Brief was prepared by empirica Communication and Technology Research, Bonn, Germany. The principal author is Stefan Lilischkis.
-lated issues among stakeholders, in particular at INNO-Grips workshops. Validated Policy Briefs shall be published on the INNO-Grips website
Economics, Erasmus University Rotterdam, Netherlands Disclaimer Neither the European commission nor any person acting on behalf of the Commission is responsible for the
Enterprise and Industry D/1"Policy Development for Industrial Innovation "Rights restrictions Material from this Policy Brief can be used freely
4. 2. 1 Entrepreneurship...36 4. 2. 2 Access to finance...39 4. 2. 3 Internationalisation...
policies to back venture finance...68 5. 4 Japan: Diversification and clustering of SMES for future growth...
programmes and venture capital increased the number of high-growth companies considerably Lack of evaluation studies: There is a lack of
The OECD defines high-growth enterprises as firms with average annualised growth in employ -ees or in turnover greater than 20%a year, over a
-zelles†are born newly high-growth enterprises not older than five years. These definitions have be
-Eurostat Entrepreneurship Indicators Programme found that in 2006, the USA were ahead of most European countries for which data were available
economic theories. Most relevant here are the theories of market failure and state failure. Market failures with respect to policies in support of high
The answer to the question why enterprises grow is complex. Many factors can trigger enterprise
growth and, vice versa, possible barriers to growth are manifold. In recent years, research has widely
of high-growth enterprises is small, but the number and share of jobs they create is disproportionally
support high-growth enterprises is still small. Re -search for this Policy Brief found hardly any fo
Investment Fund. Targeted national policies for high growth SMES were mainly found in the Nordic
Entrepreneurship: Certified coaching may help grow SMES and cross the â€oechasm†between pilot markets and mass markets.
advantage of coaching opportunities, and there is as of yet, no appropriate infrastructure to encour -age the replication of coaching networks through
Improving access to venture capital (VC) may be a priority policy objective when supporting high-growth SMES.
European venture capital market. Section 4. 2. 2 Internationalisation: Companies seeking to grow quickly need large international markets.
Enterprise Europe Network (EEN) may not be tan -gible enough for SMES, and the EEN€ s search tool
-ment-funded research and venture capital; Israel is of particular interest due to its current innovative and economic performance.
for venture capital (VC. VC support to SMES has been shown to lead to more high growth SMES.
-eral thousand German enterprises, the single most important reason for growth stated by high-growth
of business opportunities The most important reasons for non-growth stated by non-high-growth enterprises were an unfavour
-able development of the business cycle and strong competition. The companies stated a great variety of reasons for non-growth, including e g. unfavour
-able political framework conditions. Section 6 Policies for high-growth innovative SMES v1. 6 7
-port high growth of enterprises in order to leverage the positive impact of these enterprises. Such poli
-cies in any case need to result from market failure 2. Seeking sustainable (high) growth: As high
Since high-growth enterprises can be found in any industry and since business ecosystems, which
for example, be related to investment regulation, start-up regulation, market entry barri -ers, labour law, bankruptcy law, taxation, and also
Market, e g. for venture capital, rather than launch -ing specific measures for high-growth SMES 8. Enhance coaching opportunities:
Since many SMES do not take advantage of coaching opportu -nities and may not know where to find qualified
single market for venture capital 10: Improve internationalisation opportunities Since high growth requires tapping larger markets
and national markets may be too small, interna -tionalisation of SMES should thus be facilitated This may include further work towards single mar
Commission†s Enterprise Europe Network Policies for high-growth innovative SMES v1. 6 8 1 Setting the scene:
-ter fast growing enterprises †sometimes labelled â€oegazelles†or, when having reached considerable size, â€oego
-rillasâ€. 1 These enterprises are seen as important drivers of economic growth, employment and social well -being.
Asian economies. For example, while the US are home to companies such as Google, Microsoft and Ama
Therefore Europe is eager to find effective ways to promote high-growth enterprises. In particular, Europe seeks to strengthen growth of enterprises that are yet small
or medium-sized but possess high potential to grow fast in order to become the Googles, Microsofts or Amazons of tomorrow.
-pean Commission†s â€oeinnovation Union†Communication of October 2010, one of seven flagships of the
economic growth and job creation) to support all SMES"a little bit, "or to concentrate efforts on those with the highest growth potential
-tial. †An annual performance scoreboard of the EU is to include an item â€oe3. 1. 3 High-growth enterprises (with more
4) Entrepreneurship, access to finance, SME internationalisation, as well as opportunities and risks of sectoral policy approaches are dealt special issues with here
The Policy Brief will prioritise specificity over broadness. Since several general studies about high-growth in
on evidence from literature analysis, case studies, an enterprise survey and expert interviews Structure of this Policy Brief
European and national policy approaches as well as specific issues related to entrepreneurship, access to finance, internationalisation and industry focus.
-ings about reasons for growth and non-growth from an enterprise survey. Finally, Chapter 7 draws conclu
Type of enterprises focused in this study This Policy Brief follows the OECD definition which defines high growth enterprises as follows:
â€oehigh -growth enterprises, as measured by employment (or by turnover), are enterprises with average annualised
growth in employees (or in turnover) greater than 20%a year, over a three-year period,
and with ten or more employees at the beginning of the observation period. †4 A size threshold of ten employees is suggested to
avoid the growth of micro enterprises distorting the picture. Excluded from this definition are companies that
A certain share of high-growth enterprises are defined so-called â€oegazelles†as â€oehigh-growth enterprises born five years or less before the end of the three-year observation period. †6 This means that this Brief also deals
with â€oegazellesâ€, but they are not the exclusive focus of interest because this Brief also considers companies
-erature about high-growth enterprises †there is also the notion of â€oegorillas†for companies that grow quickly
size that does still not make much difference from a regional or national economy point of view
Furthermore, this Brief does not consider just any high-growth enterprises, but only innovative high-growth
enterprises. This focus can be justified with empirical findings: Innovative companies in Europe were found to be more likely to perform over 20%growth in three consecutive years than non-innovative companies
Finally, this Brief considers small and medium-sized enterprises (SMES), defined as companies with less
Exhibit 2-1 visualises the share of enterprises which this studies targets Exhibit 2-1:
high growth innovative enterprises high growth innovative SMES innovativesmes gazelle -SMES high growth SMES all SMES
all enterprises Note: Circle sizes do not reflect the actually existing number of companies. In particular, high-growth enterprises and in
-novative enterprises are in reality just a small share of all enterprises. Not shown: There are gazelles that are not SMES
Source: empirica A definition of innovation The OECD€ s â€oeoslo Manual†is accepted a commonly source for definitions of innovation.
or economy outside the governmentâ€. 13 Policies include, but are limited not to, taxation, regulation, expendi
Primary data collection ï Representative enterprise survey (CATI ï INNO-Grips case studies and case briefs
13 Deardorff's Glossary of International Economics, â€oepolicyâ€, accessed 2 may 2010 Policies for high-growth innovative SMES v1. 6
entrepreneurship/SMES (most relevant), economic and public policy, and innovation ï Research in publications lists of major relevant public organisations such as the OECD and business
Data from various secondary sources is used here not only for exhibiting numbers of high-growth enterprises but also for other indicators such as venture capital provision
Primary data collection The description of examples of successful support of high-growth innovative companies is a key element of
One with OECD economist Jonathan Potter one with US venture capital and innovation policy advisor Burton Lee,
and one with business advisor Re -becca Scheel from the Danish Accelerace programme Targeted questions were included in a primary enterprise survey by the Institut der Deutschen Wirtschaft
the IW Zukunftspanel (directly translated from German: â€oeiw Future Panelâ€) in early 2011. This panel includes
also larger enterprises to develop and operate business innovation projects in collaboration with other firms, universities and research institutions
ï Philipp Koellinger, Assistant professor in Economics at Erasmus University Rotterdam. He is asso -ciate editor of the Small Business Economics journal and has research interests and a sound publi
-cation track record in the fields of entrepreneurship and innovation These experts had agreed to review drafts of this policy brief
and contributed to the workshop where the re -sults were discussed. Allan Martel Consulting also contributed a case study (see section 5. 3) and an expert
-frastructure and economic stability (â€oeframeworkâ€. 14 This framework is conducive to the analysis of barriers to
The critical resources for innovative and growth-oriented companies are knowledge and capital ï Knowledge.
issues of human capital, access to specialised technology and business consulting, R&d clustering technology scouting to identify R&d projects with commercial potential, technology transfer, and an
ï Capital: Finance and real estate is fundamental for innovation. High-growth finance includes primar -ily the availability of venture capital through business angels, specialised private companies, other
corporations or public funds, but it also requires a functional banking system. Venture capital should correlate with companies†growth stages.
As regards real estate, innovative start-ups may benefit from business incubators as well as science and technology centres
Incentives to innovate and grow a company may originate in individual and social aspects ï Individual incentives include first of all income,
Markets are indispensable to sell innovative products and services on the output side ï Business start-up regulation may be an initial barrier to formation, growth and innovation
Demand conditions may sound trivial as a determinant, but consumers play a huge role in fostering
ï Infrastructure includes physical infrastructure for transportation, communication (e g. broadband energy/water as well as institutions for security, health education and the legal system
ï Economic stability and growth are conducive to future revenues and thus foster companies†invest -ment into growth. 16
Last but not least, the right timing, e g. related to market opportunities, is important for firms and for govern
venture capital Real estate: science & technology parks Incentives Individual benefits Income: direct, e g taxation, bankruptcy regulation;
Demand conditions Internal) Market rules Standards Framework conditions Infrastructure Facilities for transport, communication, energy/water
Institutions for security, health education, legal system (e g. employment and bankruptcy law Economic stability Right timing Resources
Knowledge/skills Technological: e g R&d, IPR protection Business-related: e g management skills â€oeentrepreneurial intelligence†Capital
venture capital Real estate: science & technology parks Incentives Individual benefits Income: direct, e g taxation, bankruptcy regulation;
Demand conditions Internal) Market rules Standards Framework conditions Infrastructure Facilities for transport, communication, energy/water
Institutions for security, health education, legal system (e g. employment and bankruptcy law Economic stability Right timing The arrow â€oeright timing†only indicates that the right time matters;
it does not suggest a flow from resources to markets and incentives Source: empirica 16 See Bares et al (2006), p. 13,
political measures that should be implemented to make the determinants more conducive to enterprise inno -vation and growth, the composition of effective policies and the types of enterprises that should be supported
are all controversial issues. 17 In the Policy Brief, the conceptual framework will ameliorate this analysis, al
barriers to competition etc but what is not so clear is what combination of conditions works best and, indeed, what
Although the subject of high-growth enterprises is of fairly recent interest, a considerable and further growing
In recent years the European commission charged three studies about high-growth enterprises which brought forward the following main results
In December 2010 the OECD published a report named â€oehigh-growth enterprises: what governments can do
Articles about high-growth SMES in entrepreneurship journals 2008 †2010 For this Policy Brief, the volumes of 2008 †2010 of major economic journals were scanned for articles about
The most notable initiative to make international data on entrepreneurship available may be the joint OECD-Eurostat Entrepreneurship Indicators Programme (EIP) launched in 2006.
Some key findings from the EIP are presented in the following, supplemented by data from other sources
The EIP provides data about high-growth enterprises which may be taken as a proxy for data about high
divided by manufacturing and services. 19 The most recent data available at the time of authoring this Policy Brief were for 2006.
on top for both manufacturing (8. 6%high-growth enterprises) and services (8. 2%)†see Exhibit 4. The fol
high-growth enterprises, the USA were nevertheless ahead of most other European countries for which data
about high-growth enterprises were available, including Hungary, Sweden Spain, Norway, Luxembourg Finland, and Romania.
economies (Germany, France, UK, Poland) are missing and no Asian country is included Exhibit 3-1: Share of high-growth enterprises (employment definition) in%of enterprises with ten or more
employees 0 1 2 3 4 5 6 7 8 9 10 Manufacturing*(2006) Services**(2006
*Mining and quarrying; Manufacturing; Electricity, gas and water **Wholesale and retail trade; Hotels and restaurants;
Transport, storage and communications; Financial intermediation; Real estate renting and business activities ***Employer enterprises with fewer than 250 employees
Source: OECD (2009), p. 29 The picture is similar for â€oegazellesâ€. Among the countries for which data are performed available,
share of gazelles, approximately 0. 2%for both manufacturing and services Eurobarometer A Eurobarometer survey in 2009 of more than 9, 000 companies provided data for all EU-27 countries. 20 As
-panies with the highest R&d expenditures among the largest enterprises from the US, Europe and other
countries. 21 Of the US enterprises, 22%were founded after 1975 and 57%before 1925, and of the enter
European enterprises were founded after 1975, while 86%were established before 1925. Exhibit 3-3 shows the related data
and the largest enterprises from other countries from EU-IPTS non-EU R&d scoreboard companies.
The sample for the US included 80 enterprises, the EU sample 86 enterprises and the sample for other countries 60 enterprises.
Firm-level data was provided by the Zentrum fã r Europã¤ische Wirtschaftsforschung (ZEW), Mannheim, Germany
Share of enterprises with highest R&d expenditure by age class and world 0 %20 %40 %60
Thus the share of young enterprises among large innovative companies is much larger in the US and
innovative enterprises are young, they must have passed through a period of high growth. In other
some in niche markets, enterprises that may be established long but largely unknown to the public due to
their specific products and services, but nevertheless very innovative and very important for jobs and
The current economic crisis hit the US, home to many big young global leaders worse than many European countries which are home to hidden champions
business dynamism for generating high-growth enterprises †and that more high growth firms in Europe may
On the importance of a theoretical foundation for economic policy If policy makers seek to promote high growth of innovative SMES,
principal insights of theories of economic policy. Otherwise such policies run the risk of wasting scarce re
-ities, imperfect competition and imperfect information. 26 An externality is an impact on a party that is not directly involved in a transaction.
First, innovative enterprises introduce new products, services, production processes or business methods that enhance consumer welfare.
Third, enterprises can contribute to industrial clusters and ensuing agglomera -tion benefits for other firms.
enterprises may also produce negative externalities: First, they may destroy the rents, market shares or em
-ployment of established enterprises. Second, when there are strong â€oefirst mover advantages†for market en -trants, the result may be an undesirable contest with too much rent seeking and investment from the soci
-ety†s perspective. Finally, high growth can potentially lead to high failure, turning positive externalities into
Imperfect competition means that one or a few agents in the market are able to shape the equilibrium allo
-cation by their own investment, pricing or quantity decisions. Imperfect competition may be due to entry bar
-riers e g. in the form of high â€oesunk costs†or increasing returns to scale which may lead to monopolies.
increase their profits which does not correspond to socially efficient allocations. In reality there are few, if
any, examples of perfect competition, so that there are many arguments in favour of state regulation or inter
Imperfect information may lead to inefficient investment decisions. For example, imperfect information re -lated to market conditions
and resource availability can lead to suboptimal investments. A particular type of imperfect information is asymmetric information,
holds up investment because of uncertainty. Access to growth finance is an example of asymmetric informa
and lobby groups maximise their individual utility and the profits of their members, respectively. Governments may have different objectives.
-tions may distort competition in favour of domestic firms. Thus one may favour to allocate decision rights
Second, as competition can be interpreted as a discovery process, the relationship between nations can be interpreted as a beneficial competition to search for most
effective policy solutions. These may then be implemented in other nations, too As regards asymmetric information, state failure in international relationships may also be due to institu
Many determinants of enterprise growth †opportunity seeking crucial A crucial question for evidence-based and effective policies to foster enterprise growth is:
Why do enter -prises grow? Or rather: Why do some enterprises grow while others do not?
This is a general question that requires a complex answer. 28 Hà lzl (2008) found that â€oethere are many factors
or allow the firm to react more quickly to market trends, the social capital of the entre
ventures, new product in new category ventures, new product in existing category ventures and idea trans
-fer/transplant ventures. 29 The â€oewave strategy†reflects the dynamic forces that can come out of early-stage
-lighting that Europe is largely lacking such opportunity-looking entrepreneurial spirit Possible barriers for high growth of enterprises in the EU
As there may be evidence that Europe generates less high-growth SMES or at least less young global lead
-kets. †31 Access to finance may also be hampered by unfavourable regulations related to investment and
A population survey of the Global Entrepreneurship Monitor 2010 in 21 innovation-oriented countries asked whether starting a company is considered an attractive professional option and whether successful
High-growth enterprises are very important for employment creation Considering policy makers†desire to create jobs,
The number and share of high-growth enterprises †more precisely: of those enterprises with persistent high growth †is small,
but the number and share of jobs they create is disproportionally large. 38 A study by the World Economic Forum published in 2011 claims to â€oepresent the first extensive evidence
A study by the Finnish Ministry of the Economy published in 2011 found that in the period 2006-2009,691
A Kauffmann Institute study of the US economy in 2010 with data for 2007 contained 5. 5 million firms.
Several studies by the Finnish economist Erkko Autio published in 2007 substantiated the importance of a
small share of high-growth enterprises for overall employment creation in several countries. 43 Other studies
Autio (2007a) concludes that â€oein order to promote economic growth, therefore, what really is needed are new
Furthermore, Davidsson/Steffens/Fitzsimmons argue that growth is often not a sign of sound enterprise de
apply to high-growth SME policies but to entrepreneurship policy in general: Economic research can as yet
what entrepreneurship policies are particularly conducive. 47 While many authors are cautious about entrepreneurship policy interventions,
some argue that â€oegovernmental pol -icy for promoting technological entrepreneurship can contribute to the vitalisation of the national economy
through the generation of new jobs and innovationâ€. 48 Among the most prominent studies about policies for high-growth enterprises are the ones by the OECD
2010) and Autio (2007. The OECD report report suggests a set of combined elements to foster high-growth
improve the business environment, encourage entrepreneurial attitude, support the provision of train -ing in young and small enterprises, improve access to debt and equity finance when necessary,
and promote innovation and internationalisation activities of new and small firms. In practice, countries†policies for foster
Autio et al. produced a comprehensive analysis of policies for high-growth enterprises. The study team men
-ticipating enterprises and entrepreneurs because only a very small share of them are willing and
-tively scan the environment for potential high-growth firms in order to develop customised support for them.
The authors conclude that â€oethe time for generic entrepreneurship policy has passed, and new focus and so
and implementation in order for economies to take full advantage of their entrepreneurial potentialâ€. 54 The study
SMES Policy High-Growth Entrepreneurship Policy Policy Goals Objectives in relation to entrepreneurs Entice more people to become
operational environment Facilitate the environment for small business operation Facilitate the environment for entrepreneurial firm growth
Resource Provision Source Mostly from public sources Combination of public and private sources Type of financial re
-sources Grants, subsidies, soft loans R&d loans and innovation grants, business angel finance, venture finance, IPOS
Dominant service Basic (standard) advice for firm creation business planning, small business operation Experience-based advice for venture finance
strategic planning, internationalisation organisational growth Resource distribution principle Ensure equal access for everyone (re -source spread) Select promising recipients (resource focus
improving the business environment, promoting entre -preneurship, facilitating access to markets and disseminating good practices. 55
The European Investment Fund†s high growth and innovative SME facility The European Investment Fund (EIF), a public-private partnership founded in 1994
whose shares are held by the European Investment Bank (61.2%),the European commission (30%)and financial institutions 8. 8%),is a specialist provider of SME risk finance across Europe and a major player in the European ven
-ture capital market. Its investment strategy has focused historically on early stage VC funds and the promo
-55 See http://ec. europa. eu/small-business/policy-statistics/policy/index en. htm 56 See http://www. eurostars-eureka. eu
fall out of the financial crisis for venture funds in their fundraising efforts. It increased its commitments to high
2007 the European Investment Fund†s operates A high Growth and Innovative SME Facility (GIF), providing
It offers two funding opportunities: 60 ï GIF1 †risk capital for innovative SMES in their early stages:
total equity of the intermediary venture capital fund or up to 50%in specific cases ï GIF2 †risk capital for SMES with high growth potential in their expansion phase:
to 15%of the total equity of the intermediary venture capital fund or, exceptionally, up to 50
%SMES seeking equity investment from these schemes need to contact funds that have signed an agreement
These funds decide about their investments based on normal commercial criteria. The GIF€ s indicative budget for 2007-2013 is 550 million euro.
turnover growth and return on investment was indicated yet because the programme was not fully implemented yet
%of the enterprises stated they would not have set up the business without GIF support. 62 The share of high
not interfere, given the current scarcity of VC in Europe. 64 They conclude that GIF is â€oerelevant to the needs of
60 See http://ec. europa. eu/enterprise/policies/finance/cip-financial-instruments/index en. htm and
61 See Centre for Strategy and Evaluation Services/EIM (2011), p. 48 62 See Centre for Strategy and Evaluation Services/EIM (2011), p. 67
63 See Centre for Strategy and Evaluation Services/EIM (2011), p. 58-59 64 See Centre for Strategy and Evaluation Services/EIM (2011), p. 109
65 See Centre for Strategy and Evaluation Services/EIM (2011), p. 142, also section 4. 2. 2 of this Policy Brief about ac
-cess to finance Policies for high-growth innovative SMES v1. 6 32 â€oeglobal starsâ€) and it may be difficult to assess
whether a policy actually targets high growth of SMES or not Second, policies may target high-growth SMES as one of several groups of SMES
-oriented SMES, Finnish Growth Company Service, Vigo) and Norway (Incubator Grant, Seed capital scheme, Nyvekst.
Netherlands (Growth Accelerator â€oegroeiversnellerâ€), and Spain (Neotec Fund). Beyond Europe, relevant policies were identified locally in Australia and the USA as well as in China, Singapore and South korea
One of the most prominent and recent national policy activities for high-growth enterprises is the Startup
-vide knowledge, tools and access to networks of customers, partners and investors that enable companies
and larger international venture capital funding. Accelerace†s services are sponsored for free and by the state investment fund â€oevaekstfondenâ€, the Region Hovedstaden (Denmark†s capital region), Region Midtjyl
-land (Denmark†s Middle-Jutland Region) and the European Commission†s Regional Development Fund Operations:
The programme runs twice a year with starts in January and August. Each time the Accelerace
-lection criteria, including for example market potential, sustainability of the business model, the quality of the 66 See http://www. whitehouse. gov/issues/startup-america
and whether the company may be a venture case. â€oetiming is essentialâ€, says Accelerace senior management consultant Rebecca Scheel †the applying companies need to be at the right develop
The Accelerace team has a wide network including for example venture capital -ists, entrepreneurship organisations, technology transfer offices,
and the private nonprofit organisation Con -nect70 which provides free advice and coaching to small businesses with high growth potential
after three months it may turn out that the company is not a venture case. After the programme it will be
These companies then do a pitch to Accelerace†s investment committee which makes the final decision.
The investment committee is made up of several investors, industry experts as well as Symbion†s CEO. The initial pitch to enter the programme resembles a typical investor pitch, while the final
pitch includes validated information for customers and industry experts, an actionable operational plan, and a
know yet if our model is better than venture capitalistsâ€, says Rebecca Scheel, â€oebut we spend more time and
-formance, such as employees, revenue growth and number of customers. A mid-term evaluation is expected to be ready in autumn 2011.
omy together with Finland†s most important R&d&i funding agency Tekes and Veraventure, a venture capital
investment company serving as the hub for public early-stage venture capital investments. VIGO is a type of
incubator that focuses on young enterprises with high growth potential. VIGO is meant to bridge the gap be
formed by the Vigo Accelerators, carefully selected independent companies run by internationally proven en -trepreneurs and executives.(.
The Accelerators are not consultants--they are co-entrepreneurs who in -vest in the companies they work with to guarantee common goals and passionate development effort. †72 The
Accelerators and other programme participants use their networks to funding sources, potential customers and partners to accelerate the growth of the target companies.
The Accelerators select their target compa -nies and negotiate the agreements with them independently. The incentive for the Accelerators is the grow
-ing value of the target companies which the Accelerators can realise when exiting their investments. The Ac
-celerators can also charge a monthly acceleration fee from the target companies which can be covered by
Tekes. The acceleration period lasts 18 to 24 months. At the end of this period, the target company should
The Accelerators were selected from the best applicants in their respective fields in a public procurement process.
In mid-2011 there were six Vigo Accelerators There is a Tekes funding programme for young innovative growth companies in.
50 enterprises were funded. This funding is intended for small early-stage enterprises with impressive plans and the resources necessary for international growth.
For example, funding was provided to two companies that in January 2010 received the prestigious â€oered herring global 100 award†for the world†s most promising
Severa (http://www. severa. com/int), a provider of enterprise resource plan -ning systems, and 7signal (http://www. 7signal. com), a wireless quality advancements specialist
and Centres for Economic Development, Transport and the Environment. 73 The development process can be launched with, for example,
In 2009 the growth company development service covered around 400 enterprises. 74 Enterprise Finland is a business service for foreigners
and immigrants in Finland targeted at various firm segments, including growth companies. In January 2011 it organised the first Enterprise Finland Venture
Forum, connecting 37 national and international financiers with 25 Finnish growth companies. 75 At the beginning of 2008 the innovation department of the Ministry of Employment and the Economy estab
-lished a division for growth ventures. The rationale behind creating this division was that â€oethe needs of
growth companies may substantially differ from others, which requires a special growth ventures policy†76
72 See http://www. vigo. fi 73 See Murray/Hyytinen/Maula (2009), p. 163 74 See Tekes (2009), p. 10
Services are provided for at least two years. Companies in the target group can have a dedicated Innovation Norway team allocated for a given period to act as a promoter and sparring partner
The programme offers no new special services but a tailored package of exist -ing services beneficial for growth companies
The International Growth Programme supports Norwegian SMES with ambitions for international growth high potential start-ups in particular.
-mestic market position against international competition. Services may also be offered to large companies The companies conclude a contract with one of Innovation Norway's offices abroad for delivery of a tailored
advisory project and pay a contribution. These offices work closely with the company†s regional offices and
other relevant professional environments within the organisation so that the company has one point of ac
Three international consultancy services are offered: interna -tional market advice, practical assistance in international markets, and access to foreign expertise.
investment branch focusing on â€oecompanies that are targeting markets that are very large and profitable or
taxpayer, by virtue of its Lottery endowment. †80 NESTA investments can thus not be classified as â€oegovern
4. 2. 1 Entrepreneurship Overview of entrepreneurship policies Entrepreneurship is the act of starting or growing a company,
so that entrepreneurship policies can be de -fined as political measures to support the start or growth of a company.
Hence policies to support high -growth SMES are a special part of entrepreneurship policies. Both general entrepreneurship policies and
high-growth entrepreneurship policies may use instruments related to the â€oeinnovation and growth triangle†as described in section 2. 3,
i e. they may be related to facilitating access to resources, incentives and markets The approaches for fostering high-growth SMES identified in the course of research for this Policy Brief focus
on measures facilitating access to finance, foreign markets and human resources. Access to finance and foreign markets will be discussed more detailed below in sections 4. 2. 2 and 4. 2. 3. Examples of policies for
easing access to human resources include the following ï The SPRING programme of the government of Singapore offers several human resources related
79 See http://www. nesta. org. uk/investments/our approach/investments criteria 80 See http://www. nesta. org. uk/home1/assets/features/government grants nesta full independence
ï Finnish Vigo Accelerators are even more than coaches, they are co-entrepreneurs who invest in the
As the evaluators of the supportiveness of the Finnish innovation system for high growth enterprises state
and will need necessarily to have access to human capital and further levels of professional advice consistent with the growth needs of the enterpriseâ€. 81 A special means of
200 start-up enterprises received the CTI start-up label, and 85%of them are still operating,
The business model is focused often on unique solutions for pilot customers With this business paradigm high growth is rarely achievable.
the transition from customised products for pilot customers to scalable products for larger markets. Even
networks change, new investment rounds are nec -essary, business plans and a new business strategy need to be developed,
core competencies and organi -sation structure need to be aligned with emerging business processes. In such a situation, experienced
venture capital, angels†investment and other financing partners which are essential to further growth 81 Murray/Hyytinen/Maula (2009), p. 168.
82 See Centre for Strategy and Evaluation Services/EIM (2011), p. 65. See section 4. 1. 1 of this Policy Brief for GIF
In spite of these initiatives, many SMES do not take advantage of coaching opportunities, and there is yet no
In terms of economic theory, coaching is a private good so that public support for facilitating coaching cannot necessarily be grounded on market failure.
growth perspectives may be looking for venture capital, i e. â€oeprofessional equity co-invested with the entre -preneur to fund an early-stage (seed and start-up) or expansion venture. †92 Venture capital is a subset of pri
-vate equity. Other sources of finance include leasing, factoring, hire-purchasing and trade credits. Finally
Discussions and analyses about high growth of companies often focus on venture capital. There are empiri -cal indications that a well-functioning venture capital market is conducive to growth not only of single compa
-nies but also of national economies: â€oeventure capital injects economic dynamism: An increase in VC invest
-ments of 1‰of GDP is associated statistically with an increase in real GDP growth of 0. 30 pp.
Early-stage investments have an even bigger impact of 0. 96 pp. The direction of causality is not always easy to estab
-lish. Yet, tests for Granger-causality in the biggest market, the US, suggest that causality runs from VC
-investments to growth. There is also substantial micro-evidence that supports this view. †93 Yet, bank loans are preferred the source of growth finance for European companies.
92 Definition of the European Venture capital Association, see http://www. evca. eu/toolbox/glossary. aspx?
95 See http://ec. europa. eu/enterprise/entrepreneurship/financing/publications documents. htm 96 See OECD (2010), p. 11.
Companies have to acquire funds in a complex and changing financial environment, in an environment that
The economic and financial crisis has had starkly deteriorating effects on the venture capital market. While private equity investments in Europe had been tripling from 24.3 Billion euros in 2001 to 72.9 Billion euros in
2007, investments fell to 23.4 Billion euros in 2009, even below the 2001 value, and recovered to 42.6 billion
Euros in 2010 †see Exhibit 4-2. This decline and recent slight recovery is a worldwide phenomenon.
high-growth oriented companies seeking venture capital to find adequate funding Exhibit 4-1: Private equity investments in Europe 2000 †2010
35,0 24,3 27,6 29,1 36,9 47,1 71,2 72,3 54,3 24,0 42,6 0 3000 6000 9000
The level of development of venture capital markets and thus the difficulties to obtain VC are very different
-uity investments made up 1. 123%of GDP there in 2010, followed by Sweden (0. 893%)and Switzerland
Private equity investments as%of GDP in Europe in 2010 0, 0 %0, 2 %0, 4
The origins of imbalance between demand for finance enterprises and finance supply are understood well in
99 See http://ec. europa. eu/enterprise/policies/finance/financing-environment/index en. htm 100 As announced by the European commission on 13 april 2011, see European commission (2011
ï Business angels and investment readiness: â€oethe Commission's policy is to identify and spread good
practices that can help improve the conditions for business angel investment. †104 ï Early stage investment:
â€oefinancing through the high growth and innovative SME facility is available to small businesses in their early or expansion phase under the Competitiveness and Innovation
ï Single market for venture capital investment: â€oeat present, there is no integrated European venture capital market-the regulatory situation varies widely from country to country(..
The EU is seeking to unify the venture capital market(..To achieve this, it is promoting cross-border venture capital
investments. †106 However, â€oewhile there is a consensus among Member States on promoting mutual recognition of national frameworks, no significant measures have been taken yet that would make
fundraising and investing across borders easier. †107 ï Growth stock markets provide listing opportunities with simplified requirements.
The EC believes that â€oeeasier EU-wide access to growth stock markets is needed in order for firms to be able to become
listed easily and for stocks to be readily accessible to qualified investors from all around the EU€
The European Private Equity and Venture capital Association (EVCA) suggests to â€oeadapt and refine the ex
-isting structures of public support for venture capital†in order to â€oeincrease its competitiveness, attract private investment and also to lead to a phased reduction of its dependence on public moneyâ€. 109 The EVCA sug
-gests a Venture capital Action Plan 2010-2020 for the EU, following the EU€ s Risk capital Action Plan of
1998. According to the EVCA, the European VC market is fragmented highly and has a serious funding gap
in that Europe†s large institutional investors consider VC as too small for allocating investment expertise and
Furthermore, GIF provisions could be tuned more towards business angel investments. GIF1 includes the option that intermediaries with co-investment arrangements with business angel networks may receive an
additional and separate commitment for co-investments. By the end of 2010, such investments were made
103 See http://ec. europa. eu/enterprise/policies/finance/financing-environment/sme-finance-forum/index en. htm
104 See http://ec. europa. eu/enterprise/policies/finance/risk-capital/business-angels/index en. htm 105 See http://ec. europa. eu/enterprise/policies/finance/risk-capital/start-up-finance/index en. htm and section 4. 1. 1 in this
Policy Brief about GIF 106 See http://ec. europa. eu/enterprise/policies/finance/risk-capital/venture-capital/index en. htm
107 See http://ec. europa. eu/enterprise/policies/finance/risk-capital/venture-capital/index en. htm 108 See http://ec. europa. eu/enterprise/policies/finance/risk-capital/index en. htm
109 EVCA (2010), p. 3 110 See EVCA (2010), p. 4 Policies for high-growth innovative SMES v1. 6
43 with business angel networks. The related evaluation study suggests that â€oethe emphasis could be on facilitat
-ing a marketplace and promoting networks of business angels and SMES, rather than fitting business angels
into a formalised and inflexible structureâ€. 111 Policies in Member States and other countries In EU Member States and beyond there is a variety of initiatives to improve access to finance for innovative
seek finance for certain stages in the life of an enterprise in a certain region may be helpful when all pieces
of business ventures through dedicated funds fuelled by domestic and overseas sources as well as by in
The government also plans to encourage venture capital investment from over -seas funds, oil money, and other sources.
114 In light of the economic crisis, Singaporean business associations started the Financial Facili -tator Programme (FFP) in January 2009, vigorously supported by the SPRING Singapore programme which
required high loans for survival, investment diversification and possible expansion Canada: 115 While there are no specific policies for grants to industry in Canada that focus on high growth
-quate levels of venture capital financing holds the greatest potential for creating â€oegazelles†and that these
111 See Centre for Strategy and Evaluation Services/EIM (2011), p. 110 112 See the related hint by entrepreneur Brian O†Connor at the workshop related to this Policy Brief, INNO-Grips (2011
The term â€oesme internationalisation†refers to SME€ s outreach to business partners and customers in other
i e. to offering products and services in other countries. In a broader definition it may also refer to other business functions such as procurement, hiring
Single Market for enterprises†growth opportunities was raised also in the workshop related to this Policy 116 Murray/Hyytinen/Maula (2009), p. 167
118 See Centre for Strategy and Evaluation Services/EIM (2011), p. 71 119 See Reinstaller et al.
sell to customers EU-wide needs to be improved†(29%each for â€oei strongly agree†and â€oei rather agreeâ€;
the Enterprise Europe Network At EU level the link between innovation and internationalisation has been recognised fairly recently. 129 A key
initiative is the Enterprise Europe Network (EEN), supported by the European commission, which links inno -vation and internationalisation policies.
-ness opportunities in the European Unionâ€, 130 bringing together 580 member organisations in 47 countries
and search tool, for promotional and informational local events as well as for advisory services e g. about EU
SMES seize global opportunitiesâ€, http://ec. europa. eu/enterprise/newsroom/cf/itemlongdetail. cfm? item id=5119
130 See http://www. enterprise-europe-network. ec. europa. eu/about/mission Policies for high-growth innovative SMES v1. 6
According to DG Enterprise and Industry, since the establishment of EEN in early 2008 by the end of 2010 more than 2 million SMES tapped into the network.
when looking for support services, the EEN was the only provider they had found. Of the remaining 41%which had also found alternative service provid
-ers, more than half (57%)said they preferred the EEN because of the opportunity of accessing European
developing an international strategy to the enterprises. A 2010 study evaluating the results of the merger
131 See Centre for Strategy and Evaluation Services/EIM (2011), p. 75 132 Remarks at the INNO-Grips workshop about â€oeinnovation policies in an anti-cyclical conjuncture†in Cologne
-nationalisation and innovativeness †and different opportunities for high growth of innovative SMES. It could
leaving relatively many opportunities for new market leaders At the workshop related to this Policy Brief, the importance of business ecosystems as well as clusters for
specific industries may mean missing emerging opportunities for high-growth in other industries †emerging
opportunities which policy makers may be unable to realise sufficiently early. Furthermore, innovation some -times takes the form of adapting an existing solution
DG Enterprise and In -dustry issued a study to assess sectoral policy approaches and to identify good practices in these initia
First, improved involvement of stakeholders, nota -136 For ecosystems see the related statements by Martin Fransman, INNO-Grips (2011), p. 4,
of stakeholders and experts with sectoral background and reputation. Second, its suitability for addressing advanced goals.
The Finnish activities to support high enterprise growth apparently have no industry focus (see section
The Canadian experience (see section 5. 3) of linking governmental R&d funding with venture capital in
to focus policies on improving access to venture capital instead of access to micro credits. 142 How are policies for innovative high-growth SMES distinct from general SME policy?
Is it more efficient (in terms of economic growth and job creation) to support all SMES"a little bit, "or to concentrate efforts on those with the highest growth
Some economists take the opinion that â€oeonly the market can determine what the optimal amount of entrepreneurship is.
We do not know enough to answer this fundamental question, much less to determine which firms to target for success
At the workshop related to this Policy Brief, Luc Hendrickx, Director for Enterprise Policy and External Relations at the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME
suggested focusing on improving the business environment for all enterprises rather than aiming to create
specific incentives for growth. Fast growing enterprises could be taken into account, but not at the expense
of other SMES. On the other hand, Canadian SME coach Allan Martel favours a focus on high-growth SMES
This position is supported by US economist Scott Shane: â€oegetting economic growth and jobs creation from entrepreneurs is not a numbers game.
It is about encouraging the formation of high quality, high growth companies. Policy makers should stop subsidizing the formation of the typical start-up
and enhancing economic growth. †145 141 For example, the case study about Korea in this Policy Brief (see section 5. 1) mentions that the Korean government
terms of population, economy and †the prime criterion here †SME policies ï South korea, with a population of close to 50 million, has emerged as a primary competitor of
-sion during the economic crisis, it has one of the world†s highest shares of R&d in GDP,
-rea has also become evident in 2010 by establishing five contact points of the European Enterprise
-tiveness Index of 2010, is heavily suffering from the economic crisis and the 2011 Earthquake, and
South korea Entrepreneurship (start-up and growth of SMES) Yes Singapore Internationalisation of SMES Yes Canada SMES€ access to finance Yes
In Korea the SME sector, accounting for 99%of enterprises and 88%of employees, is consid
and the Korean economy at large. SMBA applies more than 100 SME promotion measures Recently there have been noticeable changes in Korean SME policies.
policies have supported the growth of the venture business. However, some of the traditional SME policies have been criticised for inefficiency and ineffectiveness.
account for 99%of all enterprises and 88%of all employers. The traditional Korean policy perception of
-facturing, is an enterprise with less than 300 employees and with sales less than 8 billion won (approximately
-ment supports SMES with up to 300 employees with numerous measures, enterprises with more than 300 employees are regarded as large firms under strict government regulation
As a result, many enterprises do not grow Although the â€oeweakness concept†is still dominant,
policies for entrepreneurship, SME innovation and Policies for high-growth innovative SMES v1. 6 54
Entrepreneurship policies Recent activities to foster business start-ups In order to mitigate the negative effects of the economic crisis
and to increase employment, the government recently introduced several new programmes and activities ï the venture businessmen†s special lecture programmes on entrepreneurship at universities
ï the youth start-up education programme ï strengthening encouragement of start-up activities of professors, researchers and students
ï improved support to spin-offs by executives and employees of large enterprises ï enabling start-ups at home and expanding the infrastructure for one-person creative enterprises
ï establishing a support system to link excellent technology ideas with start-ups ï financial support and training for entrepreneurs†clubs at universities
First, public organisations and large firms voluntarily announce demand for products that SMES may develop.
-tutes and other enterprises ï If more than two SMES and a research institute cooperate to create a new product or model in one or
two years, they can receive Enterprise Joint Tech Development funds ï The Production Environment Innovation Tech Development programme provides funds to improve
efficiency of the production line and product quality ï While most of the financial support is for technology R&d,
Specifically, the government has encouraged R&d investment in response to the contraction of SME invest -ment potential due to the recent economic slowdown.
investment and support for technology innovation R&d of global leader enterprises. The government also initiated the â€oesme-type Promising Green Technology Roadmap†in June 2009.
Inno-biz and measures to strengthen venture capital investment The Korean government intensively fosters the programme â€oeinno-biz†(acronym for â€oeinnovative businessâ€.
innovative firms, ventures and firms with outstanding managerial innovations. The pro -gramme does not explicitly aspire to high growth
Ventures, according to the SMBA definition, are firms in which venture capital is invested, which invest in R&d and which commercialise new technology. 147 SMBA continues to promote the venture sector as a new
growth engine. The government is supporting business ventures, through the support of a one trillion won
private fund, by investing in a â€oefund of Funds†in 2009 as well as through a two trillion won fund with in
-ducement of further funds from the fiscal administration, the Korea Development Bank and foreign and pri
The government also plans to encourage venture capital investment from overseas funds, oil money, and other sources.
It intends to allow joint fund operation between overseas investment in -146 See http://eng. smba. go. kr/pub/poli/poli04010802. jsp#cer02 for the SMBA€ s criteria of inno-biz certification
%In addition, the government plans to facilitate venture investment by institutional investors, the post office insurance firms, universities,
-uity investment in the Fund of Funds more than three times a year and to rapidly respond to demand in the
investment market. Since the Korea Venture Fund has confirmed other investors, small investments of less than one billion won are allowed at any time
In April 2009, the government created a venture ecological system that integrates the capabilities of newborn
venture companies and of the leading venture companies in the market. Under this system, the government
intends to create a ten billion won fund and support joint R&d and overseas marketing for ventures
Business incubators The SMBA supports business incubators which are operated usually by universities and public research in
-stitutes. This programme is designed to promote the survival and growth of newly established venture com
-panies. SMES are, for example, provided with land, consulting services, and marketing education Internationalisation policies New directions of SME policies for globalisation
SME globalisation is an important part of SMBA€ s policies. Korea†s overseas market development policy has
transformed the country from being poverty-stricken into the world†s 15th largest economy. Now Korea is in a
transitional period in terms of SME policy in response to the global economic challenges and to the necessity
which was oriented towards large enterprises in the past, to SMES. The new focus is on the promotion of â€oeglobal Star SMES€ as the backbone of the economy.
The Ko -rea Export Import Bank (Eximbank) launched the â€oe300 Global Stars†Programme in 2010.148 For three
The selected enterprises will be supported by a comprehensive support package; examples of this support include technology,
employees, responding to global competition and developing initiatives to foster â€oehidden global champions†The introduction of policy schemes for supporting this group of enterprises will probably impact the Korean
economy dramatically in the coming years. Introducing a related law (Mid-sized Enterprise Promotion Act
and the institutionalisation of this structural change are complicated issues and currently under discussion The government already extended
and strengthened some existing SME programmes in this direction In addition, the government is supporting the transformation of SMES focusing on domestic demand into ex
-port-oriented enterprises. Identifying promising export companies, up to 2, 400 firms, and nurturing them into
small but strong global enterprises is the policy focus An Example of a company with Korean government support:
Donghwa Entec Donghwa Entec is a manufacturer of heat exchangers for ships, power plants, food factories and agriculture as well as of air coolers for Diesel engines.
provided capital for continuous R&d from 2004 until 2008, enabling the firm to occupy market
They comprise an increase of SME€ s R&d activities, an expansion of venture business, and various impacts on different areas of SME performance.
Trends in SME€ s R&d Investment 2000 2002 2004 2005 2006 2007 No. of SMES conducting R&d
Expanded venture business All related indicators confirm the high growth in the venture business from 1998 to 2008,
as Exhibit 5-4 indi -cates. For example, the number of certified ventures increased from 2, 042 firms in 1998 to 15,401 firms in
2008, and there are now five graduate schools specialising in the venture business. However, figures for 2009 may indicate a decline caused by the worldwide economic crisis
Exhibit 5-4: Development of the venture business in Korea 1998-2008 Indicator 1998 2008
Creation of venture firms Number of certified venture firms 2, 042 15,401 Thereof: established by professor or researcher 582 1, 555
Number of graduate schools for venture business 0 5 Venture capital in 100 mio KRW New venture investments 7, 870 12,041
Newly established venture funds 4, 929 11,954 Foreign venture funds 30 702 Source: SMBA Impacts on particular areas
Korea†s SME policies can be ascribed impacts in the following, particular areas †not accounting for potential
bandwagon effects and possible other negative effects of government support Export support: Since 2003 the Korean government supported exports in on average, more than 1, 000
SMES every year and the increase in exports was more than 200 million dollars every year Policies for high-growth innovative SMES v1. 6
59 Production improvement: Companies receiving support for production improvement in 2007 and 2008 ex -perienced an increase of their revenues by 21%and exports by 36%.
%While revenue increase is similar to that of all SMES during the period (23%),the export increase by far exceeded that of all SMES (15
%Business creation fund: In the same period, companies benefiting from the new business creation fund at
Overseas investment: Not only large enterprises, but also SMES invested in foreign countries aggressively SMES€ share of overseas investment reached 54%in terms of the number of cases and 26%in terms of
amount. The majority of Korean SMES invested in China Negative side effects of SME support Over 100 SME policy measures resulted in application congestion in SME administrations,
duplicated efforts and SME managers distracted from real business. The rigid definition of SMES resulted in the undesirable
Although, for example, more than 30,000 enterprises were designated as innovative SMES, the designation system itself seems less practical.
This case study has been conducted by Yoo Soo Hong, Director of the Institute for Global Innovation Economy (IGIE
/ï Korea Institute for Industrial Economics and Trade (KIET: http://www. kiet. re. kr/kiet/eng/index eng. jsp
-tors and has launched initiatives towards developing high-growth enterprise clusters. Two Singaporean government agencies are involved directly in supporting high-growth SMES
sub-programme named Get-Up (Growing Enterprises through Technology Upgrade. SPRING collaborates with trade development agencies to assist promising local businesses with gov
generate high-growth enterprises. While the government has attributed the successful recov -ery from the word-wide economic crisis to the numerous opportunities SMES have been pro
-vided with, there are no evaluation studies available that could substantiate the impacts of the government†s SME policy.
Development Board, 99%of all enterprises are micro, small and medium-sized enterprises. These employ
60%of Singapore's workforce and contribute an approximate value-added of 40%to the local economy
Governmental policies have been a vital factor in sustaining Singapore's business-friendly environment Singapore†s economic success has largely been built on the strength of its manufacturing and financial ser
-growth enterprise clusters. The aim is to generate †new creations, new products, new services and technol
-ogy through the careful analysis of emerging markets, technologies, business perspectives and global trendsâ€, as Francis Chu, Manager at the Infocomm Development Authority (IDA) of Singapore, explains
named Get-Up (Growing Enterprises through Technology Upgrade. Exhibit 5-5 provides an overview of the
-ternationalisation of potential high-growth enterprises and the Jurong Town Council providing real estate and connectivity infrastructures for high-growth SMES
Enterprises Nurture and Grow SMES IE Singapore Create Markets Develop access to overseas markets A*STAR
Budget Capital Flows ($ Source: Singapore Ministry of Trade and Industry Singapore†s activities in support of high-growth SMES
goals towards creating an innovative environment SPRING Singapore is an enterprise development agency with a focus on supporting the growth of
local Singaporean enterprises SPRING explicitly seeks to â€oegrow dynamic and in -novative growth-oriented enterprises††i e. to sup
-port high-growth SMES. SPRING Singapore is also the national body for standards and conformance
-terprises, products and services. Exhibit 5-6 shows SPRING€ s scheme for developing companies from
start-up to large enterprises Exhibit 5-6: SPRING€ s enterprise development concept Source: SPRING Singapore
Policies for high-growth innovative SMES v1. 6 63 In the financial year 2009/2010, SRING Singapore was allocated an operating budget of 54.5 million Singa
and proof-of value, evidence of products or services and independent third-party investors. The government considers its funding mechanisms as an investment
when reviewing potential high-growth SMES Business capability development programmes SPRING Singapore operates three key SME business capability development programmes for all SMES
Partnership (MAP) Initiative and the Enterprise Internship Programme (EIP) to assist the develop -ment of high-growth SMES.
ï The Design Engage Initiative helps local enterprises build strategic-design thinking capabilities There were 17 companies supported in 2009,23 since 2008
biomedical and healthcare services, electronics, chemical and engineering services, logistics, precision en -gineering, and retail
In light of the economic crisis, Singaporean business associations started the Financial Facilitator Pro -gramme (FFP) in January 2009.
was crucial for high-growth SMES that required high loans for survival, investment diversification and possi
The GET-Up programme, short for â€oegrowing Enterprises through Technology Upgradeâ€, supports long-term pre-competitive research and development (R&d) and enhances the technology competence of potential en
A*STAR's Science and Engineering Research Council helps enterprises in the Get up programme pair up with research partners to enhance their technology Edge in fiscal year 2009/2010
-ing to generate high-growth enterprises. There are four support initiatives under the Get-UP programme in
ï Technology for Enterprise Capability Upgrading (T-Up) is a multi-agency effort involving sending Re
-search Scientists and Engineers (RSES) to local enterprises ï Operation and Technology Roadmapping (OTR) provides the â€oebig†picture view of the technologies
ï Technical Advisory Support (TA) provides advisory services from senior research staff at research institutes ï A*STAR Facility Sharing Programme (A*FSP:
potential high-growth enterprises may leverage on the Research Institutes laboratory facilities for their R&d related activities
the end of 2010,3 million Singapore dollars, in grants, had been extended to 34 promising local enterprises 149 See http://www. a-star. edu. sg/Industry/Programmesforsmes/GETUPPROGRAMME/tabid/220/Default. aspx
-gapore dollars equity investment in a qualifying start-up can claim a 50%tax deduction on the in
-gapore dollars investment per year ï Catalysing growth investments through co-investment: 1. 5 billion Singapore dollars of growth capital
for companies by seeding a range of funds over ten years, with contributions of up to half the capital
Impacts of Singapore†s policies for high-growth SMES No policy evaluations or assessments identified
resilience, the government has attributed the success to the numerous opportunities SMES have been pro -vided with so as to further develop their business and technical capabilities through R&d and technology up
-mands of its customers, Greenpac expanded its analysis and consultation services, re -engineered its packaging systems
programme management, warehouse services, professional packing services, rigging services and contract packing. The company†s lists of loyal clients comprise some of the world†s largest
through internet protocol product distribution services for multinational corporations. The com -pany was incorporated in 1999 in collaboration with an India-based technology company that
Technology for enterprise capability upgrading for Resin and Pigment (R&p Resin and Pigment Pte Ltd (http://www. resinpts. com/)is a supplier and manufacturer of colour
global market of international polymer customers in the electrical and electronics, automotive construction and civil engineering, household and consumer, packaging and agriculture sectors
Government initiatives as well as investments in infrastructure and education are strong in Singapore. Con -sidering the dominance of micro, small and medium-sized enterprises in Singapore and the traditional
strength of the manufacturing and finance sectors, the government is seeking strategic investments to groom
potential high-growth enterprises and drive the diversification of the local economy. Consequently, invest -ments by Singapore†s government are expected to rise steadily.
However, as there are no evaluations of government support available, the actual impact of these policies cannot be assessed here
In any case, success of Singapore†s companies is based on an entrepreneurial environment in the country and a critical mass of qualified technical and managerial manpower.
Related services include for example law firms specialising in intellectual property and new ventures, human resources headhunting, consulting and market research, and investment
banking services for merger and acquisition activities. Such preconditions may be conducive to high growth of SMES in any region in the world
/ï Singapore Budget 2010-Towards An Advanced Economy: Superior skills, Quality Jobs, Higher Incomes <http://www. mof. gov. sg/budget 2010/download/FY2010 FLYERS FOR BUSINESSES. pdf
/ï SPRING Singapore-Building Growth Enterprise http://www. spring. gov. sg/Aboutus/AR/Documents/ar2009 2010/pdf/9-building-growth-enterprise. pdf
Papers and books ï Best Practices: Government Insights Country Profile Series: Singapore (IDC#HK9694101S, Jan 2010
'Entrepreneurship and SMES in Southeast asia'.'Singapore: Seng Lee Press 2004 ï Economic Stimulus and Expansionary Budgets:
Updates to Government's Response to the Economic downturn in Asia/Pacific (IDC#AP633103S, December 2009
policies to back venture finance Summary The Canadian experience suggests strongly that a concentrated focus by governments on
high-tech based SMES combined with adequate levels of venture capital (VC) financing holds by far the greatest potential for creation of â€oegazelles†and that these firms, once cre
a focus on high-tech SMES within the proper support environment can stimulate gazelles creation significantly. In Canada, the response to the dire shortage of capital funding has
Recently, the US venture capital sector has been lobbying hard to change the access rules to SBIR funding for SMES controlled by venture
capital firms The returns to VC providers in Canada and the US over the past ten years have been low
and the interest in VC fund investment is problematically low Background and objectives of VC funding and government assistance
Current situation in venture funding The Canadian experience suggests strongly that a concentrated focus by governments on high-tech based
which data are available †when a combination of venture capital 150 See Cooper (2009 Policies for high-growth innovative SMES v1. 6
There is currently a critical shortage of capital for technology based firms. The VC market in Canada col
years. 151 Many technology-based firms at the development stage with high burn rates have had to cut back
In Canada total bio investments increased from 210 mil -lion CAD in 2009 to 300 million in 2010.154
According to the Canadian Angel Investment Network their members are currently investing over CAD 3 bil
Venture capital: VC investments by the VC community in Canada have decreased from a peak of CAD 5. 9
billion dollars in 2000 to just over CAD one billion dollars for each of the past three years (2008-2010.
-natives (such as income trusts), investment by individuals in VC funds in Canada has dried all but up.
other major investment source has been pension funds, but these funds have become risk-averse and have
cut back their interest in high tech VC investments preferring to go to infrastructure investments instead Foreign VC flow has been an important source of financing for technology firms.
Venture capital: The US experience is similar to that of Canada, in terms of the collapse of financing since
As of 2007, there were state government sponsored VC funds in 22 states with 2. 3 billion USD in venture
funds but there is no data available to measure the investment performance of this group of funds
venture capital (CAD 18 billion dollars) between 1995 and 2005 showed much higher levels of gazelles crea
However, enterprises with the majority of their VC funding (but less than 100%)coming from government VCS have significantly worse exit perform
-ance than enterprises with private VC funding. Government programmes often have multiple agendas, e g local employment and regional development.
2. Linking government assistance (IRAP) with subsequent VC financing leads to less shareholder dilution and higher growth for the SME
The Effects of Government-Sponsored Venture capital: International Evi -dence 162 See Government involvement in the venture capital industry International comparisons
http://www. cvca. ca/files/Downloads/Government involvement in the vc industry intl comparisons may 2010. pdf 163 See Hellmann 2005 study Policies for high-growth innovative SMES v1. 6
The Effects of Government-Sponsored Venture capital: International Evidence ï CVCA, Canadian Venture capital Association (2009: Why Venture capital is Essential to the Canadian Econ
-omy-The Impact of Venture capital on the Canadian Economy. Available at http://www. cvca. ca/files/Downloads/CVCA VC IMPACT STUDY JAN 2009 FINAL ENGLISH. pdf 2010 October
ï CVCA (2010) and Kirk Falconer (2010) Thompson-Reuters. See http://www. cvca. ca/files/News/CVCA Q4 2010 VC PRESS RELEASE FINAL FEB 16 2011. pdf and
http://www. canadavc. com/files/public/Reseau%20capital 02-11 %20english. pdf ï Cooper, Denys (2009:
High Growth and Survival of Government Funded SMES with Venture capital in Can -ada. APEC SME Innovation conference 2009, Seoul
ï Duruflã, G, Government involvement in the venture capital industry International comparisons http://www. cvca. ca/files/Downloads/Government involvement in the vc industry intl comparisons may 20
The Venture capital Cycle, Chapter 13 http://www. google. ca/#hl=en&biw=958&bih=444&q=lerner+impact+sbir&aq=f&aqi=&aql=&oq=&gs rfai=&fp=23e
ï Hellmann, Ilyaszade and Lee, 2010 An Evaluation of the Venture capital Program in British columbia http://strategy. sauder. ubc. ca/hellmann/pdfs/Hellmann%20schure%202010%20venture%20capital%20report. p
-bour-Sponsored Venture capital Corporations ï NAS 2009: Awards-U s. Small Business Administration Tech-Net Database;
ï Venture Impact: The Economic Importance of Venture capital Backed Companies to the U s. Economy, 2008
June at http://www. asiaing. com/venture-impact-the-economic-importance-of-venture-capital-backed -companies-to-the-u-s-ec. html
http://mikevolker. com/2010/09/b-c-investment-tax-credit-program /Policies for high-growth innovative SMES v1. 6
-nese government†s SME (small and medium-sized enterprise) policies towards finance and employment safety net issues, the strategic line of discussion in 2010 gravitates around the
Toward a Radiant Japan identifies SMES as an engine for future high economic growth Key characteristics of SME policies in Japan
â€oerectify the gap between SMES and large enterprises in terms of productivity. †In 1999, the government re
economy. The new concept guiding SME policies became to â€oedevelop and support a wide range of inde
-ing apt responses by enterprises to abrupt environmental change. Two policy systems were carried-over from the previous law:(
4) finance and taxation and (5) consideration for small-scale enterprises. These five new policy systems have shifted public discussion from protection to promotion of SME business activi
revised in July 2010, specifically identifying SMES as one of the main drivers of the economy.
-panies should leverage their strengths in the areas of environment and energy (green innovations) as well as
economy revitalisation. Third, the government will create platforms for growth in the areas of science, tech
post-Lehman economic downturn has led the government to focus on legislating remedial measures to sup -port struggling SMES (e g.,
commissioned Survey of Fund Raising by Small and Medium Enterprises finds that a more fundamental
-mercialisation stages they prefer bank loans over equity finance, venture capital, and other financial prod -ucts.
According to the Survey of Fund Raising by Small and Medium Enterprises, a major bottleneck in financing
are weak in formulating business plans for innovative products and services. The SMRJ has been tasked, in a fine tuning of the SME Technological Advancement Act, with improving the capacity of SMES to develop
feasible business plans. Since writing a business plan is as much an art as a science, in coordination with
the METI Industrial Cluster Plan, the SMRJ often introduces an innovative SME to local clusters of small and
and support their business plan Addressing barriers in commercialising new products Access to finance is important in launching SMES on pathways to innovation;
White paper on Small and Medium Enterprises in Japan: Pulling Through the Crisis. Tokyo: Ministry of Economy, Trade and Industry (www. meti. go. jp
ï White paper on Small and Medium Enterprises in Japan: Finding Vitality Through Innovation and Human Re
-sources. Tokyo: Ministry of Economy, Trade and Industry (www. meti. go. jp)( p40 †70 in 2009wp
ï Ministry of Education, Culture, Sports, Science and Technology (MEXT. 2009. White paper on Science and
Survey of Fundraising by Small and Medium Enterprises. Tokyo: commis -sioned by SME Agency ï Survey on Market Capture and Intellectual Property.
ï Organisation for Small and Medium Enterprises and Regional Innovation (SMRJ. 2009 Heisei 20 nendo
loan guarantees, capital investment loans, and loans for facilities. Funding recipients should have less than 300 employees or capital below JPY 300 million.
The majority of schemes target venture companies and SMES. The number of projects awarded to participants over time has
statements, the MOIT â€oefocuses on the promotion of economic growth in Israel†and the OCS â€oeoversees all
Technological Incubators Programme("Hamamot":"Incubators have been a major tool in the Israeli pol -icy for support of R&d in SMES over the last two decades.
The Hamamot programme has been underway since 1991. The programme supplies entrepreneurs with physical premises, financial resources, professional
and acts as a venture capital fund in the early stages. An incubator company receives a development grant of up to 500,000 US dollar for a period of two years.
Over the last decade, the Technological Incubators Programme has gone through a process of privatisation during which
the ownership of the different incubators passed to private hands, while the OCS is still maintaining an ad
-ministrative and supervising role. Today, 21 incubators are active. Over the 19 years of the programme†s ex
-istence, 1, 209 companies"graduated"from the incubators, and about 37%of them have survived and are
still independently active. An evaluation of the programme in 2009 pointed out that the programme played a
1) new entrepreneurship projects, with innovative technological ideas;( (2) projects to upgrade traditional industry, aimed at developing new technology or products;(
-operation with international enterprises, aimed at developing joint technological projects;(4) â€oegreen momen -tum†for SMES, aimed at developing technologies or products related to water and green energy;
and writing a business plan. In 2009, the supports given by the programme amounted to approximately 4, 600,000 US dollar
as communication, biotech, software, new materials. An evaluation of Magneton found that most of the pro
-plements international, cooperative, industrial R&d programmes between Israeli and foreign enterprises Matimop implements international technological cooperation programmes with international agencies, bodies
joint Israeli-EU R&d ventures within the EU€ s R&d Framework Programme Sources This innovation policy summary has been authored by Reut Marciano, Jerusalem Institute for Israel Studies
ï Kaufman Dan, Gore oz,(2009) Preliminary Evaluation of the Israeli Technological Incubators Programme, Jeru
An Evaluation of the Israeli Technological Incubators Programme and its Pro -jects, The Samuel Neeman Institute of advanced Studies in Science and Technology
branch of the Institut der deutschen Wirtschaft (IW, Institute for the German Economy. 164 The IW Future
Panel is a survey of German enterprises which was established in 2005 with the objective of identifying
trends and challenges of structural changes of the economy. The surveys include companies participating in
Only enterprises from manufacturing and manufacturing -related services (such as wholesale, transport services, research and development, consulting) are included
in the survey. Companies in the IW Future Panel are more innovative and more export-oriented than the av
In all surveys of the IW Future Panel the enterprises are asked about their growth by employment and turn
of the period, classifying them as high-growth enterprises as defined by the OECD (see section 2. 1). For
1, 510 enterprises this information about their growth is available. 59 enterprises (4%)were found to having
Of the 59 high-growth enterprises, 71%stated to have introduced new prod -ucts, services or processes in the past two years and can
thus be classified as â€oeinnovativeâ€. 52%of the 59 high-growth enterprises are exporting The survey also provides the age of the enterprises,
allowing to identify â€oegazellesâ€, i e. high-growth compa -nies that are not older than five years.
However, the number of gazelles was only 22, going down to 9 when excluding micro companies with fewer than ten employees and large companies with more than 250 em
Those enterprises performing high growth in the past three years were asked about the reasons for this growth.
Those enterprises stating that they did not perform growth in the past three years were asked about the reasons for not growing.
Since this survey is restricted to German enterprises, it does not necessarily allow conclusions for other
Findings for high-growth enterprises The single most important reason for high growth quoted was that management actually targeted growth
-ties †growth-oriented entrepreneurs targeting growing markets with new products and services. Recent third-party research findings confirm this conclusion. 165 It also indicates that growth is primarily an issue in
known whether the company had actually made use of coaching services, and †if so †whether the com
opportunities after being acquired by a trust (mentioned twice), withdrawal of competitors, severe winters. 167 Exhibit 6-1:
Successful introduction of new products or services Successful expansion of supply to international markets Important reason for growth
The findings for high-growth enterprises in total are similar to the findings for high-growth enterprises with
Findings for non-growth enterprises The most important reason for non-growth stated by the non-growing enterprises was â€oeunfavourable devel
-opment of the business cycleâ€. This reason was stated as applying fully by 39%;%further 35%said that this
Competition was too strong The company was not innovative enough The company's innovations were not successful
for others it was strong competition, for a few it was difficult access to finance, a shrinking market,
and additional regulation (six times), competition from â€oelow wage†firms or â€oelow wage countries†(mentioned five times), â€oelost customers†(four times),
Results for â€oegazelles†indicate particularities of newly founded high-growth enterprises. There are several dif -ferences to the results for the total of high-growth enterprises (see Exhibit 6-2): 168
The most important differences include ï The assessment that â€oethe management targeted growth of the company†applied to 82%of the ga
both groups were also found for new marketing methods, new products or services and export orientation
All in all, entrepreneurs pursuing business opportunities appear to be pronounced an even more reason for gazelle growth than for growth of older high-growth enterprises
168 Differences should be considered cautiously because they might be within the statistical range of variation
Reasons for growth of young high-growth enterprises (â€oegazellesâ€) in the IW Future Panel 23
Successful introduction of new products or services Successful expansion of supply to international markets Important reason for growth
The dynamic character of high-growth enterprises suggests that static policies †i e. policies aimed at all SMES,
-cilitate growth for enterprises which grow quickly: â€oein fact, such policies may put a break on growth, particu
tribute the bulk of new jobs in a national economy, it would be a waste of resources to foster specifically
-prises†strategies may have to change in the face of changing economic environments. 175 Speed limitations:
investment and used risk-reward criteria for approvals and if they can squeeze the entire process from appli
-growth enterprises, the downside may be an equal increase of high failure. 177 Is Europe ready for this type of
markets, the promising high-growth enterprises of today can be the big losers of tomorrow
subsidiarity and international competition. 178 The subsidiarity principle stipulates that central authorities should have a subsidiary function, performing
International competition: In general, competition can be interpreted as a discovery process, meaning that competing companies search for solutions to best
please the needs of consumers †which leads to solutions which were unknown at the outset and which
can be interpreted as a beneficial competition to search for most effective policy solutions. These may even
entrepreneurship, access to finance and internationalisation Enhanced entrepreneurship policies Establishing a network of certified coaches across Europe
There have been several initiatives to establish professional coaching networks for SMES in Europe, also by
opportunities, many may not know about the benefits of coaching or where to find reliable high-quality coach
-ply that coaching services as such would need to be subsidised Promoting serial entrepreneurs Entrepreneurship policies may not have to consider the question how to identify SMES with high growth po
-tential. Findings from an enterprise survey in the context of this Policy Brief (see Section 6. 2) suggest that
company growth largely depends on the management†s willingness to grow and to pursue market opportuni
Thus, entrepreneurship policy may, more basically, have to seek to ensure that there are entrepreneurs who are able to generate companies
-tion of serial entrepreneurship, policy can use various instruments, and the European commission can take a role.
Enhancing the European venture capital market The European venture capital market is fragmented highly and lacking intermediaries (see section 4. 2. 2
Opportunities for companies with high growth aspirations to find venture investors are thus suboptimal. In or
-der to overcome these shortcomings, the European commission may be advised well to continue and strengthen its efforts to establish a Single European Market for VC †which is a natural task of the European
This would mean to improve the tax and regulatory environment for VC and remove impedi
Linking research funding and venture capital Case studies conducted for this report indicate that governmental policies may support access to finance for
181 The EC launched a â€oeconsultation on a new European regime for venture capital†in June 2011
A suggested enhancement of the Enterprise Europe Network The Enterprise Europe Network (EEN) provides opportunities for SMES to enter into joint development ar
-rangements with appropriate partners across Europe, which could potentially foster their growth (see section 4. 2. 3). 183 However, the lack of a semantic search capability makes reference to this network difficult for
Furthermore the EEN also offers cooperation opportunities with Technology Offers and Technology Requests. Those are not Framework Programme (FP) cooperation but alternative or complementary oppor
The opportunity finder would then return a list of open call topics †not just open calls †and technologies from the EEN database ranked by relevance.
semantic based search concept would offer to the SME the opportunity to conduct a quick scan of relevant
It would empower the user to discover new knowledge and open opportunities without having to process extensive data and information from various sources.
-tures may find little opportunity to fund growth if the right individuals are persuaded not to make the entre
social context, is likely to make a difference for high-growth entrepreneurship. †Balancing SME policies with economic policies at large
The question of balancing policies for general and high-growth SMES may have to be asked even broader
How should SME policies be balanced with enterprise policies at large? Economists suggest that policy should not principally favour SMES.
Which type of enterprise generates most innovations and growth de -pends on many factors, e g. market size, stage of market development, industry, and many more.
Since these factors and their interplay are difficult to monitor, policies favouring specific types of companies are
-tions and Communications; items 7-10 take a European perspective and require co-operation between
importance of high-growth SMES for employment in developed national economies, it appears to be worth
-while for EU policy makers to support high growth of enterprises in order to leverage the positive impact of
this type of enterprises. It needs to be stated clear, however, that the positive impacts of high-growth entre
Furthermore, governments should also not aspire to eliminate new venture failures. 192 3. Policies for general SMES and for high-growth SMES may coexist:
and non-innovative enterprises. While the arguments may be particularly strong for high-growth SMES, they
Since high-growth enterprises can be found in any industry and since business ecosystems, which are important for companies†sustainability and growth,
education system, investment regulation, start-up regulation, market entry barriers, labour law, bankruptcy law, taxation, and also to SME policies rewarding to stay small.
is European Single Markets, e g. for venture capital 8. Enhance coaching opportunities: Qualified coaching may help grow SMES
and cross the â€oechasm†be -tween pilot markets and mass markets. Since many SMES do not take advantage of coaching opportunities
an infrastructure to encourage the replication of existing successful coaching networks throughout EU Mem -ber States could be set up
Improve internationalisation opportunities: Since high growth requires tapping larger markets, and national markets may be too small,
further work towards single markets in Europe as well as enhancing the EC€ s Enterprise Europe Network
Specific high-growth business services and professional coaching Capital Finance Develop single European market for VC
European Investment Bank instruments for high growth of SMES Ensure effective growth capital provision VC funds, corporate VC, business angels
incubators Incentives (motivation Income Direct National regulation †no specific role for EU except opinion leadership
Economic stability Economic stability and growth European monetary policy (No difference between general SME poli -cies and high-growth SME policies
Right timing Right timing (No specific issue for EU.)Swift reaction to high-growth SMES€ needs
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Discussion Papers on Entrepreneurship, Growth and Public Policy; Max Planck Institute of Economics Ahmad, Nadim;
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2007, Copenhagen, Denmark Andersson, Svante; Tell, Joakim (2009: The relationship between the manager and growth in small firms.
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London. Available at http://www. gemconsortium. org/download. asp? fid=606 Autio, Erkko (2007b: Support Initiatives for High-Growth SMES:
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-vation Programme. Framework Service contract for the Procurement of Studies and other Supporting Services on Commission Impact Assessments and Evaluations Interim, final and ex-post evaluations
of policies, programmes and other activities. Final Report. April 2011. Available at http://ec. europa. eu/cip/files/docs/eip-final-evaluation-report en. pdf
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Growing profitable or growing from profits: Put -ting the horse in front of the cart? In: Proceedings Max Planck Institute Schloss Ringberg Conference
Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee
EVCA, European Private Equity and Venture capital Association (2011: Creating lasting value: Yearbook 2011 Harms, Rainer;
Venture growth †new findings from a multilevel perspective †Guest Editors†Introduction to the focus issue on growth.
Research Institute of Industrial Economics Stockholm, IFN Working Paper No. 733. Available at http://www. ifn. se/Wfiles/wp/wp733. pdf
Main characteristics of technological entrepreneurship and the im -pact of governmental policies in Korea. In:
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Growth Entrepreneurship and Finance. In: Ministry of Education and the Ministry of Employment and the Economy:
Evaluation of the Finnish National In -novation System †Full Report. Helsinki University Print, 2009.
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An Investor's Guide to Picking Winners in High technology Harperbusiness Moreno, Ana M.;Casillas, Josã C. 2008:
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and interpreting innovation data. The Measurement of Scientific and Technological Activities. Third edition. A joint publication of OECD and Eurostat
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-ness Economics, 2010, vol. 35, issue 2, pp. 203-226 Reinstaller A. coord. HÃ lzl, W.,Janger J.,Stadler,
European commission, DG Enterprise and Industry. Available at http://www. proinno -europe. eu/sites/default/files/newsroom/2010/12/Innogripsii report barriers. to . internationalisation. a
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Small Business Economics, Vol. 32, pp. 351†374 Yim, Hyung Rok (2007: Quality shock vs. market shock:
Deardorff's Glossary of International Economics, search term â€oepolicyâ€, URL: http://www -personal. umich. edu/alandear/glossary, last accessed 2 may 2010
Enterprise Europe Network: http://www. enterprise-europe-network. ec. europa. eu, last accessed January 2011
EUREKA, http://www. eurekanetwork. org/about-eureka, last accessed May 2011 EUREKA€ s Eurostars Programme, http://www. eurostars-eureka. eu, last accessed May 2011
http://ec. europa. eu/enterprise/policies/finance/index en. htm, last accessed May 2011 Policies for high-growth innovative SMES v1. 6
European Investment Fund, http://www. eif. org/what we do/equity/venture/index. htm, last accessed May
European Investment Fund, GIF 1-GIF 2 Investment Policy http://www. eif. org/what we do/resources/european commission/GIF INVESTMENTPOLICY IMPLEMENATIO
Enterprise Finland Venture Forum: https://www. efvf2011. b2bmatchmaking. com/p index. php, last accessed May 2011
Ministry of Employment and the Economy of Finland, http://www. tem. fi/?/l=en&s=2383, last accessed May
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Philipp Koellinger, Economics of Innovation: www. economics-of-innovation. com, last accessed May 2011 Platinn.
Plateforme innovation: http://www. platinn. ch/eng, last accessed May 2011 PRO INNO Europe, Tactics:
Singapore Agency for Science Technology and Research, Growing Enterprises through Technology Up -grade (GET UP: http://www. a
Jonathan Potter, OECD, Senior Economist, Local Economic and Employment Development. 1 june 2010 Burton Lee, Innovarium Ventures, 17 august 2010
Rebecca Scheel, Accelerace programme, Business Advisor, 5 january 2011 Policies for high-growth innovative SMES v1. 6
The study team scanned the following entrepreneurship journals and other journals for articles about high
Top level entrepreneurship journals Public policy journals 1 Journal of Business Venturing 2 Entrepreneurship Theory & Practice
3 Small Business Economics 4 Journal of Small Business Management 1 Cato 2 Journal of Public Policy and Management
Level 2 entrepreneurship journals Top-level general journals 1 International Journal of Entrepreneurial Venturing 2 Journal of Small Business and Entrepreneurship
3 International Journal of Entrepreneurship and Innovation Management 4 International Small Business Journal 5 Journal of Developmental Entrepreneurship
6 Venture capital 7 International Journal of Entrepreneurship 8 Journal of Enterprising Culture 9 Small Business and Enterprise Development
1 Harvard Business Review 2 California Management Review 3 Sloan Management Review 4 Long Range Planning
5 Growth and Change Exhibit A-1 lists articles in top level or level 2 scientific entrepreneurship journals dealing with high-growth
SMES in 2008-2010. Full references are included in the Reference section of this Policy Brief
Exhibit A-1: Articles on high-growth SMES in entrepreneurship journals 2008-2010 Year Author (s) Journal/Article title
Top Level Journal of Business Venturing 2008 Hyung Rok Yim Quality shock vs. market shock:
Lessons from recently established rapidly growing U s. startups Small Business Economics 2010 Parker et al What happens to gazelles?
The importance of dynamic management strategy 2010 Henrekson/Johansson Gazelles as job creators: a survey and interpretation of the evidence
2010 Goedhuys/Sleuwaegen High-growth entrepreneurial firms in Africa: a quantile regression approach 2009 Shane Why encouraging more people to become entrepreneurs is bad public policy
2009 Harms/Ehrmann Firm-level entrepreneurship and performance for German Gazelles 2009 Bianchi/Winch Supporting value creation in SMES through capacity building and innovation initia
Journal of Small Business and Entrepreneurship 2010 Baughn et al Labor Flexibility and the Prevalence Of high-Growth Entrepreneurial Activity
International Journal of Entrepreneurship and Innovation Management 2010 Zhou et al Entrepreneurial innovation problems associated with the dynamic growth of univer
opportunities, goals and growth Small Business and Enterprise Development 2010 Hoxha/Capelleras Fast-growing firms in a transitional and extreme environment:
are they different 2010 Littunen/Niittykangas The rapid growth of young firms during various stages of entrepreneurship
2008 Zhang et al A quantitative analysis of the characteristics of rapid-growth firms and their entre -preneurs in China
Source: research by empirica, status October 2010 Policies for high-growth innovative SMES v1. 6
g) successful introduction of new products or services h) successful expansion of supply to international markets
f) competition was too strong g) our company was not innovative enough i) the innovations of our company were not successful
Since the sample included only German enterprises, the original questions were in German Policies for high-growth innovative SMES v1. 6
The program gives you insights into your customers, competitors and markets. The goal is to give you the knowledge
During an intensive five-month process you will be in contact with customers and industry experts
we are able to provide our services for free. The program runs two times a year with
Arengufond â€oethe Development Fund performs risk capital investments into the starting and growth-oriented technology com
â€oetekes offers companies funding and expert services for challenging development projects that help companies to promote international growth;
â€oea key aspect of growth business policy is offered that by the Growth Business Service, part of the Enterprise
by the Ministry of Employment and the Economy http://www. yrityssuom i. fi ***Vigo by Finnish Minis
and Economy â€oethe programme bridges the gap between early stage technology firms and international venture funding.
backbone of the programme is formed by the Vigo Accelerators, carefully selected independent companies run by internationally proven entrepreneurs and executives.
These Accelerators help the best and the brightest start -ups to grow faster, smarter, and safer into the global market.
The Accelerators are not consultants--they are co -entrepreneurs who invest in the companies they work with.
-neurs build an investor-ready business plan. Once a HPSU has developed a sound business plan and identified
http://www. enterprise -ire -land. com/en/funding -**Policies for high-growth innovative SMES v1. 6
108 prise Ireland investors, you can apply to the Innovative HPSU Fund for an Enterprise Ireland equity investment.
Having se -cured the necessary investment to start the business, further supports are available to assist in the implementa
-tion of key aspects of your plan. †(Source: http://www. enterprise-ireland. com/en/funding
-supports/Company/HPSU-Funding/)â€oeenterprise Ireland is the government organisation responsible for the de -velopment and growth of Irish enterprises in world markets. †(Source:
http://www. enterprise -ireland. com/en/About-Us /sup -ports/Company/HPS U-Funding Netherlands
Programma Groe -iversneller, by Ministry of Eco -nomic Affairs â€oesummer of 2008 kickoff of the Growth Accelerator Groeiversneller programme (IP and Ministry of Economic
Affairs). ) Objective: To support 100 companies in achieving a turnover growth of several million to at least â 20
This high-tech and innovation co-investment facility was subscribed in February 2006 by CDTI, EIF and several other private investors, mainly Spanish blue chip companies.
investment represents just over 25%of the fund's final size of EUR 183m. â€) The programme has brought to
-gether Spanish public and private sector investors to boost investments in Spanish SMES which will foster inno
-ket position against international competition. Services may also be offered to large companies Information provided to empirica by Inno
-vation Norway **America USA Startup America â€oestartup America is the White house initiative to celebrate, inspire, and accelerate high-growth entrepreneurship
throughout the nation.(.President Obama has called on both the federal government and the private sector to
Unlocking Access to Capital Connecting Mentors, Reducing Barriers, Accelerating Innovation, Unleashing Market Opportunities. Second leaders in the private sector have launched the Startup America Partnership, an independent alliance of entre
-preneurs, corporations, universities, foundations, and other leaders, joining together to fuel innovative, high -growth U s. startups. â€
that have a disproportionately higher impact on the metro area economy. †East asia China Zhongguancun
Enterprises with the highest credit grade enjoy the highest discount loan of 40%.%†(Source:
The High-tech Incubator in Xi†an set up a Gazelle Valley in May 2007 to support the
development of high-growth enterprises. Source: Cunningham (2008), p. 24 ***Five-year Plan for Gazelle Enter
The plan aims to invest in 500 high-growth enterprises by 2012 by providing special funds and increasing capital accessibility. †(Source:
Cunningham (2008), p. 24 http://eng. hangzhou. g ov. cn/main/zpd/Englis h/goal/gov/T307099. s
Illawarra-based entrepreneurs who are looking to drive their businesses to achieve increased profits and sus
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