How Public Financial Instruments Impact on the Economy of a Territory

Proceedings of the 15th Uddevalla Symposium on "Entrepreneurship and Innovation Networks", Faro, Portugal, 14-16 June 2012

21 Pages Posted: 21 Oct 2012 Last revised: 22 Oct 2012

See all articles by Laura d'Alessandro

Laura d'Alessandro

affiliation not provided to SSRN

Marco Giorgino

Polytechnic University of Milan

Barbara Monda

RiskGovernance - Politecnico di Milano, Management, Economics and Industrial Engineering Department

Date Written: 2012

Abstract

The competitiveness of enterprises depends both on environmental characteristic favouring innovation and on the availability of funding for R&D activities; while the former can and should be developed by local and central authorities and agencies, the latter depends on the ability of the single enterprise to attract private investments. Unfortunately, enterprises with high technology/innovation content show a risk-return profile which is too high for private investors, which results in an Equity Gap, as shown for the first time in the Macmillan Report (1931). Given the correlation between the ability to innovate and the economic development of a country or a territory, the Public Sector often takes action in supporting high technology/innovation firms by direct intervention or by incentivizing private investments (indirect intervention) through different schemes.

This study investigates the impact that Public-private financial programs have on the innovation activities of a territory. The results should help orienting the allocation of Public resources to the most effective and efficient instruments. First, a set of innovation indicators is built, made of traditional indicators (e.g. R&D effort, Patents & Patent applications) and non-traditional indicators taken from the available literature (e.g. Kleinknecht et al, 2001). The indicators chosen take into consideration the local conditions and are normalized in order to make comparison possible among schemes activated in environments with heterogeneous characteristics. The chosen set of indicators is used to evaluate the impact of several schemes adopted in different countries and in different geographic areas (Europe, North America, Asia) on the innovation grade of the territory. The study is not intended to identify the best scheme among all, but to understand which scheme is the most appropriate to be adopted by the Public Sector in order to pursue its objectives of bridging the Equity Gap for high technology/innovation firms according to the peculiarities of the local territory.

Keywords: Entrepreneurship, Growth, Indicators, Innovation, Public-Private Partnership, Venture Capital

JEL Classification: G24, G28, L26, L53

Suggested Citation

d'Alessandro, Laura and Giorgino, Marco and Monda, Barbara, How Public Financial Instruments Impact on the Economy of a Territory (2012). Proceedings of the 15th Uddevalla Symposium on "Entrepreneurship and Innovation Networks", Faro, Portugal, 14-16 June 2012, Available at SSRN: https://ssrn.com/abstract=2164699

Laura D'Alessandro

affiliation not provided to SSRN ( email )

Marco Giorgino

Polytechnic University of Milan ( email )

vial Lambruschini 4B
Milan, Milan 20156
Italy

Barbara Monda (Contact Author)

RiskGovernance - Politecnico di Milano, Management, Economics and Industrial Engineering Department ( email )

Piazza Leonardo da Vinci, 32
Milano, 20133
Italy

HOME PAGE: http://www.risk-governance.eu

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
66
Abstract Views
580
rank
431,700
PlumX Metrics