Governing Telecommunications and the New Information Society in

Governing Telecommunications and the New Information Society in Europe

Edited by Jacint Jordana

European countries have recently been involved in an extremely broad set of regulatory changes to introduce competitive markets into the area of telecommunications. New policies to develop the information society in Europe are also emerging, taking into account the changes in regulations. The contributions included in this book examine several dimensions of these major European issues, including multi-level governance, the instruments used to produce these policy changes, and the European idiosyncrasies of globalisation trends.

Chapter 9: New Technology-based Firms in ICT Industries: A Policy Perspective

Massimo G. Colombo and Marco Delmastro

Subjects: innovation and technology, technology and ict, politics and public policy, public policy


3802_GovernTelecom/Chap 9 22/8/02 8:59 am Page 1 9. New technology-based firms in ICT industries: a policy perspective Massimo G. Colombo and Marco Delmastro 1. INTRODUCTION In the 1990s, increasing attention was given by economists and policymakers to entrepreneurship and NTBFs (New Technology-Based Firms). The reason may be traced to the evidence that small and new firms account for a substantial share of the new jobs created in those countries such as the United States that have displayed a strong employment record. According to data from the United States Small Business Administration, between 1992 and 1996 small and medium firms (that is number of employees lower than 500) created 11.8 million new jobs, while larger firms lost almost 650000 jobs, in the United States. In addition, Acs et al. (1999) show that for the five-year period from 1990 to 1995 births of new establishments (inclusive of new branches of existing firms) contributed 25.9 per cent to the net job creation rate of 7.1 per cent. Gross job creation was found to be heavily concentrated among high growth new firms, especially those that are in innovative industries (Birch and Medoff 1994; Kirchhof 1994; Reynolds and White 1997; OECD 1996). The view has also been rapidly gaining ground that successful high-tech start-ups are an important disciplining and stimulating device for the behaviour of established large companies and thus play a crucial role for the renewal of the economic system. They are also believed to provide the United States with an innovation-based...

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