Public policy can have an important role in making entrepreneurship more inclusive by addressing market, institutional and behavioural failures that tend to fall heavily on disadvantaged and under-represented groups such as the unemployed, youth, women and migrants. This includes:

• Refining regulatory and welfare institutions to reduce barriers to business creation
• Building a culture that is supportive of entrepreneurship in diverse social groups
• Increasing awareness about the opportunities, benefits and practices of entrepreneurship
• Increasing motivations to pursue these activities.

While inclusive entrepreneurship policies also to increase the number of start-ups among under-represented and disadvantaged groups, they also seek to improve the quality of these start-ups so that they have a greater chance of becoming sustainable. It is also important for public policy to encourage creativity and innovation in new businesses to minimise the displacement of existing businesses and employment. Key policy approaches to improve the quality of new business start-ups by entrepreneurs from under-represented and disadvantaged groups include:

• Facilitating access to finance, including through loan guarantees, microfinance and loans
• Building entrepreneurship skills through training, coaching and mentoring
• Strengthening entrepreneurial networks.

To be effective, support measures need to be tailored to the unique challenges faced by the different social target groups, and targeted outreach efforts are needed to reach potential entrepreneurs. For example, the Going for Growth initiative in Ireland provides coaching and mentoring to growth-oriented women entrepreneurs, as well as helping them build their networks.

It is also important for policy makers to consider bundling support measures into packages, since many of the barriers and challenges are inter-related, and to utilise appropriate delivery mechanisms. This approach is taken by the BBZ programme in the Netherlands, which provides entrepreneurship training, coaching and mentoring, and an allowance to support people receiving social welfare assistance in business creation. Support measures are often more effective when specialist agencies or specialist branches of mainstream agencies are used, but client density must be sufficiently high to achieve cost efficiency.

Governments are increasingly recognising the challenge of inclusive entrepreneurship, but there is still much to do to spread good practice.

 

Further Reading

OECD/European Union (2019), The Missing Entrepreneurs 2019: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris

OECD/European Union (2017), The Missing Entrepreneurs 2017: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris

OECD/European Union (2016), Inclusive Business Creation: Good Practice Compendium, OECD Publishing, Paris

OECD/European Union (2015), The Missing Entrepreneurs 2015: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris

OECD/European Union (2014), The Missing Entrepreneurs 2014: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris

OECD/European Union (2013), The Missing Entrepreneurs: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris