Entrepreneurship Policy

Entrepreneurship policy refers to state measures and initiatives to encourage entrepreneurship for economic development, job creation and wealth creation. It simplifies the process of creating new businesses or innovating new services and products, just like the World Bank's manner of doing business.

It has nothing to do with a theoretical approach but rather is steered by efficiency and pragmatism. It has six main components: global social and economic environment, creation procedure, development aid, entrepreneurs' concerns, ideology and ethics, and training plus education programs. It does not have any official assessment governance or overseeing organization.

Entrepreneurship policy refers to the programs that are aimed to encourage the launch of new businesses and thus boost the economic wellbeing of a nation. It represents the liberal aspect of economics, enabling entrepreneurs to initiate and develop fresh projects encompassing ethics, societal life and life view. It covers a broad spectrum of policies supporting entrepreneurs, like deploying global standards to fund entrepreneurship and support entrepreneurs. It determines the best opportunities and brings necessary resources together to use these avenues for long-term profits.

Moreover, to promote entrepreneurship, governments formulate institutions, measures and designs to bring entrepreneurship to the fore. Meanwhile, such initiatives also aim at aiding developing nations in their growth. Many organizations have been created to oversee, design and finance such entrepreneurial activities. Its implications do have a wide range of effects. Such policies related to entrepreneurship play a role in improving infrastructure, streamlining regulations and enhancing information access for the betterment of entrepreneurs.

It has greatly helped developing nations in promoting economic growth and entrepreneurship. For example, the national entrepreneurship policy of 2030 Malaysia promises to make Malaysia an outstanding entrepreneurial country by 2030. The UNCTAD entrepreneurship policy framework and implementation guidance act as a guide and prepare a framework to create and execute initiatives supporting entrepreneurship for policymakers. Entrepreneurship policy tools have had a wide array of impacts on the financial world on a significant basis. This is because governments succeeded in creating new businesses and economic growth by providing funding and support services to start-ups. In this way, a new array of products and services came into existence in the financial sector to cater to the funding of these start-ups. As such, these helped in the growth of the financial and technology sector through enhanced opportunities and a more robust and vibrant financial sector.

Thus, it can be said that policies of entrepreneurship have led to an all-around impact on a nation's economy, employment, growth, and investment by encouraging the development of entrepreneurship. 

Let us use a few examples to understand the topic.

Example #1

An online article published on 13 May 2024explores the effectiveness and impact of the entrepreneurship policy of China concerning back-home migrant laborers starting in 2015. The article used the survey data collected from Guizhou, Zhejiang and Henan provinces in conducting propensity score matching. As a result, the study showed major positive impacts upon entrepreneurial entry leasing to greater poverty alleviation. Nevertheless, its industrial effect was less, having minimal employment effect.

Besides, the infrastructure policies had a significant impact on industrial development, poverty alleviation and employment, while financial policies had no such effect. Moreover, with the increase in policy awareness, entry into entrepreneurship also rose from 15.82% to 16.77%. Other than that, different policies also affected the sales revenue, profit before tax and number of employees of start-ups, having values spreading from 14.83% to 40.47%.

Example #2

Let us assume that a country, old York, has designed and implemented a fresh entrepreneurship policy under the name of SmartStart 2025. The policy serves to amplify the entrepreneurship ecosystem by manifolds in the country by 2025. For this purpose, the Old York government has set up collaborative efforts with tech hubs, regulators and local universities to facilitate the aspiring start-up owners. Under the program of SmartStart 2025, TechNova City became the center of the policy implementation.

The government sanctioned $600 million in business grants and low-interest rate loans to entrepreneurs in the clean energy sector, biotech, and fintech. Besides, a government agency called the IDEATOR looks over the correct implementation of the policy, enabling efficient distribution of resources. As a result, a first-time entrepreneur, Mark Lee, owner of green energy start-up FusionGreen, gets the monetary support of $200000 in grants with a 7-month mentorship program. 

Hence, the grant led to higher production of GreenFusion’s solar panel with 20% increased energy efficacy that will contribute mostly towards achieving the country's goal of carbon reduction by 30% by 2040. The policy also included mandatory start-up courses to be developed and taught to budding entrepreneurs in Old York country. As a result, it increased the student-led entrepreneurship to 42% within 3 years.

Correct and well-thought-out policies have multifaceted impacts on the business scenario and societal ramifications, highlighting their importance as listed below:

• It helps in job creation by adding new business start-ups that lead to a reduction in unemployment rates.
• It promotes community changes by working towards redressal of societal needs using its innovative solutions.
• It also leads to poverty alleviation through the enablement of individuals to begin and develop their businesses.
• It also encourages using of local resources creating sustainability and economic diversification.
• It fosters a business environment by driving technological advancements and facilitating and supporting the development of unique technologies and innovation.
• It creates a stable and encouraging regulatory environment promoting growth and business operations.
• It gives essential education and training programs to people and students to equip them with the right skills, temperament, attitude and strategy to start and succeed in their entrepreneurship.
• It has become a key factor in forming and shaping the start-up ecosystem globally, leading to increased rivalry and economic growth.