Promoting Investment in Human Capital and Labor Mobility: Making the Entrepreneurial Economy Work

By Erik Stam, Niels Bosma, and Hiroyuki Okamuro

Abstract

Many economies face structural labour constraints that largely derive from the 20th century managerial economy. How can sufficiently high levels of investments in human capital and organizational knowledge be achieved, while ensuring an optimal level of worker mobility, between and within organizations? Making the entrepreneurial economy work necessitates changing labour regulation and organization of work. Public policies can stimulate worker mobility between established organizations, new ventures and especially young growing firms by loosening employment protection and making social security portable over all occupations. Businesses can change their work organization in order to enable worker mobility, and bottom-up innovation initiatives.