Sowing the seeds of the future: Policies for financing tomorrow's innovations

Abstract

In this paper, we discuss the state of the art in research and policy making related to the dynamics of financing innovation, highlighting gaps in the literature and setting up the objectives of this Special Issue. We also provide a discussion of methodological issues and future directions for the stream of studies aiming at the evaluation of the effectiveness and impact of policies to finance innovation. Finally, we discuss how the articles in this collection contribute to improve our understanding of the financing of innovation along different perspectives.

Entrepreneurship policy and the financing of young innovative companies: Evidence from the Italian Startup Act

“…While the political discussion is very much open about these issues, from a scientific point of view, it is often argued that one of the major deficiencies in the literature is traceable in the rather Manichean perspective adopted by most studies (see Colombo et al 2011;Grilli et al, 2018a). In fact, the typical study in the field analyses the effects of a specific policy measure in isolation with respect to (i.e.…”

“…One of the main problems of this stream of literature on entrepreneurship policy evaluation (see for example the case of public R&D subsidies documented by the scientific review of Zúñiga-Vicente et al, 2014) is that the effectiveness of policy instruments is often analysed in 'isolation'. In other terms, the circumstance that firms are embedded in diverse institutional contexts and are potentially the target of different policy-driven schemes has been largely overlooked in the empirical analyses on the efficacy of policy measures (Grilli et al, 2018a).…”

Capital market penalties to radical and incremental innovation

“…As we discuss in more detail in the concluding section this result can be seen in light of the results of Beck et al (2016) who find that public funding schemes show higher additionality when supporting radical innovation rather than incremental innovation. Indeed, as Grilli et al (2018) emphasize, the literature on evaluating RD investments has perhaps been too pre-occupied with short-term, narrow input additionality compared to investments in broader mission-oriented projects, which in turn are likely to need radical innovation. Financiers might be more willing to accept incremental endeavors close to what is already known on the market, but be deterred by more radical and technology-based ones (Howell, 2016;Mina et al, 2013;Westhead and Storey, 1997).…”

Formation of a portfolio of innovation projects based on management of their life cycle parameters

“…As can be seen from Figure 1, at the stage of "maturity", the potential for growth of innovations is almost exhausted. At that moment, it is necessary to switch to the next group of innovations (Table 1), which ensures the extension of the stages of the innovation process [1,2]. Table 1.…”