Measuring Entrepreneurship and Optimizing Entrepreneurship Policy Efforts in tje European Union

Szerb, László and Komlósi, Éva and Páger, Balázs (2016) Measuring Entrepreneurship and Optimizing Entrepreneurship Policy Efforts in tje European Union. CESifo DICE Report (14). pp. 8-23.

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Abstract

Abstract: In this article we provide a brief review of how entrepreneurship policies have evolved and which implied conceptions of entrepreneurship underlie at - tempts to measure the phenomenon. We propose that a major shortcoming in policy thinking is the insufficient recognition that entrepreneurship, at a country level, is a systemic phenomenon and should be approached as such. To address this gap, we propose the concept of National Systems of Entrepreneurship (NSE) that rec-ognizes the systemic nature of country-level entrepre - neurship, and also recognizes that, although embedded in a country-level context, entrepreneurial processes are fundamentally driven by individuals. We then ex- plain how the Global Entrepreneurship Index meth- odology is designed to profile National Systems of Entrepreneurship. We apply the Penalty for Bottleneck (PFB) methodology to examine the entrepreneurial per- formance of the European Union (EU). Comparing the EU and US entrepreneurship scores, Europe is seeming-ly lagging behind the US. According to the GEI scores, the EU countries reveal considerable differences in their entrepreneurial performance. Moreover, in EU member countries even larger differences over the 14 pillars of entrepreneurship prevail. In addition to highlighting bottleneck factors, the index also provides rough indica- tions of how much a country should seek to alleviate a given bottleneck. While there are numerous ways to im- prove entrepreneurship in the EU and its member states, we analyze only one simple situation. An important im- plcation of the analysis is that uniform policy does not work, and the EU member states should apply different policy mixes to achieve the same improvement in the GEI points.

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