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Unraveling the Shift to the Entrepreneurial Economy

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Author Info

  • D.B. Audretsch

    (Institute for Development Strategies, Indiana University, U.S.A.)

  • A.R. Thurik

    (Erasmus University Rotterdam and EIM, Zoetermeer, the Netherlands)

Abstract

A recent literature has emerged providing compelling evidence that a major shift in the organization of the developed economies has been taking place: away from what has been characterized as the managed economy towards the entrepreneurial economy . In particular, the empirical evidence provides consistent support that (1) the role of entrepreneurship has significantly increased, and (2) a positive relationship exists between entrepreneurial activity and economic performance. However, the factors underlying this observed shift have not been identified in a systematic manner. The purpose of this paper is to suggest some of the factors leading to this shift and implications for public policy. In particular, we find that a fundamental catalyst underlying the shift from the managed to the entrepreneurial economy involved the role of technological change. However, we also find that it was not just technological change but rather involved a number of supporting factors, ranging from the demise of the communist system, increased globalization, new competition for multinational firms and higher levels of prosperity. Recognition of the causes of the shift from the managed to the entrepreneurial economy suggests a rethinking of the public policy approach. Rather than the focus of directly and exclusively on promoting startups and SMEs, it may be that the current approach to entrepreneurship policy is misguided. The priority should not be on entrepreneurship policy but rather a more pervasive and encompassing approach, policy consistent with an entrepreneurial economy .

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-080/3.

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Date of creation: 24 Aug 2010
Date of revision: 02 Apr 2011
Handle: RePEc:dgr:uvatin:20100080

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Web page: http://www.tinbergen.nl

Related research

Keywords: entrepreneurship; economic regime switch; economic policy; new firms and startups; economic development; firm performance and market structure; globalization; new technologies;

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References

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  1. Sander Wennekers & André van Wennekers & Roy Thurik & Paul Reynolds, 2005. "Nascent Entrepreneurship and the Level of Economic Development," Small Business Economics, Springer, vol. 24(3), pages 293-309, 04.
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  4. André van Stel & Roy Thurik & David Audretsch & Martin Carree, 2007. "Does Self-Employment Reduce Unemployment?," Scales Research Reports H200709, EIM Business and Policy Research.
  5. Jose Maria Millan & Jolanda Hessels & Roy Thurik & Rafael Aguado, 2011. "Determinants of Job Satisfaction across the EU-15: A Comparison of Self-Employed and Paid Employees," Tinbergen Institute Discussion Papers 11-043/3, Tinbergen Institute.
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  9. Harry P. Bowen & Edward E. Leamer & Leo Sveikauskas, 1986. "Multicountry, Multifactor Tests of the Factor Abundance Theory," NBER Working Papers 1918, National Bureau of Economic Research, Inc.
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  18. Dominique Foray, 2006. "The Economics of Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562235, December.
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Citations

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Cited by:
  1. Tjaša Štrukelja & Matjaž Muleja & Simona Sternada, 2012. "Enterprise Stakeholder Well-Being Attained With Responsible Enterprise Policy," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 32-36, December.
  2. Michael Fritsch & Alexander Kritikos & Alina Sorgner, 2013. "Drivers of Self-Employment - A Multivariate Decomposition Analysis for the Case of Germany," Jena Economic Research Papers 2013-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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