Labor Flexibility and the Prevalence of High-Growth Entrepreneurial Activity‪.‬

While entrepreneurship has been argued to contribute to country well-being through enhancing innovation (Audretsch, 2002; Michelacci, 2003), productivity, and economic efficiency (Baumol, 1990; 2002), one of the its most important contributions is to job creation (Birch, 1979; Davidsson and Delmar, 2003; Folster, 2000). The job creation potential of entrepreneurial ventures is an important issue that has captured the attention of both researchers and policy makers. Countries differ not only in the extent of overall levels of entrepreneurial activity, but also in the growth potential of the ventures created (Autio, 2007). Earlier studies suggest that the job creation potential of entrepreneurial firms is quite concentrated, where a relatively small proportion of entrepreneurial ventures generate the vast majority of new jobs (Storey, 1994; Autio, 2005). Overall levels of entrepreneurial activity appear to be less critical to new job creation than the level of high-growth potential entrepreneurship (Autio, 2005; Wong, Ho, and Autio, 2005). These findings highlight the importance of understanding national policy and culture conditions related to high-growth entrepreneurship.