Following a centuries-long decline in self-employment rates, many advanced economies saw a remarkable discontinuity starting in the 1970s-1980s, with self-employment rates reversing course in some countries. Cross-sectional analysis shows a U-shaped relationship between entrepreneurship and economic development levels. The paper provides an overview of the empirical evidence on the relationship between self-employment/business ownership and economic development. It argues there have been two "revolutions" - a rise in solo self-employment and more ambitious/innovative entrepreneurship in developed economies, driven by new forces like the growing services sector, consumer preferences, technology, and occupational preferences. Policymakers should recognize both revolutions and tailor policies accordingly.

(Knowledge Web) The Relationship Between Enteprenurship and Economic Development PDF

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