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The entrepreneurial ecosystem in small island developing states (SIDS) presents unique challenges and opportunities for business research and policy formulation. Cape Verde's economic trajectory, marked by a strategic shift towards services and entrepreneurship, necessitates a critical analysis of how policy can better align with and stimulate robust business scholarship. This article analyses the evolution of policies affecting business research within the nation's entrepreneurial ecosystem. It aims to develop a coherent, evidence-based policy framework to enhance the quality, relevance, and impact of business research, thereby supporting sustainable economic development. The analysis employs a qualitative policy document review and synthesis, triangulated with insights from stakeholder interviews. It examines policy texts, institutional reports, and strategic development plans to map the policy landscape and its interplay with academic and practical business research. A dominant theme is the persistent misalignment between national innovation policy and the operational realities of business research institutions. Notably, over 60% of interviewed stakeholders identified access to longitudinal, firm-level data as the most significant impediment to rigorous research, a gap not addressed by current policy instruments. The existing policy environment inadequately supports the infrastructure and incentives required for high-calibre business research. A more integrated, ecosystem-level approach is essential to bridge the gap between policy aspiration and research practice. Policymakers should establish a centralised, anonymised business data repository accessible to accredited researchers. Furthermore, research funding should be explicitly tied to projects addressing priority national development challenges, fostering greater policy relevance. entrepreneurial ecosystem, policy analysis, business research, small island developing states, research capacity, Cape Verde This article provides a novel, integrated policy framework specifically designed for SIDS contexts, introducing the mechanism of a 'research-policy nexus audit' to diagnose and improve alignment between national strategic goals and business research outputs.