Many governmental programs focus their support on innovation and invention. While these can be the seeds of economic development, entrepreneurship is the process that leads to real business growth according to a new study released by the SBA Office of Advocacy.
“Entrepreneurship is the link between inventors, innovation, and economic growth,” said Brian Headd, Economist for the Office of Advocacy. “It’s not enough to just focus economic development on inventors and innovation. Entrepreneurs need to be cultivated as well, so that innovations can be turned into jobs and economic growth.”
The study, ‘The Innovation-Entrepreneurship NEXUS’ written by Advanced Research Technologies, LLC, demonstrates that innovation without entrepreneurship generally yields minimal economic impact. The authors note that, “Whether they are building new firms or reinventing existing ones, entrepreneurs, through the application of new ideas to products and services, capture locally the economic benefits of innovation.”
Public policy should address those factors that support entrepreneurial activity. Most studies have conclusively shown that reduced government interference in the small business development process and entrepreneurial education are the most effective means to support entrepreneurial economic growth.
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