Fostering innovative entrepreneurship

Challenges and policy options

image of Fostering innovative entrepreneurship
This publication sheds light on innovative entrepreneurship and difficulties that entrepreneurs face when creating businesses based on research and development results. The legal and regulatory conditions for enterprise development and the existing infrastructure for applied research are explored. Sources of financing for innovative entrepreneurs and roles of specialized financial providers are explored. Highlighted is the need to strengthen linkages between institutions that generate knowledge and the firms that strive to use it commercially. The publication discusses government policies facilitating the emergence of new innovation-based enterprises, its initial growth, identifying bottlenecks and suggesting corrective action for governments and other stakeholders.



Financing early stages of innovation-based SMEs

The access to finance is considered one of the most important factors influencing the development of entrepreneurship in general and of innovative enterprises in particular. According to the EBRD survey conducted in 2009, as much as 47 per cent of South-East European companies considered limited access to finance a significant obstacle to their growth and development. In the same way, according to the World Bank in 2008 access to finance was one of the major enterprise concerns in each of the Central Asian economies. The existence of financial constraints reduces the likelihood that a firm will undertake innovative projects. This concerns, in the first place, small and medium-sized enterprises, which refer to the financing and related problems more often than larger ones.


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