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Robert_Eberhert_#theindiadialogue Feb 2023.pdf

  1. The Weakness of Policy Efforts to Promote Entrepreneuship – and what to do about it. Robert Eberhart Associate Professor , UCLA
  2. policy to promote economic growth through entrepreneurship •Numerous national efforts to increase new firm formation: • Startup America, JOBS act - USA • Gründerland Deutschland - Germany • Startup Visa Canada - Canada • Innovation Britain - UK • Startup Chile – Chile • SME Initiative – Japan • Newgen-IDEC - India •little evidence that such efforts lead to higher performing ventures or economic growth •evidence is that they lead to founding lower performing firms (Nanda, 2011, Eesley, Eberhart 2018)
  3. The growth of entrepreneurship is not delivering: • Jobs • entrepreneurship does not deliver promised jobs (Decker, Haltiwanger, Jarmin, and Miranda 2014) • startups deliver less than half of US jobs concentrated among a very few firms • declining jobs in all startup sectors • startup jobs are short-term, and unstable • Shared prosperity
  4. The focus is not even delivering entrepreneurship • A steadily declining organizational phenomenon in the US, Japan, many European countries (Kaufman 2019, Statistics Japan) • annual startup rate declined from 12.0 percent in the late 1980s to below 8 percent just before the Great Recession • startup rate has declined in all major sectors
  5. policy to promote entrepreneurship often fails a good environment for entrepreneurs: • Stable government, currency, and tax structure • Reliable and transparent court system for dispute resolution • Well-regulated market rules, exit institutions, and property laws • A growing economy with robust large company activity • government spending on advanced technology What often happens instead: • Establish resource flows • Establish incubators/accelerators • Establish entrepreneurship teaching programs We need to create a demand for entrepreneurs, we focus instead on the supply of entrepreneurs
  6. Why supply of entrepreneur efforts often fail • The best entrepreneurs (of growth companies) are older and experienced executives. • Training focuses instead on inexperienced youth who are likely to fail – supplying the wrong people • Good investments are based on market size, growth rate, and the strategy to access that market • Sponsored investment often focuses on innovation and product – more of an engineering task without market fit • The entrepreneurs need local markets, supply and customers • Copying Silicon Valley often leads to inappropriate and mal-adapted ventures and support
  7. What can be done? Increase DEMAND • Pass laws to remove any corruption, protect property, and establish courts that offer a fair and predictable adjudication of disputes • Manage the government to avoid fiscal crisis and defend the currency • Allow and encourage large companies where appropriate, entrepreneur need the for customers and as refuges when their ventures fail, (they also promote equality) • Government should be spending on advanced technology for it own policy needs to provide a basis of profitable innovation • Schools must emphasize a general, liberal education to develop rounded and capable citizens who will lead
  8. Thank you and welcome to Stanford.