SMEs, Entrepreneurship and Innovation

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Small firms are playing an ever-increasing role in innovation, driven by changes in technologies and markets. Some spin-offs and high growth firms are having remarkable success. However, the broad bulk of small firms are not capitalising on their advantages. This book explores how government policy can boost innovation by improving the environment for entrepreneurship and small firm development and increasing the innovative capacities of enterprises. Policy findings and recommendations are presented in three key areas: embedding firms in knowledge flows; developing entrepreneurship skills; and social entrepreneurship.  In addition, country notes present statistics and policy data on SMEs, entrepreneurship and innovation for 40 economies, including OECD countries, Brazil, China, Estonia, Indonesia, Israel, the Russian Federation, Slovenia and South Africa.

SMEs, Entrepreneurship and Innovation is part of the OECD Innovation Strategy, a comprehensive policy strategy to harness innovation for stronger and more sustainable growth and development, and to address the key global challenges of the 21st century.



The combined forces of globalisation, technological progress and growing market demand have created a new type of innovation: one that is widespread across many agents and sectors and open. New firms, small and medium-sized enterprises (SMEs) and entrepreneurs are key players in this type of innovation. They are key precisely because they are now bringing new ideas to the market. That contribution to the economy is reflected in the rapid growth of some of these firms, the “gazelles” of the enterprise ecoystem. Governments are seeking ways to help them emerge and carry with them innovations that will go toward meeting our economic and social challenges. But for economic growth and adaptation, it is vital to have incremental innovation from the broader bulk of SMEs as well, and this is often lacking.


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