Schumpeterian Policy Makers : Pro-Active Policies for Innovative Entrepreneurship

Traditional economic theory rejects the notion that government can offer significant contributions to entrepreneurial development, beyond the structural and legal roles of protecting property and the rule of law. Ignorant or disbelieving of this fact, many national and local governments have sought to jump-start entrepreneurial activity on a large scale. Given this persistence, it is a valuable effort to determine what, if anything, government can do to encourage entrepreneurs. This paper analyzes the traditional impact of government on entrepreneurship, and goes further to consider whether government can shape the risk-based environment in which entrepreneurs exist in order to increase entrepreneurship. When such analysis fails to yield a useful role for policy-makers, Mayer-Schoenberger questions the uni-directional nature of entrepreneurship, and offers examples of ways in which government regulation created opportunities for entrepreneurship. From these examples, he draws out a framework for "entrepreneurial policy-making", in which policy-makers experiment with regulation to encourage entrepreneurship