Does Startup Support Work? New Evidence

I’ve blogged a bit in the past about how new research techniques, especially randomized controlled trials, are providing new insights into what works in innovation and entrepreneurship policy.  (The Innovation Growth Lab is a great resource to track recent trends.)  It’s actually getting tough to keep up with new research, as useful studies and reports seem to be coming out on a daily basis.  The latest example comes to us from Geoffrey Barrows in a report published by the French Association of Environmental and Resource Economists (FAERE).  This study asks the basic question:  Do business accelerators and startup business competitions work?  In other words, do the world’s many business accelerators and business idea/plan competitions actually produce better business outcomes in terms of jobs, profitability, innovation and firm survival?  Barrows studied 460 different programs and competitions that took place in 113 countries, engaging more than 20,000 firms.  He finds that the competitions have a big impact.  Competition winners have a 64% higher rate of survival, and their employment levels exceed non-winners by 47%.  Finally, competition winners also win in the quest for capital, as the average winner typically raises an additional $260,000 in follow-on funding.   We should expect that accelerator graduates perform well–after all, that is our goal!  But, it’s still helpful to have new and strong evidence that these programs work.