Enhancing innovation through venture capital: lessons from Asia for Nigeria

Innovation is viewed as the main determinant of nations' economic growth and competitiveness in the modern economy. And the important role played by venture capital in financing innovation has been widely documented. This paper attempts to discuss how Nigeria can leverage venture capital to drive innovation by building an efficient venture capital industry drawing lessons from the experience of China, Hong Kong, and South Korea respectively. Findings from our study revealed government intervention through policy initiation, support funds and programs; strong innovation and entrepreneurial ecosystem; favourable tax policies, vibrant stock markets; and active venture capital associations as key success factors. We concluded that for Nigeria to build a flourishing venture capital industry, specific focus should be placed on improving the standard of education, enhancement of the innovation eco-system, improving the environment for venture capitalist exit, strengthening the regulatory framework through sound fiscal policy (taxation), and the intensification of government support for innovative high risk venture projects (small innovative business).