Promoting entrepreneurship as a means to foster economic development :|ba review of market failure and public policy

Abstract

Background and Purpose: Governments and policy makers continue to look to entrepreneurship as a vehicle to economic development. This is informed by the perception shared by governments and policy makers that entrepreneurship is a good thing and we ought to have more of it. Thus a wave of policies has emerged in the UK and elsewhere which advocates for an increase in the level of enterprise activity. Our understanding of how and when governments intervene to assist entrepreneurs, and indeed which, if any, specific entrepreneurs should receive assistance in some shape or form, still has substantial knowledge gaps. The review aims to contribute to the building of this knowledge. Methodology: The systematic review methodology was followed to examine the entrepreneurship literature. Quantitatively, the data was examined using basic descriptive statistics and content analysis. Qualitatively, the data was analyzed based on an inductive approach in order to identify emerging, frequent, dominant or significant themes that dominate in understanding entrepreneurship. Findings: This review has identified factors which affect entrepreneurial performance, the market failure that result as well as the policy instruments defined in literature that aim to rectify the perceived market failure. Different typologies were identified which illustrate how the different policy instruments are categorised. Further, this review highlights the complex nature of public policy and entrepreneurship and raises the importance of adopting a more coherent “holistic” approach when advocating for intervention in entrepreneurship and public policy