Encouraging more people to start businesses is not effective public policy for economic growth or job creation, according to Scott Shane. While start-ups like SAP, Google, and Genentech are often cited as successful, they are not typical. In the U.S., the average start-up is a small, low-profit business that rarely generates jobs or wealth. Most start-ups fail within five years, and their productivity is lower than existing firms. Countries with higher economic growth have lower rates of new firm formation, as wealthier societies invest more in capital and technology, reducing the need for self-employment. New firms also create fewer jobs than existing ones, with most jobs in new firms being part-time and lower-paying. Moreover, new firms often fail, leading to job losses. High-growth start-ups, which are rare, contribute significantly to economic growth and job creation. These firms are typically backed by venture capital and have higher productivity. Policy makers should focus on supporting these high-growth firms rather than subsidizing typical start-ups. This approach would lead to more effective economic growth and job creation. Policies should be shifted to support high-potential businesses, not just any start-up. This requires identifying and investing in the most promising ventures, rather than spreading resources thinly across many start-ups.Encouraging more people to start businesses is not effective public policy for economic growth or job creation, according to Scott Shane. While start-ups like SAP, Google, and Genentech are often cited as successful, they are not typical. In the U.S., the average start-up is a small, low-profit business that rarely generates jobs or wealth. Most start-ups fail within five years, and their productivity is lower than existing firms. Countries with higher economic growth have lower rates of new firm formation, as wealthier societies invest more in capital and technology, reducing the need for self-employment. New firms also create fewer jobs than existing ones, with most jobs in new firms being part-time and lower-paying. Moreover, new firms often fail, leading to job losses. High-growth start-ups, which are rare, contribute significantly to economic growth and job creation. These firms are typically backed by venture capital and have higher productivity. Policy makers should focus on supporting these high-growth firms rather than subsidizing typical start-ups. This approach would lead to more effective economic growth and job creation. Policies should be shifted to support high-potential businesses, not just any start-up. This requires identifying and investing in the most promising ventures, rather than spreading resources thinly across many start-ups.