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Entrepreneurship in Economic Development

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  • Naude, Wim

Abstract

What is the role of entrepreneurship in economic development? At a minimum the answer should be able to explain the role of entrepreneurs in the structural transformation of countries from low income, primary-sector based societies into high-income service and technology based societies. More broadly though, it should also be able to explain the role of entrepreneurs in the opposite pole of stagnating development (including conflict) and in high innovation-driven growth. Although economic development lacks a ?general theory? of entrepreneurship, which could encompass a variety of development experiences, much progress has been made in extending the understanding of entrepreneurship in the process of development. This paper surveys the progress with the purpose of distilling the outlines for a more general theory of entrepreneurship in economic development. Entrepreneurship in developing countries remains a relatively under-researched phenomenon, so by surveying the current state of research, and by discussing the role of entrepreneurship in dual economy models of structural transformation and growth, a secondary objective of this paper is to identify avenues for further research. Finally, the policy implications from the economic literature suggest that a case for government support exists, and that this should focus on the quantity, the quality, and the allocation of entrepreneurial ability. Many routinely adopted policies for entrepreneurship, such as provision of credit and education, are shown to have more subtle effects, not all of which are conducive to growth-enhancing entrepreneurship.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/20.

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Length: 48 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-20

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Keywords: entrepreneurship; economic development; small business;

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Cited by:
  1. Emilia V√°zquez & Sofia Gomes & Elvira Vieira, 2011. "Entrepreneurship and Economic Growth in Spanish and Portuguese Regions," ERSA conference papers ersa10p1537, European Regional Science Association.
  2. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
  3. Naudé, Wim, 2012. "Entrepreneurship and economic development: Theory, evidence and policy," MERIT Working Papers 027, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. Tyrowicz, Joanna, 2011. "What distinguishes entrepreneurs? Evidence on the motives for self-employment," Economics Letters, Elsevier, vol. 112(3), pages 226-229, September.
  5. Corradi, A.A., 2014. "The building blocks of a resource-based theory of business start-ups," ISS Working Papers - General Series 51040, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  6. Naude, Wim & McGillivray, Mark & Rossouw, Stephanie, 2008. "Measuring the Vulnerability of Subnational Regions," Working Paper Series RP2008/54, World Institute for Development Economic Research (UNU-WIDER).
  7. Zuzana Brixiova & Mthuli Ncube & Zorobabel Bicaba, 2014. "Skills and youth entrepreneurship in Africa: Analysis with evidence from Swaziland," William Davidson Institute Working Papers Series wp1077, William Davidson Institute at the University of Michigan.
  8. Jolanda Hessels & André Stel, 2011. "Entrepreneurship, export orientation, and economic growth," Small Business Economics, Springer, vol. 37(2), pages 255-268, September.
  9. Andrzej P. Dabkowski, 2011. "Entrepreneurship and Economic Growth: An Investigation into the Relationship between Entrepreneurship and Total Factor Productivity Growth in the EU," CASE Network Studies and Analyses 427, CASE-Center for Social and Economic Research.
  10. Corradi, A.A., 2013. "Critical learning episodes in the evolution of Brazilian business start-ups: a theoretical and analytical tool," ISS Working Papers - General Series 559, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.

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