Naslov
Venture capital firms as production network participants in transition economies

Autori
Iliev, Ilian ; Račić, Domagoj

Vrsta, podvrsta i kategorija rada
Poglavlja u knjigama, znanstveni

Knjiga
Transition Countries in The Knowledge Society : Socioeconomic analysis

Urednik/ci
Švarc, Jadranka ; Lažnjak, Jasminka ; Šporer, Željka ; Polšek, Darko

Izdavač
Institut društvenih znanosti Ivo Pilar

Grad
Zagreb

Godina
2004

Raspon stranica
301-341

ISBN
953-6666-38-3

Ključne riječi
venture capital, production networks, transition economies, systems of innovation, small and medium size enterprises

Sažetak
A comparison between the industrial structures of developed and Central and East European economies (CEEs) reveals that in CEEs Small & Medium Enterprises (SMEs) play a comparatively smaller role in corporate production networks, and are characterised by lower levels of innovation. This contributes to a lower level competitiveness and flexibility in CEE production networks, which justifies a research focus on the sources of this difference, and the identification of mechanisms to improve this aspect of CEE economies. We focus on Venture Capital firms (VCs) as an organisational form that can contribute to increased levels of innovation in CEE SMEs and increased levels of competitiveness in CEE production networks. In developed economies VCs play an important role in the identification and development of innovative SMEs and their integration in production networks. By contrast, in CEEs VCs are less important as a source of support for innovative SMEs. We distinguish two areas of interaction between VCs and corporate production networks: directly, through the sale of VC-backed firms to corporations, the use of VCs to develop corporate spin-offs and Corporate Venture Capital (CVC) programs ; and indirectly, through VCs facilitating science-industry technology transfer via their supportive role for the selection, development and integration in production networks of Higher Education Institutions (HEIs) spin-offs. In CEEs VC investments have so far been focused on SMEs that are readily integrated in MNE production networks, with very little interaction with domestic corporate production networks and HEIs. This type of investments have tended to be in late-stage companies characterised by low levels of innovation. We see this pattern of development as problematic, as the impact of MNEs is limited to SMEs that fit in with MNE strategies, which leaves out the possibility of developing innovative SMEs and strong linkages with domestic production networks. We identify two general areas where barriers to the further development of VC role in domestic industry. Firstly, domestic corporate strategies are characterised by low levels of linkages with SMEs, and low levels of technology development, and weak linkages with HEIs. In the VC industry this is manifested by little interest in purchasing innovative SMEs from VCs, few corporate spin-offs that could be supported by VCs, and no significant corporate venturing programs. Secondly, science-industry technology transfer policies remain underdeveloped, with weak technology transfer mechanisms. Consequently, the incentive systems, resources and organisational support are not in place that would allow the development of HEI spin-offs, which in turn has meant few avenues for linkages with VCs. We argue for the urgent need of formulation of policy measures in these two areas, in line with the overall policy maker concern with increasing the knowledge-intensity of CEE economies. This in turn necessitates further research focused on the problems we identify.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA