Methodological note. EIS: Venture capital as % of GDP

The amount of venture capital is a proxy for the relative dynamism of new business creation. In particular for enterprises using or developing new (risky) technologies venture capital is often the only available means of financing their (expanding) business.

The indicator is obtained as a quotient.

Numerator:

Venture capital investment is defined as private equity being raised for investment in companies. Management buyouts, management buyins, and venture purchase of quoted shares are excluded. Venture capital includes early stage (seed+start-up) and expansion and replacement capital.

Denominator:

Gross domestic product as defined in the European System of Accounts (ESA 2010), in national currency and current prices.

Note:

Three-year averages have been used for calculating the normalised scores for this indicator, which are used for calculating the Summary Innovation Index.