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Is Encouraging Entrepreneurship Bad Public Policy?In a recent issue of Small Business Economics, Scott Shane argues that encouraging more people to become entrepreneurs is bad public policy. In particular, he wants policy to shift from supporting general entrepreneurship to supporting “high potential businesses.” He supports this conclusion with the following unstated assumptions, beliefs and evidence that I find questionable:
In short, I agree with the author about the importance of supporting high-growth potential businesses. There could definitely be a lot more of this. However, I don’t believe we need to rob Peter to pay Paul. Furthermore, I think general entrepreneurship has a lot of important benefits that extend beyond purely economic ones such as the development of human capital and resourcefulness. People who looked at this item also looked at…Related items2 comments to Is Encouraging Entrepreneurship Bad Public Policy?
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When you were talking about this author, I was thinking he sound a lot like Shane. I really like him and he makes very good points. He has been studying entrepreneurship for decades and he should be one to listen. The question is, are all small business, entrepreneurship? And is all the entrepreneurship, in small business? I think both answers are not. He argues that subsidies to starting small business should stop, and that will never happen because all municipalities have programs to pick winners (in his words), even though the majority of the the small business don’t get social nor financial help. For the second questions, I would say that the goverments should support more intrapreneurship. There is not intrapreneurship policy, and this is key to economic development. Anyways nice blog. I’ll keep an eye on it.
Hey Carlos, I noticed from you’re website that you’re a doctoral student studying entrepreneurship – which is great. I am as well!
Regarding your comment, I like Scott Shane’s body of work too, but I question his assumptions in the article he made. Specifically whether entrepreneurship policy should divest out of supporting small business and focus solely on those ‘high potential’ entrepreneurs. If it were an either/or world and we had to choose one thing, I would agree with him. But it’s not. Furthermore, to say that supporting small businesses is bad policy is a strong statement which I do not believe he successfully argued in his paper for the reasons I noted in my article above.
If you’re ever in Washington DC feel free to contact me. I’m always interested in meeting fellow entrepreneurship scholars!
Cheers, Robert
PS, BTW, I’m in the process of starting a new website http://www.robertvesco.com which will focus solely on promoting entrepreneurship research.