Knowledge-Based Start-ups and Entrepreneurship Policy

Abstract

In the past decade, entrepreneurship policies aimed at encouraging entrepreneurial activities in general and policies that aim at supporting the formation of knowledgebased start-ups in particular have been implemented in many industrial economies. The strong interest in knowledge-based start-ups might be explained by the fact that in a global economy, the comparative advantage of developed, high labor cost countries has continuously shifted toward knowledge-based activities and innovation being the key to economic growth and employment. This development created a compelling argument in favor of policies in areas such as venture capital markets, knowledge commercialization, R&D skill-upgrading efforts, and clustering (Audretsch et al. 2007). Consequently, universities and research institutes gained attention from policymakers who developed policy instruments to invest in knowledge. In order to commercialize scientific knowledge, incumbent firms or knowledge-based start-ups must use that new knowledge and create new products, processes, or services.