“But,” some readers might say, “look at Israel, look at San Diego—it is still feasible to become a Silicon-Hyphen.” To which this chapter answers: “And would it be a good idea if it is?” The chapter opens the mind of the reader to new ways of thinking about innovation and growth. Providing a frontal attack on the start-up religion and its most important commandment: using venture capital (VC) as a basis for growth. VCs have attained the paradigmatic status of a “must-have,” institution, when in fact they are just one, not very successful, solution to solving the question of how to finance innovation. The chapter does it by explaining how VCs really work and make money (and for whom), where and when they are successful (rarely and only in ICT and biotech), what does that means to the companies they finance, who is allowed to be part of this party, and what are the impacts on communities in places where the VCs are successful (inequality levels last seen in the Gilded Age). It utilizes research on Israel and Silicon Valley to drive those points home. At the end of the chapter the reader should realize that, YES, they want innovation-based growth, but NO, even if they could make it happen, the last thing they want for their community is to become a Silicon-Valley/Israel look-alike.
The Impact of Venture Capital on the Persistence of Innovation Activities of Swiss Start-Ups