Abstract
The ideas-led growth model is the macroeconomic framework that describes the inventive process in which VC funds operate. The connection between ideas and growth, and the role of radical ideas within that connection, are discussed in this chapter. As was illustrated in Chap. 3, it takes a long time to move from an idea to concrete products, services, and production technologies that affect consumption. VC funds take a small but important role in this process. VC funds operate in what is defined in economic growth theory as the “technology push” within different technology trajectories in different periods. GPs of VC funds select radical ideas “pushed” by innovators, scientists, and entrepreneurs and turn them into firms.
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The washing machine has been considered as perhaps the most important innovation for changes in our daily life. It freed more time than other innovations (compare TV that absorbs time) for doing other activities and has had a special gender effect increasing the possibilities for women to spend time on other activities (see Hans Rosling at https://www.ted.com/talks/hans_rosling_and_the_magic_washing_machine for an amusing presentation on statistics on the “washing line” and world development).
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Agmon, T., Sjögre, S. (2016). A Macro Perspective on the Unique Role of VC Funds in the Process from Ideas to Growth. In: Venture Capital and the Inventive Process. Palgrave Pivot, London. https://doi.org/10.1057/978-1-137-53660-0_4
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DOI: https://doi.org/10.1057/978-1-137-53660-0_4
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