Who Drives Smart Growth? The Contribution of Small and Young Firms to Inventions in Sustainable Technologies. WWWforEurope Working Paper No. 47

Europe's innovation potential is currently dominated by well-established large companies. In most member countries the bulk of R&D expenditures is spent by large companies. The figures point to a considerable heterogeneity with regard to the importance of SMEs in national R&D activities. However, young companies are said to be the driving force behind radical innovation which will be a source of employment and growth in future. In addition, the weakness of Europe is not only the small number of high-tech start-ups but more specifically the small number of high-tech start-ups which accomplish continuing, rapid growth. The central question of the paper is whether SMEs and young firms might be agents with a special contribution to new growth path in Europe.