ABSTRACT
This chapter examines policies towards new firms. It outlines some of the measures in operation. The chapter looks at the ways in which new firms may be influenced by policy. It considers the underlying rationale for policy in this area. The chapter discusses the evaluation of policy. If policies are to have any effect on formation activity, they must influence – directly or indirectly – the private decisions of potential founders. The most commonly used method of identifying a without policy position utilizes the views of individuals directly affected by policy. A 'counterfactual' approach has been used in the evaluation of counselling services for small firms; the enterprise allowance scheme; the Loan Guarantee Scheme; and the new enterprise programmes. It is relatively simple to employ, but has obvious dangers. Nevertheless with carefully tested interview schedules some insights are possible.
