DANCEST 805 Lecture Notes - Lecture 4: Creative Destruction, William Baumol, Rent-Seeking
Document Summary
Chap3: entrepreneurship and economic development: entrepreneurship and economic development. The process of entrepreneurship is widely considered to stimulate competition, drive innovation, create employment, generate positive externalities, increase productivity by introducing technological change and provide a route out of poverty. Government intervention within the field of entrepreneurship therefore is inspired by the view that the entrepreneur is one of the solution to weak economic performance and poor levels of job creation. In the past, the prevailing view of economists was that large scale enterprises were the key to economic development, while small firms were viewed as relatively inefficient and less involved in innovative activity. The notion that economic growth was possible without the innovations of individual entrepreneurs grained support with small firms and entrepreneurship viewed as a luxury rather than a necessity. The route to economic growth was seen as being a combination of large scale production and collectivist ideologies and stability, continuity and homogeneity became the cornerstones of managed economies.
