Taking Risks in the Geographical Anatomy of Europe's Emerging Venture Capital Market

Over the past 25 years, the USA has pioneered a new technological revolution based on large numbers of new small enterprises, financed by a dynamic venture (risk) capital market. The European Union, meanwhile, has lagged behind in this sector of economic activity. The European Commission considers the development of a substantial risk capital market to be the key condition for closing the 'enterprise gap' with the US. But whereas the Commission argues that venture capital activity needs to be much more regionally clustered if it is to emulate the US experience, some member states, together with the OECD, have argued for a more even regional distribution. The aim of this paper is to chart the growth and geographical anatomy of the emerging European venture capital market and examine its spatial development and its regional implications in the context of these somewhat opposing views.