The Divide between Subsistence and Transformational Entrepreneurship
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605853.pdf
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265.49 KB
Format
Adobe PDF
Checksum (MD5)
15890f770296dc9c41265e6a80f6b4a7
Author(s)
Schoar, Antoinette
Date Issued
January 2010
Journal
Innovation Policy and the Economy
Publisher
University of Chicago Press
Citation
Schoar, Antoinette. “The Divide Between Subsistence and Transformational Entrepreneurship.” Innovation Policy and the Economy 10 (January 2010): 57–81.
Version
Final published version
Abstract
This paper argues that it is crucially important to differentiate between two very distinct sets of entrepreneurs: subsistence and transformational entrepreneurs. Recent evidence suggests that people engaging in these two types of entrepreneurship are not only very distinct in nature but that only a negligible fraction of them transition from subsistence to transformational entrepreneurship. These individuals vary in their economic objectives, their skills, and their role in the economy. Most important, they seem to respond very differently to policy changes and economic cycles. Yet most development policies aimed at fostering entrepreneurship focus on subsistence entrepreneurship in the hope of creating transformational entrepreneurs. I argue that unless we understand the differences between those two types of entrepreneurs more clearly, many policy interventions may have unintended consequences and may even have an adverse impact on the economy.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1086/605853
