Entrepreneurship and Public Policy: Can Government Stimulate Business Startups?

Entrepreneurship and Public Policy: Can Government Stimulate Business Startups?

Entrepreneurship and Public Policy: Can Government Stimulate Business Startups?

Entrepreneurship and Public Policy: Can Government Stimulate Business Startups?

Synopsis

"This book takes a close look at the contribution of small firms to the U.S. economy and at the contrasts between traditional development policies and those often recommended to help the small enterprise. The book offers systematic guidelines that will assist economic developers, policy makers, and private citizens in their efforts to promote entrepreneurship and assure sound economic development at local and state levels." Recent Publications on Governmental Problems

Excerpt

Entrepreneurship is in a renaissance in America today. People are creating small businesses in record numbers and are receiving an immense amount of attention from policy makers interested in creating jobs and raising incomes. Promoting entrepreneurship has taken its place alongside industrial recruitment as a component of economic development policy, even displacing it in some cases. Before entrepreneurial promotion becomes too well established as the new economic development orthodoxy, we need to consider some basic questions.

How does entrepreneurship occur? Can public policy intervene in the process in a positive way? How is promoting entrepreneurship different from "traditional" economic development? Are there prerequisites for entrepreneurial policy to be effective? Are communities up to the task of designing and delivering the right assistance to the right people at the right time and will it make a difference in entrepreneurial behavior?

Anecdotal evidence exists about "what small businesses need" and about how providing it helped a particular community or collection of firms. A number of writers have discussed specific actions governments should take to help entrepreneurs. Yet it is amazing that many states and communities have jumped on the entrepreneurial bandwagon with so little evidence that assisting entrepreneurs makes any difference in local economic health. The reply "Nothing else is working and such efforts can't hurt" is true to a point, but do we want to travel the same road we did with industrial recruitment incentives? An immense amount of evidence shows that most recruitment incentives, such as tax abatements and cheap loans, make little or no difference in business location patterns, yet state and community continue to act as though they do. Passing complicated legislation and establishing bureaucracies to deliver programs makes up a substantial portion of what we do when we go about "promoting economic development. . . ."

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