Rafael La Porta and Andrei Shleifer write,
the bottleneck is the supply of educated entrepreneurs–people who can run productive businesses. These entrepreneurs create and expand modern businesses…This is how the informal economy dies out in the process of development…the policy message for how to grow the formal economy and shrink the informal one is to increase…the supply of educated entrepreneurs.
An interesting combination of two themes in the latest issue of The Journal of Economic Perspectives–entrepreneurship and development. But I worry that causality may not be established. That is, the increase in the supply of educated entrepreneurs could be a symptom rather than a cause.
Yes, a symptom in the sense that a marketplace has not yet been created for the educated entrepreneur. Not to say that it couldn’t be done. Rather, potential wealth contained in this new possibility is not easy to visualize, until a few communities “make the break” with previously existing rules which allow institutions to define services product, instead of the people who rely on (services) time use product.