Unleashing Society’s Innovative Capacity: An Integrated Policy Framework

This is an open access book.

Europe faces significant challenges in the coming decades: geopolitical, demographic, technological, increased competition, climate-related, and health issues due to an aging population, to mention a few. Given these challenges, technological progress and new ways of handling complex issues will be key to continued prosperity and growth. To accomplish a growth process driven by innovation and entrepreneurship, the institutional environment must take into account a multitude of different policy areas that interact to either strengthen or weaken an economy’s innovative potential. Innovation is not only about R&D and higher education but is also intimately related to entrepreneurship. Similarly, entrepreneurship is not only about low start-up costs and favorable tax rates. Hence, a consistent and coordinated policy environment conducive to innovation and entrepreneurship is required to translate innovation into high-growth firms and macro-level growth.

This book presents the basic cornerstones required to provide a policy regime that can nurture such dynamics. The authors draw extensively on empirical analysis of the development of the Swedish economy, which has been transformed from a so-called ＂sclerosis＂ state in the 1980s until the early 1990s to an economy characterized by successful entrepreneurship and innovation. This transformation resulted from a reform agenda that has been gradually rolled out, beginning in the mid-1980s. The authors argue that the Swedish experience provides useful lessons for other nations as well.

Pontus Braunerhjelm has held leading positions at the Research Institute of Industrial Economics (IFN, Stockholm, Sweden), the Center for Business and Policy Studies (SNS), KTH (Sweden), and the Swedish Entrepreneurship Forum (as managing director from 2008 to 2015). His research focuses on the intersection between innovation, entrepreneurship, industrial dynamics, and growth. He has approximately 350 publications, of which 150 are published in peer-reviewed international journals and books. Pontus has also been involved in several policy-oriented projects for the Swedish government. Between 2007 and 2009, he served as the General Secretary of the Swedish Globalization Council. From 2014 to 2016, he was the Chairman of the governmental committee on Swedish entrepreneurship policies, initiated by the Finance Minister of Sweden.

Magnus Henrekson is a professor of Economics and a senior research fellow at the Research Institute of Industrial Economics (IFN) in Stockholm, Sweden. He was the president of IFN from 2005 until 2020. Until 2009, he held the Jacob Wallenberg Research Chair in the Department of Economics at the Stockholm School of Economics. Since the late 1990s, his primary research focus has been entrepreneurship economics and the institutional determinants of the business climate. He has published extensively in peer-reviewed journals, international collective volumes, more than 25 books, 14 edited volumes, and several essays commissioned by the Swedish government.