After the European Commission unveiled its Single Market Strategy in October 2015, Professor Erkko Autio examined the kinds of policies modern entrepreneurship needs to flourish in an increasingly digital marketplace, and developed three distinctive definitions for young, innovative firms
Businesses don’t exist in a vacuum: they need investment, expertise and support to reach their full potential. Government policy plays an important role in creating conditions in which businesses thrive – as long as the policies are fit for purpose.
So what policies does modern entrepreneurship need in order to flourish in an increasingly digital marketplace, and how does policy apply to different types of new businesses?
In my recent policy report for EU DG GROWTH, I define three types of young, independent businesses: start-ups, scale-ups and unicorns. A scale-up is an evolution of the start-up: while still relatively new, it’s settled on a scalable business model, attracted at least €1 million in venture capital funding, and is now entering a period of extreme growth and assessing its next steps.
A “unicorn”, essentially, is the dream: a scale-up valued at more than €1 billion. These are the Ubers, Snapchats and Airbnbs of this world: young, thriving, and – almost without exception – utilising a digital-centric business model.