Economic development and 
      entrepreneurship
  • Theoretical setup
     – Joseph Schumpeter (1911) - Innovation
     – Paul Douglas (1934) – (K,L)
     – Robert Solow (1957) - TFP
     – W. W. Rostow (1960) – Stages of Growth
     – Paul  Romer (1990) - Knowledge
     – Porter and Sachs (2002) Stages of Development
     – Samuelson (2009) Acs, Audretsch Strom 2009
  • TFP is what remains unexplained after (capital and labor) 
    accounted for.
     – Knowledge (Romer)
     – Institutions (North)
     – Entrepreneurship (Schumpeter)
  • How to combine inputs is key to development.
  • Need entrepreneurs.
       The connection between entrepreneurship 
       and economic development
   Entrepreneurship and Prosperity
 •Factor driven stage most people are 
  involved in underproductive, 
  unproductive or destructive 
  entrepreneurship.
 •Efficiency driven stage people shift out 
  of destructive entrepreneurship
 •Innovation most people shift out of 
  unproductive and most destructive 
  entrepreneurship.
    Explaining development – the role of 
    indices 
  • Global Competitiveness Index – World Economic 
   Forum
  • The Index of Economic Freedom – Heritage 
   Foundation
  • Ease of Doing Business - World Bank 
  • Global Creativity Index – Richard Florida
  • (Prosperity Index – Legatum)
   – None of these focus on entrepreneurship!
     Entrepreneurship definitions, concepts, 
     measure
 • Entrepreneurship definitions – different in terms of aims, can be 
  societal, academic or teaching phenomenon (Shane and Venkatamaran 
  2000)
   – One-dimensional definitions
     • Factor of production
     • Assemble resources
     • New business creation 
     • Innovation
     • Opportunity recognition and exploitation
   – Multidimensional definitions – includes more than one from the 
    followings:
     • Innovation 
     • Opportunity exploitation
     • New venture creation
     • Risk taking
     • (judgemental) decision making
     • Specific behavior – entrepreneurial attitudes
     • (positive) result orientation – wealth, growth, value creation