Entrepreneurial activity and economic growth

Abstract

The purpose of this paper is to show the importance of entrepreneurial activity for economic growth. Entrepreneurs are individuals who perceive and exploit profit opportunities. Every time an entrepreneur fills an existing niche in the market, he mobilises resources. This produces the conditions for new markets to develop and, as a consequence, new entrepreneurial opportunities are created. Thus, I argue, entrepreneurs are catalysts of economic growth for the entire economy. If, as I claim, entrepreneurship creates a network externality that promotes the creation of new markets, then each individual entrepreneurial action has a more than proportional impact on economic growth.

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