Mobilizing Early-Stage Investments for an Innovation-Led Sustainability Transition

Abstract

To achieve the transition toward a green economy, policy makers are required to redirect abundant financial resources into green tech innovations. Theoretically, policy makers have a menu of options ranging from technology-push support in the invention stage to market-pull mechanisms supporting the commercialization and diffusion of green technologies. This chapter proposes a mix of policies to mobilize early-stage finance for green technologies. To develop this policy package, we considered the menu of available policies from an investor’s and entrepreneur’s point of view. Based on a series of interviews and a survey with entrepreneurs and investors in Sweden and the Netherlands, we conclude that their preferred policy mix would include measures that fit the nature of innovation and overcome the disadvantages of green tech while also addressing barriers to the early-stage investment process in general, such as labor-market rules, intellectual property policy and tax treatment of early-stage investments.