gies such as “ Facebook ” and “ Snapchat ”. This is because complex technologies are much more difficult to produce than narrower technologies , because these latter are compatible with a high degree of inequality in a country ’ s level of economic development . Furthermore , in our view , the technological frontier should not necessarily be defined in terms of GDP per capita . Some western countries have high levels of GDP per capita , combined with low scores in terms of provision of basic goods .
4 High GDP per capita is often a feature of “ pay-as-you-go ” societies
5 . Our model has implications for entrepreneurship policy . Entrepreneurship “ zealots ” often assume that entrepreneurship makes a positive contribution to economic growth , although a closer investigation of the matter finds no such causal effect ( Beck , Demirguc-Kunt , & Levine , 2005 ; see also Blanchflower , 2004 ). We suggest that entrepreneurial success does not rely on individual efforts , but depends mainly on the degree of development of the entire society . Entre-
Journal on Policy and Complex Systems
4 For example , basic goods such as the reliable provision of electricity and drinking water ; availability of public transport ; level of average education ; life expectancy ; rates of obesity ( which is a form of malnutrition ); rates of child poverty ; crime ; quality of housing ( e . g . whether houses have well-functioning showers , double-glazed windows , reliable plumbing ).
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preneurship may , therefore , be easier in more developed countries . Indeed , this may explain observations that entrepreneurship rates are higher in developed countries , even though entrepreneurship makes no causal influence on economic development ( Beck et al ., 2005 ). In developing countries , which are farther from the world technological frontier ( and hence rely less on innovation and more on scale and investment ), the appropriate industrial policy would be reliant on large firms rather than entrepreneurial SMEs ( Acemoglu , Aghion , & Zilibotti , 2006 ). Individuals in developing countries with exceptional entrepreneurial talent may well do better to migrate and start their business in a developed country ( to the benefit of the developed country ) rather than remaining in their home country , where institutional support is low .
6 . There are also implications for a theory of value . Economic performance depends on many individuals at all levels of the economy , and to reflect this our model would suggest that profits should be widely distributed throughout the economic system rather than concentrated among any particular minority .
6 . Extensions to the Model
Further work could evaluate more
rigorously the theoretical predictions in real-world contexts .
One possible avenue of further work could be in moving from a uni-