Unraveling the Shift to the Entrepreneurial Economy

27 Pages Posted: 25 Aug 2010 Last revised: 13 Oct 2011

See all articles by David B. Audretsch

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

A. Roy Thurik

affiliation not provided to SSRN

Date Written: August 14, 2010

Abstract

A recent literature has emerged providing compelling evidence that a major shift in the organization of the developed economies has been taking place: away from what has been characterized as the managed economy towards the entrepreneurial economy. In particular, the empirical evidence provides consistent support that (1) the role of entrepreneurship has significantly increased, and (2) a positive relationship exists between entrepreneurial activity and economic performance. However, the factors underlying this observed shift have not been identified in a systematic manner. The purpose of this paper is to suggest some of the factors leading to this shift and implications for public policy. In particular, we find that a fundamental catalyst underlying the shift from the managed to the entrepreneurial economy involved the role of technological change. However, we also find that it was not just technological change but rather involved a number of supporting factors, ranging from the demise of the communist system, increased globalization, new competition for multinational firms and higher levels of prosperity. Recognition of the causes of the shift from the managed to the entrepreneurial economy suggests a rethinking of the public policy approach. Rather than the focus of directly and exclusively on promoting startups and SMEs, it may be that the current approach to entrepreneurship policy is misguided. The priority should not be on entrepreneurship policy but rather a more pervasive and encompassing approach, policy consistent with an entrepreneurial economy.

Keywords: entrepreneurship, economic regime switch, economic policy, new firms and startups, economic development, firm performance and market structure, globalization, new technologies

JEL Classification: E10, E60, H11, L1, L2, M13, O10

Suggested Citation

Audretsch, David B. and Thurik, A. Roy, Unraveling the Shift to the Entrepreneurial Economy (August 14, 2010). Tinbergen Institute Discussion Paper 10-080/3, Indiana University-Bloomington: School of Public & Environmental Affairs Research Paper No. 2010-08-02, Available at SSRN: https://ssrn.com/abstract=1664466 or http://dx.doi.org/10.2139/ssrn.1664466

David B. Audretsch (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

A. Roy Thurik

affiliation not provided to SSRN

No Address Available

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
326
Abstract Views
1,597
Rank
169,366
PlumX Metrics