Public policy to promote entrepreneurship: a call to arms

Zoltan Acs, Thomas Astebro, David B. Audretsch and David Robinson

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We debate the motivation for and effectiveness of public policies to encourage individuals to become entrepreneurs. Reviewing established evidence we find that most Western world policies do not greatly reduce or solve any market failures but instead waste taxpayers’ money, encourage those already intent on becoming entrepreneurs, and mostly generate one-employee businesses with low-growth intentions and a lack of interest in innovating. Most policy initiatives that would have the effect of promoting valuable entrepreneurship would not be recognizable as such, because they would primarily address other market failures: A central-payer health care would remove healthcare-related distortions affecting employment choices; greater STEM education would produce more engineers of which some start valuable new firms; and labor market reform to encourage hiring immigrants in jobs they have been educated for would reduce inefficient allocation of talent to entrepreneurship.

Keywords: Entrepreneurship; Public policy; Social welfare (search for similar items in EconPapers)
JEL-codes: J50 (search for similar items in EconPapers)
Date: 2016-06-01
New Economics Papers: this item is included in nep-cse and nep-sbm
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Citations: View citations in EconPapers (147)

Published in Small Business Economics, 1, June, 2016, 47(1), pp. 35-51. ISSN: 0921-898X

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Related works:
Journal Article: Public policy to promote entrepreneurship: a call to arms (2016)
Working Paper: Public Policy to Promote Entrepreneurship: A Call to Arms (2016)
Working Paper: Public Policy to Promote Entrepreneurship: A Call to Arms (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:67382

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