Foresight in economic development policy: Shaping the institutional context for entrepreneurial innovation

In this paper we take issue with the standard economic prescription for a “one size fits all” approach to economic development policies. We first argue that the entrepreneur exists in a much broader institutional context than current economic models of entrepreneurship consider. We then develop a definition of entrepreneurship as a special case of foresight—we argue that entrepreneurs are individuals who enact a unique vision of the future, and show how this view of entrepreneurial action leads to a new view of the basis of competitive advantage for startup firms. We then use this definition of entrepreneurship and the expanded view of institutional context to develop a model of entrepreneurial policies that takes the state of economic development and the unique historical context of the country into account. We close by discussing the implications of the model for policy makers and scenario planners in the domain of economic and institutional development.