Page 17 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

6 Norman Walzer and Adee Athiyaman

Community-Specific Generalizations
The existence of a population with specific environmental traits or char-
acteristics prone to entrepreneurship has a positive impact on the potential
for entrepreneurship-induced economic development in a region (Lump-
kin and Dess 2000). This is not to say that entrepreneurial ability cannot
be modified through education and experiences. Lyons, Lichenstein, and
Kutzhanova (chapter 6) examine these issues.
Likewise, the economic, political/legal, and social factors in the region
are important in promoting successful entrepreneurship (Lee and Peterson
2000; Ibeh 2003). Creating an environment that encourages risk-taking and
investment is key to success as discussed by Hustedde (chapter 3).
An entrepreneurial culture or environment involves the public sector di-
rectly because public policies can seriously affect investor attitudes and ap-
proaches. An entrepreneurial public sector creates a climate that encourages
and enhances the potential of business investors to succeed. This type of cli-
mate is also likely to attract innovators. The role of entrepreneurial strate-
gies in managing the public sector was recognized early by Osborne and
Gaebler (1993).

Firm-Specific Generalizations
An entrepreneurial culture when combined with market orientation, i.e.,
a strong customer focus, recognition of competitors’ sources of advantage,
and a strong cross-functional team approach to providing customer solu-
tions, results in higher start-up success rates (Schlosser and Todorovic 2006;
Bhuian and Habib 2004; Kyriakopoulos, Muelenberg, and Nilsson 2004).
Banks or financial institutions are less likely to finance new start-ups es-
pecially in industries with which they are unfamiliar. While entrepreneurs
typically provide much of the start-up capital from their own funds, they
need access to other avenues of support. Venture capital funds can finance
innovative and growth-oriented firms (Cosh, Cummings, and Hughes
2005; Lindsay 2004) but areas with a variety of financing sources more of-
ten succeed as discussed by Markley (chapter 7).

Public Policy
Successful entrepreneurship requires public policies that emphasize
greater competition, provide at least a level playing field, and actively pro-
mote entrepreneurial behavior (Parker 2002; Mody 1999). During the past
decade or so, entrepreneurship has become recognized in its own right as a
distinct development approach rather than as a minor part of other devel-
opment strategies. Practitioners realize that a mission-driven approach