NBER Working Group Descriptions: Entrepreneurship

The past decade has seen a dramatic increase in the importance in entrepreneurial activity: the role of new enterprises in fomenting innovation, stimulating employment, and creating value for investors increased dramatically. Moreover, the resources available to support young firms also increased sharply: for instance, the pool of venture capital increased by nearly ten-fold. Yet surprisingly, academic research-particularly in economics-has not kept pace. The number of articles on entrepreneurship issues in the major economics journals actually declined in the 1990s from the levels seen in the 1980s.

This lack of attention is a consequence of the barriers to pursuing research in this area. While data on public firms are readily available in computer databases, information on young private firms is much harder to come by. The consequences are unfortunate, as the tools and frameworks of economics have the potential to analyze entrepreneurial situations in an effective and compelling way.

The NBER Entrepreneurship Working Group, established in the spring of 2003, seeks to address these problems. The group brings together some of the leading discipline-based researchers in the field of entrepreneurship. While the effort largely draws upon those approaching these issues from a variety of economics-based perspectives-for instance, from the disciplines of corporate finance, industrial organization, and labor studies-leading researchers from other areas are involved. A common theme, however, is that the participants have a strong track record or orientation towards publishing in the major discipline-based journals.

The working group has three components. First, there is a regular series of workshops where new work is presented. Second, there are special projects that look at important themes relating to the economics of entrepreneurship. Finally, there is a provision for advanced doctoral students to visit the NBER entrepreneurship meetings.

The Entrepreneurship Group has been supported by a generous grant from the Kauffman Foundation.