1. Building Venture Capital Industries: Understanding the U.S. and Israeli Experience
- Author:
- Martin Kenney, Gil Avnimelech, and Morris Teubal
- Publication Date:
- 03-2004
- Content Type:
- Working Paper
- Institution:
- Berkeley Roundtable on the International Economy
- Abstract:
- During the growth phase of every venture capita (VC) business cycle, it seems as though both local and national governments in various countries initiate policies aimed at establishing VC industries as part of a high-technology economic development strategy. It is remarkable how each time there seems to be a proliferation of ill-advised policies that are usually reminiscent of the ones tried during the previous phase. Not surprisingly, in a distressingly large number of cases, the “new” policies to foster VC meet with minimal success or fail outright. While the causes of failure are undoubtedly multiple, there is ample room for believing that often the policies were based on a simplistic or incomplete understanding of the roots and dynamics that have led to the development of self-sustaining national VC industries. This paper uses historically informed case studies of Israel and the U.S. to develop an appreciative model of how the VC industries in these two nations came into being. Our model and understanding of this process is deliberately evolutionary and systemic. We believe that this perspective is the only one capable of providing both scholars and policy-makers with a grounded understanding of the emergence and development of the VC industries in these two nations.
- Topic:
- Economics, Government, Industrial Policy, and Science and Technology
- Political Geography:
- United States and Israel