Geography Reference
In-Depth Information
Distinct local cultures can have ef ects on dif erent types of entrepreneurship. For
example a 'self-employment' and a 'career' life-mode have dif erent positive ef ects on
entrepreneurship, while a 'wage-earner' life-mode has a clear negative ef ect on entre-
preneurship (Illeris, 1986). In the self-employment life-mode the dominant job-related
motivation is to own the means of production and control the production process.
This culture is carried over from generation to generation, and is most frequently
found in rural areas characterized by independent and self-reliant small-scale farmers,
artisans and small business owners. It is rare in areas dominated by large-scale opera-
tions. The dominant value in the wage-earner life-mode is the sale of one's labour at
the highest possible price in order to maximize the utility of one's leisure time. Such
individuals are unlikely to set up new businesses, except when they are 'forced' by
unemployment. This life-mode is likely to be most common in regions characterized
by a narrow industrial base and dominated by large externally owned i rms. Finally,
the dominant value of individuals with a career life-mode is the advancement of their
career. They are likely to be well-educated and working in large private or public
sector organizations. They will start their own businesses if this becomes the best
way in which to benei t from their skills, knowledge and expertise. These businesses
are often technologically advanced, innovative and with good marketing capabili-
ties. Career mode entrepreneurs are often concentrated in large metropolitan areas
and smaller attractive cities (Savage et al., 1988). This career life-mode resembles the
life-mode of the so-called creative class to a large extent. The creative class consists
of individuals with relatively high levels of creativity in their work. A spatial concen-
tration of creative class has been shown to positively af ect new i rm formation rates
(Lee et al., 2004; Marlet and Van Woerkens, 2007; Van Aalst et al., 2006). Indirectly,
amenities in regions ('quality-of-place': Florida, 2002) af ect new i rm formation rates,
by attracting the creative class.
Growth in knowledge
New knowledge created at universities and research centres generates opportunities
for entrepreneurship, especially in high-tech industries. Often these organizations are
not able to fully recognize and appropriate the ensuing opportunities to commercialize
that knowledge. Knowledge workers in these organizations respond to opportunities
generated by new knowledge by starting a new i rm, and in this way appropriate the
expected value of their endowment of knowledge (Acs et al., 2005; Audretsch et al., 2006;
Feldman, 2001; Kirchhof et al., 2007; Zucker et al., 1998).
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Geographic proximity to
these sources of new knowledge is an asset, if not a prerequisite, to entrepreneurial i rms
in accessing and absorbing spillovers from universities and research centres (Audretsch
and Feldman, 1996; Audretsch and Lehmann, 2005a, 2005b; Audretsch et al., 2005;
Audretsch and Stephan, 1996). The most relevant spatial scale where these spillovers
take place is not clear, as these knowledge spillovers are said to extend up to approxi-
mately 10 km (Baldwin et al., 2008), 50 miles (Anselin et al., 1997), 75 miles (Varga,
1998), 145 miles (Woodward et al., 2006), or even 300 km from their source of origin
(Botazzi and Peri, 2003). The temporal scale on which these processes take place might
also range from a few months to several decades: major breakthrough inventions like the
discovery of the DNA were followed by substantial entrepreneurial activity only decades
later (and often in other places than the context of invention, Cambridge, UK, in this
