The role of start-ups in stimulating innovative economic growth: challenges and risks

Nataliia Kriuchkova, Vyacheslav Truba and Iryna Nyenno

No 756676, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Understanding how economic factors affect a business is essential to making smart decisions and leading a business. However, this starts with understanding the role of internal and external factors and how they play out in a business. A start-up is no exception, although it is hard to call it a full-fledged business; a start-up is a project of any kind that is just starting to develop in the market. For the successful implementation of a new project, a certain amount of start-up capital is required. No start-up can be implemented without appropriate financial injections, without attracting investments that are quite risky and require significant attention from the investor at the investment planning stage. Almost all start-up projects are financed by investors who are willing to invest their own capital in the development of a promising project. In general, any project begins with an idea that will form the basis of a new business. If an entrepreneur manages to offer consumers a high-quality product that has no analogues in the market but is in demand, his success will be guaranteed. But to achieve this, a good idea needs to be properly developed, involving specialised professionals and investors. Venture capital funds and investment companies that invest in innovative projects are engaged in the development of such ideas, and the state stimulates these processes through a system of mechanisms and levers of economic development of business. Given the significant importance of start-ups for the economic growth of the State, the purpose of the study is to determine the role of start-ups in stimulating innovative economic growth, taking into account the challenges and risks posed by the environment. To achieve this goal, the methods of statistical data analysis, generalisation of scientific sources, specification of opportunities and risks created by start-up projects for economic systems were used. In the process of developing the study, it was found that start-ups play an important role in ensuring economic growth opportunities for the entire state, since creating favourable conditions for the development of small businesses and stimulating investment activity in innovative projects can lead to a significant increase in tax revenues to budgets of various levels in the future, but an important aspect of stimulating start-up projects is risk assessment and prudent investment in such projects.

Keywords: barriers to market entry; innovation ecosystem; scaling strategies; technology commercialisation; venture funding (search for similar items in EconPapers)
Pages: 13
Date: 2025-01-06
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-ppm and nep-sbm
Note: paper number MSI_2501
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Published in FEB Research Report MSI_2501, pages 1-13

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