A portfolio perspective on entrepreneurship and economic development

A portfolio perspective on entrepreneurship and economic development Because the large majority of new ventures remain small, their economic contribution is questioned. Shane (Small Bus Econ 33(2):141–149, 2009) has argued that designing public policies which encourage more people to become entrepreneurs is counterproductive, and the exclusive focus should be high-growth ventures, or gazelles. As a counter to Shane’s position, four types of start-up ventures are considered, with each having differing needs and making unique contributions to the economic welfare of a nation, region, or locality. Based on this typology, seven counter-arguments to Shane’s position are presented, addressing issues related to the cost of entry and exit, rates of efficiency and failure, employment levels, sector differences, ecosystems, and venture emergence. Based on these counter-arguments, a portfolio perspective is advocated, where societal risks and a variety of returns are balanced across all four types of new ventures. An example of a portfolio approach to policy design is provided, and implications are drawn. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

A portfolio perspective on entrepreneurship and economic development

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Publisher
Springer Journals
Copyright
Copyright © 2015 by Springer Science+Business Media New York
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-015-9678-5
Publisher site
See Article on Publisher Site

Abstract

Because the large majority of new ventures remain small, their economic contribution is questioned. Shane (Small Bus Econ 33(2):141–149, 2009) has argued that designing public policies which encourage more people to become entrepreneurs is counterproductive, and the exclusive focus should be high-growth ventures, or gazelles. As a counter to Shane’s position, four types of start-up ventures are considered, with each having differing needs and making unique contributions to the economic welfare of a nation, region, or locality. Based on this typology, seven counter-arguments to Shane’s position are presented, addressing issues related to the cost of entry and exit, rates of efficiency and failure, employment levels, sector differences, ecosystems, and venture emergence. Based on these counter-arguments, a portfolio perspective is advocated, where societal risks and a variety of returns are balanced across all four types of new ventures. An example of a portfolio approach to policy design is provided, and implications are drawn.

Journal

Small Business EconomicsSpringer Journals

Published: Sep 11, 2015

References

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