Innovation and Ethics Ethical Considerations in the Innovation Business

Abstract

In our global economy knowledge- based industry is taking more importance. Recent years have seen the success of an increasing number of start-up companies, most technology-based enterprises inanced by private persons or companies, or through venture capital funds and public offering. In many years, those companies are faced at certain critical moments with matters involving intellectual property rights, insider information and raising money. These facts all have an ethical dimension. There is an increasing need for ethical behaviour from all parties involved. A code of conduct of all parties should be applied. This paper describes the growth process of a company and the valuation of an innovation project. It will overview a number of ethical issues, at different stages in the innovation business, and in the lifetime of a start-up company, such as the problems of intellectual property, the confidentiality of information, the negotiation process between the entrepreneur and the financier, the marketing of raising funds and of an IPO, and finally the information and insider trading. The paper concludes with a plea for increased ethical behaviour and the need for rules of best practice for all parties: the inventor, the entrepreneur, the financial investor, and other stakeholders.

Yves Fassin combines a career as an entrepreneur with an academic activity. He is a partner of the Vlerick Leuven Gent Management School. and taught technological innvoation at the FUCAM, University of Mons. His research interests include innovation, technology transfer, entrepreneurship, venture capital and IPOs, and business ethical issues in these fields.