Headlines 2013

Politicians should pave the way


The IT crash at the beginning of the 2000s "meant that the names entrepreneur and entrepreneurship lost its luster" writes Magnus Henrekson in the preface to the Swedish translation of Josh Lerner's book Boulevard of Broken Dreams : Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do About It . Henrekson argues that entrepreneurship is more and wider than today’s more popular term innovation. He warns against "misdirected" government assistance and believes that the Swedish Government’s VC firms Fouriertransform and Inlandsinnovation "in fact, are industrial and regional aid in disguise."

Governments worldwide are trying to stimulate economic growth by investing in innovation and business clusters, entrepreneurial incubators and various private equity solutions. Silicon Valley, Singapore and Tel Aviv - well-known hubs for entrepreneurial activity - have all matured with the help of public investments. Though, for every successful such public initiative there are numerous unsuccessful ones.

Henrekson explains that Lerner is crystal clear on one point: politics is crucial in ensuring that the rules promote a productive entrepreneurship, including a sophisticated VC industry. "Politicians should pave the way.”

Magnus Henrekson writes:

A recurring theme by Lerner is how important all facets are when creating a support system. Though, this is hard to achieve when each part of the system is the result of a political process where different interests are catered for. The risk is that instead of creating a system that supports and enhances processes and business that arises spontaneously in the market, support systems is established to solve additional pressing problems. Two recent Swedish examples of this are the state-owned VC firms Fouriertransform and Inlandsinnovation.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se