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Entrepreneurial Ventures and the Developmental State: Lessons from the Advanced Economies

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  • Lazonick, William

Abstract

A basic intellectual challenge for those concerned with the poverty of nations is to come to grips with the nature and causes of the wealth of the world?s wealthier nations. One might then be in a position to inform the poorer nations how they might achieve similar outcomes. This paper is organized around what I call ?the theory of innovative enterprise?, a perspective derived from the historical and comparative study of the development of the advanced economies. The theory of innovative enterprise provides the essential analytical link between entrepreneurship and development. Section 2 offers, as a point of departure, a contrast between entrepreneurship in rich and poor nations. Section 3 outlines the theory of the innovating firm in which entrepreneurship has a role to play. Section 4 identifies the roles of entrepreneurship in new firm formation in terms of the types of strategy, organization, and finance that innovation requires, and emphasizes the ?disappearance? of entrepreneurship with the growth of the firm. In Section 5 I argue that, in the advanced economies, successful entrepreneurship in knowledge intensive industries has depended heavily upon a combination of business allocation of resources to innovative investment strategies, and government investment in the knowledge base, state sponsored protection of markets and intellectual property rights, and state subsidies to support these business strategies. One cannot understand national economic development without understanding the role of the developmental state. At the same time, the specific agenda and ultimate success of the developmental state cannot be understood in abstraction from the dynamics of innovative enterprise. It is through the interaction of the innovative enterprise and the developmental state that entrepreneurial activity inserts itself into the economic system to contribute to the process of economic development.

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  • Lazonick, William, 2008. "Entrepreneurial Ventures and the Developmental State: Lessons from the Advanced Economies," WIDER Working Paper Series DP2008/01, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:dp2008-01
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    Cited by:

    1. Naudé, Wim, 2011. "Entrepreneurship is Not a Binding Constraint on Growth and Development in the Poorest Countries," World Development, Elsevier, vol. 39(1), pages 33-44, January.
    2. Boris Urban & Eric Wood, 2015. "The importance of opportunity recognition behaviour and motivators of employees when engaged in corporate entrepreneurship," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(5), pages 980-994, October.
    3. repec:wsi:ijimxx:v:18:y:2014:i:02:n:s1363919614500169 is not listed on IDEAS

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    Keywords

    entrepreneurship; innovative enterprise; developmental state;

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