INNOVATIVE ENTERPRENEURSHIP DEVELOPMENT MANAGEMENT ON MACRO LEVEL
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Keywords:
entrepreneurs, innovation, financing, debt, grant, Small and medium-sized enterprises (SMEs), project.Abstract
Government policy issues and approaches of improvement innovative entrepreneurship are considered in the paper. Elements of policy intervention on innovative entrepreneurship were described.
The way firm innovate and the nature of their contributions to innovation varies and depends critically on firm characteristics and the conditions they face to engage in innovation. The “technology push” and “market pull” models provide two perspectives on firm innovation. Innovation output may differ along the several dimensions, including the type of innovation and the impact of innovation.
Innovation can play a critical role in addressing socio-economic objectives, which are affected by the following factors: economic growth and employment, environmental challenges, social challenges. Innovative entrepreneurship can contribute to socio-economic challenges by formalizing the informal sector.
The main policy approaches to address challenges associated to policy intervention for innovative entrepreneurship deal with: institutional governance, strategy and coherence of policies, policy-making contexts for innovative entrepreneurship. Achieving coherence and balance in the set of policies affecting innovative entrepreneurship, and coordinating the various actors involved in these policies have, consequently, become increasingly important for policy efficiency. Specific rationales for public policies: access to finance, access to knowledge, access to labor, entrepreneurial capabilities and culture, market development and access, regulatory framework.
Access to finance is a key driver in the creation, survival and growth of innovative new ventures. Within the context of innovative entrepreneurship, public policy can in the following ways: debt financing, venture capital, business angels, private sources of funding. Access to debt financing is a critical issue for innovative businesses. It allows them to finance their growth, meet working capital requirements and invest in innovation.
Relevant to innovative entrepreneurs are alternative types of loans, such as convertible and subordinated loans. Convertible loans give lenders the right to convert credit into an equity participation in the company, whereas subordinated loans are junior forms of debt that, in case of insolvency, have lower priority than senior debt (e.g. asset-based lending). They are riskier but pay higher interest rates.
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