Page 24 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

Introduction and Overview 13

Potential and Role of Microenterprises in Local Development
The point was made earlier that entrepreneurship can exist in virtually
any size establishment as well as in the public sector. Small businesses,
however, are especially important in rural areas with small markets. For this
reason, special attention is paid to the importance of small businesses, en-
trepreneurial or otherwise, in local development.
Henderson, Low, and Weiler (chapter 5) examine the breadth (quantity
of entrepreneurs) and depth (value created) of self-employment in regional
economies across the United States. They also examine spatial variations in
the importance and effects of entrepreneurship in metro and nonmetro
counties, testing for the effects of human capital, amenities, financial capi-
tal, and infrastructure based on proprietor employment and income data.
The results from this national study demonstrate that entrepreneurship, as
measured by proprietors, is influenced by, among other factors, the con-
centration of foreign-born residents, amenities, financial capital, infrastruc-
ture, region of the United States, and whether a county is micro- or metro-
politan.
Small businesses, however measured, are a mainstay of many rural coun-
ties and often represent one-third or more of the total employment in rural
areas (Walzer, Athiyaman, and Hamm, chapter 4). Walzer, Athiyaman, and
Hamm examine microenterprises, when defined as those with either no
employees (other than the owner) or four employees or fewer. They study
the percentage of total nonfarm employment represented by these estab-
lishments in rural counties in six midwestern states and the rate of change
in the number of these businesses in recent years. The authors address sev-
eral issues such as identifying the likelihood of potential sources of entre-
preneurs. For instance, the impact of county business structure on attracting
entrepreneurial talents to the county is examined as is the effect of natural
amenities such as perceptions about quality of life on entrepreneurship.
While the midwestern and the national studies differ in approach and re-
gion, they both offer insights to practitioners regarding groups to target in
entrepreneurship initiatives, and shed light on the potential impact of suc-
cessful entrepreneurship programs on local economies. This information
can help find or reallocate resources to these initiatives along with other de-
velopment pursuits.
Once businesses start, owners and managers often need considerable as-
sistance with marketing and daily operations such as financing. This need
has been documented many times by the high closure rate of small busi-
nesses (Macke and Kayne 2001). Woods and Muske (chapter 10) examine
the reported needs of small business owners and managers along with op-
tions for providing assistance. The issues with which small business owners
require assistance often involve daily operations from such issues as health