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Should the focus of publicly provided small business assistance be on start-ups or growth businesses?

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  • Greene, Francis

    (Warwick Business School)

Abstract

How is New Zealand best able to maximise the potential of its enterprise population? The simple answer is that it has to ensure that the „rules of the game‟ (incentives and signals) are as good as they can be. Nonetheless, there still may be instances of market failure, suggesting grounds for publicly provided business assistance. This paper examines whether any such business assistance would be better provided to start-up or small fast growth firms. The paper presents both arguments for and against support for these two types of small firms. It finds, overall, that the arguments for supporting fast growth firms are more compelling. It then considers a range of potential policy options (e.g. the introduction of a voucher scheme, managerial training). After reviewing the evidence base, the paper recommends that there still remains a need for the stronger evaluation of public assistance programmes.

Suggested Citation

  • Greene, Francis, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.
    • Handle: RePEc:ris:nzmedo:2012_002
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    More about this item

    Keywords

    Economic development; enterprise policy; business assistance; entrepreneurship;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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