A small sub-set of small- and medium-sized enterprises – innovative, high-growth enterprises (IHGEs) – play an outsize role in innovation and structural transformation across the world. They spearhead experimentation with new ideas to create value, address challenges, and reduce transaction costs – demonstrating what works and what does not to the rest of the economy and society. Strong IHGEs are essential for diversifying production, creating jobs and opportunities, and building an increasingly knowledge-based economy in the six countries of the Eastern Europe and South Caucasus region (EESC). IHGEs can also contribute to circular economy transition, which UNECE member States have identified as the key topic for discussion at their 69th Commission session (20-21 April).
At the same time, IHGEs face challenges and have needs that differ, at times substantially, from those of the broader private sector population. These include higher risks involved in innovation, heightened vulnerability to the effects of regulation, and the specific needs related to the rapid change from a small start-up to scaling up to become a medium-sized or large firm successfully. As a result, many standard instruments to enable and promote SMEs and private sector development are often less effective at supporting firms trying out new ideas to create value and to scale up what works.
Understanding IHGEs and how to support them is, as a result, a central concern in the EESC region. On 16, 18 and 22 March UNECE organised a series of online training sessions for policy makers from the region to strengthen their ability to support IHGEs in their countries. Building on previous events on IHGEs and the upcoming Handbook on “Supporting Innovative High Growth Firms in Eastern Europe and the South Caucasus” (to be published in 2021), the three training sessions provided EESC policymakers with the tools to identify and support firms with high growth potential, drawing from the experience of different countries, including Denmark, Estonia, UK (Scotland), as well as countries from Central Europe and the Western Balkans, taking into account the national context.
Participants discussed the rationale for State support to IHGEs and the type of support required; the benefits of a portfolio approach to assist IHGEs; and the mechanisms to ensure sufficient financing for IHGEs, with the government playing the role of partner and coordinator in the process.
To find out more about the training please click here.