The enterprises that make the greatest contribution to the economy are those that can grow quickly, a new study has argued.
Support and encouragement should, therefore, be directed at entrepreneurs with the ability to promote job creation and develop businesses that have the potential to expand.
The report, by the Global Entrepreneurship Monitor, studied 700,000 people across 53 countries.
Its author, Professor Erkko Autio, concluded that business policies were best aimed towards supporting only those enterprises that could make a meaningful addition to economic prosperity.
Professor Autio said: “The key question for policy is not ‘how many’, but rather ‘who’ starts new firms. Increasing the numbers of new entrepreneurs is not necessarily the key to economic growth.”
He added: “Instead of offering a little support to everyone, economic policies need to target those few start-ups with the potential and motivation to grow quickly.”
The report also revealed that the UK produces fewer good quality entrepreneurs than many of its rival economies.
In the UK, just seven in every 1,000 people considered that they had the ideas and energy to set up a business capable of employing 20 staff within five years of starting.
This compares with 17 in every 1,000 in China, 15 in the US and 12 in Canada.
Professor Autio said that “high expectation” entrepreneurs were responsible for a mere 7 per cent of new enterprises but that their businesses made a disproportionately large contribution to the economies in which they operate.
Date:14 November 2007
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