The rapid transformation experienced by the economy in recent years is leading to the emergence of new companies that make innovation and the digital environment the basis for the creation of products and services of high added value. Supporting and promoting this type of business is essential to improve the country’s competitiveness at a time when the commitment to technology, digitalization and innovation is already an obligation.
In this context, it should be noted that emerging companies have certain specific characteristics that make it difficult to fit them into the traditional regulatory framework:
- The high risk arising from its high innovative content - The uncertainty about the success of its business model, hinders financing in the initial phases by requiring capital to be able to mature and test its ideas before the company begins to generate income.
- The potential for exponential growth through economies of scale - Requires large capital investments to allow its rapid expansion in case of success.
- The dependence of the recruitment and retention of highly qualified and highly productive workers from the initial stages of the company - In them there is no flow of income to remunerate them through classic wage instruments.
- Exposure to strong international competition for attracting foreign capital and talent.
The draft law on the promotion of the ecosystem of emerging companies therefore seeks to respond to the main challenges faced by this type of companies.
To determine which companies can benefit from the benefits and specialties included in the bill, the text defines in its article 3 the concept of startup. Among the characteristics that are established is “to be an innovative company, in accordance with the provisions of article 4”. Indeed, the innovative nature of the business model is one of the determining elements that will be used to differentiate those companies of recent creation that will be considered startups from those that will not.
The purpose of this Ministerial Order will therefore be to establish the criteria that will be used to assess the innovative nature of an emerging company, thus providing a clear and defined framework that allows a full application of the various precepts established in the draft law at the time of its adoption and entry into force.