Significance of Entrepreneurship

Abstract

This paper investigates the degree of  current empirical evidence that  can communally and systematically authenticate the claim that entrepreneurship has important economic value. A systematic assessment is provided that can  answer the contribution of entrepreneurs to the economy in contrast to non-entrepreneurs? We study the comparative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment creation and dynamics, (ii) innovativeness and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e. the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in escalating individuals’ effectiveness levels. 57 recent studies of high quality that contain 87 relevant separate analyses, were referred to  conclude that entrepreneurs have a very important – but specific – purpose in the economy that  they bring about relatively much employment creation, productivity growth and produce and commercialize towering quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important externalities that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be ignored either as they contribute to a relatively high value of GDP, a less unpredictable and more sheltered labor market, higher paid jobs and a greater number of innovations or they have a more dynamic role in the adoption of innovations. Keywords: entrepreneur, entrepreneurship, self-employment, productivity, economic development, growth, employment, innovation, patents, R&D, utility, remuneration, income