Gazelle Solution vs. Portfolio Thinking

Abstract

Abstract It is clear that entrepreneurship has a major impact on the economy because of the innovation, competition, productivity, wealth generation, and job creation all developed through new ventures. However, researchers have been divided on what specific type of entrepreneurial venture is best for economic growth and job creation. This chapter examines the debate between researchers on whether or not a “gazelle” approach, focusing only on high growth ventures, or a “portfolio” approach, taking in account all the various types of ventures, is better for economic growth and job creation. The gazelle approach’s solution is for the government to only invest in those firms that are high growth. In contrast, the portfolio approach’s solution is to encourage all forms of entrepreneurship because the ventures are interdependent on each other in the entrepreneurial ecosystem and each venture no matter the size is serving some purpose to the economy. This chapter highlights the two sides of the issue but also argues that in order for a true entrepreneurial economy to exist then all various type of ventures need to be encouraged in order for competition to be greatest and for society to reap the highest benefits.