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Innovation, Entrepreneurship and Financial Market Cycles


  • Josh Lerner

    (Harvard University)


While hard data is difficult to find, the financial crisis appears to have had a substantial negative effect on investors’ willingness to finance innovative entrepreneurship. This dearth of capital is particularly worrisome in light of the widely recognised need for innovative ventures—the so-called “green shoots”— to reignite economic growth after the world-wide recession. A growing body of evidence suggests a strong relationship between entrepreneurship, innovation, and economic growth. This document first reviews the evidence concerning the relationship between innovation and entrepreneurship. It then turns to understanding the consequences of market cycles for these activities. We look at the way that financial considerations impact the innovation investment decision, and innovation in entrepreneurial ventures specifically. Il est difficile de trouver des données objectives sur la question, mais la crise financière semble avoir eu un effet négatif sensible sur la disposition des investisseurs à financer les entreprises innovantes. Cette pénurie de capital est particulièrement inquiétante à la lumière du besoin largement admis d'entreprises innovantes – les fameuses « jeunes pousses » – pour relancer la croissance économique après la récession mondiale. De plus en plus d’éléments laissent à penser qu'il existe un lien fort entre entrepreneuriat, innovation et croissance économique. Ce document s’ouvre sur un examen des informations disponibles concernant la relation entre innovation et entrepreneuriat. Je m’efforce ensuite de cerner les conséquences des cycles des marchés sur ces activités. J’examine la façon dont les considérations financières se répercutent sur les décisions d’investissement en matière d'innovation, et plus précisément s’agissant de l’innovation réalisée dans les jeunes entreprises.

Suggested Citation

  • Josh Lerner, 2010. "Innovation, Entrepreneurship and Financial Market Cycles," OECD Science, Technology and Industry Working Papers 2010/3, OECD Publishing.
  • Handle: RePEc:oec:stiaaa:2010/3-en

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