National Systems of Entrepreneurship: Measurement Issues and Policy Implications

Abstract:     
We contribute to research on country-level entrepreneurship by introducing the concept of National Systems of Entrepreneurship and by providing an approach to characterizing them. We suggest that National Systems of Entrepreneurship are fundamentally resource allocation systems that are driven by individual-level opportunity pursuit, through the creation of new ventures, with the outcomes of this activity regulated by country-specific institutions. In contrast with the institutional emphasis of the National Systems of Innovation frameworks, where institutions engender and regulate action, National Systems of Entrepreneurship are driven by individuals, with institutions regulating the outcomes of individual action. Building on these principles, we introduce a novel index methodology to characterizing National Systems of Entrepreneurship. The distinctive features of the methodology are: (1) systemic approach, which recognizes interactions between components of National Systems of Entrepreneurship; (2) the Penalty for Bottleneck feature, which identifies bottleneck factors that hold back system performance; (3) contextualization, which recognizes that national entrepreneurship processes are always embedded in a given country’s institutional framework.

Number of Pages in PDF File: 55

Keywords: Systems of Entrepreneurship, National Systems of Innovation, Economic Development, Institutions, Index Methodology, Penalty for Bottleneck

working papers series