Chapter 3: Entrepreneurs, Networks, and Economic Development: A Review of Recent Research

The process of economic development is complex and involves many players or actors, including large and small firms, various levels of government, and combinations of these. At first glance, to many, only capitalist firms have any role to play in the creation of jobs and economic growth. However, Porter’s (1990) work on The Competitive Advantage of Nations has shown convincingly that government policies, explicit and implicit, play a large role in defining the factor conditions, the size of firms, and the basis for competition. The process of economic growth and development takes place not so much in the isolated actions of individual firms as through the interactions of firms with other firms, with local institutions, and with other actors at the local, regional, and national levels.