Racehorses or Rabbits? Are Entrepreneurs a Scarce Resource?

Abstract

Why study entrepreneurs? Is the presence of a class of entrepreneurs, or entrepreneurial personalities, the critical scarce resource which makes development possible or inevitable? Or will entrepreneurs emerge anywhere, like rabbits, if conditions are right? The question is urgent in the context of India’s liberalisation. This paper argues that the sources of economic development are more complex. A wider range of institutions and political factors have to be considered: some are susceptible to social engineering, planning, and political choice. This approach has been developed in recent research on institutional economics, business systems, and flexible specialisation, and shifts attention away from entrepreneurship to the economic, technological, moral, institutional, and political conditions for development. Entrepreneurs are a valuable resource but not the critical resource which makes all the difference: not rare and valuable creatures like racehorses, nor common as rabbits, but useful animals like bullocks, which sometimes work best alone, sometimes in teams.