Promoting entrepreneurship through institutional reform
Posted on January 11th, 2011 at 6:04 pm by Anna NadgrodkiewiczThemes: entrepreneurship, institutional reform
Regions: Global | No Comments »
Millions of young people around the world enter the workforce with high hopes for a successful career yet they cannot find jobs. Although for sure a lack of needed skills contributes to this problem, something else is responsible for persistently high unemployment in many countries. What is preventing all the economic potential of the “generation in waiting” from being tapped? Nobel Laureate Douglass North provides the answer: countries with sustainable economic growth trajectories are able to establish institutional structures that allow them to move from personal interactions to impersonal exchanges, or in other words to provide an enabling environment for conducting business.
In this Feature Service article CIPE’s Director for Policy Reform Aleksandr Shkolnikov explains the importance of building entrepreneurial economies. He says, “The link between entrepreneurship and institutions is not immediately obvious. When we think of successful entrepreneurs we think of innovators, risk-takers, or people with great ideas exhibiting determination, hard work, and dedication. But in entrepreneurial economies, individual skills are not the only thing in play – the rules within which interactions occur matter just as much, if not more.”
130 viewsArticle at a Glance
- Traditional approaches to promoting entrepreneurship focus too much on individual skills-building at the expense of institutional reforms needed to remove barriers to doing business.
- Through institutional reform it is possible to empower entrepreneurs to transition from micro-enterprises to small and medium-sized business that can create jobs, innovate, take advantage of economies of scale, and increase productivity.
- Private sector organizations can play a vital role in removing barriers to entrepreneurship through public policy advocacy and community engagement.
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