Page 97 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

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

Figure 5.3. Self-Employed in Major Industry by Metropolitan Status

quality of life in a region, but economic growth is driven by the value that
entrepreneurial activity generates. Some entrepreneurs earn more income,
add more value, and enhance regional growth and prosperity more than
other entrepreneurs. Depth of entrepreneurship differs from breadth in that
it examines the value of entrepreneurial activities rather than the number of
entrepreneurs. Income and value-added measures are used to measure en-
trepreneurial depth across regions.

Entrepreneurial Income

The goal of entrepreneurial depth measures is to better understand the
economic value entrepreneurs generate. One basic measure of prosperity is
to analyze the incomes associated with entrepreneurs, under the assump-
tion that entrepreneurs with higher incomes are operating profitable firms
which add more monetary value to the community. As average proprietor
income rises, the region as a whole becomes more prosperous.
A useful income-based measure of entrepreneurship depth is the ratio of
proprietor income to proprietor employment in a county. Proprietor in-
come and employment data was obtained from Bureau of Economic Analy-
sis–Regional Economic Information System (BEA–REIS 2004) data. Non-
farm proprietor income was divided by the number employed as nonfarm
proprietors in 2001.
The entrepreneurial income metric indicates a wide distribution in the in-
come that entrepreneurs are creating in their communities (figure 5.4). On
average, proprietors earned $28,900 in 2001; however, average proprietor
income at the county level ranged widely from less than $2,500 in Hayes