Theory: why should governments support Entrepreneurs and their Ecosystems?

The third ingredient, a measure/degree of ‘productivity’, is where Entrepreneurship Policy comes in:
Entrepreneurship spurs innovation, increases market competition and improves production efficiency.
Entrepreneurship creates jobs through growth of companies and boosting skills. Entrepreneurship helps diversify the economy by creating and nurturing new industries.

Evidence on the importance of entrepreneurship is growing:

• A study covering 12 African countries, including Senegal, Zambia and Ghana, shows that entrepreneurship is instrumental to economic growth.
• A study in Nigeria indicated that entrepreneurship is indispensable in achieving sustainable growth as it impacts the economy positively.
• Even more striking, data shows that in Nigeria, the technology sector contributed more to the country’s overall economic development than the oil and gas sector did between 2010-2019.
• A study from Rwanda further underscores the positive impact of entrepreneurship, showing that support for firms in the internationally competitive tradable sector can strongly boost local employment.

Caution: a lack of tested results still exists for the long-term relationship between entrepreneurship and economic development.