A portfolio perspective on entrepreneurship and economic development
- 1.9k Downloads
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.
KeywordsEntrepreneurship Public policy Entrepreneurial performance Portfolio approach
JEL ClassificationsL26 L25
- Acs, Z. J., Audretsch, D. B., & Strom, R. J. (Eds.). (2009). Entrepreneurship, growth, and public policy. Cambridge: Cambridge University Press.Google Scholar
- Audretsch, D. B. (Ed.). (2002). Entrepreneurship: determinants and policy in a European–US comparison (Vol. 27). Berlin: Springer.Google Scholar
- Audretsch, D. B., Grilo, I., & Thurik, A. R. (Eds.). (2007). Explaining entrepreneurship and the role of policy: A framework. In The handbook of Research on Entrepreneurship Policy (pp. 1–17). Cheltenham, UK: Edward Elgar.Google Scholar
- Bates, T. (1995). Analysis of survival rates among franchise and independent small business startups. Journal of Small Business Management, 33, 26–36.Google Scholar
- Birch, D. G. (1987). Job creation in America: How our smallest companies put the most people to work. Champaign, IL: University of Illinois at Urbana-Champaign’s Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship.Google Scholar
- Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review, 91(5), 63–72.Google Scholar
- Bochner, S., Diaz, F., & Hancock, R. (2015). Silicon Valley index: People, economy, society, place and governance. San Jose, CA: Silicon Valley Institute for Regional Studies.Google Scholar
- Brush, C., Carter, N., Gatewood, E., Greene, P., & Hart, M. (2004). Clearing the hurdles: Women building high-growth businesses. Upper Saddle River: FT Press.Google Scholar
- Carland, J., Hoy, F., Boulton, W., & Carland, J. (1984). Differentiating entrepreneurs from small business owners: A conceptualization. Academy of Management Review, 9(2), 354–359.Google Scholar
- Carree, M. A., & Thurik, A. R. (2003). The impact of entrepreneurship on economic growth. Handbook of entrepreneurship research (pp. 437–471). Berlin: Springer.Google Scholar
- Cassar, G. (2010). Are individuals entering self-employment overly optimistic? An empirical test of plans and projections on nascent entrepreneur expectations. Strategic Management Journal, 31(8), 822–840.Google Scholar
- Chandler, A. D. (1990a). The enduring logic of industrial success. Harvard Business Review, 68(2), 130–140.Google Scholar
- Chandler, A. (1990b). Scale and scope: The dynamics of industrial capitalism. Cambridge, MA: Harvard University Press.Google Scholar
- Cooper, A. C., & Dunkelberg, W. C. (1981). A new look at business entry: Experiences of 1805 entrepreneurs. Frontiers of Entrepreneurship Research, 1(1), 1–20.Google Scholar
- Davidsson, P. (2005). Researching entrepreneurship (Vol. 5). Berlin: Springer.Google Scholar
- Eddleston, K. A., Kellermanns, F., & Sarathy, R. (2008). Resource configuration in family firms: Linking resources, strategic planning and technological opportunities to performance. Journal of Management Studies, 45(1), 26–50.Google Scholar
- Hamel, G., & Prahalad, C. K. (1990). The core competence of the corporation. Harvard Business Review, 68, 79–91.Google Scholar
- Hisrich, R. D., & Peters, M. P. (1998). Entrepreneurship: Starting, developing and managing a new venture. Chicago: Irwin-McGraw-Hill.Google Scholar
- Isenberg, D. J. (2010). How to start an entrepreneurial revolution. Harvard Business Review, 88(6), 40–50.Google Scholar
- Kuratko, D. F. (2014). Entrepreneurship: Theory, process, practice (9th ed.). Mason, OH: Cengage/Southwestern.Google Scholar
- Lazear, E.P. (2005). Entrepreneurship. Journal of Labor Economics, 23(4).Google Scholar
- Mielach, D. (2012). What it really costs when Walmart comes to town. Business News Daily, April 23. http://www.businessnewsdaily.com/2405-real-cost-walmart.html. Accessed April 5, 2015.
- Moogk, D. R. (2012). Minimum viable product and the importance of experimentation in technology startups. Technology Innovation Management Review, 2(3).Google Scholar
- Morris, M. H., Kuratko, D. F., & Covin, J. G. (2011). Corporate innovation and entrepreneurship. Mason, OH: Cengage/South Western Publishing.Google Scholar
- Morris, M. H., Neumeyer, X., Jang, Y., & Kuratko, D. F. (2015). Revisiting the entrepreneurial context: Types of ventures and associated identities. In Annual meetings of the academy of management, Vancouver, Canada.Google Scholar
- Morris, M. H., & Pitt, L. F. (1995). Informal sector activity as entrepreneurship: Insights from a South African township. Journal of Small Business Management, 33(1), 78.Google Scholar
- Morris, M. H., & Webb, J. (2014). Entrepreneurship as emergence. In C. E. Shalley, M. A. Hitt, & J. Zhou (Eds.), Oxford handbook of creativity, innovation and entrepreneurship: Multilevel linkages. New York: Oxford University Press.Google Scholar
- Mufson, S. (2011). Before Solyndra, a long history of failed government energy projects. The Washington Post, November, 12. http://www.washingtonpost.com/opinions/before-solyndra-a-long-history-of-failed-government-energy-projects/2011/10/25/gIQA1xG0CN_story.html. Accessed April 5, 2015.
- Phillips, K. A. (2005). The broken mirror: Understanding and treating body dysmorphic disorder. New York: Oxford University Press.Google Scholar
- Robinson, R. B. (2002). Creating a 21st century entrepreneurial organization. Academy of Entrepreneurship Journal, 8(1), 87.Google Scholar
- Schindehutte, M., Morris, M. H., & Pitt, L. (2008). Rethinking marketing: The entrepreneurial imperative. Upper Saddle River, NJ: Pearson Prentice Hall.Google Scholar
- Schow, A. (2012). President Obama’s taxpayer-backed green energy failures. The Daily Signal. http://dailysignal.com/2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/.
- Senyard, J. M., Baker, T., & Steffens, P. R. (2010). Entrepreneurial bricolage and firm performance: Moderating effects of firm change and innovativeness. http://eprints.qut.edu.au/39755/.
- Sexton, D. L., & Bowman-Upton, N. B. (1991). Entrepreneurship: Creativity and growth. New York: Macmillan.Google Scholar
- Stangler, D. (2010). High-growth firms and the future of the American economy. Kansas City: Kauffman Foundation.Google Scholar
- Storey, D. J. (1994). Understanding the small business sector. Champaign, IL: University of Illinois at Urbana-Champaign’s Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship.Google Scholar
- Sturgeon, S. (2000). Matters of mind: Consciousness, reason and nature. London: Psychology Press.Google Scholar
- Thurik, A. R., & Audretsch, D. B. (2004). A model of the entrepreneurial economy (No. 1204). Papers on entrepreneurship, growth and public policy.Google Scholar
- U.S. Small Business Administration. (2012). www.sba.gov/advocacy.
- Vesper, K. H. (1990). New venture strategies. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
- Wolfson, M. (1994). When inequalities diverge. The American Economic Review, 84, 353–358.Google Scholar