Should governments try to spur entrepreneurship and investment in early-stage firms?

Posted on May 27, 2011 by


High-tech start-ups can play a vital role in seeding future economic growth both at a regional and national level. As venture capital firms tend to invest in businesses as they approach financial viability, accessing investment at the very early-stage of a companies formation can be tricky. Wealthy entrepreneurs may have access to their own savings or those of their close friends and family willing and able to share the risk. 

Not all entrepreneurs have this option.  How should governments encourage entrepreneurs to take what can be significant risks in establishing and driving forward new businesses exploiting promising early-stage technologies?  Government strategies can include offering grants, investor tax credits, start-up tax credits and/or mentoring services. Often governments use a combination of policies.

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