Abstract

Whether policies can indeed improve entrepreneurship in developing countries, and whether more and better entrepreneurship will necessarily lead to better development outcomes, have long been subject to controversy. At the basis of this controversy are divergent views with respect to the nature and contribution of entrepreneurship in developing countries. One the one hand are those who see the predominantly micro and small nature of firms as being more survivalist and less important for growth and development, and who warns have warns ‘not to romanticize these penniless entrepreneurs’ (Banerjee and Duflo 2007: 162). On the other had an increasing number of scholars see the kind of small scale entrepreneurship dominating in developing countries as important for poverty alleviation, growth and innovation. In this paper we wish to add two fresh perspectives to help clarify the debate. Thus we argue that development is a multi-dimensional concept, and that the interest ought to be not only on the impact of entrepreneurship on income poverty, but on multi-dimensional poverty and wellbeing. Here it is not only ex post poverty measurement that is necessary, but moreover ex ante poverty (vulnerability). We also stress from the standpoint of the capabilities approach that entrepreneurship is an end in itself, and that promoting human development broadly may also be important for entrepreneurship.

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