Public Policy: Moving Beyond Firm Creation


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Inproceedings: an article in a conference proceedings.
Public Policy: Moving Beyond Firm Creation
Title of the conference
Ewing Marion Kauffman Foundation International Research and Policy Roundtable
Petty J.S., Bonardi J.-P.
Liverpool, UK
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What role does government policy play in promoting and supporting entrepreneurial activity? An increasing number of countries have initiated or modified programs and policies designed to promote entrepreneurship, promote investment in new ventures, or reduce the burden of bankruptcy on firm owners yet, unfortunately, not all of these policies have achieved the desired effects within their respective economies. Although specific policies do appear to promote firm formation and other selected entrepreneurial activities, policy implementation has often been piecemeal in nature. Hence, while many new firms have been created, the needs and challenges that will be faced by these nascent firms in their latter stages of development potentially go unaddressed by the policy makers who seek to support them. Focusing on the promotion of new firm formation and the level of nascent entrepreneurial activity captures the effects of policies at the earliest stage of the process but only provides a partial view of the total entrepreneurship landscape. First, many of the firms that are created as a result of incentives also benefit from, and perhaps come to rely upon, other government initiatives such as tax incentives, access to technology transfer schemes, advisors and subsidized premises yet may not be prepared to cope with the realities of operating as an independent enterprise and do not survive. Second, there is an inherent risk that policies that either lower the entry barriers for new firms or promote start-up activity will attract less productive or marginal entrepreneurs that pursue less viable opportunities and draw resources from more promising entrepreneurs. Additionally, many government policies designed to promote entrepreneurial activity, including the establishment of a business or investing in a new venture, may be compromised by other government policies thereby threatening the survival of new firms and negating the intended positive effects over the longer term. Rather than focusing on the effectiveness of an individual government policy, our research is interested in the integration and overlap of different policy measures including both policies to remove the barriers to entrepreneurship as well as those designed to facilitate business more generally. As such, our approach is to view entrepreneurship as a process rather than as a singular event and thus will incorporate an evolutionary perspective. Our analysis includes policies that affect several critical events over the lifecycle of a firm as well as multiple stakeholders that interact with the firm. In doing so, we seek to determine what, if any, strategy is pursued with respect to the alignment or interconnectedness of a country’s institutional framework and policies that are relevant to the broader conceptualization of entrepreneurship. In the absence of such a deliberate strategy policy makers run the risk of creating unintended negative consequences, including but not limited to, investment gaps, misallocation of resources, excessive churn rates, and market bubbles.
Create date
29/03/2012 17:01
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21/08/2019 6:18
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