Nordic Growth Entrepreneurship Review - preliminary findings

The Nordic Growth

Entrepreneurship Review

Preliminary Findings!

Glenda Napier, Chief Advisor, RegX and SDU

1

2

Content

• Findings

• Challenges

• Recommendations

• Country Findings (panel)

• Background & Methodology (handout)

Please note:

Figures and graphs presented in the Seminar (slides 4-54) are preliminary – the final figures will be available and updated by 30 September 2012

NGER Findings 2012:

Growth Entrepreneruship Performance

3

• High levels of Nordic start-up activity

• High levels of gazelles

• Nordic gazelles are mainly in services

• But not enough up-scaling activities

• Not many gazelles that grow really big

in the Nordic region

High level of Nordic start-up activity - Employer enterprise birth rates, 2009

4

0

2

4

6

8

10

12

14

16

Norway Denmark OECD average

Iceland Sweden USA Canada Finland

Source: NGER based on National Statistics offices in Nordic countries and OECD

High Nordic levels of gazelles - firms with average 20% annual growth in employment over a 3-year-period and

younger than 2 years old at the beginning of the growth period, 2009

5

0,87

0,70

0,60 0,57 0,56

0,43

0,33

0,11

0,0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1,0

Norway Sweden OECD average Canada Finland Denmark Iceland USA

Shae

r o

f ga

zelle

s

Source: NGER based on National Statistics offices in Nordic countries and OECD

Nordic gazelles are small in

numbers, so even more

important that they become

successful growth firms!

Norway Sweden Finland Denmark Iceland

214 206 92 84 6

6

Source: NGER based on National Statistics offices in Nordic countries

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

Denmark Sweden Norway Finland Iceland

Services, more knowledge-intensive Services, less knowledge-intensive

Manufacturing, higher technology Manufacturing, lower technology

Other

Nordic gazelles are mainly in service industries

7 Source: NGER based on National Statistics offices in Nordic countries

Nordic gazelles are small in size

8

47,83

38,32

24,76

20,24

16,67

0

10

20

30

40

50

60

Pct

. of

gaze

lles

Finland Norway Sweden Denmark Iceland


Share of gazelles that reach more than 50 employees

Even less ever reach 100 employees..

9

23,91

17,29

14,29

12,14

0,00 0

5

10

15

20

25

30

Pct

. of

gaze

lles

Finland Norway Denmark Sweden Iceland


Share of gazelles that reach more than 100 employees

Weak Nordic ability to upscale firms compared to USA

10

20%

2,2% 1,5%

0

5

10

15

20

25

USA Finland Denmark

Share of firms with 500-999 employees and younger than 10 years-old

Source: Nordic Entrepreneurship Monitor, 2010.

11

Summary I

• Nordic gazelles are few in numbers

• Even fewer that ever reach more than 50 employees

• Only in Finland approx. 50% of gazelles reach more than 50 employees

• A challenge to create more firms that become big players in the Nordic countries

12

NGER Findings 2012:

Framework Conditions for Entrepreneurship

13

• Nordic framework conditions for entrepreneurship

are catching up with the best performing countries:

USA, UK and Canada

• Nordic region are much ahead of both central

Europe (Austria, Belgium, Germany and

Netherlands) and South Europe (Greece, Italy and

Spain) in terms of framework conditions for

entrepreneurship.

Nordic region catching up

Framework conditions in Nordic region second to

USA, UK and Canada, 2012

14

0 10 20 30 40 50 60 70

South Europe

Central Europe

Nordic region

USA, UK, Canada

Source: NGER.

15

• Nordic region has particular strong framework

conditions in the policy areas related to the Regulatory

Framework and Market Conditions – on par with the

best countries.

• Easy and cheap to start a new firm

• Bankruptcy has limited financial risk

• Labor market regulations fine (despite marked

differences across Nordic countries)

Nordic strongholds is regulation and

market access

Regional comparison of the six policy areas

0

20

40

60

80

100

Regulatory Framework

Market Conditions

Access to financing

Creation and Diffusion of Knowledge

Entrepreneurial Capabilities

Entrepreneurial culture

The Nordic Region Continental Europe USA, UK, Canada

16 Source: NGER.

17

Access to finance and entrepreneurial

capabilities are challenging areas

• Access to Finance – particularly access to

venture capital at expansion stage and stock

markets are challenged in the Nordic region.

These element are critical for growth-firms

• Nordic region ranks low on Entrepreneurial

Capabilities – business education, perceived

entrepreneurial capabilities, and how much

Nordic countries allow inflows of foreign talent

• These elements are critical for the formation

and strengthening of strong management

teams in the young growth firms

18

Summary II

• Nordic region scores low on Access to

Finance/expansion capital – although

critical for growth firms!

• Entrepreneurial Capabilities and the

ability to run successful firms is a

challenge in the Nordic region

• A need to improve access to finance and

capabilities in the Nordic region.

19

Thematic discussion

20

Is it one or two challenge(s)?

21

• Of all US venture-backed public companies in 1990-2005, 25% of them were immigrant-founded.

• Study conducted by NVCA!

• Much lower rate of return in Northern Europe vs. USA (Figure)

Some reflections regarding finance and

capabilities

Source: AmericanMade study, National Venture Capital

Association(NVCA)

-3,50

-3,00

-2,50

-2,00

-1,50

-1,00

-0,50

0,00

0,50

1,00

Northern Europe Western Europe North America

Figure: IRR Pooled Average, 2011

What do firms need to succeed and grow?

22

Service providers

Venture capital

Established firms

Knowledge institutions

Strong ecosystem

23

Copenhagen London Silicon Valley

Zooming in on the Ecosystems..

Stockholm

1. Silicon Valley

2. Boston

3. San Diego

4. Boulder

5. Cambridge

6. København

7. RTP

8. Minneapolis

9. Stockholm

10. Seattle

11. Denver/Boulder

12. Austin

13. Chicago

14. London

15. Phoenix

16. Montreal

17. Toronto

100

75

61

53

53

44

43

33

31

29

27

27

24

24

15

6

4

BIOTEK & MEDICO

Source: NGER based on Hansen and Lempel 2012 (to be published).

1. Silicon Valley

2. Boulder

3. Austin

4. Boston

5. Seattle

6. Stockholm

7. San Diego

8. Denver/Boulder

9. RTP

10. København

11. Cambridge

12. Chicago

13. London

14. Phoenix

15. Minneapolis

16. Montreal

17. Toronto

100

43

35

31

25

24

23

21

21

19

15

15

13

13

13

3

2

ICT & TELE COMMUNICATION

Ecosystem Index value Ecosystem Index value

Composite

Index based on :

• Patents

• LQ

• Venture capital

• Dealmakers

Benchmarking Ecosystems (only with some Nordic capitals)

Startup-America Partnership to

develop stronger ecosystems

America’s Top Entrepreneurs and Business Leaders Form New

Alliance

Launched at the White House in January 2011, the Startup America

Partnership is an independent alliance of top entrepreneurs,

investors, corporations, universities, foundations, and other

leaders, joining together to grow the entrepreneurial ecosystems that

support innovative, high-growth U.S. startups.

The Startup America Partnership has already mobilized more

than $1 billion in private-sector commitments to provide

products, services, mentorship and funding to scale and grow

100,000 U.S. startups over the next three years.

http://www.startupamericapartnership.org/


What to do in the

Nordic region?

26

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• Sharpening the Nordic Entrepreneurship policy debate and facilitate policy learning and exchange of best/worse practices across the Nordic countries

• Strengthening the Nordic entrepreneurship infrastructure in order to address the Nordic growth challenge

• Fill the Nordic knowledge gap on entrepreneurship and enhance Nordic entrepreneurship analysis and data

• RECOMMENDATIONS HAVE BEEN FOLLOWED BY THE NORDIC COUNCIL OF MINISTERS AND NORDIC INNOVATION!!

Nordic Policy Recommendations (2010)

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• Create better data and indicators for scaling of young firms,

both for the Nordic countries and benchmark countries –

more analysis and even suggest new indicators in OECD.

• Conduct a benchmark study of Nordic and other universities’

entrepreneurship and outreach activities

• Make a comparison of selected Nordic entrepreneurship

ecosystems with some of the world's best entrepreneurship

ecosystems.

• Improve the understanding of which policy areas lead more

or less to growth-entrepreneurship, possible include new

areas such as ecosystem indicators in the model

• Develop a composite indicator for tax and free welfare

services and enhance our understanding of the topic

Knowledge-oriented Policy Recommendations

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• Established a Nordic Startup Partnership with

participation of Nordic flagship companies, high-level

government representatives, universities, investors and

Nordic foundations/funds.

• Create an Entrepreneurship Ecosystem Forum with

private and public operators to enhance discussion on

how to strengthen the Nordic ecosystem(s).

• Initiate a Nordic discussion regarding public enterprises

and institutions' role in the entrepreneurship ecosystem.

• Encourage and create strong entrepreneurship

‘outreach’ centers at universities across the Nordic

countries with the objective to have them become much

stronger partners in the ecosystem

Action-oriented Policy Recommendations

Thank you!

Please see hand-outs for more detailed

information and/or await the NGER

publication this Fall.

30

Country Findings Glenda Napier, RegX &SDU

Petri Rouvinen, ETLA

Thorvald Finnbjornsson, RANNIS

Espen Solberg, NIFU

Dan Johansson, HUI Research

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• Finland scores highest on the overall framework

condition values and Norway scores lowest.

• Finland has the strongest framework conditions

among the Nordic countries, followed by Iceland,

Denmark, Sweden and Norway (ranked in this

order).

Framework conditions across the

Nordic countries

Please note: figures and graphs presented in the

Seminar (slides 4-54) are preliminary - the final

figures will be available and updated by 30

September 2012

33

50 52 54 56 58 60 62 64

Norway

Sweden

Denmark

Iceland

Finland

USA

Finland has the best framework conditions of the

Nordic countries, 2012

Source: NGER.

0

20

40

60

80

100

Denmark Finland Iceland Norway Sweden

Regulatory framework

Market Conditions

Access to Finance


Entrepreneurial

Capabilities

Entrepreneurship Culture

Framework conditions across Nordic countries, 2012

34 Source: NGER.

Denmark

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0



Access to financing



Market Conditions

Denmark strengths vs TOP3 OECD)

-15 -10 -5 0 5 10




Access to financing

Market Conditions


Denmark strengths vs Nordic countries

36

-80 -75 -70 -65 -60 -55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15

Income Taxes Business and Entrepreneurship education (skills)

Entrepreneurial mindset Immigration

Public Procurement Business and Capital Taxes

Stock markets Court and Legal framework

Attitude to entrepreneurship Venture capital

Competition legislation Bequest and Wealth Taxes

Transfer of non-commercial knowledge Social and Health Security Patent System - Standards

R&D Activity Technology availablity and take-up

Bankruptcy legislation Administrative burdens

Foreign Markets Access to debt financing

Degree of Public Involvement Product and Labour regulations

Denmark strengths vs TOP3 OECD

37

-20 -15 -10 -5 0 5 10 15 20 25 30 35 40 45 50 55

Income Taxes Court and Legal framework

Entrepreneurial mindset Public Procurement

Attitude to entrepreneurship Venture capital

Business and Entrepreneurship education (skills) Competition legislation

Stock markets Immigration

Bequest and Wealth Taxes Business and Capital Taxes

Administrative burdens Social and Health Security

R&D Activity Bankruptcy legislation

Patent System - Standards Foreign Markets

Degree of Public Involvement Transfer of non-commercial knowledge

Technology availablity and take-up Access to debt financing

Product and Labour regulations

Denmark strengths vs Nordics countries

Finland

-45 -40 -35 -30 -25 -20 -15 -10 -5 0 5



Market Conditions


Access to financing


Finland strengths vs TOP3 OECD

-10 -5 0 5 10 15


Market Conditions



Access to financing


Finland strengths vs Nordic countries

40

-65 -60 -55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10

Income Taxes Business and Entrepreneurship education (skills)

Product and Labour regulations Immigration

Public Procurement Entrepreneurial mindset

Business and Capital Taxes Transfer of non-commercial knowledge

Bequest and Wealth Taxes Social and Health Security

Competition legislation Court and Legal framework

Foreign Markets Stock markets

Access to debt financing Attitude to entrepreneurship Degree of Public Involvement

Venture capital Administrative burdens

Bankruptcy legislation Technology availablity and take-up

R&D Activity Patent System - Standards

Finland strengths vs TOP3 OECD

41

-20 -15 -10 -5 0 5 10 15 20

Public Procurement Business and Entrepreneurship education (skills)

Social and Health Security Bequest and Wealth Taxes


Transfer of non-commercial knowledge Foreign Markets

Degree of Public Involvement Administrative burdens

Income Taxes Business and Capital Taxes

Bankruptcy legislation Court and Legal framework

Access to debt financing Entrepreneurial mindset

Competition legislation Attitude to entrepreneurship

R&D Activity Venture capital

Technology availablity and take-up Patent System - Standards

Stock markets

Finland strengths vs Nordics countries

Iceland

-40 -35 -30 -25 -20 -15 -10 -5 0 5

Access to financing




Market Conditions


Iceland strengths vs TOP3 OECD

-30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35

Access to financing


Market Conditions




Iceland strengths vs Nordic countries

44

-55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15

Venture capital Access to debt financing

Income Taxes Competition legislation

Patent System - Standards Stock markets

Business and Entrepreneurship education (skills) Technology availablity and take-up

Foreign Markets Entrepreneurial mindset

Transfer of non-commercial knowledge Product and Labour regulations

Bequest and Wealth Taxes Attitude to entrepreneurship

R&D Activity Business and Capital Taxes

Bankruptcy legislation Public Procurement

Administrative burdens Degree of Public Involvement

Court and Legal framework Social and Health Security

Immigration

Iceland strengths vs TOP3 OECD NOT AVAILABLE

-40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35

Access to debt financing Venture capital

Patent System - Standards Competition legislation

Foreign Markets Technology availablity and take-up

Stock markets Bankruptcy legislation

R&D Activity Administrative burdens

Degree of Public Involvement Bequest and Wealth Taxes

Transfer of non-commercial knowledge Attitude to entrepreneurship

Business and Entrepreneurship education (skills) Entrepreneurial mindset

Income Taxes Public Procurement

Court and Legal framework Business and Capital Taxes Social and Health Security


Iceland strengths vs Nordics countries NOT AVAILABLE

Norway

-45 -40 -35 -30 -25 -20 -15 -10 -5 0





Access to financing

Market Conditions

Norway strengths vs TOP3 OECD

-20 -15 -10 -5 0 5 10





Market Conditions

Access to financing

Norway strengths vs Nordic countries

48

-85 -80 -75 -70 -65 -60 -55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10

Product and Labour regulations Income Taxes

Business and Capital Taxes Business and Entrepreneurship education (skills)

Technology availablity and take-up Entrepreneurial mindset

Transfer of non-commercial knowledge Immigration

Bequest and Wealth Taxes Stock markets

R&D Activity Competition legislation

Attitude to entrepreneurship Social and Health Security Patent System - Standards

Degree of Public Involvement Venture capital

Public Procurement Foreign Markets

Court and Legal framework Administrative burdens

Access to debt financing Bankruptcy legislation

Norway strengths vs TOP3 OECD

-40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20

Product and Labour regulations Technology availablity and take-up

Business and Capital Taxes Bequest and Wealth Taxes

Transfer of non-commercial knowledge R&D Activity

Entrepreneurial mindset Degree of Public Involvement

Patent System - Standards Social and Health Security

Competition legislation Stock markets

Attitude to entrepreneurship Administrative burdens

Business and Entrepreneurship education (skills) Income Taxes

Foreign Markets Immigration

Venture capital Bankruptcy legislation

Court and Legal framework Access to debt financing

Public Procurement

Norway strengths vs Nordics countries

Sweden

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0





Market Conditions

Access to financing

Sweden strengths vs TOP3 OECD

-15 -10 -5 0 5 10




Market Conditions


Access to financing

Sweden strengths vs Nordic countries

52

-90 -85 -80 -75 -70 -65 -60 -55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0

Product and Labour regulations Income Taxes

Business and Entrepreneurship education (skills) Immigration

Court and Legal framework Public Procurement

Stock markets Entrepreneurial mindset

Social and Health Security Business and Capital Taxes

Attitude to entrepreneurship Bankruptcy legislation

Transfer of non-commercial knowledge R&D Activity

Degree of Public Involvement Administrative burdens

Technology availablity and take-up Venture capital

Patent System - Standards Access to debt financing

Foreign Markets Competition legislation

Bequest and Wealth Taxes

Sweden strengths vs TOP3 OECD

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20

Product and Labour regulations Court and Legal framework

Bankruptcy legislation Social and Health Security

Attitude to entrepreneurship Public Procurement

Stock markets Income Taxes

Degree of Public Involvement R&D Activity

Administrative burdens Transfer of non-commercial knowledge

Immigration Business and Entrepreneurship education (skills)

Business and Capital Taxes Entrepreneurial mindset

Foreign Markets Patent System - Standards

Access to debt financing Technology availablity and take-up

Venture capital Competition legislation

Bequest and Wealth Taxes

Sweden strengths vs Nordics countries

Background and Methodology

(handouts)

Background

56

Nordic Entrepreneurship Monitor 2010 - many new firms in the Nordic regions, but the new firms

do not turn into equally high levels of growth firms.

0 10 20 30 40 50 60 70

Firm growth

Firm entry

The Nordic region USA 57

58

How does NGER differ from the National

growth-entreprenership reviews?

• Iceland, Norway and Sweden do not conduct annual/biannual entrepreneurship reviews

• Denmark does conduct an annual national entrepreneurship index for Denmark (since 2004/2005).

• Finland has for 2 years conducted a national entrepreneurship review. However, it does not apply much international comparable data like OECD definitions.

• Generally the indexes provide little/none international benchmark of entrepreneurship performance and framework conditions putting all the Nordic countries in an international context

• In national reviews there are no Nordic policy recommendations, if policy recommendations at all.

• National reviews do not contribute to the development of new indicators

• !!!! NGER includes UPDATED data for ALL Nordic countries !!!!

Methodology

59

60

Entrepreneurship

Framework

Entrepreneurship

Performance

Wealth

Creation

Methodology

The Nordic Growth Entrepreneurship Review is based on an international entrepreneurship

framework condition model, which rates the entrepreneurial capacity of OECD countries

relative to each other.

According to this model, entrepreneurship is viewed as a driver of wealth creation, and

working strategically with targets for entrepreneurship enables governments to meet a

number of macroeconomic targets.

The framework identifies three separate, but inter-connected flows – all of which are

important for policy measures. Thus, entrepreneurship framework conditions reflect the key

areas affecting entrepreneurship performance, which again has an impact on the economy.

61

Methodology

The core purpose of the entrepreneurship model is to identify the policy-affected areas in

the framework conditions that will help improve entrepreneurship performance. In addition

to this, the model has the strength of being based on a broad understanding of

entrepreneurship – and therefore includes a wide variety of external factors that influence

entrepreneurship performance.

The external factors that influence entrepreneurship performance can be strengthened or

weakened through public policymaking, and governments can work strategically with

entrepreneurship through six policy areas (see also below).

The model first occur in 2004 and has been developed over the years based on the main

theoretical foundations at that time as well as work taking place in international working

groups such as the OECD.

As opposed to other approaches, this model discusses framework conditions for

entrepreneurship as opposed to specific policies. In other words, sound entrepreneurship

performance is a result of a mix of different policies (framework conditions) as opposed to

one single policy (Hoffmann and Gabr, 2006).

62

The Nordic Growth Entrepreneurship Review builds on composite index analysis. Composite Index

analysis provides a useful tool for policy analysis, i.e. how to optimise a set of framework conditions

for growth entrepreneurship. Contrary to analysis focusing on a common trend in many different

indicators, the advantage of composite indices is that they combine separate indicators into an

overall picture thereby providing an easy tool for interpretation. Composite indices are made up of

different indicators which measure different aspects of a certain area.

Throughout the publication, a four-step method is used including the following four steps.

1. Ranking and Regional Analyses

Based on the selected indicators, a complete ranking of countries is carried out in terms of both

performance and framework conditions.

2. Best Practice

The best-performing countries are identified for each of the 6 overall policy areas and the 20 sub-

policy areas describing entrepreneurship framework conditions. Best practice is drawn from each

policy area by comparing the top-performing countries to other countries.

Composite index values for entrepreneurship

framework conditions

63

3. Peer Review

Analyses are carried out for each of the Nordic countries – Denmark, Finland, Iceland,

Norway and Sweden. Individual country’s framework conditions and performance are

compared to each of the other Nordic countries and the top-performing country.

Developments are analysed over time. The results are qualified and elaborated upon by

policy experts. The analysis also covers individual country analyses in terms of the

coverage and quality of policies supporting entrepreneurship efforts.

4. Policy Recommendations

The framework conditions and performance is evaluated and analysed, providing a solid

ground for policy recommendations. The recommendations for the Nordic region are

presented in the Nordic Growth Entrepreneurship Review.

64

To measure and compare performance in growth-entrepreneurship and framework conditions

84 internationally comparable indicators for entrepreneurship framework condition are used.

Various sources are used for these indicators such as WEF, OECD, GEM etc and some

indicators are survey-based (see below). .

Fact-based surveys relate to easy quantifiable aspects, in which different people would give the

same response to a question. The OECD Regulatory Database is an example of this type

because respondents are asked about whether or not a country has a given regulation.

Action-based surveys concern issues where respondents are asked if they have performed a

given action within a given time period or not. The European Community Innovation Survey is

an example of this type of survey. In this survey, firms are asked whether they have introduced

new or technologically improved products or processes on the market during the last year.

Opinion-based surveys deal with questions asking for a subjective evaluation of a given aspect

of the economy. The World Economic Forum’s Executive Survey is an example of this type of

survey. It asks executives about their opinion of the functioning and the quality of various

aspects of the economy.

Data sources and coverage

65

Framework and performance

Framework conditions Entrepreneurship

Performance

6 overall policy areas Employment based entry rates

25 sub-policy areas Gazelles

84 international comparable indicators

for framework conditions

Sources: OECD, Eurostat, World Bank,

GEM etc.

The policy areas cover a wide variety of external factors since they include a combination of the

entrepreneurs’ opportunities, competencies and available resources. The framework conditions

are essential in order to improve entrepreneurship performance. In the following, entrepreneurship

performance and framework conditions are explained in more detail.

66

1. Regulatory framework refers to the policy areas which governments can influence directly through

regulation. Public regulations such as administrative procedures, bankruptcy and labour market

regulation have an effect on entrepreneurship performance. For instance, a strict labour market

regulation might hamper the flexibility of hiring and firing employees and thus also firm growth.

Moreover, the costs and days it takes to start a business are important issues that have direct

influence on the ability and flexibility of starting a business. Finally, the tax structure influences the

attractiveness of starting and growing a business, thereby also constituting an important area of

regulatory frameworks.

2. Market conditions have an impact on the entrepreneur’s possibility for starting a new business.

For instance, access to foreign markets determines the general market access for new firms.

Market conditions are an important underlying requirement for effective business growth and firm

entry. Firms depend to some extent on their national market; a well-organized national market is a

good starting point for business growth. Globalization has opened up for increased international

opportunities for entrepreneurs, making import and export burdens a very important aspect of

market conditions.

3. Access to finance has an impact on the resources available to entrepreneurs. This area is an

important precondition for entrepreneurial activity, and is vital for both firm entry and firm growth.

Without finance and venture capital, newly-established firms and entrepreneurs would be restricted

in their efforts toward higher growth. Different ways of financing are important for different stages in

firm development. For instance, firm entry relies on venture capital, both in the early stage and in

the expansion stage. Firm growth relies on access to loans and a well-functioning stock market.

6 Policy areas

67

4. Creation and diffusion of knowledge is related to the ability of diffusing new knowledge created

through research and development activities, as well as the availability of new technology on the

market. R&D and entrepreneurship often go hand in hand, and R&D is an important factor when

discussing entrepreneurial activity. Funding of R&D activity is essential in order to attain additional

market share and grow business opportunities, thereby enabling firm growth. Patenting might be a

tool to minimize knowledge diffusion; nonetheless, it is a central indicator on the level of R&D

activity. In addition to this, the education system is a contributing factor to transfer of non-

commercial knowledge, especially when it comes to collaboration between industry and

universities.

5. Entrepreneurial capabilities refer to the entrepreneur’s capability to create value through new

innovative products. One of the main factors for creating entrepreneurial capabilities is high-quality

business schools and universities, and their emphasis on education in entrepreneurship.

Immigration and inflow of foreign labor is also an important source of start-up and growth of

companies in many countries; in particular, immigrants with a high education are valuable and

important in creating companies with high-growth potential. Entrepreneurship capabilities can also

be strengthened through appropriate access to business services and entrepreneurship

infrastructure. However, international comparison in this area is not yet possible.

6. Entrepreneurial culture refers to how society and individuals understand entrepreneurship, as well

as the possibility for individuals to start their own firms. The culture of entrepreneurship is very

different in the individual countries; often this culture goes back many years and is not easily

changed. Indicators such as “Image of entrepreneurship” and “Desirability of becoming self-

employed” are related to the culture of entrepreneurship and the desirability of starting a new

business. The willingness to take risks is also a very important factor in the cultural understanding

of entrepreneurship, since risk tolerance is often correlated with the image of entrepreneurs. Still, it

should be noted, a strong business culture is not enough to ensure entrepreneurship performance,

since this willingness to start new businesses does not guarantee that these businesses will

generate high growth.

Framework condition model

68

Regulatory

Framework

Market

Conditions

Access to

Finance

Creation and

Diffusion of

Knowledge

Entrepreneurial

capabilities

Entrepreneurship

culture

Administrative burdens Foreign Markets Access to Debt

Financing

R&D Activity Business and

Entrepreneurship

Education (skills)

Entrepreneurial attitude

in Society

Bankrupt legislation Degree of Public

Involvement

Access to Venture

capital

Transfer of Non-

commercial Knowledge

Immigration Entrepreneurial

education (mindset)

Product and labor

legislation

Public Procurement Stock markets Co-operation Among

Firms

Court and legal

framework

Private Demand Technology Availability

and Take-up

Competition legislation

Social and health

security

Income taxes

Bequest & Wealth

Taxes

Business and Capital

Taxes

Patent System:

Standards

69

Canada Czech Republic

Denmark Estonia

Finland

France

Hungary

Italy

Latvia

Lithuania

Luxembourg Netherlandfs

New Zealand

Norway

Portugal

Slovenia

Spain Sweden

USA

R² = 0,0033

0

10

20

30

40

50

60

70

80

90

0,00 10,00 20,00 30,00 40,00 50,00 60,00 70,00

Fram

ew

ork

co

nd

itio

ns

(no

rmal

ise

d v

alu

e 0

-10

0)

Growth (normalised value 0-100)

70

• A part of regulatory framework is taxes, an area that

the Nordic region ranks lowest

• What would be the best incentives for growth

entrepreneurs – low taxes or access to free hospital,

schools, universities, services etc.?

• Some measures for social and health security are

already included in the NGER index and outweighs the

low tax score

• Maybe a more developed combined composite

indicator measuring tax vs. free welfare services

Nordic region scores lowest on taxes

71

Some national highlights • Nordic countries have high overall score for

regulatory framework and market conditions – with

Denmark in lead due to labor market regulations.

• Sweden ranks lowest on labor regulation

• Iceland has been hit tremendously by the financial

crises and access to finance has been drained.

• Finland and Iceland score high on their

entrepreneurship culture

• Norway is particualry challenged in the area of

creation and diffusion of knowledge, partly due to

high GDP (R&D indicators are % of GDP), but also

rank low an areas such as enterprise-university

collaborations

Some recent initiatives abroad

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Startup-America Partnership to

develop stronger ecosystems America’s Top Entrepreneurs and Business Leaders Form New Alliance

Launched at the White House in January 2011, the Startup America Partnership is an independent

alliance of top entrepreneurs, investors, corporations, universities, foundations, and other

leaders, joining together to grow the entrepreneurial ecosystems that support innovative, high-

growth U.S. startups.

The Startup America Partnership has already mobilized more than $1 billion in private-

sector commitments to provide products, services, mentorship and funding to scale and

grow 100,000 U.S. startups over the next three years.


Startup Britain Partnership

StartUp Britain is a national campaign by entrepreneurs for entrepreneurs, harnessing the expertise

and passion of Britain’s leading businesspeople to celebrate, inspire and accelerate enterprise in the

UK.

The campaign was founded by eight entrepreneurs and launched on 28th March 2011 by the Prime

Minister, with the full support of the Chancellor and HM Government, although it is completely funded

by our private-sector sponsors such as AXA, Dell, Intel, Intuit, Magento Go and PayPal.

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http://www.startupbritain.org/sponsors





Final NGER publication will be

finished in Fall 2012.

For further information, please

contact Glenda Napier:

[email protected]

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Date post:	13-Sep-2014
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Nordic Growth Entrepreneurship Review - preliminary findings

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