“Chase the vision, not the money, the money will end up following you.”

THE IMPORTANCE OF STARTUPS FOR ECONOMIC DEVELOPMENT

Five key reasons for encouraging startup entrepreneurship:

The majority of developed countries in a knowledge-based society encourage startup entrepreneurship from the aspect of investment into the future as well as from the aspect of actively designing long-term economic policy. Why?

  • Innovations – They are the main driving force behind economic development and the increase of productiveness in a knowledge-based society. Startup companies are the most suitable form of implementing inventions and consequently the best mechanism for commercializing technological and other novelties. Startup companies contribute to a quick development of new technologies and the location where they operate. Large companies often buy startup companies because of technology (fundamental ingredient) that they then integrate into their business and thus keep their competitive advantage. At the same time, they provide knowledge as well as spin-off and spin-out companies to the startup environment, which wouldn’t be possible without a well- functioning startup ecosystem.
  • New jobs and economic growth – In the long term, startup companies create a large portion of new jobs and contribute to the country’s economic growth. Considering that startup companies are based on innovations, the potential of startup companies represents the healthy core of the economy. If the country wishes to encourage new employments in the long term, it is necessary for it to invest into the segment of companies that create the most jobs in the long run (in 10 years and more). Startup companies are the ideal form and opportunity for employing and activating the Y generation.
  • Bringing new competitive dynamics into the economic system – Startup companies are the most dynamic economic organisations on the market, since they provide additional dynamics and competitiveness to the economic system. This means that the economy stays healthy, vital and diligent, while individual companies find it harder to fall asleep on their laurels.
  • Promoting the research-innovation system – High-tech as well as knowledge-based service startup companies are very closely connected to knowledge institutions. An appropriate entrepreneurship ecosystem thus promotes the research & development as well as research & innovation approach of knowledge institutions, companies and connecting institutions as well as contributes to the applicative orientation of research work at universities and research institutions. Meanwhile it also works as a role model and encourages students and researchers to implement their ideas via a startup company.
  • Bringing the values of proactivity into the society – Startup entrepreneurship changes the values of the society and brings a new mind-set, in line with the society based on knowledge and creativeness. The population is starting to increasingly realize that they have a responsibility for their work and career development.