Business Creation and Public Policy
Business creation is the transformation of an entrepreneurial idea into a firm that is capable of operating in a marketplace. A number of longitudinal studies are now available that have tracked the emergence of new firms from their initial formation through their first few years of operation. These studies, which involve repeated follow-up interviews with entrepreneurs, provide rich descriptions of the start-up process and its unique features. They also offer substantial evidence relevant to assessing the extent to which public policy might facilitate or impede entrepreneurship.
The rewards for an entrepreneur in taking on the risk associated with turning their business idea into a successful firm include personal wealth in terms of earnings, as well as the sense of satisfaction that comes from seeing their hard work pay off. In addition, many businesses create positive impacts on their communities in the form of taxes, jobs, and other benefits.
Despite these rewards, starting a business can be a difficult endeavor, especially in tough economic times such as those encountered during the COVID-19 pandemic. Some analysts argue that the 2020 surge in entrepreneurship is a reflection of the fact that business creation tends to rise during downturns because of low competition and cheap inputs, such as labor and supplies.
Whatever the reason for the surge, it is clear that entrepreneurship remains a significant source of employment and growth in our economy. For those who are considering embarking on a new enterprise, the IPAG business school offers an essential guide to the key steps in setting up a professional project.