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Can Governments Nurture Young Growing Firms? Qualitative Evidence from A Three Nation Study

Jonathan D. Levie

University of London
London Business School
Sussex Place, Regent's Park
London, NW1 45A, ENGLAND

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Principal Topics
A model of the effect of government nurturing policies on early corporate growth is presented and qualitative evidence for the model is outlined. This qualitative research complements quantitative research presented at the previous Babson entrepreneurship research conference. The data from both papers are combined.

Method
In a refinement of the "pattern matching" technique suggested by Campbell (1975), the paper analyses six longitudinal case studies of potential and actual young growing firms, tow each from Denmark, Ireland, and Scotland. Five criteria of corroboration (drawn from the literature) are used to test four propositions deduced from general evolutionary theory and bureaucracy theory.

Major Findings
The cases suggest that the process of selective nurturing (i.e. "picking winners") has unintended negative effects on the process of early corporate growth and that a concentrate delivery system exacerbates these negative effects. General nurturing (i.e. skills and information flow enhancement) however has positive effects.

Implications
Entrepreneurs and public policymakers should be aware of the possible down-side of becoming a picked winner. The emphasis of public policy should be on general nurturing rather than selective nurturing.

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