Not all entrepreneurship is good entrepreneurship, but how do you measure, evaluate, assess a new enterprise? How do you identify which are destined for success—and which are headed for failure? Catherine Fazio, SF ’14, Managing Director of the MIT Lab for Innovation Science and Policy is working to get real answers to those questions.
Part of the Institute-wide MIT Innovation Initiative (MITii), Fazio’s lab convenes faculty and students from across campus to study innovation systematically and identify factors that create effective outcomes. “We’ve made terrific progress on developing new metrics for entrepreneurial quality and innovation ecosystems,” says Fazio. “Now the challenge is to turn our evidence-based research into effective policies and programs.”
Fazio, MIT Sloan doctoral student Jorge Guzman, and MIT Sloan professors Scott Stern and Fiona Murray put their collective insights into a 2016 policy briefing, A New View of the Skew: A Quantitative Assessment of the Quality of American Entrepreneurship. The idea is to help regional and national government agencies improve their performance in stimulating economic growth.
Fazio notes that the two most common methods for measuring entrepreneurship have polarized public policy debates in recent years. “One approach, which tracks the sheer quantity of new businesses, shows a three-decade decline in U.S. startup dynamism. The other method uses performance outcome post-mortems that end up conflating startup potential at founding with other factors that contribute to later success, such as regional ecosystems, the supply of capital, and luck. Some analysts look at that data and say we have too much entrepreneurship.”