Startup capitalism

Robyn Klingler-Vidra and Ramon Pacheco Pardo

Chapter 46 in Elgar Encyclopedia of Business and Government, 2026, pp 268-273 from Edward Elgar Publishing

Abstract: Startup capitalism represents an expanse in industrial policy, with governments worldwide embracing startups as engines of economic growth, innovation, and job creation. This paradigm emphasizes high-growth firms in technology-intensive sectors, contrasting with traditional industrial policies that prioritized large manufacturing firms. Policymakers aim to foster technological advancement, boost national competitiveness, and address societal challenges through targeted startup policies, including access to finance, taxation incentives, cluster formation, talent attraction, and public procurement initiatives. While startups are often viewed as disruptive forces in the Schumpeterian sense, startup capitalism increasingly integrates them into the innovation ecosystems of established firms through open innovation practices. This dual approach blends the dynamics of creative destruction with collaboration, striving to leverage the complementary strengths of startups and incumbents. However, this Janus-faced strategy raises critical questions about whether open innovation logics inadvertently risk stifling cutting-edge innovation by incumbents or startups.

Keywords: Economic competitiveness; Industrial policy; Innovation; Political economy; Schumpeter; Startup (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035307777
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