Government’s Role as Public Venture Capitalist in High-Technology Small and Medium Sized Enterprises

Abstract

Productivity growth is dependent on technological advancement. However, capital constrains commercialization of technology, which venture capital could solve. Still, a capital supply gap exists between venture capital and technology commercialization, especially in the start-up stages of high-technology enterprises. The outcome of this research will provide guidelines for participation in the public venture capital industry. This research introduce the government as public venture capitalist for filling the gap between technology opportunities and technology commercialization and found that the government plays an important role in high-technology enterprises in developing countries. Further, the venture capital industry adopts various operational models, especially in developing countries that lacks legal and accounting infrastructure. In the infancy stage, government plays a catalyst, but indispensable role.