How Venture Capital Became a Component of the U.S. National System of Innovation

Abstract:     
Venture capital (VC) is a relatively recent addition to the U.S. national system of innovation (NSI). Tracing the history of the VC industry in the U.S. provides an interesting example of how NSIs can add new institutions and in the process be transformed. The history encompasses important exogenous events, endogenous developments, and actions by individual actors. The story of the development of VC is set in the technological trajectories where it has experienced its greatest success, the ICT and biomedical industries. The emergence of VC is intimately related to various government actions, and yet the paper does not attribute a deus ex machina role to government actors. While NSI theory provides the framework, it is also recognized that VC is geographically localized in a few regions, and a regional innovation system perspective is also valuable.

Number of Pages in PDF File: 72

Keywords: venture capital, innovation, national system of innovation, NSI, regional

working papers series