Page 100 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

The Drivers of Regional Entrepreneurship in Rural and Metro Areas 89

quotients were the highest for metropolitan counties (1.037), followed by
micropolitan (1.005) and town counties (0.976). These results are similar
to those from income depth, but all the value-added LQs were closer to the
average of one, indicating the value-added is less spatially dependent than
either the breadth or income metrics.
Rural areas lag metropolitan places in capturing high income or value-
added associated with entrepreneurial activity. The lack of access to larger
markets is one reason for the lack of entrepreneurial depth in rural areas.
These locations simply contain smaller economies and fewer market op-
portunities, which are limited by the size and remoteness of rural commu-
nities (Dabson 2001). Entrepreneurs that operate in such limited markets
will have fewer income generating opportunities and lower depth measures,
especially in terms of income.
Lack of access to larger markets also constrains the value-added measure
because more remote firms pay higher costs to access a more distant mar-
ket. In comparing two firms selling the same product in the same market,
the more remote firms will have higher transportation costs, limiting in-
come and reducing the value-added measure.
The value entrepreneurs generate is also affected by the types of industries
in which regions specialize (Malecki 1994). Entrepreneurs working in in-
dustries that take advantage of greater worker skills are likely to generate
more value for themselves and their local economy; however, in both goods
and service-producing sectors, rural entrepreneurs are highly concentrated
in lower-skilled industries. Only 21 percent of the self-employed in rural
manufacturing specialized in high-tech industries compared to 27.8 percent
of the self-employed in metropolitan areas. 8
In service sectors, half of the rural self-employed operate in consumer ser-
vice industries, which tend to utilize lower-skilled workers. Moreover, only
28 percent of the rural self-employed operate in service producing indus-
tries that tend to employ high-skilled workers, well below the 45 percent of
metropolitan self-employed involved in producer services. 9
The skill differences are also reflected in the occupations of the entrepre-
neurs. Rural entrepreneurs tend to work in more blue-collar occupations
than their metropolitan counterparts. Compared with the metropolitan
self-employed, higher shares of rural self-employed work in production,
natural resource, and construction occupations (figure 5.6). These occupa-
tions tend to have lower levels of educational attainment. The share of ru-
ral self-employed in professional, management, business, and financial oc-
cupations is much lower than the share of metropolitan self-employed in
these fields. According to Census Bureau data (2004), professional, man-
agement, business, and financial occupations tend to have higher levels of
educational attainment.