Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed and What to Do About It

In response to the financial crisis, governments are being far more aggressive in intervening to promote economic activity, a trend that shows little tendency of alleviating. This book looks at the experiences of governments in encouraging entrepreneurs and venture capitalists across many decades and continents. Certainly, the dollars spent each year on these programs—while significant on an absolute basis—pale when compared to defense and healthcare expenditures, not to mention the costs incurred recently rescuing failing banks and automakers, among others. But the picture changes when we consider the long-run consequences of policies that facilitate or hinder the development of a venture sector: that is, the impact on national prosperity that a vital entrepreneurial climate can have. In the long run, the significance of these policies looms much larger. Much of the discussion in the book has focused on specific policies and analyses. From the discussion, five consistent themes emerge:
• Governments around the world today are seeking to promote entrepreneurial and venture capital activity, employing a variety of "stage setting" and direct strategies.
• These steps are sensible, given the historical record and theoretical arguments regarding the importance of such interventions in the development of entrepreneurial regions and industries.
• But these efforts are challenging. Governments cannot dictate how a venture market will evolve, and "top-down" efforts are likely to be unsuccessful.
• The same common flaws doom far too many programs. These reflect both poor design—reflecting a lack of understanding of the entrepreneurial process—and problematic implementation.
• Government must play a careful balancing act, combining an understanding of the necessity of playing a catalytic role with an awareness of the limits of its ability to stimulate the entrepreneurial sector.
If policy makers can apply these key lessons, many, if not most, of the sagas of waste and disappointment that we have highlighted could be avoided. Entrepreneurs could find a more hospitable climate, and we would all benefit.