The Role of Innovative Entrepreneurship in the Economic Development of EU Member Countries

Abstract

In the specialized literature, entrepreneurship has been acknowledged to have a salient role in driving innovati on, economic growth, and welfare, in additi on to its eff ect on job creati on. Researchers have expressed diff erent views about the relati onship between economic development and entrepreneurship throughout ti me. It is also considered that innovati on is a driving force in the economic development of nati ons. Therefore, innovati ve entrepreneurship started to be considered a key factor in modern economic development. For instance, SMEs and innovati on lay at the core of the European Union's development strategy-Europe 2020 strategy. The aim of the arti cle is to analyze the role of innovati ve entrepreneurship in the economic development of EU member states. Taking into considerati on that both processes: economic development and innovati ve entrepreneurship are multi faceted, the arti cle comes to express the relati onship between the two phenomena and its specifi cs in EU member countries. Given the nature of contemporary highlights of the literature review and the stated research objecti ve, in this arti cle, a model was tested that captures the new or young and innovati ve fi rms, as aspects of innovati ve entrepreneurship and determinants of the economic growth rates. The research method used is regression model analysis. For the stati sti cal data analysis and processing, Stata and SPSS soft ware tools were used. The key fi ndings of the paper show that innovati ve entrepreneurs (being measured by the Total Early-stage Entrepreneurial Acti vity (TEA) innovati on level) are more present in countries with higher development levels and higher incomes, being moti vated by the improvement opportunity they see in becoming entrepreneurs. However, a higher degree of entrepreneurship, especially new fi rms' creati on, does not substanti ally contribute to accelerated economic development. This is explained by the variati on in the moti vati on (necessity or improvement oriented) entrepreneurs across EU countries.

Business Dynamism and Innovation Capacity, an Entrepreneurship Worldwide Perspective

“…In France, the weight of the business services sector in GDP has been increasing [64]. The "TEA" variable negatively influences innovation capability, which is in line with what was indicated by [65]. Innovative entrepreneurs are more present in countries with higher levels of development and income, being motivated by the opportunity they see in becoming entrepreneurs [66].…”

Diversification of innovation strategies of Polish industrial processing enterprises depending on their size after the global financial crisis

“…It is assumed that entrepreneurs of the Schumpeter type, i.e. innovators applying creative destruction, are prevalent in developed countries, which naturally contributes to economic growth, while less innovative shopkeepers are the most common in developing countries (Crudu, 2019;Block, Fisch, & van Praag, 2017).…”

Exploring the Effects of Types of Early-Stage Entrepreneurial Activity on Subjective Well-Being

“…The positive effect of entrepreneurship on employment growth was only evident years after initial entry. Tang and Koveos (2004) even reported a negative relationship between the innovation index and economic growth in high-income countries, a result that corroborated that of Crudu (2019). However, Andersson and colleagues (2012) found support for positive long-term effects of entrepreneurship on productivity, although the immediate effects were negative.…”