What's New About the New Economy? Sources of growth in the managed and entrepreneurial economies

The purpose of this paper is to document the fundamental shift that is taking place in OECD countries. This shift is from the managed economy to the entrepreneurial economy. While politicians and policy makers have made a plea for guidance in the era of entrepreneurship, scholars have been slow to respond. This paper attempts to make a first step identifying and articulating these differences. We do this by contrasting the most fundamental elements of the newly emerging entrepreneurial economy with those of the managed economy. We identify fourteen trade-offs confronting these two polar worlds. The common thread throughout these trade-offs is the increased role of new and small enterprises in the entrepreneurial economy. A particular emphasis is placed on changes in economic policy demanded by the entrepreneurial economy vis-?-vis the managed economy.entrepreneurship;Europe;government policy;industrial structure;new economy

The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries

This paper investigates the impact of changes in the number of business owners on three measures of economic performance, viz. employment growth, GDP growth and labor productivity growth. Particular attention is devoted to the lag structure. The analysis is performed at the country level for 21 OECD countries. Our results confirm earlier evidence on three stages in the impact of entry on economic performance: an initial direct positive effect, followed by a negative effect due to exiting capacities and finally a stage of positive supply-side effects. The net effect is positive for employment and GDP growth. Changes in the number of business owners have no effect on labor productivity.Entrepreneurship;Business Ownership;Economic Growth;Lag Structure

Postmaterialism Influencing Total Entrepreneurial Activity across Nations

The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The objective of this paper is to explore how postmaterialism may explain these differences. A distinction is made between nascent entrepreneurship, new business formation and a combination of the two, referred to as total entrepreneurial activity, as defined within the Global Entrepreneurship Monitor (GEM). The model is also tested for the rate of established businesses. The measure for postmaterialism is based upon Inglehart’s four-item postmaterialism index. A set of economic, demographic and social factors is included to investigate the independent role postmaterialism plays in predicting entrepreneurial activity levels. In particular, per capita income is used to control for economic effects. Education rates at both secondary and tertiary levels are used as demographic variables. Finally, life satisfaction is included to control for social effects. Data from 27 countries (GEM, World Values Survey and other sources) are used to test the hypotheses. Findings confirm the significance of postmaterialism in predicting total entrepreneurial activity and more particularly, new business formation rates.Entrepreneurship;Comparative Analysis of Economies;Cultural Economics;Macro-economic Analyses of Economic Development;Self-employment

A Note on Entrepreneurship, Small Business and Economic Growth

The aim of the present short paper is to show that since the 1970s the world has changed considerably, and that this change has had consequences for the current policy debate on the determinants of economic growth. Our paper deals with some aspects of the recent scientific literature on the relation between entrepreneurship and small business, on the one hand, and economic growth, on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in the Netherlands. It refers to scientific analyses showing that countries that are lagging behind in the process of restructuring will pay a penalty in terms of forgone growth. It also pays attention to the Global Entrepreneurship Monitor (GEM), a new and large multinational project focusing on the collection and analysis of internationally comparable data on the rate of entrepreneurial activity.entrepreneurship;growth;economic development;market structure;small firms

Start-Up Capital

Female and male entrepreneurs differ in the way they finance their businesses. This can be attributed to the type of business and the type of management and experience (indirect effect). Female start-ups may also experience other barriers based upon discriminatory effects (direct effect). Whether gender has an impact on size and composition of start-up capital, is the subject of the present paper. To test for these direct and indirect effects data of 2000 Dutch starting entrepreneurs, of whom approximately 500 are women, are used.Entrepeneurship;Financing;Gender;Start-ups

Entrepreneurship, Economic Growth and Policy in Emerging Economies

Entrepreneurship has emerged as an important element in the organization of economies. This emergence did not occur simultaneously in all developed countries. Differences in growth rates are often attributed to differences in the speed with which countries embrace entrepreneurial energy. This led to the political mandate to promote entrepreneurship. Hence, a clear and organized view is needed of what the determinants and consequences of entrepreneurship are. The present contribution tries to provide this view with a particular view on emerging economies. Entrepreneurship, its drivers and its consequences can be best understood using the model of the Entrepreneurial Economy which explains the functioning of the modern economy. This model differs from that of the earlier Managed Economy. Policies in emerging economies should aim at combining the two models

Introduction: economic performance and small business

This paper introduces the special issue of Small business Economics on Performance. The concept of economic performance refers to the degree to which society's resources are being used as efficiently as possible. Where the field of industrial organization has emphasized the influence of market concentration on economic performance, the papers of this special issue zoom in on the link between firm size and economic performance