The relationship between entrepreneurship and economic development: Is it U-Shaped?
Following a centuries-long decline in the rate of self-employment, a discontinuity in this downward trend is observed for many advanced economies starting in the 1970s and 1980s. In some countries, the rate of self-employment appears to increase. At the same time, crosssectional analysis shows a U-shaped relationship between start-up rates of enterprise and levels of economic development. We provide an overview of the empirical evidence concerning the relationship between independent entrepreneurship, also known as self-employment or business ownership, and economic development. We argue that the reemergence of independent entrepreneurship is based on at least two 'revolutions'. If we distinguish between solo self-employed at the lower end of the entrepreneurship spectrum, and ambitious and/or innovative entrepreneurs at the upper end, many advanced economies show a revival at both extremes. Policymakers in advanced economies should be aware of both revolutions and tailor their policies accordingly. © 2010 S. Wennekers, A. van Stel, M. Carree, and R. Thurik.
|Keywords||Business ownership, Business start-ups, Economic development, Entrepreneurship, L-shape, Self-employment, U-shape|
|Persistent URL||dx.doi.org/10.1561/0300000023, hdl.handle.net/1765/21515|
|Journal||Foundations and Trends in Entrepreneurship|
Wennekers, A.R.M, van Stel, A.J, Carree, M.A, & Thurik, A.R. (2010). The relationship between entrepreneurship and economic development: Is it U-Shaped?. Foundations and Trends in Entrepreneurship, 6(3), 167–237. doi:10.1561/0300000023