Authors: Simon C. Parker
Addresses: Richard Ivey School of Business, University of Western Ontario, Room 1N72, 1151 Richmond St N, London, ON N6A 3K7, Canada
Abstract: Entrepreneurship is popularly regarded as an unmitigated boon that can solve a wide variety of organisational and economic problems while benefiting its practitioners. In contrast, this article provides a different perspective by drawing on a diverse body of theory to explore the costs of entrepreneurship. I propose two broad categories of costs: those that chiefly affect entrepreneurs themselves, and those that impact on society as a whole. Both types of cost can be monetary and non-monetary in nature. After categorising the most salient types of costs associated with entrepreneurship, I discuss various ways they might be mitigated, by entrepreneurs as well as third parties. A particular role is proposed for public policies, which may seek to: moderate entrepreneurial mismanagement based on over-optimism and dysfunctional business decision-making; strengthen intellectual property rights protection for university researchers and private-sector entrepreneurs; and curtail unproductive lobbying by powerful business interests, inter alia. Future researchers are challenged to develop further strategies to minimise the costs of entrepreneurship, while preserving their benefits.
Keywords: entrepreneurship costs; public policy; over-optimism; rent-seeking; entrepreneurial mismanagement; dysfunctional decision making; intellectual property rights; IPR protection; university researchers; private-sector entrepreneurs; unproductive lobbying; business interests; financial costs; non-financial costs.
International Journal of Entrepreneurial Venturing, 2012 Vol.4 No.4, pp.330 - 350
Received: 08 May 2021
Accepted: 12 May 2021
Published online: 16 Oct 2012 *