Microeconomics - Entrepreneurship and Unemployment Essay

Microeconomics - Entrepreneurship and Unemployment - Essay Example Low entrepreneurship levels could also result from low levels of economic growth that are also symptomatic of high unemployment levels. Whereas unemployment has a significant influence on the rate entrepreneurial activity, Audretsch et al (2011: p32) also claim that entrepreneurship has an equally significant impact on unemployment because of the low rates of survival for entrepreneurial activity that limits the influence of entrepreneurship on unemployment. Therefore, there is ambiguity as to whether unemployment is related to increased entrepreneurship or whether unemployment and entrepreneurship are inversely related. As a result, it can be argued that unemployment causes an increase in entrepreneurship and self-employment uptake, while entrepreneurship may also cause unemployment (Faria, 2013: p289). The unravelling of the association between unemployment and entrepreneurship is essential because most policies are based on assumptions that fail to reflect such ambiguity, thus req uiring a robust economic analysis of the available policies. Sub-national governments like the Welsh Assembly Government have the capacity to design and implement policies that support self-employment and entrepreneurship, specifically in complementing the effects of national policies to reduce unemployment levels. While there are numerous policy programs that can be used in support of entrepreneurial activity to reduce unemployment in the South Wales Valleys, there are generally three forms of policies: entrepreneurial education and training; financial assistance; and consultancy, advice, and general assistance. Entrepreneurs in the South Wales Valleys who might want to set up a business may sometimes require advice on the best types of businesses to pursue, required formalities, management implications, and planning required. Indeed, according to Williams and Nadin (2012: p900), majority of people who want to be self-employed only vaguely conceive