Page 33 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

22 Brian Dabson

inquiry (see Lyons, Lichtenstein, and Kutzhanova, chapter 6). These dis-
cussions are important to the policymaking process because they may even-
tually help to identify where public policy can best encourage and foster
entrepreneurship. As David Hart (2003) argues, “entrepreneurship ought
to be an explicit focus of policy design, choice, and implementation. Ana-
lysts can and should do a much better job of assisting policy-makers in
making it so” (4).
One of the main challenges for entrepreneurship policy is to be clear
about what is meant by entrepreneurship as distinct from small business de-
velopment. For most purposes, it is sufficient to apply a broad definition
such as “entrepreneurs are people who create and grow enterprises” (Dab-
son et al. 2003) or “entrepreneurship is any attempt to create a new busi-
ness enterprise or to expand an established business” (Zacharakis, Bygrave,
and Shepard 2000, 5) or “the processes of starting and continuing to ex-
pand new businesses” (Hart 2003, 5).
As Peter Drucker (1985) observes, however, not every new small business
is entrepreneurial or represents entrepreneurship—most repeat what has al-
ready been done before, creating “neither a new satisfaction nor new con-
sumer demand” (21). Entrepreneurs, he continues, “create something new,
something different; they change or transmute values” (22). Drucker also
helpfully points out that not every entrepreneurial venture is small; indeed,
large corporations can be and often are entrepreneurial. Further, he adds,
not every entrepreneurial venture is an economic institution, it can be a
university or a nonprofit agency; not all entrepreneurs are capitalists, some
are pursuing social causes; and not all entrepreneurs are employers, they
can also be employees.
What Drucker (1985) sees as the defining characteristic of an entrepre-
neur is not the venture size, nor its newness, nor its institutional form, but
the willingness and ability to innovate: “Innovation is the specific instru-
ment of entrepreneurship. It is the act that endows resources with a new ca-
pacity to create wealth” (30).
It would be a mistake for policy purposes, however, to narrow the defini-
tion to particular types of entrepreneurs—for instance, those which are
deemed innovative or are to be found in a specific high-technology sector.
It is impossible to identify in advance which entrepreneur will grow and
have a significant economic impact. The policy goal should be to mobilize
a diverse pool of people wanting to create new businesses from which a
steady stream of growth entrepreneurs will drive the local and regional
economy (Dabson 2003).
To amplify this assertion, it is necessary to turn to data about the nature
and characteristics of entrepreneurship and small business development. In
2000, there were about 21 million employer and nonemployer firms in the
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United States, of which some 76 percent were nonemployer firms. In spite