Role of government in promoting entrepreneurship PDF

This report is to understand the role of a government for creating an entrepreneurial environment. It explores the idea and goals of the government policies that encourages entrepreneurial activities. It also highlights the importance of entrepreneurship and innovation and how the government is working together with entrepreneurs and entrepreneurial organisations to support an entrepreneurial environment. Discussing how the formation of regional clusters have fostered the entrepreneurial activities and added a social and cultural aspect to entrepreneurship. Then presenting the case study of Essex County and highlighting its entrepreneurial culture and how it is impacting in growth of local economy and job creation.

2. Introduction

The role of the government is to encourage the entrepreneurs, entrepreneurial activities and entrepreneurial organisation by facilitating them with opportunities and favouring policies. Creating suitable conditions for new business to start and thrive, enabling existing firms to grow by developing new products and services in new markets through appropriate tax policies, supportive physical infrastructure, provision for training and information, promoting incubation facilities, research and development facilities and entrepreneurship education are just some of the means by which governments can encourage entrepreneurship in a country and its regions (Mitra, 2012, p.223).

3. Government policy

The government must structure its policies in such a way that it nurtures an entrepreneurial environment and allows effective opportunities for entrepreneurial firms to grow and make an impact towards national economic development. ”By focusing on existing, new and nascent entrepreneurs, entrepreneurship policy focuses on the change of process acknowledging the need to respect antecedents and consider future opportunities” (Mitra, 2012, p.227). The entrepreneurial policy must also deliver protection to the existing entrepreneurial firms in order to sustain the durability. “Entrepreneurship policy has a greater sensitivity to framework or contextual conditions that shapes the decision-making process of potential entrepreneurs” (Audretsch, Keilbach and Lehmann, 2006, p.177).

Mitra (2012, p.231) highlights the key goals of an entrepreneurial policy:

- More effective entrepreneurs
- Continuous Innovation
- Economic Growth
- Equal Opportunity

4. Rapidly changing global economy

The push for innovation in unpleasant economic times, rising levels of unemployment, globalization and dispersed modes of production and service provision, the domination of information and communication technologies, and the rise of the new industrial economies have called for various pronouncements on policy that matter- policies that are shaped and formed by and for entrepreneurial people, entrepreneurial organizations and entrepreneurial environments.” (Mitra, 2012, p.224). Sometimes, stable economies are often observed experiencing variations in the trends, it is important to save the small and medium sized firms. Large companies and firms are no longer the only economic value creators. These small and medium sized firms are on the principle vehicle for job creation, they account for major part of entrepreneurial activities and employment ability.

5. Entrepreneurship and Innovation

Innovation is defined as a process of seeking new products, new markets, new sources or new form of business. Growth and development cannot be sustained without additional innovation. “Innovation is different from ‘invention’ because invention is limited to concerns with new ideas and developments of mechanical or technical nature, where as innovations centres on the commercial application of new ideas” (Mitra, 2012, p.43). Innovation provides a competitive advantage to the firm as it also attract potential investors to look forward to investing in the product.

6. Entrepreneurial Innovative Organisations

The entrepreneurial organisation needs to be created or maintained as an innovative organisation. The process and routines of the organisations should endeavour an innovative environment within organisation (Mitra, 2012, p.86). Tidd and Bessant et al. (2009) argues that the innovative organisation is characterised by an ‘integrated set of components that work together to create and reinforce the kind of environment which enables innovation to flourish, the components of innovative organisations such as:

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