Geography Reference
In-Depth Information
are necessary to identify the value of the new business and the involvement in business
af airs by the venture capital provider. These contacts are hard to initiate and sustain
over a large distance (Mason and Harrison, 2002; Sorenson and Stuart, 2001; Stuart
and Sorenson, 2003). Recent evidence shows that most of these contacts cannot easily be
maintained over a longer distance via telecommunication: this can be used as a comple-
ment to face-to-face contacts, not as a substitute (Fritsch and Schilder, 2008).
4. Summary and research agenda
In the prior sections we have reviewed the empirical literature that relates to entrepre-
neurship, evolution and geography. The industry structure of a region was revealed to
have consistent ef ects on the prevalence of entrepreneurship in a region. This covers
both the nature of the activities as well as the characteristics of the organizations (size
and age). Regional and national culture conditions the preference for entrepreneurship.
Another important factor for entrepreneurship is the expanding knowledge base of a
region, which increases the number of technological inventions to be commercialized by
new i rms. Urbanization is also likely to af ect entrepreneurship, as it generally improves
access to resources and increases diversii cation of demand. Finally, the relatively abun-
dant supply of (venture) capital is likely to lower the barriers to develop a new business,
and might lure i rms (and employees) to capital-rich regions. Even though there is a
substantial tradition now on studying the spatial aspects of entrepreneurship, many
opportunities for improving insights in this are still not exploited. For example, there are
currently many fewer studies on the dynamics in entrepreneurship and complex systems
in regional contexts than relatively static studies on the spatial distribution of entrepre-
neurship in short periods of time. A few research opportunities are discussed, which deal
with the nature and measurement of the phenomenon to be explained (entrepreneurship)
and the explanatory mechanisms.
Until now, most empirical studies on entrepreneurship have taken new i rm forma-
tion or self-employment as indicators of entrepreneurship. The advantage of this is
that these indicators are widely available in census data or large scale surveys. The
disadvantage is that these indicators are too broad, but also too narrow to capture the
pursuit of entrepreneurial opportunities. They are
too broad
, because we know that
the majority of founders have no motivation to innovate or grow their i rm (Santarelli
and Vivarelli, 2007; Stam et al., 2008; Stam and Wennberg, 2009; Vivarelli, 2007). This
means that future research should use more specii c indicators that better capture the
phenomenon that is theorized to have an ef ect on economic development. Traditional
(neo-classical) frameworks have been shown to be relevant to analyse the occupational
choice between wage earning and self-employment
10
and the entry of new establishments
in general. Neo-classical theories have not been able to deal adequately with the innova-
tion and motivations involved in entrepreneurship (see Bianchi and Henrekson, 2005).
The latter issues are key in evolutionary economics, and thus provide opportunities for
evolutionary economic geography. Dif erent types of entrepreneurship require dif erent
types of explanation. Let us take two extremes: the entrepreneur who is self-employed
out of necessity, and the ambitious and technologically innovative high-growth start-up.
High rates of necessity self-employment are positively af ected by high levels of unem-
ployment, which is often driven by decreasing levels of general demand, and maturing
industries, and is more likely for low skilled young and old individuals.
11
On the other
