Policy Lessons from Financing Innovative Firms

Abstract

There has been increasing concern from policy makers around the world about the lack of access to finance for young innovative firms. As a result, governments in many OECD countries have sought to address the financing gap and perceived market failures by supporting the seed and early stage market. This paper seeks to summarise the lessons learned in seed and early stage finance based on OECD work over the past several years focused on policies related to financing high growth firms, including angel investment and venture capital. That research was supplemented with a questionnaire on seed and early stage financing policies in 2012 and a series of policy workshops held between 2012 and 2014. The workshops provided deeper insights into experiences and lessons learned from OECD member countries. The OECD has been working on seed and early stage finance within the Committee for Industry, Innovation and Entrepreneurship (CIIE) in the Directorate for Science, Technology and Industry as well as across other Directorates. This work has highlighted the growth in seed and early stage finance policies as well as the importance of high-growth firms for job creation and the role that financial development and other policies play in firm dynamics and the growth of such firms. The OECD Secretariat would like to thank Norway, Switzerland, the Netherlands and Sweden for hosting financing policy workshop over the past several years as well as all of the representatives and experts who provided input throughout the research process. The OECD Secretariat would also like to thank Norway for the voluntary contribution in support of this work. Note to Delegations: This document is also available on OLIS under reference code DSTI/IND(2014)5/FINAL The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD member countries.

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