Page 13 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

2 Norman Walzer and Adee Athiyaman

areas and smaller markets than in large regional centers can mean less inter-
est and fewer opportunities for business starts. Young families have migrated
to larger centers which, in and of itself, can mean a smaller pool of potential
people interested in starting businesses.
At the same time, an in-migration of early retirees with considerable
wealth and growing numbers of foreign-born populations can offer poten-
tial opportunities for new part-time business ventures either directly or
through financial investment. Hispanics and other groups with limited in-
comes may be survival entrepreneurs if they can access capital to start an en-
terprise.
The importance of small businesses in generating employment in rural
areas is well-known (Bruce et al. 2007). For many years, large corporations
have not grown at rates sufficient to propel national and local economies.
Birch and others documented the employment increases contributed by
small businesses laying the groundwork for supporting this group as a de-
velopment strategy since the 1980s (Birch 1987; Acs and Armington 2005;
Shaffer 2002, 2006).
The changing economic environment, combined with increased pres-
sures on rural areas to replace lost jobs or create additional jobs, forced lo-
cal development practitioners to seek alternative strategies. Entrepreneur-
ship as a development strategy is one such approach that has become
prominent especially in the past decade as practitioners recognize the lim-
ited number of firms relocating and the resulting competition for these
businesses.

BACKGROUND RESEARCH

The importance of entrepreneurship in business and regional development
can be traced to Schumpeter and others early in the twentieth century
(Schumpeter 1934; Wilkens 1979) but research on entrepreneurship has
grown rapidly in recent years (Low 2001; Schenkel 2006). For instance, a
survey of the Academy of Management Journal shows more articles published
on entrepreneurship since 2000 than in all previous periods combined (Ire-
land, Reutzel, and Webb 2005). The recent growth in entrepreneurship re-
search raises the question of “how the field got a start,” and “why the sud-
den interest in the study of entrepreneurship?” The next several pages
briefly summarize major research directions leading to the current interest.
Economic changes in the late eighteenth century to the mid-nineteenth
century with the growth of industry from agriculture to shop assembly fos-
tered the role of entrepreneurs in assembling capital and organizing pro-
duction processes (McDaniel 2005). Classical economists such as Ricardo