Page 35 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

24 Brian Dabson

enterprises in order to pursue a certain lifestyle or live in a specific com-
munity.
It is generally assumed that although survival and lifestyle enterprises,
without doubt, make significant contributions to their local economies,
only a very small fraction will evolve into companies that will become eco-
nomic drivers based on some form of innovation. It would be a mistake,
however, to dismiss these enterprises as unimportant in policy terms—not
only because of their local economic impact, but also because they do still
provide a seedbed for potential economic drivers, and they contribute to an
overall entrepreneurial climate in their community and region.
There are two more types of entrepreneur: (1) growth entrepreneurs, who
are motivated to grasp opportunities and to develop and grow their busi-
nesses that create jobs and wealth, and (2) serial entrepreneurs, who make
a career out of creating businesses, often selling them once they are suc-
cessful, and sometimes assembling multienterprise holding companies.
Obviously, growth and serial entrepreneurs are of most interest to policy-
makers because they are likely to yield the highest return on investments—
ironically, it is these entrepreneurs who are the least likely to want or need
assistance from formal sources.

THE GLOBAL CONTEXT FOR ENTREPRENEURSHIP

A slightly different distinction is made by the GEM, which classifies entre-
preneurs both by their stage in the entrepreneurial life cycle and by two pri-
mary motivations (Minitti 2006). GEM is an annual cross-national assess-
ment of entrepreneurial activity, which for the 2005 edition had 35
participating countries. Its purpose is to measure differences in the level of
entrepreneurial activity between countries, to uncover factors determining
the levels of entrepreneurial activity, and to identify policies that may en-
hance the level of entrepreneurial activity.
Data is collected over the life cycle of the entrepreneurship process with
three critical points examined: (1) when an entrepreneur (ages 18 to 64)
commits resources or starts a business, termed a nascent entrepreneur; (2)
when she or he owns and manages a business that has paid salaries for
more than 3 months but less than 42 months, known as a new business
owner; and (3) when she or he owns and manages an established business
that has been in operation for more than 42 months, known as an estab-
lished business owner. Nascent entrepreneurs and new business owners can
be combined into a category of early-stage entrepreneurs. Established busi-
ness owners have survived the liability of newness at which point the focus
shifts from the individual to the businesses.