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Growth Entrepreneurship and Finance

In: The Evaluation of the Finnish National Innovation System

Author

Listed:
  • Gordon Murray
  • Ari Hyytinen
  • Markku Maula

Abstract

Tax policy should explicitly recognize the incentives needed for talented persons to consider an entrepreneurial career choice as well as for potential High Growth Entrepreneurial Firms (HGEFs) to pursue (international) expansion. The planned reform of the Finnish tax system presents a unique opportunity to make the taxation treatment of equity income more favourable to entrepreneurial risk-taking and creation of potential HGEFs. The Ministry of Employment and the Economy and the Ministry of Finance should publicly assume joint operational responsibility for policies that aim at promoting entrepreneurship and knowledge-based HGEFs. The present public support system is in need of a major revision. Issues of access and relevance are particularly important for HGEFs. It is believed that both the governance and cost-effectiveness of the support system could be improved by reducing its complexity. The Finnish innovation system suffers from a mismatch between 1) the growing demand by Finnish HGEFs for global insight, foreign expertise, international networks, and 2) an insufficient supply of inward foreign spillovers due to the scarcity of world class human capital, foreign R&D and cross-border venture capital within Finland’s borders. Even if there is no single policy measure that can resolve this issue, it should be urgently recognized and addressed. The Finnish educational sector has a greater role to play in the creation of HGEFs. The reform of the Finnish university sector and the creation of Aalto University present an important and timely opportunity to create world class infrastructure for entrepreneurial education, training and research accessible to both Finnish and collaborative foreign interests involved in growth oriented and new knowledge based enterprise.

Suggested Citation

  • Gordon Murray & Ari Hyytinen & Markku Maula, 2009. "Growth Entrepreneurship and Finance," Chapters, in: Reinhilde Veugelers (ed.), The Evaluation of the Finnish National Innovation System, pages 147-202, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:otchap:492
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    Cited by:

    1. Mika Maliranta & Satu Nurmi, 2019. "Business owners, employees, and firm performance," Small Business Economics, Springer, vol. 52(1), pages 111-129, January.
    2. Robert Baldock & Colin Mason, 2015. "Establishing a new UK finance escalator for innovative SMEs: the roles of the Enterprise Capital Funds and Angel Co-Investment Fund," Venture Capital, Taylor & Francis Journals, vol. 17(1-2), pages 59-86, April.
    3. Alexander Ebner & Fabian Bocek, 2015. "Best Practices as to How to Support Investment in Intangible Assets. WWWforEurope Working Paper No. 101," WIFO Studies, WIFO, number 58258, April.
    4. Robert Baldock, 2016. "An assessment of the business impacts of the UK’s Enterprise Capital Funds," Environment and Planning C, , vol. 34(8), pages 1556-1581, December.
    5. Autio, Erkko, 2009. "The Finnish Paradox: The Curious Absence of High- Growth Entrepreneurship in Finland," Discussion Papers 1197, The Research Institute of the Finnish Economy.
    6. Luukkonen, Terttu, 2010. "The Effectiveness of the Finnish Pre-Seed and Seed Policy Schemes to Promote Innovative High-Growth Entrepreneurial Ventures," Discussion Papers 1221, The Research Institute of the Finnish Economy.
    7. Robyn Owen (Baldock) & Colin Mason, 2017. "The role of government co-investment funds in the supply of entrepreneurial finance: An assessment of the early operation of the UK Angel Co-investment Fund," Environment and Planning C, , vol. 35(3), pages 434-456, May.

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