عنوان انگلیسی مقاله:

Incentives to Promote Entrepreneurship in Greece: Results Based on the ‘New Innovative Entrepreneurship’ Program

ترجمه عنوان مقاله: انگیزه‌هایی برای ترویج کارآفرینی در یونان: نتایج براساس برنامه کارآفرینی نوآورانه جدید

رشته: کارآفرینی

سال انتشار: 2015

تعداد صفحات مقاله انگلیسی: 10 صفحه

منبع: الزویر و ساینس دایرکت

نوع فایل: pdf

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چکیده مقاله

This paper examines a national case of providing incentives, which aims at promoting entrepreneurship and enhancing innovation. This national case concerns the case of Greece and the analysis is based on the participation of the Greek, existing and prospective, entrepreneurs and their project proposals in the ‘New innovative entrepreneurship’ program, which was launched in 2011. The analysis is based on the examination of a sample of 439 projects-proposals submitted by existing and prospective Greek entrepreneurs. Typically, the program under consideration provided incentives in the form of grants to promote entrepreneurship in Greece and was seen as a main driver for the upgrading of the country’s production structure and its redirection towards high added-value goods and services. The research findings show that half of projects are related to the manufacturing sector. Overall, however, the majority of projects concern the activities of information technology and its applications, while emerging sectors seem to be those of ‘scientific research and development’ and ‘architectural and engineering activities; technical testing and analysis’. In addition, nearly half of projects concern start-ups and very small and small new firms located in the region of Attica. Results also show that only the 16.9% of projects use the banking system as a complementary financing source. The 27.3% of projects has rights of intellectual property ownership related to the innovation introduced at the level of the Greek territory. The majority of the Greek entrepreneurs intend to introduce a new or significantly improved product or service in the market based on their innovative idea, aiming at diversifying and improving the quality of their products and/or services. Last but not least it seems that the Greek entrepreneurs have as main target the increase of their profitability and the further strengthening of their competitive position in the market.

Keywords: Government support; Innovation; Policy; Subsidies

مقدمه مقاله

Nearly 80 years ago, Schumpeter (1934) stressed the role that entrepreneurship plays in the development and spreading of innovation. He actually defined entrepreneurship as ‘the assumption of risk and responsibility indesigning and implementing a business strategy or starting a business’. Gough (1969) argued that ‘entrepreneurship refers to a person who undertakes and operates a new enterprise or venture, and assumes some accountability for the inherent risks’. Klapper et al. (2010) interpreted entrepreneurship as the ‘activities of an individual or a group aimed at initiating economic activities in the formal sector under a legal form of business.

Along complementary lines, Acs, Audretsch, Braunerhjelm, and Carlsson (2004) argued that the main contribution of entrepreneurship to economic growth consists in playing the role of a knowledge filter that transforms inventions into commercially viable products and processes. Based on the above definitions, it can be argued that the concepts of ‘discovery’, ‘creation’ and profitable exploitation for goods and services’ are implicit in the entrepreneurial process. Finally and focusing on the philosophy of policy practitioners, entrepreneurship has generally been viewed as the process of creating new wealth. Economic growth relies on both the fostering of entrepreneurship and the production of innovation. In fact there is a wide acknowledge of the significant role played by both entrepreneurship and innovation in economic growth (Baumol, 2002; Djankov et al., 2002; Klapper et al., 2006). Entrepreneurship is also very important for the dynamism of every economy, as it is usually expressed by the establishment of new firms, which create jobs and foster competition finally leading to economic growth. However, the assumption of risk, the taken up and running of a new business and the initiation of economic activities aren’t always easy, especially during periods of economic crisis and, more generally, during periods of economic instability. In such difficult cases and periods, the government intervention and the state aid could be more than ever justified.

Government intervention can take many forms: Regulations, antitrust laws, public ownership (World Bank, 2004), the establishment of appropriate institutions (North; 1990), different schemes of financing, taxation, and measures for the encouragement of innovation activities (Harrison, Mason, & Girling, 2004). Thus, one form of intervention and aid is the so called national grants- subsidies. A subsidy is a grant or other financial assistance given by one party (e.g. central, regional, local government) for the support or development of another (e.g. producer, prospective  entrepreneur.

According to the OECD definition, a subsidy is a ‘measure that keeps prices for consumers below market levels, or keeps prices for producers above market levels or that reduces costs for both producers and consumers by giving direct or indirect support’ (OECD, 2006). Subsidies can be direct (cash grants, interest- free loans) or indirect (tax breaks, insurance, low- interest loans, depreciation write-offs, rent rebates). This form of support can be legal, illegal, ethical or unethical. Subsidies are used for a variety of purposes, including the growth of employment, the upgrading of production and the promotion of exports. Subsidies are often regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets, and can impose large economic costs (Parkin, 2005; Amegashie 2006).

The objective of this paper is the study of a national case of providing incentives, which aims at promoting entrepreneurship and enhancing innovation. This national case concerns the case of Greece and the analysis is based on the participation of the Greek, existing and prospective, entrepreneurs and their project proposals in the ‘New innovative entrepreneurship’ program, which was launched in 2011. The analysis is based on raw data of projectsproposals and is further limited to those projects- proposals which have been included in the program ‘New innovative entrepreneurship’. The above program provides public funding in the form of national grants- subsidies.

Greece has many and different schemes of grants- subsidies. The analysis basically presents first results on how the Greek individuals and prospective entrepreneurs as well as the existing ones perceive the issue of innovative
entrepreneurship during a period that the country faces its deepest economic crisis, while implementing a very austere fiscal program imposed by the IMF and the European Union. The paper examines a topic, which hasn’t been studied so far. The paper is structured as follows: Section two discusses the theoretical and empirical framework of providing grants- subsidies, while describing the experience of a number of countries in this field. Section three describes the data that has been used and the methodology that has been applied in the study. Section four is focused on the main findings and empirical results of the study based on the Greek case. Section five synthesizes, further discusses the results, presenting at the same time some concluding remarks.

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