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Why do regional governments establish venture capital funds? Government intervention in venture capital markets is traditionally legitimised by market failure rationales. In this paper, we analyse the supply of public and private venture capital in Dutch regions, which reveals a multiplicity of rationales for government intervention in the regional economy. We ground this in the policy diffusion literature and distinguish four rationales for government intervention: economic competition, coercion, imitation and learning. The findings enrich the analysis of regional government interventions and challenge the rhetoric that regional policies seeking to foster venture capital markets are solely implemented to address market failures.

In knowledge-based economies, long-term wealth generation depends not only on human capital and research as separate resources but also on the complementarity between research and human capital in the creation of innovation and the feedback effects of innovation into the economy. The interaction between education, research and innovation has gained prominence with the “Knowledge Triangle” concept (OECD 2015). In this chapter, we present an explorative study of knowledge triangles of research-education-innovation within Dutch entrepreneurial ecosystems. Knowledge Triangles do not evolve in a vacuum but are part of a broader set of interdependent actors and factors that, if coordinated in an adequate way, might enable entrepreneurship within a particular territory. We especially focus on the role of regional governance (i.e. networks and leadership) in the knowledge triangle and the entrepreneurial ecosystem more broadly.