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Creating good public policy to support high-growth firms

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  • Colin Mason

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  • Ross Brown

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    Abstract

    Writing in Small Business Economics Scott Shane argues that policy-makers should stop subsidising start-ups and instead focus on supporting the small subset of new businesses with high growth potential. However, both Shane and other scholars who have made the same argument only offer broad-brush proposals to achieve this objective. The aim of this article, in contrast, is to engage in a detailed discussion of how to create appropriate policies for high-growth firms (HGFs). Drawing on research in Scotland, we argue that policy-makers are looking for HGFs in the wrong places. The heterogeneous nature of HGFs in terms of sector, age, size and origins makes in impractical to target support on particular sectors, technologies or types of firms (e.g., new or R&D intensive). The article proposes a reorientation of HGFs, both in terms of appropriate targeting and forms of support. Public policy also needs to focus on the retention of HGFs which are acquired by non-local businesses. Finally, policy-makers need to properly reflect upon the specificities of their entrepreneurial environment when devising appropriate policy interventions. Copyright Springer Science+Business Media, LLC. 2013

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    Bibliographic Info

    Article provided by Springer in its journal Small Business Economics.

    Volume (Year): 40 (2013)
    Issue (Month): 2 (February)
    Pages: 211-225

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    Handle: RePEc:kap:sbusec:v:40:y:2013:i:2:p:211-225

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    Web page: http://www.springerlink.com/link.asp?id=100338

    Related research

    Keywords: Entrepreneurship; High-growth firms; Gazelles; Regional development; Policy;

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    Cited by:
    1. Choi, Taelim & Robertson, John C. & Rupasingha, Anil, 2013. "High-growth firms in Georgia," Working Paper 2013-20, Federal Reserve Bank of Atlanta.
    2. Neil Lee, 2014. "What holds back high-growth firms? Evidence from UK SMEs," Small Business Economics, Springer, vol. 43(1), pages 183-195, June.

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