Entrepreneurship and Employment

Abstract

The significant contribution of smaller firms to employment and particularly, the creation of new jobs was, next to their crucial role in innovation, a key argument for rejecting the notion that the sector of small and medium-sized enterprises (SMEs) plays a peripheral role in the economy, thus calling for a new paradigm on the entrepreneurship renaissance that took place at the turn of the 21st century. The promotion of entrepreneurial activity for the purpose of countering unemployment remains at the centre of attention for policymakers. The recipe seems simple. Let’s encourage people, including the unemployed, to set up their own business: they will employ themselves and, in the future, might also give work to other job-seekers. In reality, however, the situation is much more complex. In order to use the entrepreneurial lever to fight unemployment effectively, one needs to have a thorough understanding of the trends prevailing in the business sector in order to identify categories of business establishments and the forms of entrepreneurial activity that generate new jobs. Equally important is the quality of jobs in the small business versus the corporate sector.