Fostering breakthrough entrepreneurship

At the end of last year an articles by Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson, IFN, et al was published at Vox, CEPR's policy portal. The researchers have looked into the fact that most developed economies provide significant subsidies to small businesses. The reason being to encourage innovation. In the Vox-article the researchers argue that while subsidies to reduce entry costs may increase entrepreneurial entry, they can also lead to a reduction in the likelihood of ‘breakthrough’ inventions.