Stimulate entrepreneurship and business startups with a system of subsidies? Yes, but...
Insights from research at HEC Lausanne – Many governments currently provide financial support for startups that want to launch themselves into the adventure of entrepreneurship. Subsidies for R&D are a common example. But recent research by Professor Annamaria Conti at HEC Lausanne (UNIL) shows that budding businesses may well turn away from financial support, depending on the policy that underpins it.
As a country of successful start-ups, Israel was the ideal location for the study carried out by Prof. Conti. With a population of barely 8.5 million, Israel has the highest number of startups in the world, with one for every 1,400 inhabitants.
Despite this, it has taken policymakers several attempts to find the right approach for supporting business creation. Initially, the government applied a policy of subsidies combined with restrictions on transferring know-how, fearing that its investment would be siphoned off to other countries.
What was the impact on the most promising start-ups? Should the policymakers better incentivize or sanction? What are the most effective financial support policies for both startups and the country’s economy?
Find the answers in the article by Prof. Annamaria Conti published on HEC Lausanne’s research blog, HECimpact.
Get to know more about:
- Prof. Annamaria Conti: Annamaria Conti is Associate Professor of Strategy at HEC Lausanne, University of Lausanne. She conducts research in the fields of entrepreneurship and economics of science: in the field of entrepreneurship, she has examined the signaling value of patents, the role of R&D grants in spurring innovation by new ventures, and the role of venture capitalists’ monitoring capital in upgrading startups’ value. In the field of economics of science, Prof. Conti has investigated cohort and gender effects on graduate students’ placement.
- Department of Strategy, Globalization and Society: The department is conducting research on the sources of firms’ long-term competitive advantage and sustainable performance. One of the founding belief of the department is that firms’ strategies in a globalizing world often have to take into account not only market dimensions and opportunities (competition, price, differentiation, innovation, diversification, M&As, etc.) but also nonmarket ones (ethics, environmental aspects, regulation, macroeconomic policies, politics, media influences, etc.).
par HEC Communication