Venture Failure and the Timing of Telecommunications Reform
Chapter 7: Varieties of Internet Venture Development in Europe: The Swedish Case
The countries of Europe provide an excellent sounding board for hypotheses of uneven internet development. This is because a direct comparison between Europe and the USA would need to take into account several country-speciﬁc variables next to telecommunications liberalization, such as taxation, legal and other conditions for entrepreneurship and equity investing. One would need to, furthermore, understand the eﬀect of regionspeciﬁc variables such as the dynamics of Silicon Valley and its venture capital community (Kenney, 2000b). A further important distinction between the United States and Europe was the size of the home market and the persisting diﬃculties and costs of cross-European business at the time, which were not limited to diﬀering languages and multiple currencies. In contrast, when conditions for internet entrepreneurship are compared across the countries of Europe, signiﬁcant diﬀerences existed only in terms of telecommunications liberalization and its impact on the local loop. Regarding the other country-speciﬁc and region-speciﬁc factors such as the availability of venture capital; deﬁcits were the norm in Europe. Until the late 1990s, when the situation was transformed, European start-ups with new internet business models were in general not ﬁnanced by venture capitalists. Exceptions were internet software developers and Internet Service Providers (ISPs). Furthermore, the low barriers to entry associated with the internet and its horizontal applicability meant that the usual set of national innovation criteria pertaining to the educational system did not apply. In this chapter, learning from the German case will be...
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