Fostering Innovation and Entrepreneurship: Shark Tank Shouldn\u27t be the Model

For the past half century, innovation has driven the economic growth that has made the American economy the envy of the world. For most of this period, venture capitalists provided not only the capital that new innovative companies needed, but also the management expertise

The Impact of Regional Supply and Demand Conditions on Job Creation and Destruction

Regions are exposed to intensive competition to provide the most attractive location conditions for firms and their employees. Therefore, regional employment development depends to a decisive degree on the attractiveness of locations both on the supply and the demand side. This paper gives an empirical analysis of the impact of regional conditions on regional manufacturing employment growth. Based upon a firm-level panel of manufacturing establishments in Baden-Wuerttemberg, Germany, which can be aggregated to regional panel data for forty-four counties, both the role of supply-side and demand-side conditions and a possible impact of characteristics of the regional industry structure on regional employment growth are analysed for the period from 1980 to 1999. Moreover, the paper examines whether the impact of regional conditions on regional net employment growth is driven by their impact on regional firm-level job creation and/or job destruction. Our results indicate that supply-side conditions seem to be more important for regional employment growth than demand-side factors. While lower costs of production lead to higher regional employment growth due to lower job destruction, a better endowment with human capital and a higher regional R&D intensity stimulate employment growth by higher rates of job creation. Differences in regional firm size structure, export intensity, and other industry structure aspects are affecting job creation, but not job destruction. Moreover, the analysis reveals at least the tendency that regional location factors mainly influence either job creation or job destruction, but seldom both at the same time.Regional development, employment growth, job creation, job destruction, location conditions, manufacturing

Transfers and the transition from socialism : key tradeoffs

The old days in the now transition societies were characterized by stagnant incomes, rationed goods, and few civil liberties, but a high degree of income security. The early days of reform have brought crashing incomes, more goods, civil liberties, and rising insecurity. Most countries are set on a course toward some form of capitalism, which by definition means greater risk-taking, less security, and almost certainly greater inequality in income distribution. Should transfers be used to compensate for increasing insecurity and poverty? The short-run drop in incomes, the heritage of cradle-to-grave state protection, and the Western European vision of the welfare state provide compelling motivation for using transfers. But, argue the authors, there are significant tradeoffs between moving to a welfare state and shifting to dynamic, growing economies. The transition economies do not have the real levels of productivity or the tax bases needed to sustain the kind of tax effort a large-scale system of transfers would require. Short-run gains in security could in the long run mean insufficient private and public capital accumulation and lack of competitiveness. The result could be financial collapse (as witnessed in Ukraine) or an extreme form of Eurosclerosis (a possibility for Hungary or Poland). Under either scenario, those whom the transfers are supposed to protect - the old, the poor, the disabled, and the unemployed - are most likely to suffer disproportionately over the medium to long term, and probably even in the short term. In any viable scenario, transfers are likely to be important for both welfare and political reasons. Some options for providing transfers are more likely to be consistent with macroeconomic imperatives and to have relatively low adverse-incentive effects - for example, flat-rate (or flatter) pensions at quite low replacement rates, and local rather than general (income-tested) social assistance. The authors recommend using intrisically temporary measures - such as temporary employment schemes - in the transition. This avoids a permanent transfer burden while recognizing the severity of the interim transition period. In sum, the alternative of less reliance on comprehensive transfers puts more pressure on private coping mechanisms and will, in the short run, increase risk. But it may be the price of a viable transition to the growth that is essential to success.Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Services&Transfers to Poor,Safety Nets and Transfers