New tools and practices for financing novelty: a research agenda

Abstract

Purpose The expectations surrounding innovation as the principal mean by which firms gain a sustainable advantage while simultaneously alleviating social problems are tremendous. However, in the process of developing innovation, many small entrepreneurs, SMEs, as well as large firms struggle to access the necessary finances in order to further develop their innovative projects. The purpose of this paper is to underline some of the most recent tools and practices used to finance novelty. Design/methodology/approach This paper synthetizes some thoughts about the financing of novelty and proposes a research agenda based on trends highlighted in the recent literature. Findings This paper pinpoints recent advances in finance applied to the field of innovation. In particular, this paper highlights both promising developments as well as the need for more research in this area in order to untangle the links between creativity and financial support, the financing of innovation in developing countries, accounting and evaluation of ideas. Social implications The importance of developing innovation and easing access to resources has societal implications. The development of education around finance and entrepreneurship, as well as improving literacy of citizens in these fields could yield a more open view on innovation and financial supports in the future. Originality/value Financing novelty, evaluating projects and facing uncertainty are among the most difficult decisions investors take. This paper combines many dimensions of innovation and finance to construct an overview of current and future practices within both domains.