Investigating the Impact of the Business Environment on the Dimensions of the Innovation Valley of Death; A Case Study of Startups at the Isfahan Science and Technology Town

Document Type : Original Article

Authors

1 PhD student in Entrepreneurship, Faculty of Entrepreneurship, University of Tehran,Tehran, Iran

2 Associate Professor, Faculty of Entrepreneurship, University of Tehran, ,Tehran, Iran

3 Professor, Faculty of Entrepreneurship, University of Tehran,Tehran, Iran

10.22034/jstp.2026.12276.2034

Abstract

The innovation valley of death represents a critical bottleneck in the transformation of novel ideas into marketable innovations, particularly for small and early-stage firms. Policymakers within national innovation systems aim to mitigate these challenges through targeted interventions; however, the role of the business environment remains pivotal. This study investigates how various dimensions of a country’s business environment influence the challenges associated with the innovation valley of death. Adopting an exploratory and applied approach, this qualitative research employs a multiple case study design involving eight successful and unsuccessful innovative firms. Data were collected through in-depth interviews and analyzed using thematic analysis in conjunction with the “railway model” of the innovation valley of death. The rigor of the analysis was ensured using the criteria proposed by Guba and Lincoln. The findings identify 18 key factors within the national business environment that exert both facilitating and constraining effects on different stages of the innovation valley of death. These factors are synthesized into a force field model. The results indicate that existing policies are relatively effective in addressing challenges during the early (research and laboratory) stages. However, as firms transition toward semi-industrial, industrial, and commercialization phases, structural deficiencies in the business environment become more pronounced, exacerbating the challenges faced by innovators. The study concludes that substantial policy reforms are required to improve the business environment and support firms in successfully navigating the later stages of the innovation valley of death

Keywords

Main Subjects

References

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