What's New about the New Economy? Sources of Growth in the Managed and Entrepreneurial Economies

Abstract

The purpose of this paper is to document the fundamental shift that is taking place in OECD countries. This shift is from the managed economy to the entrepreneurial economy. While politicians and policymakers have made a plea for guidance in the era of entrepreneurship, scholars have been slow to respond. This paper attempts to make a first step identifying and articulating these differences. We do this by contrasting the most fundamental elements of the newly emerging entrepreneurial economy with those of the managed economy. We identify 14 trade‐offs confronting these two polar worlds. The common thread throughout these trade‐offs is the increased role of new and small enterprises in the entrepreneurial economy. A particular emphasis is placed on changes in economic policy demanded by the entrepreneurial economy vis‐à‐vis the managed economy.