Elgar original reference
Chapter 4: The Global Entrepreneurship and Development Index
Over 100 years ago Joseph Schumpeter in the Theory of Economic Development pointed out that entrepreneurs are not only important for economic development. Rather, they are the key drivers of economic development, the primus motor of change in economic systems. While Schumpeter was describing countries at a similar level of development, in a globalized world we are interested in countries at different levels of development as well. Over the years, the importance of institutions in economic development has become increasingly clear to economists and policymakers alike. A half century later we understand better why institutions are important for development and what role they play. Recently, we have learned that institutions are also important because they create the incentive structure that determines the behavior of entrepreneurs. Without positive incentives in society, entrepreneurs will not engage in productive activities. The modern temple of economic development is like many other temples of the ancient world. It is held up by pillars. The pillars of economic development, like the pillars of ancient temples, are made of durable materials – sand and limestone held together by strong cement.