Scandinavian Working Papers in Economics

CISEG Working Papers Series,
Jönköping International Business School, Centre for Innovation Systems, Entrepreneurship and Growth

No 7: Entrepreneurship Policies: Principles, Problems and Opportunities

Charlie Karlsson () and Martin Andersson ()
Additional contact information
Charlie Karlsson: Jönköping International Business School, Postal: P.O. Box 1026, SE-551 11 JÖNKÖPING, Sweden
Martin Andersson: Jönköping International Business School, Postal: P.O. Box 1026, SE-551 11 JÖNKÖPING, Sweden

Abstract: In this paper, we discuss the current status of the literature on entrepreneurship policy. The purpose is to discuss and assess several fundamental questions pertaining to entrepreneurship policies, such as “What is the optimal rate of entrepreneurship?” and “What entrepreneurship policies to pursue to remedy market failures and to avoid policy failures?”. In the entrepreneurship policies literature several contributors make distinctions between five types of entrepreneurship policy: government intervention on the demand side, as well as on the supply side; government policies aiming at influencing the supply of input factors of entrepre¬neurship, plus the preferences of potential entrepreneurs; along with government policies directly targeting the decision-making processes of potential and actual entrepreneurs. We conclude in this paper, there is a need for both a broad and a narrow definition of entrepreneurship poli¬cies. A broad perspective implies that the anal¬ysis also must consider the general conditions for entrepreneurship in terms of, for instance, insti¬tu¬tions. If the general conditions are wrong it can be meaningless as well as a waste of time and re¬sources to develop sophisticated policies targeting entrepreneurs. In these cases, the im¬portant entrepreneurship polices are those directed towards the general conditions. When the general conditions are reasonable, then it might be appropriate to develop and apply narrow entrepreneurship policies. Furthermore it is important to analyze how entrepreneurship policies should be de¬signed for countries and regions with different economic histories, different levels of economic development, different economic specializations, and different institutions.

Keywords: Entrepreneurship Policies; Rate of Entrepreneurship; Market Failures; Policy Failures; Government Intervention; Entrepreneurial Opportunities

JEL-codes: D40; L22; L52; O38

24 pages, January 27, 2009

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