Page 92 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

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The Drivers of Regional

Entrepreneurship in Rural

and Metro Areas

Jason Henderson, Sarah A. Low, and Stephan Weiler 1

In a rapidly globalizing economy, traditional rural assets such as cheap land
and labor can no longer ensure regional prosperity. New mixes of assets,
such as those leveraging local strengths in workforce, innovation, lifestyle,
finance, and information, will shape economic prospects for both rural and
metro areas in this globalizing environment. Entrepreneurship in particular
is already an important component of rural prosperity, with its role in rural
economic success becoming even more essential in the new millennium.
Entrepreneurs have been shown to be a critical mechanism for new ideas
and innovations to take root in the marketplace (Small Business Adminis-
tration 2005). Entrepreneurs create local jobs, wealth and growth, and are
themselves innovative users of other assets and resources. Research has
found a strong correlation between entrepreneurship and long-term em-
ployment growth at the regional level (Acs and Armington 2003). Fostering
local entrepreneurship and innovation is becoming a favorite strategy in
aiding economic development (Pages 2004). Yet few measures exist for ru-
ral regions to gauge their entrepreneurial assets.
This chapter outlines new indicators of entrepreneurship and uses these
metrics to understand the reasons for the wide spatial variation in entre-
preneurship. The first section explores why entrepreneurs are vital compo-
nents of regional economic development. The second section constructs
measures of the local quantity of entrepreneurs and the value they generate.
The third section compares trends between metropolitan and nonmetro-
politan counties to provide insight into rural America’s entrepreneurial
base. The fourth section examines the county characteristics that drive spa-
tial variations in entrepreneurship quantity and value. In particular, the
analysis seeks to understand whether differences exist between rural and

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