By examining the functions of new firms and entrepreneurs in the economy, the essays in this volume make a fundamental contribution to our understanding of the macroeconomy. Each chapter clarifies the role of entrepreneurs in economic theory, the function of small and medium-sized enterprises that they found and build and the impact of the innovations introduced on employment, productivity and economic growth. The public policy implications of this process are clear. Countries that encourage entrepreneurship and free entry will have better macroeconomic performance than those that retard it. And a dynamic small and medium-sized enterprise sector requires addressing the issue of inadequate management competence and bridging the gap between large and small firms.