291incentives facing the would-be entrepreneur.

13The initiative was known as Prêt Industrie du Futur – Technologies et usages du futur. See for example, OECD (2018, p. 244).

292A. Coad et al.

The logic of ambitious entrepreneurship is not slow accumulation, but rather an up or out dynamic by which entrepreneurs are uncomfortably positioned between the promise of upside gains and the threat of downside losses. HGE policy should not seek to make applicants comfortable with their current performance, but to give them a temporary springboard into growth. HGE initiatives such as science parks, incubators, and accelerators should not allow ventures to persist for long periods of time if they are not showing any signs of progress—instead the logic is up or out. Autio and Rannikko (2016) highlight the importance to HGE policy that ventures are able to meet ambitious milestones before being able to receive further HGE support. Biancalani et al. (2021, p. 18) suggest that startup support programs should be designed to reduce the extent of loan guarantees and to expand the income tax breaks, in order to adjust the incentives facing investors away from protecting downside losses and toward enhancing upside gains. In contrast, Brown and Mawson (2016) discuss the “dependency culture” that may arise in environments set up to support potential HGEs and that end up “killing them with kindness” (Brown & Mawson, 2016, p. 828). In line with the logic of up or out, young firms should be privileged, because firms in their first five–seven years are much more likely to grow fast (Haltiwanger et al., 2013; Coad et al., 2018). Old SMEs, and particularly old micro firms, are especially unlikely to grow (Coad & Karlsson, 2022).

Relevant here is the commendable design of the Dutch “Growth Accelerator Programme” (OECD, 2013, Chap. 7), a sophisticated program for training and supporting firms which was heavily subsidized by public funds, although joining the program was not entirely costless. Participants were required to commit to paying a matching contribution (€75,000 over a five-year period), which would only be a rational choice for entrepreneurs who have genuine growth aspirations. If the program had been free, then it might have been taken up by curious firms with no serious growth ambitions. HGE policy could potentially be set up to allow firms to self-select to buy a growth option or a derivative such that they would only benefit if they grew, and if they do not grow they will have the costs but not the benefits. This way, firms can manipulate their incentive structure (in terms of the balance between upside gains and downside losses) to find themselves in a fast-track environment. For example, firms could be able to self-select into a program whereby they pay reduced employment tax on their next five hires, but there is a fixed cost involved (payable mainly at the end of the period), such that firms that select into this program but do not grow will pay a fixed cost but have no benefits.14 Another idea could be a loan to potential HGEs that no longer needs to be repaid if the firm actually demonstrates genuine job creation. Therefore, firms will use their private information to self-select into a

14Perhaps the fixed cost could take the form of compulsory training using an online asynchronous education program set up to develop some relevant entrepreneurial skills. Another possibility could be that training or mentoring is billed 12 months later, but the bill is waived if the firm has actually hired or started exporting. In a similar spirit, perhaps personalized business advice is available but not free; instead it is only available after completion of a relevant online learning module.

293Policy Instruments for High-Growth Enterprises

regime of enhanced incentives, which would only make sense for firms that are convinced of their growth potential.

4.4

The Need for Coordinated Policy

There has been a dramatic growth of SME policy and entrepreneurship policy in the United Kingdom, European Union, and elsewhere since the onset of the Thatcher- Reagan neoliberal turn.15 The sudden appearance of thousands of entrepreneurship support programs has taken place in the context of an uncoordinated proliferation that has largely escaped evaluation. Nevertheless, Storey (2006), Shane (2009), and Lundström et al. (2014) document the uncoordinated nature of the expenditure from many different government departments, and the lack of awareness (by the public,