Hamburg's Entrepreneurial Ecosystem And The Next Media Initiative. Moritz Philip Recke

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      2.3 Public Policy Towards Entrepreneurship

      Just like politics, entrepreneurship is local, since any type of enterprise must start somewhere (Ács & Armington 2006). Historically public policy surrounding economic development was focused on attracting existing firms from somewhere else to relocate or expand into the region. The concepts behind public policy towards entrepreneurship take a fundamentally different approach. According to the Knowledge Spillover Theory, entrepreneurship can generate economic growth by penetrating the knowledge filter. It focusses on commercialising recognised business opportunities that would otherwise remain unutilised through the formation of new firms (Ács & Szerb 2007).

      Over the past decades globalisation led to the loss of jobs and stagnation in many regional economies. Therefore policy makers at state and municipal levels started to implement policies to strategically manage the regional economic development. Measures focussed on entrepreneurship in general as a driver of economic growth and subsequently resulted in new public policy agendas promoting entrepreneurship on all levels of government in the western world (Gilbert et al. 2004).

      Economic growth and Job Creation

      In 2000 the Global Entrepreneurship Monitor established an empirical link between entrepreneurial activity and economic growth at the country level (Reynolds et al. 2000). To show the effect more drastically, Kane (2010) gathers from U.S. employment data that startups create an average of 3 million new jobs per year, while all other firms combined loose 1 million jobs per year on average and claims them to be de-facto job destroyers. Furthermore he indicates that job growth is in fact solely driven by organically growing startup firms and implicates that effective public policy should include a more essential consideration for startup firms.

      Many public policy initiatives around the world reflect these findings. For instance, the German Ministry of Economics and Technology (1999) introduced a variety of instruments to stimulate the founding of new enterprises, especially in high-technology industries. The EXIST program - aimed at startups spun-off from universities and research institutions - explicitly lists creating entrepreneurial culture, commercialisation of scientific knowledge and increasing the number of innovative startups as its goals (Bundesministerium für Bildung und Forschung 2000).

      Entrepreneurship Policy Effectiveness

      Still, the merits around the connect between entrepreneurship and economic growth are highly disputed in scientific literature, as there is also evidence indicating it does in fact not always contribute to economic growth (Kösters 2010).

      It is shown by many researchers, that high-growth entrepreneurship disproportionately effects innovative change and economic growth (Autio 2005b, Henrekson & Johansson 2008, Stam et al. 2009), while other forms of entrepreneurship do not.

      Most small firms do not grow (or do so only very slowly) while a few high-growth ventures are responsible for job creation (Ács & Mueller 2008). Although forms of entrepreneurship such as self-employment are preferable to unemployment, there is no evidence that it is economically preferable to regular employment (Autio 2005b).

      To promote economic growth and job creation, public policy should therefore focus specifically on entrepreneurial firm growth. Since high-growth ventures are different from any other kind of new firm formation, they require unique forms of support.

      The main differentiators between regular entrepreneurship policy and high-growth entrepreneurship policy are quantity and quality. While regular entrepreneurship policy tries to increase the number of new firms and their stability, high-growth entrepreneurship policy focusses on quality and dynamism (Autio et al. 2007).

      The most relevant differences between regular entrepreneurship policy and high-growth entrepreneurship policy are illustrated below (see table 5). Although the importance of high-growth ventures for economic growth has been substantiated in empirical research and the intention to foster high-growth ventures is commonplace among policy makers, only very few public policy agendas target them explicitly or exclusively (Autio et al. 2007).

      Providing public resources at some level to every entrepreneurial entity is not compatible with the goal of generating economic growth and job creation. Still, most policies remain general, unfocused and accentuate quantity. Economic impact requires more complex policy designs at different levels, well thought implementation and monitoring (Autio et al. 2007).

      Entrepreneurship policy should cover various layers of society (see table 6) - from the individual entrepreneur to national economic and societal context - since it might not lead to positive outcomes if specific layers are ignored (Ács & Armington 2006).

      Only if balanced measure are taken, considering both regional economic and social contexts, high-growth entrepreneurship can be stimulated. This calls for broad collaboration between multiple political stakeholders and policy shaping departments or ministries; and requires them to target their measures horizontally rather than vertically and expects active participation from industry, university as well as financial entities (Autio et al. 2007).

      Entrepreneurship Policy Categories

      Public policy measures for supporting high-growth oriented entrepreneurial ecosystems can be categorised as follows according to an examination of support initiatives in nine countries undertaken by Autio et al. (2007):

      • BA and VC access

      • Business coaching

      • Business idea competition

      • Commercialisation subsidies

      • Consulting subsidies

      • Entrepreneur training

      • Entrepreneur spawning

      • Incubation and technology parks

      • Internationalisation financing

      • Loan subsidies

      • One-stop information shop

      • R&D tax cuts

      • Research commercialisation centers

      • Research commercialisation grants

      • Technological development subsidies (equipment & IP)

      • Venture capital (tax) subsidies

      • Venture capital funds

      Furthermore, these measures can be clustered around pre startup formation and post startup formation as well as assigned to traditional policy domains such as innovation policy, business/industrial policy and financial market СКАЧАТЬ