Creating and sustaining local entrepreneurs: a Schumpeterian view of economic growth

Abstract

In his Theory of economic development and Business cycles Joseph Schumpeter explained the long and short-run importance of an economy’s credit system to the vitality of entrepreneurship. Famously, the entrepreneur is the key figure in the process of innovating the structure of an economy, according to Schumpeter, which is the secret to the long term growth record of capitalist economies. In this project we use Schumpeter’s ideas about the relationship between credit, innovation, and growth in order to evaluate the current state of this relationship in the Mediterranean region, using Sicily as a case study. Based on the case of Sicily we then suggest ways in which local, as opposed to global credit institutions can be changed and made a better partner in the entrepreneur’s struggle to create new economic opportunities. The project is timely in that it provides economic insight into the steps that will be needed in order to use the energy that brought about President Barak Obama’s recent summit on entrepreneurship, which included many representatives from EMUNI’s focal region, to construct a sustainable culture of entrepreneurship.