Page 93 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

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

metropolitan entrepreneurship, and which regional drivers are affected by
such differences. The final section sketches potential policy implications of
the findings.

IDENTIFYING AN ENTREPRENEUR

The first fundamental challenge in building an entrepreneurship indicator
is defining an entrepreneur. Despite decades of research focused on defin-
ing entrepreneurship, a commonly accepted definition has failed to emerge
(Gartner 1988); however, the role of entrepreneurs as owners-managers
does differentiate them from other economic participants. As owners, en-
trepreneurs are risk-bearers. They reap the rewards for innovative, entrepre-
neurial success and bear the consequences of innovative, entrepreneurial
failure. While the prospect for huge profits from a successful firm motivates
entrepreneurs, the risk of bankruptcy can make the leap into entrepreneur-
ship daunting.
In addition to their role as owners, entrepreneurs are also managers. As
managers, entrepreneurs are decisionmakers with management control
over the firm. Entrepreneurs decide when to be innovative, what innova-
tions to adopt, and how far to push the innovative changes in the firm. A
further key element of entrepreneurs’ management role is the resource de-
cisions they make. Each must decide how to acquire and bundle resources
together to build competitive advantages in the marketplace.
Entrepreneurs are indeed unique economic players (figure 5.1). Entre-
preneurs are distinguished from corporate managers and career profession-
als because while the latter have decisionmaking roles in the organization,
career managers in general are not the risk-bearers or owners of the com-
pany. While stockholders are corporate owners, they are not entrepreneurs
because they, in general, transfer decisionmaking responsibilities to corpo-
rate management. Entrepreneurs develop from many sources—the unem-
2
ployed, private workers, and corporate managers. Many begin as part-time
entrepreneurs.
Self-employment is the simplest type of entrepreneurship (Blanchflower
and Oswald 1998). Entrepreneurs in this study are defined as those people
who are self-employed because they satisfy the basic characteristic of entre-
preneurs: owner-management. By owning their business, they exert man-
agement control in the business and they have the right to extract business
3
profits. They also assume the risks associated with the loss of their busi-
ness.
Not all entrepreneurs are alike in their impact on local economies (Hen-
derson 2002). Some entrepreneurs start their business to fulfill a dream or