Executive summary
The International Compendium of Entrepreneurship Policies illustrates the main types of policy interventions available to encourage entrepreneurship and key considerations for their successful design and delivery. The report focuses on promoting productive entrepreneurship, i.e. on policies that emphasise the creation of businesses with job creation and innovation potential but including those that are unlikely to become high growth “gazelles” or “unicorns”.
It identifies three main types of interventions.
1. First, policies can aim to improve institutional conditions for entrepreneurship, which includes initiatives for the development of an entrepreneurial culture, a favourable tax and regulatory framework for entrepreneurs and favourable competitive conditions.
2. Second, policies can offer direct support to entrepreneurs and start-up businesses, through training and education programmes, provision of information, advice, coaching and mentoring, facilitating access to finance for entrepreneurs and supporting entrepreneurs in specific activities that are conducive to growth, such as innovation and internationalisation.
3. Third, entrepreneurship policy can take a holistic approach and support the development of entrepreneurial ecosystems.
The report also outlines the main policy challenges that arise in designing and implementing entrepreneurship policies and monitoring and evaluation frameworks to assess their impact. It identifies a series of key considerations for designing effective entrepreneurship policies.
Interventions should aim to focus resources on nascent entrepreneurs and new ventures with potential for growth and avoid subsidising businesses that aim to enter excess supply sectors.
Monunitoring and evaluation should be built into policies and programmes from the start, with proportionate but adequate resources allocated. Mechanisms to incorporate results into programme revision and future policy developments should be included. Key indicators of policy achievements include start-up survival, growth and employment creation. The impacts of some entrepreneurship policies occur over long timelines, calling for outputs and impacts to be assessed at different points in time.
Policy needs to be sensitive to structural conditions in the economy, and to new economic developments such as digitalisation.
Policy implementation is as important as policy design for effectiveness. Factors for success include choosing the appropriate delivery agency or partner and providing them with adequate resources, setting relevant targets and including processes for feedback from frontline programme workers and users.
Since the barriers to entrepreneurship are multifaceted they require corresponding packages of support that address all the main constraints. Linkages should be fostered between different programmes and across different entrepreneurship support organisations, and as the support needs of firms change as they progress from idea, start-up, early-growth and scale-up there should be referrals to the next source of needed support.
Moreover, policy should not overlook institutional conditions, as they can contribute as much to supporting entrepreneurship as directly targeted programmes. These include culture, taxation, competitive conditions and the regulatory framework.
These policy discussions are illustrated by a selection of 16 international case study examples highlighting good practices in policy design and implementation. Key lessons from the policy examples include:
Setting clear and appropriate goals and corresponding KPIs is key to policy success. Involving stakeholders in designing programmes can also help ensure that the issues for policy to address and the targets of policy are identified accurately and solutions are delivered in a format that matches recipient capacities and takes full advantage of existing support actors. Setting concrete objectives and measurable KPIs is important to allow delivery to match programme intentions and allow for monitoring progress.
Investing resources in non-core activities is pivotal to successful implementation. This includes investing resources in awareness raising which can be crucial to promote up-take, especially among target groups who traditionally do not seek information from business support providers (e.g. angel investors). This also includes minimising the administrative burden for programme participants and allocating resources to administrative tasks, since the delivery of programmes, especially those involving screening, can create significant burden on applicant firms and programme staff. Finally, sufficient resources should be allocated to monitoring and evaluation, and programmes should consider measures to facilitate reporting (e.g. support tools) and build capacity.
Building on existing actors and structures fosters policy cohesion and efficient delivery. New programmes should consider possible interactions with the existing portfolio of initiatives early in the design phase. Programmes should also be embedded in national and local entrepreneurship development strategies, to foster cohesive action and signal political support. Programmes should consider leveraging existing capacity for delivery, relying on existing ecosystem actors, building around existing structures rather than starting new structures from scratch. This also involves supporting ecosystem players of different sizes, as small scale development support providers can sometimes have advantages, especially when local knowledge is critical and when in-person interaction plays a role.
Including capacity building as part of policy delivery increases chances of success. Offering training, peer learning and other capacity building support to programme managers and delivery staff is important to the effective delivery of policy. This is especially true for initiatives which involve the use of new tools or the launch of platforms.
