Page 81 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

70 Norman Walzer, Adee Athiyaman, and Gisele F. Hamm

offers many opportunities. Thus, microenterprises might be expected to be
higher in counties with concentrations of these residents.

Entrepreneurship Factor
As noted previously, entrepreneurship is a dynamic concept. It involves
innovations in meeting new markets (e.g., new products), and managing or
optimizing the production process. This all-inclusive concept is measured
using microenterprises as a general proxy for entrepreneurship. Specifically,
changes in the number of microenterprises in the counties are included in
the empirical model.

EMPIRICAL FINDINGS

As previously mentioned, the Midwest is an especially appropriate region in
which to study the importance of the relationship of entrepreneurship,
small business development, and employment growth because it offers a
variety of urban and rural settings with a diversified economy, including
agriculture, manufacturing, and service jobs, many of which have under-
gone a major transition in the past decade or more (Walzer 2003).
Regions in the Midwest also differ widely in socioeconomic conditions
such as income, age, and educational attainment. The fact that large metro
centers are surrounded by rural counties offers opportunities to test propo-
sitions about the interrelationships between microenterprises located in ru-
ral counties and large businesses in adjoining urban centers.
The six midwestern states included in this study have a strong agricultural
sector and a large rural population base. At the same time, each state has
numerous relatively small rural communities that have undergone popula-
tion shifts in recent years. The sample states have a total of 460 rural coun-
ties with a combined population of 10.7 million residents and an age dis-
tribution not unlike the United States (table 4.2). In 2000, the
unemployment rate in the sample rural midwestern counties was 5.3 per-
cent, slightly less than the 5.8 percent for the nation. Agriculture and related
industries in the counties represent 5.3 percent of employment compared
with 1.9 percent for the United States, and manufacturing represented 21.8
percent compared with 14.1 percent nationally. Per capita income in the
sample counties averaged $17,198—substantially below the $21,587 for
the United States. No difference is found in the percentage of residents in
poverty, however (12.4 percent for both the sample and the United States).
The results of the model estimated to quantify relationships among
the various factors contributing to entrepreneurship and regional devel-
opment are shown in figure 4.1. Five theoretical constructs—Economic