The enterprise sector of SMEs generates the majority of output of entire economies. To a large extent, therefore, the economic situation in the entire national economy depends on the economic and financial condition of economic entities in this sector.
The aim of activating economic processes is necessary to create and develop instruments of state intervention, thanks to which it is possible to effectively stimulate entrepreneurship and innovation of economic entities of the SME sector.
In view of the above, I would like to ask you: What are the instruments of state intervention in your countries to stimulate entrepreneurship and innovation in enterprises in the SME sector?
Please, answer, comments.
I invite you to the discussion.
Dear Friends and Colleagues of RG
The issues of the importance of innovativeness and entrepreneurship in economic development are described in the publication:
Chapter The Importance of Innovation in Poland`s Business and Financ...
I invite you to discussion and cooperation.
Thank you very much
Best wishes
In the UK we generally separate state intervention into 'hard' and 'soft' support. Hard support tends to focus on removing barriers to accessing finance (both debt and equity) whilst soft support relates to information and advice (and generally management capacity building). Financial support on the debt side is through loan guarantee schemes and on the equity side is through the creation of hybrid funds or through tax incentivised business angel and lower order VC funds. For technology and innovative firms we have science parks and incubators on the soft side, and an innovation loan fund for R&D investment in radical innovation. In terms of what works, our loan guarantee scheme creates modest value, and our lower order equity schemes, but not regionally focused programmes. There is scant evidence that science parks promote improved innovation outcomes. But there is evidence on the soft side that business diagnostic checks promote better quality management in SMEs. A brief run through but hope this helps. Cheers, Marc
It is easier to define policies that do not help the development of enterprises, than those that do help, among these it is important to generate a space for the promotion of micro and SMEs.
In the UK we generally separate state intervention into 'hard' and 'soft' support. Hard support tends to focus on removing barriers to accessing finance (both debt and equity) whilst soft support relates to information and advice (and generally management capacity building). Financial support on the debt side is through loan guarantee schemes and on the equity side is through the creation of hybrid funds or through tax incentivised business angel and lower order VC funds. For technology and innovative firms we have science parks and incubators on the soft side, and an innovation loan fund for R&D investment in radical innovation. In terms of what works, our loan guarantee scheme creates modest value, and our lower order equity schemes, but not regionally focused programmes. There is scant evidence that science parks promote improved innovation outcomes. But there is evidence on the soft side that business diagnostic checks promote better quality management in SMEs. A brief run through but hope this helps. Cheers, Marc
Indian government has started many schemes to improve the MSME (micro small and medium enterprises) contribution to GDP. Apart from training and financial support,various other interventions are put in place to provide momentum to the MSME growth. One of the major initiatives is " Make in India" programme which provides a platform for entrepreneurs to take up manufacturing and service oriented activities. For an overview ,please read my article "Indian Startups- Issues Opportunities and Challenges" in ResearchGate.
Dariusz,
The performance (entrepreneurial / innovation) of any business including SME's are influenced by the external macro drivers as well as the internal under-the-hood micro issues in the firm.
The macro context includes the legislative, administrate, fiscal, policy-making environment that all firms have to operate within. However, even where there is a fantastic facilitative macro context, there will be great firms and weak firms. There are decisions that are made daily within the boundary of the firm eg on talent selection and recruitment, training and development, market development strategies, technology adoption, financial modelling etc, that are within the remit of the entrepreneurs, leaders and managers of the firm.
In Jamaica the levers of the state are many and may be interrogated in more detail in the MSME and Entrepreneurship Policy at link below. In general the macro framework includes, policies around trade agreements to broaden access to global markets; policies around inflation targeting and management; labour market policies to reduce the mismatch between the demands of business and the supply (quality and quantity) of employable talent; procurement policies to improve efficiencies with public sector acquisition of services and products; policies on trade facilitation and other business support services; policies on bankruptcy and re-emergence of distressed businesses among many others.
Technical Report MSME & ENTREPRENEURSHIP POLICY
The above question inspired me to the following considerations:
Should the state support the development of entrepreneurship and innovation?
Activation of entrepreneurship and innovation is essential for effective socio-economic development of the national economy.Failure in entrepreneurship in the context of entire markets, sectors, the whole society, the entire economy is a negative effect of taking risks in the situation of starting a business and running a business. This is the price of few, spectacular business successes. Therefore, it should not be reduced due to the existence of investment risk. Investment risk should be examined, analyzed, measured and hedged, for example, in the form of maintaining established, estimated financial provisions for the situation of potential loss of financial liquidity. An entrepreneur should take risks, accept a certain level of investment risk, measured and hedged risk. Entrepreneurship should be supported by both public sector institutions and through private investment funds that finance the development of innovative startups. In modern knowledge-based economies, the state through central and through local government public institutions should support the development of entrepreneurship and innovation.In view of the above, the current question is: Should the state support the development of entrepreneurship and innovation?Please, answer, comments.
I invite you to the discussion.
The issues of the importance of innovativeness and entrepreneurship in economic development are described in the publication:
Chapter The Importance of Innovation in Poland`s Business and Financ...
I invite you to discussion and cooperation.
Greetings
Dear, we are initiating an investigation in this subject, in the northeast region of Argentina, so it would be very nice to be able to share experiences and join the international cooperation proposed Dariusz Prokopowicz
Dear Darius,
in the Czech Republic, we have direct subsidies (grants) for SMEs and we also have public support schemes offering financial instruments (soft loans, credit guarantees). Moreover, there is also a small grant for unemployed to start business as a part of active labour market policy. I should also mention there are many regional policies and of course, there is an entrepreneurial infrastructure (business incubators, accelerators)....
Nevertheless, the empirical evidence we have so far (mainly my evaluation studies) do not seem to be supporting the argument that policy actions in the Czech Republic help in promoting competitivness of the supported firms.
Best,
Ondřej
In Austria there are soft and hard instruments to help SMEs to support entrepreneurship and innovation in SMEs. To provide a brief overview:
In order to support entrepreneurship in general there are regulatory policies that remove barriers to entry. While barriers to entry are sector-specific (free professions and regulated trades have quite substantial entry barriers) there are also laws that support new firms (NeuföG) the allows exemptions from taxes and charges linked to their setting up or the firm and in addition, certain wage-related levies or contributions are waived for a maximum period of 12 months.
The Austrian support landscape (hard and soft support) at the level of the federal government is organized in two support agencies: (a) the aws - the austiran business development bank -provides loan guarantees, supported erp loans, soft support schemes, business angels network, vc initiatives. The focus is often on expansion investment and also linked to innovation. (b) FFG (research promotion agency) provides project-based support for innovation projects. Both agencies have a strong focus on SMEs. In addition there are labour market programmes to support unemployed to start a business, and support scheme at the level of Bundesländer, that largely focus on SMEs.
In the past years digitalisation led to the set up of new support schemes that focus more on advice and consulting for SMEs willing to invest in new digital technologies (diffusion oriented).
I hope that helps.
In all EU countries the states use the same instruments. Usually it depends on what is ECommission priorities which normally provided in ex-ante evaluation for the next programming period. Check what are ECommision is trying to promote now and you will see next from 2020-2027
Dear Friends and Colleagues of RG
The enterprise sector of SMEs generates the majority of output of entire economies. To a large extent, therefore, the economic situation in the entire national economy depends on the economic and financial condition of economic entities in this sector.
The aim of activating economic processes is necessary to create and develop instruments of state intervention, thanks to which it is possible to effectively stimulate entrepreneurship and innovation of economic entities of the SME sector.
Do you agree with me on the above matter?
Please reply
I invite you to the discussion
Best wishes
Dear Friends and Colleagues of RG
The issues of the importance of innovativeness and entrepreneurship in economic development are described in the publication:
Chapter The Importance of Innovation in Poland`s Business and Financ...
I invite you to discussion and cooperation.
Thank you very much
Best wishes
I would like to supplement our inspiring and interesting discussion with another, significant, following issue regarding this topic:
In many countries, fiscal policy instruments, the structure of the tax system as well as subsidies for specific types of business ventures and investment projects involving employees are considered the most important instruments for activating entrepreneurship and innovation. They are also systemic instruments for activating the labor market in order to reduce unemployment. In combination with active interventionist, Keynesian economic policy, the implementation of large-scale investment projects financed from public funds, expansion of communication, housing, energy security infrastructure for providing other categories of public services, monetary policy of low interest rates, social policy of subsidies for citizens in order to stimulate consumption demand The aforementioned activation of entrepreneurship and innovation is one of many elements of the counter-cyclical, pro-development social and economic policy of the state.
What do you think about this topic?
Please reply
The enclosed publication might be of your interest.
Best regards,
Marco
Our country Bangladesh is spilling over with numerous unemployed people with potentiality in the periphery. With a growing economy, having an increasing youth population, entrepreneurs will be a key driving force to meet the needs of the industry and economy. It has the ability to foster growth and alleviate poverty. here are certain probabilities for that the government should acquire a practical and implacable policy for entrepreneurship development, focusing on decentralisation, rural development and protect domestic entrepreneurs. In the long run, it will result in social benefit with a huge increase in national entrepreneurs. Educational funding for entrepreneurship development in the undergraduate level specially the Bachelor of Entrepreneurship Development (BED) should be emphasised by Universities. More competition based award-reward program like HSBC young entrepreneur awards, case competition, Battle of Mind by British American Tobacco, The Future Leader etc. for inspiration and social recognition to young entrepreneurs should be established by national private companies. Entrepreneurship Development Policy (EDP) should integrate assistance in three categories of program, including (i) Stimulatory programs, (ii) Supportive programs and (iii) Sustaining programs by ensuring political stability, removing legal complexity, strengthening the developing program, stimulating and patronising privatisation ensuring transparency and just practice in market strategy, increasing logistic and infrastructural support. Re-enforcement package for failure entrepreneurs by arranging required finance for new start-ups, granting tax relief etc. Both government and non-government organisation should ensure investment consultancy with counselling, seminar, workshop, camping to influence newbie in entrepreneurs’ world.
The government, however, brought changes in trade and industrial policies alongside the monetary and exchange rate policies. Import controls were considerably relaxed to reduce the level of protection thus encouraging efficiency in resource allocation and promotion of competitive abilities of domestic industries. Industrial policies adopted in different years attempted to create an investment-friendly atmosphere and encouraged entrepreneurship development. Reforms were also made in import policy, fiscal policy and taxation policy along with liberalisation of trade and investment to increase both local and foreign investment.
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