Business start-ups and innovation: The effect of the 2008 economic crisis

Abstract

This research aims to analyze if innovation, regarded as a distinctive feature of entrepreneurship, is a key element for obtaining satisfactory performance during a recession. The relationships between entrepreneurship and recession are difficult to establish, and there is no consensus in the literature on the effects of recession on entrepreneurial activities. This research has been conducted on four items in the “Individual level data GEM 2009 APS Global” survey. Results show the ineffective trend of innovation strategies in start-ups during times of economic prosperity. However, this negative effect disappears and even becomes positive in situations of economic crisis.