same time, a cross-network collaboration by
which ideas, new technologies, and business models are transposed from one to
another, create the so-called mechanism of cross-realm transposition.
In general, activity proposals are solicited with an annual call in the areas of: i)
Grand Challenge, namely strategic objective 1 (overcome low consumer trust &
262 9 A European Food Ecosystem: The EIT Food Case Study

enhance transparency), ii) Innovation, iii) Education, iv) Business Creation, and v)
Communication. Next to this general call for activity proposals, EIT Food also
includes a call to “Infrastructure Projects”, namely activities that have strategically
relevance and/or that build key infrastructure to achieve EIT Food’s strategic
objectives. Examples are the Accelerator and Incubator Networks, FoodUnfolded,
and the Master in Food Systems program. All proposals need to be aligned with EIT
Food’s overall vision, mission, and set of KPIs, contributing at least to one of the
strategic objectives. They must articulate the market need, output and impact, and
demonstrate a realistic prospect for market and/or societal success, including the
competitive landscape. The proposals, executed by a consortium of partners of EIT
Food, from both academia/research institutes and industry, representing different
areas of the food system, and including at least three members representing a
minimum of two different CLCs, also include a roadmap for implementation of
the results, milestones with measurable go/no-go criteria, expected risks and a
dissemination plan. All Activities are expected to be led by a partner organization
that takes the role of the project “facilitator”. The activity leader is responsible for the
project management and report on all outputs, deliverables, impact, and financial
aspects achieved.
Each proposal requires the collaboration of multiple partners since food chal-
lenges cannot be solved in a classical bilateral approach, but with a strong partner
commitment and a European dimension involving multiple countries and partners to
drive a change in innovation culture. Moreover, EIT Food expects from the project
consortium the definition of the added value and business/societal impact traced with
quantifiable changes in societal trends and EIT Food KPIs, e.g., creating a new start-
up, product or service, achieving specific consumer engagement targets, delivering a
number of upskilled students. The projects have to use innovative approaches,
demonstrating that methodologies, technologies, and/or processes applied or to be
developed go beyond the current state-of-the-art.
Over the next 5 years, EIT Food partners will invest almost 1200 million Euros
with a match of up to 400 million Euros financed by EIT Food and will rely on its
four focus areas, or pillars, in order to move innovation forward.

9.4.1 Innovation

Currently, EIT Food drives the change through partners’ co-creation projects that
may provide breakthrough solutions for societal challenges with a focus on devel-
oping technology-based products, services, and business models with tangible
economic or societal impact (Call for proposal 2020 Guidelines). Annual proposals
are assessed and assigned to the best and motivated teams of EIT Food members,
who are then tasked with carrying out the activities in an entrepreneurial manner,
e.g., always including open innovation practices as central components. Further-
more, these teams are meant to engage consumers in dynamic value creation
activities in order to tackle pressing challenges in the food system. EIT Food aims
9.4 EIT Food Strategic Pillars and Business Areas 263

to act as an investor, identifying innovation and entrepreneurial opportunities with a

high potential to scale-up, and providing economic and societal impact to face
challenges in a sustainable way. Under the innovation pillar, EIT Food aims to
pave a development path for the implementation of innovative ideas, fueled by the
co-founding of partners, and building on and implementing promising results of
successful research projects (EIT Food, 2018).

9.4.2 EIT Food’s Innovation Programs

In its role finalized to stimulate and accelerate the innovation processes that will lead
to sustainable transformations of a resilient food system EIT Food community is
committed to increase consumer trust, creating consumer-valued food for improved
nutritional outcomes, and building a consumer-centered and connected food system
that naturally enhances sustainability by promoting a circular
bio-economy (De Bernardi, Bertello, & Venuti, 2019; De Bernardi, Bertello, Venuti,
& Zardini, 2019). By actively involving and empowering consumers to be active
members in efforts to engage in ‘future-proofing’ food systems, EIT Food simulta-
neously creates the innovators and entrepreneurs of tomorrow and builds and
inclusive an innovative community.
The Innovation branch of EIT Food is further developed into four main innova-
tion programs1:
1. Inclusive and Trusted Food System: innovation activities involve consumers
and deem them responsible co-creators. EIT Food is demonstrating how technol-
ogy and innovation in food systems are positive elements for consumers by
bringing together the most novel technologies, which enable greater food safety
and transparency.
2. Healthier Nutrition: innovation activities are helping to reduce the prevalence
and risk of developing metabolic disease through personalized nutrition services.
For example, non-invasive tools, online information services, and novel technol-
ogies that assist individuals in making healthier, more informed, food choices
(Wahlqvist, 2002).
3. Connected and Transparent System: EIT Food is increasing the connectivity
and transparency of the food system to improve the safety, real-time traceability,
and quality and sustainability of ingredients benefitting both consumers and
industry.
4. Circular Bio-economy: the consortium is developing multidisciplinary
approaches to encourage a circular bio-economy culture among consumers.
This approach focuses on reusing bi-products and waste, thus increasing the
environmental sustainability of our food system.

1
For a full list of EIT Food’s recent innovation activities please visit—[Link]
264 9 A European Food Ecosystem: The EIT Food Case Study

9.4.3 Education

The education pillar follows a multi-targeted, non-classical approach to develop and

promote a creative, knowledgeable and out-of-the-box thinking human resource
force, which will be the key human and intellectual capital able to transform the
food system. The target audiences include firstly top students in academic institu-
tions, but also professionals in the food and adjacent sectors, as well as citizens and
consumers in the public space representing various cultures and consumer cohorts.
In this vein, EIT Food educational core strategy is to provide EIT-branded Food
Systems Master of Science (MSc) that can bridge compartmentalized skills/know-
how/expertise overcoming the shortage of talented recruits through the EIT Food
Academy. The main programs offered with this pillar are: (i) extracurricular,
industry-mentored program Food Solutions for BSc/MSc/PhD students; (ii) the
Food Entrepreneur Summer School for students and professionals (SMEs, enter-
prises) to work jointly on business-relevant case studies; and (iii) the ground-
breaking Global Food Venture Programme.
EIT Food also trains students, entrepreneurs, and food system stakeholders, via
workshops, summer school programs, and online educational programs such as
Massive Open Online Courses (MOOCs) and Specialized Private Online Courses
(SPOCs). EIT Food seeks to establish the ‘entrepreneur’ as a role model in univer-
sities and academic settings, thus allocating the same recognition to the ‘successful
entrepreneur’ as one would to the ‘successful scientist or professor’. It has also
initiated the migration from a classical degree-based education model to one that
includes a continuous skills-based human capital development approach.

9.4.4 Business Creation and Entrepreneurship

EIT food provides support for startups, entrepreneurs, and aspiring entrepreneurs
through a powerful business creation ecosystem. Support is made available at every
phase of venture maturation, or company development, from ideation, to accelera-
tion, to funding. It has developed a successful end-to-end business creation approach
(i.e., explore, nurture, scale, and grow sustainably) that begins with support and
stimulating for idea generation. Then it moves viable to its accelerator, from then
startups are funded for further development by the EIT Food Sparks and the Rising
Food Stars community of successful and fast-growing startups.
Through business creation, EIT Food seeks to educate, coach, and guide entre-
preneurs on their journey from ‘idea to viable product or service’ in order to establish
European world leaders on the food innovation domain, provide access to unique
expertise and technologies through the network of members and access to funding
opportunities, thereby accelerating and reducing the risk of operating a new venture
(EIT Food, 2018). Specifically, EIT Food offers:
9.4 EIT Food Strategic Pillars and Business Areas 265

• An unparalleled network: access to 50+ of Europe’s leading food system

businesses, universities, and research organizations.
• European reach: they have a presence in every country in Europe and other
territories, thus helping businesses reach new markets and develop
internationally.
• A powerful brand: as the designated EU body to transform Europe’s food
system, EIT members benefit from a powerful brand, making new businesses
more attractive to investors and customers.
• Long-term support: they provide support from the generation of ideas for as
long as new ventures require it.
Furthermore, these services are spread out through three categories of entrepre-
neurial phases of development—namely:
1. Explore: “I’ve got a great idea!”—it is for individuals, academics, and aspiring
entrepreneurs who are driven to solve the complex challenges facing the food
system. These activities are designed to help transform ideas into viable market
solutions by providing individuals with the skills, network, and funds needed to
validate their business idea and accompanying business models. Three key pro-
grams under the explore phase include EIT Food’s “Make-It!”, “Change
Makers”, and the “SEEDBED Incubator”.
2. Nurture: “I’ve got a new business”—it is for entrepreneurs and registered startups
that are well on their way to transforming the food system and would benefit from
EIT Food’s support services to bring their new business to markets. Two key
programs under nurture that help support existing startups include “Innovation
Prizes” and “EIT Food’s Accelerator Network”.
3. Scale: “I’ve got a growing business”—scale elevates high-potential, and mature
food system startups and early scale-ups to the next phases of becoming interna-
tional businesses and game-changers. A key program under nurture if the “Rising
Food Stars”, discussed in greater detail in Sect. 9.9.1.
Finally, EIT Food employs a business creation model named “Smart Entrepre-
neurial Development”, which integrates the most relevant aspects for successful
business creation. This approach goes beyond raising funds and garnering profits.
Moreover, it is especially targeted at young entrepreneurs, startups, and SMEs by
combining access to a network, access to competence and technology, support for
scaling prototypes, access to funding sources, and access to markets (Fig. 9.6).

9.4.5 Communication and Public Engagement

EIT Food is the first of the EIT KICs to actively seek to encourage community and
citizen participation in entrepreneurial and innovation activities. It seeks to move
citizens from being passive recipients, to actively engaged players, to enthusiastic
agents of change. This is achieved through multiple tools, including consumer-led
266 9 A European Food Ecosystem: The EIT Food Case Study

Fig. 9.6 Smart entrepreneurial development model. Source: EIT Food (2018)

innovation campaigns and available digital platforms. Furthermore, EIT places a

degree of recognition on everyday consumers and potential entrepreneurs. This
effort to collectively support European citizens to become critical change agents in
the transition toward a sustainable food system is the first time everyday citizens
have been empowered as active agents of change in food systems (EIT Food, 2018).
EIT Food does not only engage citizens through online communication channels
and look and feel campaigns, but also considers them important co-creators in idea
generation and concept prototyping phases to improve satisfaction with new prod-
ucts and services. Furthermore, through its Citizen Participation Forum, EIT Food
provides consumers and everyday citizens with an institutional voice for change,
thereby having great influence on the direction of future EIT Food activities.
EIT Food holds the belief that every member is responsible for and connected to
the food system. Therefore, it is only through collective efforts that food systems can
be improved and prepared for the future. EIT Food is currently building an inclusive
community of food system members that involves actors throughout the supply
chain, especially consumers, in order to deliver a resilient food system that produces
both healthy and sustainable food and is trusted by society. EIT Food’s public
engagement activities are further grouped into the following three areas:
1. Dialogue and engagement: through events and (digital) platforms—e.g.,
“FoodUnfolded”.
2. Offering guidance: by providing targeted information—e.g., “SEE & EAT”.
3. School programs: e.g., “EIT Food School Network”.
The entirety of EIT Food activities aims to fully integrate the knowledge triangle
of Education, Innovation, and Business Creation. Given the emerging challenges
threatening our food ecosystem coupled with the notion of systems thinking, it is
clear to see that catalyzing innovation through the Knowledge Triangle Integration
(KTI) model is the logical next step to achieving sustainability. This new proposition
9.5 EIT Food Growth Strategy 267

of the Knowledge Triangle defines communication as the unifying element that

leverages the four pillars of EIT Food; especially, to overcome the relevant social
and global challenges best and, to integrate food consumers as independent and
essential partners within the whole food supply and nutrition chain (EIT Food,
2018). EIT Food’s KTI aims to transform new knowledge into tangible innovations
that can provide substantial benefits for sustainability efforts. It dedicates a specific
focus on entrepreneurship as a possible channel to diffuse the collectively generated
knowledge and innovations and thus foster greater societal engagement. The KTI
framework also acknowledges the need for institutions and industries to organize
innovation activities in-house so that they can better understand and communicate
their mission, as well as receive assistance from complementary partners when
carrying out their diverse projects.

9.5 EIT Food Growth Strategy

Despite the many successes of EIT Food in creating a world-class complementary

network of food system stakeholders, one must realize that this is not a single action,
or a static undertaking but a continuous and dynamic process. To continuously
expand their partnerships and networks, and to tackle the challenges in integrating
the knowledge triangle with their fourth communication pillar, EIT Food has
designed a thorough growth strategy. This policy applies to both EIT Food Core
Partners and Network Partners and functions as a balance keeper between industry
and non-industry, and geographical balance. Furthermore, a partnership of repre-
sentatives from the CLCs and the EIT Food management is tasked with making sure
this policy is implemented and continuously developed to meet the ever-evolving
grand challenges.
EIT Food wants to be an open consortium that actively seeks to engage new
partners. However, interested parties must demonstrate that they meet the same
‘admissions’ standard and criteria as existing consortium partners. The core princi-
ples that guide member acceptance are as follows (EIT Food, 2019c):
• Excellence and Complementarity: Applicants must demonstrate that they bring
and added value to the existing partner network and to the food value chain, or are
able to introduce new and emerging technology competencies, and commit to
fully supporting and contributing to EIT Food’s strategic ambitions.
• Resource Commitment: Candidates must demonstrate their ability and commit-
ment to providing the required financial contributions to achieve EIT Food’s
objectives.
• Regional Coverage: Determined by an EIT Food working group that continu-
ously identifies regions of interest, or priority regions, and countries where they
may find new partners, and ensure that specific attention is given to the EIT RIS
areas.
268 9 A European Food Ecosystem: The EIT Food Case Study

9.6 EIT Food Organizational Structure

EIT Food has designed its organizational structure to govern the KIC as efficiently as
possible in order to achieve the highest impact with its strategy. This structure can be
defined as a results-driven model that is founded by transparency, innovation, ability
to adapt quickly, and connectivity. EIT Food’s overarching organizational principles
are as follows:
• partnerships guided by solid leadership and coupled with project ownership and
execution by partners;
• well-defined and transparent decision-making mechanism and reporting
processes;
• prioritization of outcomes over processes to generate commercial output and
value to society;
• innovation by responsible partnerships with consumers that foster creativity;
• commitment to a flexible, scalable, and self-learning framework, striving for
continuous improvement;
• promotion of growth and planning for future diverse income sources.
In essence, the EIT Food organizational structure is designed to promote value
creation and capture, as well as to establish norms that safeguard compliance with
the objectives and values of EIT Food.

9.6.1 EIT Food Organizational Governance Structure

EIT Food is characterized by a strong central government that provides strategic

advice and leadership, while allowing regional autonomy and entrepreneurship to
maximize partner engagement. This central government further allocates decision-
making power strategically to represent all dimensions of the food system, thereby
creating the perfect conditions for cohesion and co-ownership throughout its net-
work. EIT Food consists of several legal entities and legally binding agreements,
which are as follows:
• the KIC Legal Entity EIT Food;
• the five CLC Legal Entities (discussed in the following sections);
• Rising Food Stars, a startup association;
• EIT Food Sparks, an investment vehicle.
EIT Food is presented as a not-for-profit association with limited liability under
Belgian Law. All EIT Food partners constitute the entirety of the association and
govern as members of both EIT Food and the CLC legal entities. EIT Food’s overall
organizational structure is characterized by a clear separation of operations, super-
vision, and partnerships. The KIC is managed by an expert executive team that is
adept at quickly reacting and interacting in response to dynamic external conditions.
9.7 Multi-Annual Business Models 269

Food ecosystem
EIT Food Partner Assembly (PA)

Supervisory Board (SB)

EIT Food ivzw (KIC LE)

Extended Management Board (EMB) Advisory Councils

Management Board (MB) EIT Food Policy

CEO
EIT RIS
Director
Director Director Director
Business COO
Innovation Education Comm.
Creation Ancillary Committees

IP / Legal
Director Director
Director Director Director Ethical / Social
CLC North- CLC North-
CLC Central CLC West CLC South Implications and
West East
Compliance

Two-way communication

Citizen Participation Forum on Food

Fig. 9.7 EIT food organizational structure. Source: EIT Food (2018)

For an illustration of the main governance bodies of the EIT Food, as well as a short
description, see Fig. 9.7 and Table 9.2, respectively.
The activities outlined in Table 9.2 are conducted and made possible by five core
processes of EIT Food—(i) strategic planning, (ii) business planning, (iii) Area
Portfolio Planning, (iv) Activity Management and Reporting Process, and (v) the
continuous improvement process (EIT Food, 2018). For a more detailed description
of these five core processes, see Table 9.3.

9.7 Multi-Annual Business Models

With its “future-focused” vision, EIT food plans ahead and creates multi-annual
business models, that guide the sustainable development of its products and services,
human and intellectual capital, and innovative solutions in order to manage itself in
way that fosters a connected European food system which focus special attention to
consumers and civil society.
270 9 A European Food Ecosystem: The EIT Food Case Study

Table 9.2 Governance, management, and executive positions of EIT food

Position Description
Partner Assembly (PA) EIT Food’s highest decision body; decides on strategic
issues and approves the EIT Food Strategic Agenda.
The PA elects the supervisory board members
Supervisory Board (SB) Consists of one representative from each CLC. The
EIT Food partner assembly elects these individuals
from a list presented by each CLC that consists of a list
of candidates with a maximum of three external
members. The SB appoints its chairmans, the CEO,
and the COO, and it is the chairman’s responsibility to
sustain the strategic position of EIT Food and secure
long-term consortium sustainability
Chief Executive Officer (CEO) The CEO is appointed by and works under the super-
vision of the SB. S/he helms EIT Food’s daily opera-
tions and focuses on achieving the goals and
objectives according to established business plans.
The CEO is tasked with liaising with EU, national, and
international programs, coordinating their activities
with EIT Food. The CEO also works in close collab-
oration with the functional directors to prepare the
Strategic Agenda as part of annually drafted business
plans
Chief Operating Officer (COO) The COO is responsible for the administrative assign-
ments reading the redaction of the Business Plan. S/he
is also responsible for the allocation of EIT funds to
the CLCs and KIC partners
Education, innovation, business crea- EIT Food’s functional directors are responsible for
tion, and communication directors developing pillar’s strategies and their implementation
in the respective key business area
Management Board (MB) The MB is chaired by the CEO, and consists of the
COO and the functional directors. MB serves as a
support system for the CEO in executing the KIC’s
daily operations and implements a range of activities
designed to support the integration of the knowledge
triangle
Extended Management Board (EMB) Chaired by the CEO, is comprised of the MB mem-
bers, and the CLC directors who coordinate the CLC
activities and ensure that KIC-level objectives are met,
and promote inter CLC-collaborations
Citizen participation forum on trust Provides everyday consumers with the possibility to
express their opinions and beliefs, and to evolve from
passive to active relationship with consumers and cit-
izens. The Forum works on policy recommendations
to strengthen EIT Food’s consumer centered approach.
The Director of Communication chairs the Citizen
Participation Forum
Advisory councils
Food policy council Focuses on vision and development for European food
systems and sets a framework future endeavours
(continued)
9.7 Multi-Annual Business Models 271

Table 9.2 (continued)

Position Description
EIT RIS council Contains representatives from science, industry, gov-
ernment, and non-governmental organizations from
EIT RIS countries that advice the development and
implementation activities specific to RIS countries
Ancillary committees
IP and legal committee Composed of IP experts that represent each CLC, and
one person representing EIT Food, and one represen-
tative of the Rising Food Stars. This community han-
dles any arising issues regarding consumer rights and
processes
Ethical, social implications, and com- Composed of one representative from each CLC,
pliance committee appointed by the PA, and serves to advice the MB with
regard to ethical and social issues, including compli-
ance with privacy and compliance with applicable
regulations
Source: EIT Food (2018)

Table 9.3 EIT food core processes

Responsible
Core process member Description
1. Strategic planning CEO Guides the work of the entire KIC by developing and
maintaining a long-term vision for the development of
European Food Systems
2. Business planning COO Translates the vision to the annual Business Plan
(BP) through a call for proposals (CfP) scoped and
guided by the SB
3. Area Portfolio Functional Transforms (BP) into an executable plan. This involves
planning directors the creation of detailed Activity Plans per activity and
the Partner Agreements, which summarize the responsi-
bilities of each partner
4. Activity manage- COO Tracks implementation of BP through regular reporting,
ment and reporting quality control, KPI tracking, and ecosystem wide com-
munications. These activities result in the annual Cost
and Performance Report and the related KPI and impact
reports
5. Continuous COO Regularly collects lessons learned and best practices
improvement throughout the ecosystem in order to identify elements
that improve efficiency
Source: EIT Food (2018)

With this business model approach, EIT Food aims to continuously expand its
activities, incorporating emerging knowledge and adapting to the changing environ-
mental conditions in efforts to raise EIT Food into a high-impact and sustainable
innovation and educational entity.
272 9 A European Food Ecosystem: The EIT Food Case Study

9.7.1 Financial Sustainability

EIT Food’s main funding streams come from the EIT and the KIC’s partners’
contributions. However, the business model approach discussed above aims at
ensuring financial sustainability once the annual EIT contributions decrease. EIT
Food has focused on developing a diversified income stream and therefore ensuring
a sustainable future and the progression of the consortium. This sustainability-based
model is guided by the EIT Governing Board and prepares EIT Food for the total
loss of EIT KAVA funding. This model is holistically inclusive of all parts of the
network, and all four pillars are expected to contribute to the projected sustainability
income, thereby delivering significant and reliable financial income streams (EIT
Food, 2018).
Possible additional income streams are tools to assist EIT Food in breaking even
with expenses, and eventually to re-invest in its own services to continue serving as a
catalyst for food system transformation. For example, in current calls for proposals,
applicants are asked to describe the mechanisms and financial planning for generat-
ing a financial backflow to EIT Food upon successful completion of the activity.
This novel approach is based on a sustainability contribution that partners are
expected to pay once they commercialize the results of activity-funded projects.
Finally, EIT is continuously adapting and developing its sustainability model
annually. In essence, the sustainability of EIT Food will be ensured through a joint
long-term vision and partner commitment with its innovative business model
approach to deliver significant and continuous income streams (Fig. 9.8).

9.8 EIT Community

9.8.1 EIT Food Partnerships

As abundantly stated in this text, the food system is a complex structure, which
comprises multiple layers and includes partners from several industries (e.g., elec-
tricity, transportation, marketing, etc.). Furthermore, many calls to action have
centered on the concept of systems thinking in order to decrease the inter-sectorial
and inter-industrial gaps. In efforts to address these challenges within the European
food system, EIT Food employs a well-defined and clear partnership growth strategy
to deliver impact for all members of the food system.
EIT Food’s partners form a remarkable group of world-class multinational
enterprises. SMEs, universities, research institutes, and everyday citizens that com-
plement each other’s capabilities. Furthermore, the key leaders of partner organiza-
tions express a personal and organizational commitment to the EIT Food strategy
and its approaches, which the main driver of the sustainable success of EIT Food
(EIT Food, 2018). EIT Food strategically selects its partners in efforts to create its
network of world-class and well-balanced resources that encompass every phase of
9.8 EIT Community 273

Creating a world leading innovation ecosystem for food production and nutrition

Self-sustaining
Innovation Engine
5 GROWTH
PHASE
YEARS

Build sustainable ecosystem

Transform the new ideas into innovation,

2
YEARS
RAMP - UP
PHASE
businesses and jobs

Building foundation and partner network

Fig. 9.8 Multi-annual business model. Source: EIT Food (2018)

the food value chain and its complementary areas. The existing partnerships also
pave the way for integrating the complex entities of SMEs, startups, and consumers.
Through this multi-disciplinary partner network and to organize the roles and
responsibilities of each consortium member, EIT employs a model that consists of
different categories that represent different partner rights and responsibilities. For
instance, they are: “EIT Food Partners”, “Network Partners”, “Associate Partners”,
and the startups of the “Rising Food Stars”.

9.8.2 Partner Categories

EIT Food employs a partnership model that consists of three options for becoming a
network member, each with a different set of predefined rights and obligations—i.e.,
Core Partners, Rising Food Stars, Network Partners and Associate partners.
• Core Partners: they are formal partners of EIT Food and participate in PA. All
EIT Food core partners formally select their desired membership level that is
based on their financial contributions (e.g., annual membership fees, and KIC
Complementary Activities), which determines their voting rights and access to
certain pools of funding.
274 9 A European Food Ecosystem: The EIT Food Case Study

– Gold: Annual membership fee of 100,000 Euros. These Core Partners are
granted five voting rights in the PA and unlimited access to “KIC Added Value
Activities” (KAVA) funding.
– Silver: Annual membership fee of 50,000 Euros. These Core Partners are
granted two voting rights in the PA and capped KAVA funding at max
500,000 Euros annually.
– SME: Annual membership fee of 25,000 Euros, can attend, speak, and vote
(1) in the PA, participate in EIT Food Activities, and have access to EIT
Funding of a maximum of amount of 250,000 Euros.
• Rising Food Stars: it is an established legal entity and a core partner of the KIC.
Rising Food Stars provides serves as an attractive element for a large number of
innovative startups, which engage in collaborations with EIT Food and provide
substantial added value to the network.
• Network Partners: they are not formal partners of EIT Food but participate as
project and network partners. Their financial contribution to the KIC is a man-
agement fee of 4% of the received KAVA funding, which is capped at a
maximum of 60,000 Euros annually.
• Associate Partners: they must be a legal entity and have the ability to contribute
or participate in one or more of the EIT Food Activities upon invitation of a Core
Partner or EIT Food. These partners may participate in EIT activities with no EIT
funding when invited to participate by EIT, a Core Partner; Associate partners do
not have the right to lead activities. These partners may use the label of “Asso-
ciate of EIT Food” for the time they participate, and the EIT Food MB may invite
these partners to Matchmaking or Innovation marker activities to help them
expand their network. Associate partners are not required to pay a membership
fee and do not participate in the Food Partner Assembly.
EIT Food Core Partners, as members of the consortium, commit to pay the
partnership fee and to support and facilitate the active participation of their organi-
zations in the array of EIT Food Programs. Rising Food Stars is an association of
high-potential startups tackling issues in the food system, and functions to enable
networks and open collaboration among a large pool of innovative startups. These
startups benefit from EIT Food’s extended networks and its access to technology,
financial resources, and human capital. These startups, however, not only cultivate
outputs from the Rising Food Stars but also provide valuable input to the EIT Food
ecosystem by driving EIT Food activities as linked third parties. Moreover, they do
that through their breakthrough and innovative technologies and disruptive business
models. Finally, network partners are legal entities that have demonstrated their
capability to contribute to the KAVA. They function to extend to complement and
extend the reach of EIT Food, especially to SMEs and consumers throughout
Europe.
9.9 Start-Up Support 275

9.9 Start-Up Support

9.9.1 Rising Food Stars

Rising Food Stars is a unique association that functions as a supportive entity for
startups by providing them with access to knowledge, networks, and the entrepre-
neurial opportunities to engage in EIT Food’s diverse range of activities.
Importantly, it is important to note the distinction that Rising Food Stars is a
subsidiary of EIT Food central and functions as a not-for-profit entity, and is itself a
Core Partner of EIT. This provides an interesting outcome since it means that all of
the startups currently being housed by the Rising Food Stars are also core partners in
the network, but with slightly higher restrictions than the Core Partners discussed in
Sect. 9.8.2.
Upon joining Rising Food Stars, startups benefit from access to the expert partner
network, programs, technological resources, technical-entrepreneurial support, and
access to potential markets and distribution channels. These services, collectively,
provide the opportunity to significantly accelerate the development of startups and
ensure their growth potential. Specifically, like Core Partners, Rising Food Stars
members are viewed as core partners, albeit existing limits regarding access to EIT
Funding. These members do not pay a membership fee but are capped at a maximum
of 100,000 Euros from KAVA funding. These startups do, however, have the
possibility to apply for further funding through EIT Food but will need to justify
their requests explicitly.
Furthermore, it is not only the startups that benefit from this partnership. The
resulting collaborations between Rising Food Stars and other EIT Food Partners
provide and entrepreneurial and fluid innovation culture that brings added human
capital from the entire food system to EIT Food. In addition to that, it funnels
unprecedented value to emerging innovations in terms of new technologies and
innovative business models.
Rising Food Stars elevates startups to viable business ventures, and helps entre-
preneurs gain international recognition as game changes for future food systems.
Specifically, the benefits provided by Rising Food Stars are as follow:
• provides access to, and collaboration with, EIT Food’s expert network of indus-
trial, academic, and research partners, and provides access and communication
and distribution channels to potential markets;
• encourages startups to further develop their innovation in EIT Food projects in an
international context;
• increases the visibility of startups by promoting access to the most popular Food
System events in Europe and other areas;
• provides guidance on European project opportunities including funding and
financial possibilities;
• supports innovations, investments, and business growth;
• facilitates access to necessary laboratories and equipment at partner research
institutions and companies to further develop products and technologies.
276 9 A European Food Ecosystem: The EIT Food Case Study

Finally, in order to become a member of the Rising Food Stars, startups need to
respond to an annual call for new members. The call is launched every Spring on the
FS6 platform (an application website, that is home to over a million tech founders
and startups searching for funding) (FS6, 2019).

9.9.2 EIT Food Sparks

EIT Food Sparks is a unique initiative to provide access to funding. Food Sparks is
financed by voluntary EIT Food partners who are granted access to the deal flows,
and therefore does not utilize EIT funding. The target group for funding is startups
that have graduated from the EIT Food accelerator. The initiative not only funds
high-potential startups, but it also provides access to management support, the
entirety of existing EIT Food human capital, distribution, and dissemination chan-
nels, and opens doors to potential markets. This is a one-of-a-kind program that not
only supports, but also accelerates the success of startups.

9.10 EIT Food Impact

EIT Food’s strategic objectives, highlighted by the extended educational, innova-

tion, communication, and business creation programs, will lead to significant
impacts for people, consumers, and hopefully to the whole food system. Its progress,
performance, and impact will be monitored through Key Performance Indicators
(KPIs).

9.10.1 EIT Food Impact through Synergies

EIT functions as a powerful bridge between initiatives at the European, national, and
regional levels in efforts to improve the overall impact of EIT Food. To achieve this,
EIT Food has defined three distinct approaches to harness the potential of these
synergies in a structured manner in order to most effectively generate the desired
impact and reach essential potential entrepreneurs that are traditionally external to
the agri-food system.
1. Specifically, the directors from the three EIT Food pillars relating to the knowl-
edge triangle (i.e., Innovation, Education, Business Creation) are encouraged to
actively seek collaborations in the form of co-creation projects with other stake-
holders in the food system. Furthermore, based on EIT Foods Strategic Report for
2018–2024, the Food KIC already possesses a list of the most promising partners
9.10 EIT Food Impact 277

and initiatives in order to define concrete and sustainable projects to create

maximum impact.
2. Two-way exchanges and consultations with relevant initiatives that are coordi-
nated by the Director of Communication to identify joint opportunities and work
together towards common policy goals. The Food Policy Council will be the
governing body (when applicable) to maximize the impact of the synergies.
3. Information and communication (i.e., knowledge exchanges and open innova-
tion) will be pursued with other organizations (e.g., with a consumer focus),
governmental bodies, and other mutually beneficial programs through the
communication team.
EIT Food actively seeks collaborations as far as to call for projects, and in
business creation endeavors, especially in promoting startups. With this in mind,
EIT Food enables internal synergies by employing the Knowledge Triangle Integra-
tion model in order to unite Education, Research and Innovation, Business Creation
and Entrepreneurship, and Communication (EIT Food, 2018).

9.10.2 Key Performance Indicators

EIT Food operates based on a results-driven performance management approach,

which closely monitors EIT Food’s performance (e.g., progress, inputs, and outputs)
through well-defined and measurable Key Performance Objectives (KPIs).
EIT as an institution already contained established KPIs; however, these did not
account for the specific targets of the food system, so EIT Food developed its own
specific set of KPIs that are designed to measure the progress of EIT Food continu-
ously. The specific EIT Food KPIs serve as qualitative indicators that seek to
optimize measurements and tracking of the impact EIT Food aims to achieve.
Furthermore, each pillar of the KIC has its specified KPIs.
• Innovation & Research KPIs: Measure the extent to which EIT Food brings
innovation to the market and the involvement of relevant successors.
• Education KPIs: Measure the progress of the provision of education to students,
professionals, and executives (including non-food disciplines) by EIT Food.
• Entrepreneurship & Business Creation KPIs: Measure how EIT Food enables
sustainable business creation (e.g., the number of Rising Food Stars)
• Communication & Community Engagement KPIs: Focuses on issues such as
awareness of EIT and the KIC brand (EIT Food) and the potential value of cross-
KIC activities.
For a projection of the KPIs, see Fig. 9.9.
Finally, EIT Food is also engaged in actively monitoring number of KIC and
network partners, as well as their consortium membership satisfaction rate.
278 9 A European Food Ecosystem: The EIT Food Case Study

Fig. 9.9 Projected impacts of EIT food. Source: EIT Food (2018)

9.11 Conclusions

EIT Food is on a mission to create a new horizon for food system innovations and
entrepreneurship in Europe. By building bridges between consumers, startups,
industry partners, innovators and entrepreneurs, SMEs, and universities, EIT Food
aims to create immediate actions from trans-disciplinary expert collaborations to
achieve a sustainable and future food system.
Many experts and scholars agree that research, innovation, and education should
be viewed through a more holistic lens, and research results better put into practice
through innovation which transform knowledge into capacity, resulting in new
products and services (Tataj, 2015). Regarding food systems, interventions should
be more focused on a specific challenge, concrete, detailed, and transparent, while at
the same time keeping in mind the possible contributions of different food system
actors. Furthermore, to create these synergies that drive the innovations to begin
with, access to support services for startups, SMEs, industry, and lower performing
actors of the food system should be improved.
EIT Food implements the organizations’ objectives to enhance entrepreneurship
on the path towards social, economic, and environmental wellbeing, bringing the
European Food system at the helm of innovations of the twenty-first century. By
eliminating its fragmented structure, lack of consumer trust, limited innovation,
and slow adoption of new technologies, EIT Food is steadily achieving its mission
to catalyze the transformation of the food system by building, managing, and
empowering a sustainable and trusted multi-stakeholder network of food ecosystem
agents of change.
References 279

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