1: Formulating a National Entrepreneurship Strategy

1. Formulating a National Entrepreneursip Strategy

Entrepreneurship is one of the most important drivers of job creation and economic growth, and is crucial for the development of a vibrant formal small- and medium-sized business sector. It enhances productivity growth and can also help find practical business solutions to social and environmental challenges, including climate change. Despite its importance, entrepreneurship is not always actively encouraged in all developing countries through dedicated policy initiatives. Both economic theory and practice demonstrate that entrepreneurship may generate social gains beyond private gains. A proactive role of governments in supporting entrepreneurship is therefore justified and it requires a systemic approach. This section explores key elements of a national entrepreneurship strategy.

Policy Objectives

Understand country specific challenges

Policy options (recommended actions):

  • Map the current status of entrepreneurship in the country
  • Identify country-specific entrepreneurship opportunities and challenges

Specify goals and set priorities

Policy options (recommended actions):

  • Define strategies to achieve specific objectives and reach specific target groups
  • Develop and prioritize actions

Ensure coherence of entrepreneurship strategy with other national policies

Policy options (recommended actions):

  • Align entrepreneurship strategies with overall development strategy and other private sector development strategies
  • Manage interaction and create policy synergies

Strengthen the institutional framework

Policy options (recommended actions):

  • Designate a lead institution
  • Set up an effective coordination mechanism and clarify mandates
  • Engage with the private sector and other stakeholders
  • Ensure business-like service delivery

Measure results, ensure policy learning

Policy options (recommended actions):

  • Define clear performance indicators and monitor impact
  • Set up independent monitoring and evaluation routines
  • Incorporate feedback from lessons learnt
Checklist of key questions
  • Are there surveys for assessing the national entrepreneurial environment?
  • Do mechanisms, such as multi-stakeholder forums, exist to promote policy dialogue on entrepreneurship?
  • Does the country have a dedicated policy framework to promote entrepreneurship? Is there a national entrepreneurship strategy?
  • Is there clarity about the priorities and type of entrepreneurship that the country wants to encourage?
  • Are there specific policies in place to favour start-ups and SMEs?
  • Are there specific policies in place to encourage the transition to the formal business sector?
  • Is the entrepreneurship policy closely coordinated with other national policies? Is entrepreneurship embedded into other national policies?
  • Is there a ministry, agency or institution championing entrepreneurship? Is there a ministerial level entity in charge of coordination of the strategy?
  • Is there a deliberate policy to promote formal entrepreneurial activity among specific groups of the population?
  • Are there specific targets or measurable objectives to increase entrepreneurial activity?
  • Does the government assess the impact of policy measures?
  • Does the government support regular independent policy evaluations?
  • Does the government incorporate feedback from lessons learnt?
  • Is there an annual (periodic) report on the state of entrepreneurship?
Indicators to measure effectiveness

Possible indicators

  • Survival rates
  • Share of total start-ups in target areas such as high-tech enterprises, green enterprises, social enterprises or enterprises in key exporting sectors
  • Share of total start-ups in target groups such as women, youth, minorities, rural populations
  • Job growth due to start-ups
  • Revenue generated and taxes paid by start-ups (values and growth rates)

What they monitor

  • Success of entrepreneurs in starting and sustaining businesses
  • Success in reaching specific targets for different sectors
  • Improved economic opportunities for target groups of the population
  • Economic impact of entrepreneurship