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Fostering Breakthrough Entrepreneurship

Färnstrand Damsgaard, Erika, Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson och Helder Vasconcelos (2017). ”Fostering Breakthrough Entrepreneurship”., 23 januari.

Erika Färnstrand Damsgaard, Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson, Helder Vasconcelos

Most developed economies provide significant subsidies to small businesses to encourage innovation. This column argues that while subsidies to reduce entry costs may increase entrepreneurial entry, they can also lead to a reduction in the likelihood of ‘breakthrough’ inventions. Entry costs, which are incurred when an innovation project is successful, prompt small firms and entrepreneurs to pursue high-risk, high-reward innovations.