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Max-Planck-Institut für Ökonomik

Max Planck Institute of Economics

The Entrepreneurship, Growth and Public Policy Group

 

The Entrepreneurship, Growth and Public Policy Group was phased-out in 2010.

Entrepreneurship refers to the process of change. In a rapidly globalizing economy, as the process of change accelerates, entrepreneurship, or its absence, becomes increasingly important. Yet, scholarly research on entrepreneurship had been relatively undeveloped and dispersed across a broad spectrum of academic disciplines. The purpose of the Entrepreneurship, Growth and Public Policy Division of the Max Planck Institute of Economics was to provide a locus for systematic scholarly research on entrepreneurship and to develop an intellectual framework and approach to launch entrepreneurship as a bona fide interdisciplinary field of scholarship.

The prevalent model of economic growth over the past fifty years considered growth as being a mere accumulation of capital and labor. This paradigm, however, is no longer appropriate for the modern times in which production has shifted to increasingly knowledge intensive products. Correspondingly, the macroeconomic model of growth has been adapted in that knowledge has been integrated into the model. The intellectual breakthrough contributed by this extended growth theory was the recognition that investments in knowledge and human capital endogenously generate economic growth through the spillover of knowledge. However, questions remains: how or why spillovers occur? In particular, what is the mechanism which converts general knowledge into commercially relevant knowledge and in turn into new products and services? Entrepreneurship represents at least one such mechanism in the spillover process. Thus, it can be considered as an important engine of economic and social development.

The purpose of the research unit was to focus on the economics of entrepreneurship. This research agenda, which examined the process of radical economic change and development, consisted of four elements. The first was to identify and describe the historical role of entrepreneurship. The second was to better understand the factors that influence the amount of entrepreneurial activity in an organization or in a region. The third element focused on the analysis of the impact of entrepreneurship on organizational and regional economic performance and growth. Fourth, the research unit endeavored to develop theoretical and empirical frameworks which could serve as a guiding light to policy makers.

In its six years of existence, the group pursued this demanding research agenda though interdisciplinary work on macro-level, meso-level, and micro-level. This diversity is also represented in the group’s publications, which appear in a variety of high-ranking economics, management, and entrepreneurship journals, including the groups' own "Small Business Economics". In addition, several journals were overseen in the groups' Editorial Office. Further, the group organized numerous research and educational events, including conferences, workshops, and summer schools. In recognition of their efforts, the departments' scientists received several awards. Alumni of the group now hold high ranking research positions in university and independent research institutes in various countries around the globe.

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