Start-ups and innovative entrepreneurship

The process of business entry and exit as well as post-entry firm growth enhance productivity and drive economic growth. New enterprises exert competitive pressure on incumbents and improve resource allocation by forcing less efficient firms out of the market, a process which Schumpeter called creative destruction. This process is especially important during a post-recession phase, as business creation can help renew productivity growth and job creation (OECD, 2010 Criscuolo et al., 2014). New start-ups can exploit knowledge that is not used or is underused by existing companies and draw on existing knowledge to enter new or established markets (Acs et al., 2009). This is especially true in knowledge-intensive sectors.