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Venture Capitalism, New Markets and Innovation-led Economic Growth

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  • Cristiano Antonelli
  • Morris Teubal

Abstract

This paper explores the new market-mediating mechanisms linking SU invention on the one hand and economic growth on the other. Two such mechanisms come to our mind under venture capitalism (of which venture capitalism is directly involved only in the first): 1) a systemic rather than haphazard link between radical inventions and the emergence of new product markets; and 2) a link between new product markets) on the one hand and invention & unbundled technology markets on the other. The first highlights not only the volatility and precariousness of the R&D companies which operated prior to venture capitalism, but also, and related to this, the weak links that existed then between radical invention and the emergence of new markets. There are two aspects of 2) above: 2a) derived demand for improvements in the product and process technology underlying a market (and industry); and 2b) a demand for a substitute, disruptive technology which could replace the existing one. In both cases market size signals the ‘benefits’ to be derived from improving or substituting the underlying technology.

Suggested Citation

  • Cristiano Antonelli & Morris Teubal, 2009. "Venture Capitalism, New Markets and Innovation-led Economic Growth," ICER Working Papers 03-2009, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:03-2009
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    References listed on IDEAS

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    1. Cristiano Antonelli & Morris Teubal, 2010. "Venture Capitalism as a Mechanism for Knowledge Governance," Chapters, in: Riccardo Viale & Henry Etzkowitz (ed.), The Capitalization of Knowledge, chapter 3, Edward Elgar Publishing.
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    Cited by:

    1. Michael Peneder, 2009. "The impact of venture capital on innovation behaviour and firm growth," Venture Capital, Taylor & Francis Journals, vol. 12(2), pages 83-107, November.
    2. Gil Avnimelech & Alessandro Rosiello & Morris Teubal, 2010. "Evolutionary interpretation of venture capital policy in Israel, Germany, UK and Scotland," Science and Public Policy, Oxford University Press, vol. 37(2), pages 101-112, March.
    3. Alessandro Rosiello & Gil Avnimelech & Morris Teubal, 2011. "Towards a systemic and evolutionary framework for venture capital policy," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 167-189, February.

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