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How can the Nordic countries diagnose growth challenges and develop better entrepreneurship policy?

Glenda Napier, FORA, presented the Nordic Entrepreneurship Monitor at the workshop.
  • Publisert 19.01.2012
How can we improve our analytical policy tools in order to achieve a deeper insight into how entrepreneurs contribute to job creation and growth as well as the barriers to growth? This topic was intensely discussed by Nordic and international policy makers and analysts in Copenhagen on 19-20 January.

The aim of the workshop was to serve as a kick-off for international collaboration in order to provide Nordic policymakers with a state-of-art fact base for entrepreneurship policy development. It was hosted by the Danish Business Authority in collaboration with the Finnish Ministry of Employment and the Economy, Nordic Council of Ministers and Nordic Innovation. Moderator of the workshop was Anders Hoffmann, Deputy Director General of the Danish Business Authority.

 

The first day of the workshop focused on analyses and measures that are needed to provide answers to the questions: What type of indicators and analytic tools do we need to improve our understanding of the Nordic growth challenges and what are the critical policy areas in order to accelerate firm growth?

 

 

Monitoring Nordic entrepreneurship

Glenda Napier, Chief Adviser at FORA, revisited the Nordic Entrepreneurship Monitor 2010 with collected data on entrepreneurship performance in the Nordic countries: growth rates, conditions for entrepreneurship and comparisons within the Nordic countries as well as to other regions.

 

- There are many differences between the Nordic countries, but also many similarities. When it comes to access to finance and the creation and diffusion of knowledge the Nordic region is one of the best. A common challenge seems to be the capability of getting firms to grow.

 

At the moment a second Monitor is at its planning stage. The focus will be on growth and also keeping track on the results from 2010.

 

- We want to facilitate policy learning between the Nordic countries and gather the strongest analyzers to be able to compare with and learn from each other, Napier said. 

 

 

Defining a high-growth firm

The definition of a high-growth firm being used in the Monitor is the one of Eurostat and OECD, and suggests that a high-growth firm is one with 10 or more employees at the beginning of the observation period, and with an average annualized employment growth greater than 20 % a year over a 3-year period. However, Dan Johansson, Associate Professor at HUI Research and Dalarna University, highlighted the fact that there is no generally accepted definition for a high-growth firm, and also the importance of this being discussed.

 

- When we only include firms with 10 or more employees, more than 90 % of the firms generating a majority of new jobs in Sweden are excluded. And what about the difference between employing people from other firms or generating new jobs and employment by employing those who are unemployed? The OECD definition needs to be complemented, and the Nordic countries have the best data in the world. We can do top quality research of general interest, Johansson stated.

 

 

Are we walking the talk?

Gordon Murray, professor at University of Exeter, asked the question if we really are walking the talk when it comes to growth and enterprise policy.

 

- Despite available and growing evidence, enterprise policy has remained a policy of small businesses. Growth is poorly represented in policy decisions being made, he said.

 

Murray also highlighted that growth opportunities are linked to human and intellectual capital and the quality of enabling environment. Networks, markets, knowledge and region all make a difference when it comes to growth opportunities.

 

- There is a critical need of robust independent evaluation studies of existing growth programmes and policies. Growth policies are too often defined or understood as generic SME policies but policy toolkits should be different. I am not saying that SMEs should not be supported, but then they must meet valuable social and regional goals.

 

 

Innovation funding

Raine Hermans, Director of Strategic Intelligence at Tekes, discussed growth and internationalization as impact of innovation funding. The Finnish Funding Agency for Technology and Innovation has increasingly allocated its funding to growth companies.

 

- The questions still unanswered are: What kind of innovations generate the highest rate of commercial success, and how to systematically link innovation to industries and enterprises as well as different instruments of the innovation system to innovation typology and growth rates?

 

James Spletzer, Research Economist at US Bureau of Labour Statistics, said that statistics on high-growth firms and gazelles is important to understand the source of job creation.

 

- Ideally, we want to be able to identify firms likely to be a high-growth firm or a gazelle. It is about understanding business cycles and long term growth. But statistics show that the number of high-growth firms is extremely sensitive to definitions, and therefore we welcome alternative definitions to the one from OECD.

 

 

Experimenting on innovation and entrepreneurship

 - We need more comparable cross-country data on productivity and firm dynamics and policy creating the right conditions for companies with the ambition and potential to grow, said Albert Bravo-Biosca, Senior Economist at Nesta. He added that Nesta is currently developing a new initiative and network to bring formal experimentation to the innovation and entrepreneurship space. The aim is to test intervention, but also to use this as an opportunity to understand the mechanisms behind the decisions of entrepreneurs and innovators.  

 

Sylvain Coté, Manager of Economic Research on Entrepreneurship, Innovation and Growth at Industry Canada, said that even though growth remains a rare and heterogeneous event, it is multidimensional in its nature and can be achieved in different ways.

 

- It is not a matter of a single policy approach or recipe, but it requires a comprehensive approach involving a number of complementary actions and strategies. These need to be advanced simultaneously as well as at different times in the life-cycle of a firm. In addition to policy, these dimensions can inform and guide research and data development. We need to capture more information on the life-cycle of firms to better understand the impact of key determinants in the growth process of high-growth firms. Strategic evaluation should be a policy priority, Coté said.