ABSTRACT
University and industry researchers in Germany based their own laser activities on the prior state of the art in international laser research. Their research efforts enabled the development of marketable products that allowed German firms and entrepreneurs to enter the laser industry. In addition to these researchbased channels of international knowledge transfer, further entrants to the German laser industry primarily derived their capabilities from foreign, particularly US and UK, producers of commercial lasers. Several entrepreneurial de novo entrants to the German laser industry were started by former employees of foreign laser producers. Accordingly, the spin-off process, which has previously been identified as an important source of entrant capabilities in the US laser industry (Klepper and Sleeper 2005), also had an international dimension. In addition, a substantial number of entrants started out as importers and distributors of foreign lasers before successfully integrating into the manufacturing stage of the industry. The presence of foreign competitors thus gave rise to international knowledge transfers between firms, providing a further avenue of entry for new German laser firms. This private-sector international knowledge transfer did not operate through direct foreign investment, as was suggested by Vernon (1966), but through spin-off entrepreneurship and also vertical integration from laser imports and sales into manufacturing. These activities have received little prior attention as vehicles of international knowledge transfer.
