Entrepreneurial heterogeneity and the design of entrepreneurship policies for economic growth and inclusive development

Entrepreneurship is the object of renewed and increasing attention, not only by academics, but also by policy makers worldwide. This interest partly results from a positive perception of entrepreneurship as a driver of economic growth, and the urgency for policy makers to find ways to stimulate and sustain economic growth, in developed as well as in developing countries. This trend raises the need to have a clear understanding of the role of entrepreneurship in the economy and society.

This chapter acknowledges that there is a large heterogeneity across entrepreneurs in their ability to contribute to economic growth. We present insights from macro-economic studies supporting this statement. We next take a micro perspective and discuss the evidence based literature to identify the critical factors and entrepreneur characteristics that can lead to entrepreneurial success and contribute to growth. This discussion serves as a framework against which we reflect on the rationales and effectiveness of entrepreneurial policies in developing countries.

Keywords: entrepreneurship, firm growth, development policy

JEL Classification: O12, O20, L26