The Oil Clean-up Industry

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How the Oil Spill Disaster Underlines the Oil Clean-up Industry’s Potential as a Business Sector

The national commission’s (2011) report clearly indicates, that the most controversial part of technology discussion, was the decision of whether or not to use chemical dispersants instead of mechanical solutions. Choosing between insufficiently investigated novel mechanical methods and spreading chemicals on the water surface was regarded as a “trade-off of bad choices” (National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011, p. 143). Even though dispersants represent an alternative to skimming or burning in case of bad weather, the potential threats were not explored to the full extent yet (National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011). This insecurity in suitable and sustainable mechanical solutions opens the window of opportunity for innovation and further research.

The XPrize Foundation

XPrize is a U.S.-based non-profit organisation with a social-entrepreneurial orientation, which initiates innovation prizes in various challenges. XPrize describes itself as ”an innovation engine. A facilitator of exponential change. A catalyst for the benefit of humanity” (XPrize, Who we are, 2015). Compared to charity organisations, social entrepreneurs aim to find solutions for problems rather than alleviating their consequences, and empower people to help themselves instead of trying to take care of them (Dees, 2012). One tool that reaches increasing importance in this field is the creation of innovation competitions such as the WSOCXC in 2010/2011. Innovation competitions ”set a clear, measurable, and objective goal and offer a large prize to the first person to achieve it” (Diamandis & Kotler, 2015, p. 520). They offer 16 the potential to foster innovation and find solutions that seemed to be impossible at first (Diamandis & Kotler, 2015).

The Wendy Schmidt Oil Cleanup XChallenge

The challenge was designed as a result of the disastrous results of the BP oil spill in April 2010. The goal was to re-design existing spill removal techniques, find more efficient solutions to remove oil from the ocean surface and increase performance of existing skimmer/boom systems technology (Herox, XPrize Case studies, 2015). The use of traditional clean-up methods only achieved to remove less than 50 per cent of the oil. Therefore, the challenge was to, at least, double the amount of oil recovered per minute and to reach an Oil Recovery Efficiency Rate of minimum 70%. A grand prize of one million US Dollars for the winner, 300.000 US Dollars for the second and 100.000 US Dollars for the third place should arouse the necessary motivation (Diamandis & Kotler, 2015, p. 537). In the first phase of the competition, the teams would present their designs to judges, who selected the ten most promising plans (Herox, XPrize Case studies, 2015). The decision was based on: “feasibility, commercialization plan, the ability of the technology to improve over the baseline of performance, the ROM cost of approach, the ability to minimize negative environmental impact, and the ability to deploy the system during the testing phase of the competition” (Herox, XPrize Case studies, 2015). Those ten teams then received the opportunity to test their prototypes at the National Oil Spill Response Research & Renewable Energy Test Facility (OHMSETT), evaluated on the achieved Oil Recovery Efficiency (ORE) and Oil Recovery Rate (ORR) (Herox, XPrize Case studies, 2015).

The Model of Entrepreneurial Motivation

The model of entrepreneurial motivation, developed by Naffziger et al. (1994), examines the motivation of start-ups as well as the motivation behind sustained entrepreneurship. The model states that the crucial portion of the entrepreneurial process is the decision to remain in business, launch a new company or to abandon the business completely. It is also argued, that the decision to sustain entrepreneurship, i.e. to stay in business, is closely related to company performance but is also dependent on company ownership. Their theory provides a broad overview of the field of entrepreneurial motivation, which should include “behaviors necessary for the operations of the firm, its performance and the psychological and non-psychological firm outcomes” (Naffziger et al., 1994, p. 31). Elementary to the process and evaluation is the performance of the company, without a constantly successful business the entrepreneur might be worse off than if she had not started the business in the first place (Naffziger et al., 1994).

Commencement of Entrepreneurial Activity

Davidsson (1991) argues that in order to understand the motivation for growth, one must understand the factors behind it. The individual behind the company is a substantial factor of growth and sustainability of the company. Factors such as previous experience, the need for economic achievement and economic goals as well as the personal environment and personal characteristics heavily influence the decision to behave entrepreneurially (Davidsson, 1991; Gimeno et al., 1997; Naffziger et al., 1994). Subjective 21 norms, on the other hand, measure external factors such as social pressure to behave entrepreneurially. For a family-owned organisation that pressure could lead to increased motivation (Gimeno et al., 1997). Additionally, motivation could be driven by the wish to be self-employed and a wish for autonomy (Naffziger et al., 1994).

Research Purpose

The research design is distinguished by the study’s research purpose, which can be of exploratory, descriptive or explanatory nature. With regards to the subsequently following choice of method, three conditions help to determine the research purpose: (1) the type of research question, (2) the degree to which the researcher can execute control over the behavioural events and finally (3) the question, if the study rather focuses on historical or contemporary events (Yin, 2009, p. 8). Whereas descriptive studies provide an explicit picture of a person, event or situation, they lack subsequent analysis and referring conclusions on the issue (Saunders et al., 2009, p. 140). Explanatory research, on the other hand, is used to explain causal relationships between different factors (Saunders, 2009, p. 141). Asking the question of ’what’ (…factors motivate entrepreneurs to take part into an innovation competition?) indicates, in this thesis’ case, exploratory research with ”the goal being to develop pertinent hypotheses and propositions for further 25 inquiry” (Yin, 2009, p. 9). Furthermore, the study helps gain an understanding of the contemporary question of entrepreneurs’ motivation for entering into an innovation competition as well as their motivation to continue business after the commencement of the competition.

Table of Contents :

• 1 Introduction
  • 1.1 Background
  • 1.2 Problem Statement
  • 1.3 Purpose of the Study
  • 1.4 Research Questions
  • 1.5 Delimitations
  • 1.6 Definitions
  • 1.7 List of Abbreviations
• 2 Frame of Reference
  • 2.1 Entrepreneurship
    • 2.1.1 Factors that Motivate Entrepreneurs
  • 2.2 Innovation Competitions
  • 2.3 The Oil Clean-up Industry
    • 2.3.1 How the Oil Spill Disaster Underlines the Oil Cleanup Industry’s Potential as a Business Sector
  • 2.4 The XPrize Foundation
    • 2.4.1 The Wendy Schmidt Oil Cleanup XChallenge
  • 2.5 Theoretical Perspective
    • 2.5.1 The Model of Entrepreneurial Motivation
    • 2.5.2 The Threshold Model
  • 2.6 Motivation at Different Phases of Entrepreneurial Activity
    • 2.6.1 Commencement of Entrepreneurial Activity
    • 2.6.2 Continuation of Entrepreneurial Activity
    • 2.6.3 Abandonment of Entrepreneurial Activity

• 3 Methodology
  • 3.1 Research Philosophy
  • 3.2 Research Design
    • 3.2.1 Research Purpose
    • 3.2.2 Research Strategy – Case Study
    • 3.2.3 Unit of Analysis
    • 3.2.4 Selection of the Cases
    • 3.2.5 Research Choice
    • 3.2.6 Time Horizon
  • 3.3 Data Collection Process
    • 3.3.1 The Interviews
  • 3.4 Data Analysis
  • 3.5 Quality of the Research Design
• 4 Presentation of Findings
  • 4.1 Characteristics of the Cases
  • 4.2 The Case Companies at Commencement of the
  • Competition
  • 4.3 The Case Companies During the Competition
  • 4.4 The Case Companies’ Continuation after the Competition
• 5 Analysis
  • 5.1 Within-Case Analysis
    • 5.1.1 Company A
    • 5.1.2 Company B
    • 5.1.3 Company C
  • 5.2 Cross-Case Analysis
    • 5.2.1 Motivational Factors for Entering an Innovation
  • Competition
    • 5.2.2 Motivational Factors for Continuing Business After
  • Participation in an Innovation Competition
• 6 Conclusion
• 7 Discussion
  • 7.1 Limitations
  • 7.2 Recommendations for Further Research
  • List of references

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Does the Winner Take It All? A Case Study on Entrepreneurs’ Motivation in an Innovation Competition