Public promotion of new technology ventures: an agency perspective

Understanding the proper role of government in the promotion of small technology-oriented firms is a priority given the potential benefits to society as a whole and the inability of traditional market mechanisms to adequately nurture such firms. Further, designing the appropriate public policies to sufficiently satisfy the involved stakeholders has typically proven to be an elusive pursuit. With these issues in mind, this paper applies the concept of agency theory to evaluate government programs seeking to promote technology start-ups. A new program associated with the Innovation Ontario Corporation, which utilizes equity joint ventures between government and small technology-oriented firms, is described and evaluated using the agency perspective. Suggestions are made for further inquiry and analysis. (Reprinted by permission of the publisher.)