Innovation Capabilities, Technology Adoption, and Financial Structure of New Ventures in a Border Territory: Sectoral Evidence From Cúcuta, Colombia

Abstract

Border territories subject to abrupt closure of cross-border trade offer a natural setting for examining how new ventures build competitive capabilities under conditions of systemic disruption, yet sectoral evidence from such settings is scarce. This article characterizes the innovation capabilities, technology adoption, and financial structure of ventures created in Cúcuta, Colombia, on the border with Venezuela, following the 2015 closure of the binational border. A quantitative, analytical, non-experimental field design was applied to a probabilistic sample of 156 micro, small, and medium enterprises created between 2016 and 2018, drawn from a population of 260 registered ventures and stratified across three economic sectors: manufacturing, wholesale and retail trade, and accommodation and food services. Data were collected through an expert-validated questionnaire whose subscales attained Cronbach's alpha coefficients between .754 and .959, with an overall mean of .850. Results reveal three convergent patterns. First, innovation is predominantly incremental across all three sectors, with radical innovation virtually absent and a substantial share of trading firms reporting no product innovation at all; distinctive capabilities differ sectorally, as manufacturing concentrates on innovation while trade concentrates on customer responsiveness. Second, technology adoption is dominated by the acquisition of software and by mixed mechanical-electronic control systems rather than by automation, and it coexists with decision-making concentrated in fewer than three people per firm. Third, and most unexpectedly, public funds constitute the principal source of initial capital across all three sectors, ranging from 66% in trade to 80% in accommodation, while venture capital and bank lending are marginal, and reported financial position clusters at medium levels for manufacturing and trade and at high-to-medium levels for accommodation. The study argues that this configuration describes a subsidized survival equilibrium in which public financing sustains firm creation without generating the technological depth required for growth, and derives implications for regional entrepreneurship policy in border economies.