Biomedical Engineering Reference
In-Depth Information
identified as increasing the minimum amount of capital required for
development and potentially acting as a barrier to entrepreneurship
(van Stel et al., 2007). Policies designed to encourage new firm
formation are focused on reducing such barriers and thus facilitating
innovation (van Stel et al., 2007). Moreover, such government strategies
are typically based on either reducing regulations for new firms or
providing more support for this early phase (van Stel et al., 2007).
Examples of business rules that have been thought to act as
barriers to new firm formation include the time involved in starting
a new business, the number and cost of any licences required and the
minimum liquidity needed (van Stel et al., 2007). Other difficulties
that are considered to affect the capacity of small to medium-sized
enterprises (SMEs) to innovate are labour market rules regulating
the hiring and dismissal process for staff, gaining access to capital,
negotiating the taxation system and regulations governing the
closing of a business (van Stel et al., 2007). Policy options addressing
these factors for start-ups and SMEs might be addressed at reducing
these burdens, or alternatively, providing government support and
training for entrepreneurs to learn how to negotiate these barriers
(van Stel et al., 2007).
Evaluating which policies work best is a difficult task. One study,
however, shows that the biggest barrier to entry is in fact the cost of
starting a new business (van Stel et al., 2007). The other barriers to
entry around regulations and licensing are argued to be more likely
to simply push new businesses into the informal economy rather
than act as a prohibition per se (van Stel et al., 2007). Overall, the
biggest barrier for both new and established SMEs was identified to
be the labour market rules governing how entrepreneurs might hire
and fire staff (van Stel et al., 2007).
3.2.5 Patenting
As the debates over the stem cell patents in the US and the EU
highlight, patenting is seen to be central to the innovation process.
Consequently, the patent system can also be used to stimulate
innovation by government policy. For example, robust intellectual
