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Public Policy to Promote Entrepreneurship: A Call to Arms

Author

Listed:
  • Zoltan Acs

    (Max Planck Institute of Economics - Max-Planck-Gesellschaft)

  • Thomas Astebro

    (Joseph L. Rotman School of Management - University of Toronto)

  • David Audretsch

    () (Indiana University [Bloomington] - Indiana University System)

  • David Robinson

    (Air Force Institute of Technology)

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 healthcare would remove health-care 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.

Suggested Citation

  • Zoltan Acs & Thomas Astebro & David Audretsch & David Robinson, 2016. "Public Policy to Promote Entrepreneurship: A Call to Arms," Working Papers hal-01993414, HAL.
  • Handle: RePEc:hal:wpaper:hal-01993414
    Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-01993414
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    More about this item

    Keywords

    entrepreneurship; public policy;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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