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A Portfolio Perspective on Entrepreneurship and Economic Development

16 Pages Posted: 25 Jan 2016 Last revised: 16 Aug 2016

Michael H. Morris

University of Florida; Oklahoma State University

Xaver Neumeyer

University of North Dakota

Donald F. Kuratko

Indiana University - Kelley School of Business - Management & Entrepreneurship

Date Written: September 4, 2015

Abstract

Because the large majority of new ventures remain small, their economic contribution is questioned. Shane (Small Bus Econ 33(2):141-149, 2009) has argued that designing public policies which encourage more people to become entrepreneurs is counterproductive, and the exclusive focus should be high-growth ventures, or gazelles. As a counter to Shane’s position, four types of start-up ventures are considered, with each having differing needs and making unique contributions to the economic welfare of a nation, region, or locality. Based on this typology, seven counter-arguments to Shane’s position are presented, addressing issues related to the cost of entry and exit, rates of efficiency and failure, employment levels, sector differences, ecosystems, and venture emergence. Based on these counter-arguments, a portfolio perspective is advocated, where societal risks and a variety of returns are balanced across all four types of new ventures. An example of a portfolio approach to policy design is provided, and implications are drawn.

Keywords: entrepreneurship, public policy, entrepreneurial performance, portfolio approach J

JEL Classification: L26, L25

Suggested Citation

Morris, Michael H. and Neumeyer, Xaver and Kuratko, Donald F., A Portfolio Perspective on Entrepreneurship and Economic Development (September 4, 2015). Small Business Economics, Vol. 45, No. 4, 2015; Kelley School of Business Research Paper No. 16-9. Available at SSRN: https://ssrn.com/abstract=2720603

Michael Morris (Contact Author)

University of Florida ( email )

Gainesville, FL 32611
United States
352-273-0329 (Phone)

Oklahoma State University ( email )

Stillwater, OK 74078-0555
United States
(405) 744 5357 (Phone)

HOME PAGE: http://entrepreneurship.okstate.edu

Xaver Neumeyer

University of North Dakota ( email )

293 Centennial Dr Stop 8098
Gamble Hall Room 365-O
Grand Forks, ND 58202
United States

Donald Kuratko

Indiana University - Kelley School of Business - Management & Entrepreneurship ( email )

Bloomington, IN 47405
United States

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