This chapter examines in-depth the behavior of necessity- and opportunity-driven entrepreneurship. First, it considers their relevance to total entrepreneurial activity. The chapter determines which social and economic factors affect the two types of entrepreneurship, as well as their relative importance for a sample of 32 previously selected countries during a period of expansion (2001-2008) and of crisis and recovery (2009-2016). The analyzed factors include monetary and fiscal policy instruments (economic factors) and representative variables of governance and human capital (social ones). The findings show that both necessity- and opportunity-driven entrepreneurship largely explain the behavior of total entrepreneurial activity. They moreover show that the explanatory factors of both kinds of entrepreneurship differ depending on the business cycle phase considered. These findings will be key to proposing efficient economic policy measures to promote entrepreneurial activity and, thus, economic growth in economies around the world.
TopIntroduction
Entrepreneurship involves the set of activities related with identification, evaluation and exploitation of new business opportunities in the market (Peña et al., 2014, p.47). Entrepreneurs play a central role in the creation of economic and social value throughout the positive impact that their economic activity exerts on employment (Keynes, 1936; Halicioglu & Yolac, 2015), innovation (Schumpeter, 1911/1963; Acs & Audretsch, 2003; Galindo & Méndez, 2014), competitiveness (Thurik et al., 2008), economic growth (Urbano & Aparicio, 2016; Acs, et al.; 2017) and the social well-being (Ribeiro et al., 2007, Fritsch and Kublina, 2018).
An entrepreneur can be innovative (Marshall, 1963/1890; Schumpeter, 1911/1963; Malerba y McKelvey, 2019), persevering, a leader (Say, 1803/1855; Weber, 1904/1955; Palazzeschi et al., 2018), risk and uncertainty tolerant (Knight, 1921/1947; Zahra, 2018) and have the quality of “alertness” to perceive new economic opportunities that no prior economic actor has yet recognized (Kirzner, 1973). Entrepreneurs not only venture for purely economic motivations, based on the pursuit of profit, but also for a psychological, personal, or social motivations as the desire for autonomy, independence, achievement, recognition, self-esteem, among others. All in all, every entrepreneurial initiative has some kind of motivation that drives it (De la Vega et al., 2008). All these components reflect the important role of entrepreneurs in the creation of both economic and social value.
In recent years, there has been growing interest in the entrepreneurial phenomenon, not only by governments and other authorities since it was established as a key component of economic policy (Acs et al., 2017), but also by individuals who are increasingly attracted to the option of becoming entrepreneurs. The existing attraction for the figure of the entrepreneur and the consolidation as a meritorious employment option, has become evident in aspects such as the emergence of a large number of financial and fiscal assistance programmes aimed at this group; educational reforms to include entrepreneurial training programs; the standards, regulations and bureaucracy designed to simplify and facilitate the process of starting and developing a business, etc.