High-Tech Entrepreneurship in Europe: A Heuristic Firm Growth Model and Three "(Un-)easy Pieces" for Policy-Making

Increasing the number of rapid-growth new technology-based firms(NTBFs) is considered one of the key priorities of innovation policy adopted by the European Commission. Grounded in the empirical literature on the determinants of high-tech start-up growth in Europe, this paper develops a heuristic firm growth model for European NTBFs to individuate three primary areas of intervention for policy-making aimed to sustain the growth of NTBFs: (i) reducing the social and regulatory burdens arising from (honest) firm failure, (ii) acknowledging the local nature of the venture capital industry and promoting territorial marketing initiatives to attract (international) venture capitalist players and (iii) leveraging the "halo and certification" effect of directs public subsidies and grants towards NTBFs. If recent initiatives of the European Commission go in these directions, much remains to be done to increase the growth potential of high-tech start-ups on the European landscape.