Incentives for Entrepreneurial Firms

Abstract

Many economic development organizations (EDOs) have embraced the mission to support entrepreneurial firms in their communities. EDOs engage in their entrepreneurial ecosystems, in part, by providing resources, sometimes in the form of business incentives. The purpose of this report is to provide practitioners and policymakers with insights regarding the use of these incentives and guidance for offering incentives to entrepreneurial firms. Researchers and policymakers use a wide range of definitions for “entrepreneurial firm” and “incentive,” making it difficult to categorize and describe the current state of entrepreneurial firm incentives. Multiple additional research challenges, including a lack of data on program outcomes, hinder the ability to draw definitive policy guidance from both program evaluations and academic research. This report strives to sort this tangle of material into a framework that is helpful for policymakers and economic development practitioners.