Growth-seeking entrepreneurship: The role of the support system
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A keynote speech at the award ceremony of the annual Icelandic Innovation Award, 10 April 2014, Grand Hotel Reykjavik

A keynote speech at the award ceremony of the annual Icelandic Innovation Award, 10 April 2014, Grand Hotel Reykjavik

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  • Growth Track service, which aims to provide a one-stop-shop for companies seeking quickgrowth and internationalization. Tax incentives for R&D and angel investors

Growth-seeking entrepreneurship: The role of the support system Growth-seeking entrepreneurship: The role of the support system Presentation Transcript

  • Growth-seeking entrepreneurship: The role of the support system Petri Rouvinen ETLA, The Research Institute of the Finnish Economy Nýsköpunarverðlaun Íslands Grand hótel Reykjavík April 10th, 2014
  • What I mean by…
  • Invention Innovation≠ $+
  • Innovation ≈ Seeking opportunities 1% spark – 99% sweat Needs (some) money Mostly not technical Mostly incremental Increasingly digital
  • Innovation Entrepreneurship≈ $+ $+ +
  • Entrepreneurship Self-employment Perceives economic opportunities and introduces them in the market Works but is not employed by others; may employ others but typically not Overlap under 10%
  • EU Innovation Scoreboard: Finland among leaders & Iceland among followers (above the EU average) Source: European Union, Innovation Union Scoreboard, 2014 0.684 0.593 Finland Iceland
  • 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Economic effects Innovators Intellectual assets Links, entrepren. Firm investments Finance, support Research systems Human resources Economic effects: Finland Innovators: Iceland Intellectual assets: Finland Links, entrepreneurs: Iceland Firm investments: Finland Finance, support: Iceland Research systems: Iceland Human resources: Finland New PhDs, upper sec. ed. Int. co-publicat., non-EU grad stu. Pub-priv co-publ. Patents, trademarks protected designs Share of Innovative sales Dimensions of Innovation Union Scoreboard Source: European Union, Innovation Union Scoreboard, 2014 VC n/a
  • “Iceland is the only country for which innovation has not improved over the 2006–2013 period.” Innovation Union Scoreboard 2014, p. 71
  • Early-Stage Entrepreneurs: Iceland leads the advanced countries Source: Global Entrepreneurship Monitor, 2010 Global Report. Measure: Early-Stage Entrepreneurial Activity / Adult pop. 5.7 10.6 Finland Iceland
  • • History: Attitudes & culture hostile to growth companies … but since the crisis Finland to a global startup hotbed! • Why? – Aalto university – Encouraging examples – Challenges of incumbents – Digitalization & globalization – Several good policy measures Startup in Finland!?
  • A new Act in 2009 “privatized” universities and reformed management & decision-making 3 former university merged to form Aalto Univ. in 2010 Aalto’s faculty & students became cheerleaders for startups: Aalto Entrepreneurial Society, Aalto Centre for Entrepreneurship…
  • A brochure of Tekes and NeoGames by the same name. After 50 failures, Rovio hits the jackpot with Angry Birds Over 800 employees After just three years of operation, Supercell sold a 51% stake for €1.5bn 150 employees 250 900 2012 2013 Turnover Million € 1,800 pers. 2,200 pers.
  • 0.5 0.3 0.5 0.7 0.8 1.1 1.2 1.8 2.5 3.1 4.0 3.3 3.6 3.8 3.0 2.9 3.1 3.2 2.6 1.2 1.2 0.5 -0.1 0.5 1990 1994 1998 2002 2006 2010 Nokia’s Share of Finnish GDP, % Source: Ali-Yrkkö, ETLA est. Beyond corporate & public employment…
  • 1011 0101 1100 0010 3D IoT Cost of entry ↓ Market reach ↑
  • With outsourcing &offshoring: size & location matters less Ability to position oneself in global value chains
  • Vigo Accelerators Tekes: Shift in Emphasis 10 Vigos, public–private Tekes startup funding, m€ partnership business accelerators: €220mn private & €70mn public investment to 90 target firms in 2009–2013. Some public measures 45 40 42 61 58 74 88 102 127 134 2003 2006 2009 2012
  • Conclusions
  • Some observations regarding Finland • Seeking a list of (broad) growth industries inconsistent with global realities (cf. megatrends) – Businesses do grow, but across a range of industries & often in small increments • Too focused on “big hits” & the VC market? – A number of “nice growth” companies may jointly matter more for society
  • Humble questions regarding Iceland • Good scientific base... Applications??? • Icelanders with sufficient tools for thought? • Banks & family/friends finance 90% of new firms – But does not fulfill needs of growth-seeking startups – 5–10 rounds of startup finance before maturity: path? • Manifold innovation support in Finland... Iceland at its optimal level of public support?
  • Growth-seeking entrepreneurs (and similarly-minded corporate intrapreneurs) are a necessary link between ideas & their societal impacts… Is this link sufficient in Iceland?
  • For Iceland to do? • Lessons from Finland? – Vigo Accelerators? • A Norwegian-style tax incentive (≈Tekes)? • But: No silver bullets – this domain is systemic – A broad set of framework conditions needed for innovation & entrepreneurship (cf. Nordic Innovation: 20 categories)
  • Try a lot, fail fast and often, scale up or try again.
  • Thank You! fi.linkedin.com/in/petrirouvinen/ Petri.Rouvinen@ETLA.fi  +358–50–3673474