Entrepreneurship and Urban Success: Toward a Policy Consensus

27 Pages Posted: 28 Feb 2008 Last revised: 28 Sep 2014

Zoltan J. Acs

Schar School of Policy and Government

Edward L. Glaeser

Harvard University - John F. Kennedy School of Government, Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Robert E. Litan

Ewing Marion Kauffman Foundation; AEI-Brookings Joint Center for Regulatory Studies

Lee Fleming

Harvard University - Technology & Operations Management Unit

Stephan J. Goetz

Pennsylvania State University - The Northeastern Regional Center for Rural Development

William R. Kerr

Harvard University - Entrepreneurial Management Unit

Steven Klepper

Carnegie Mellon University - David A. Tepper School of Business

Stuart S. Rosenthal

Syracuse University - Department of Economics

Olav Sorenson

Yale School of Management

William C. Strange

University of Toronto - Rotman School of Management

Date Written: January 2008

Abstract

Like all politics, all entrepreneurship is local. Individuals launch firms and, if successful, expand their enterprises to other locations. But new firms must start somewhere, even if their businesses are conducted largely or exclusively on the Internet. Likewise, policymakers at local and state levels increasingly recognize that entrepreneurship is the key to building and sustaining their economies' growth. Although this is a seemingly obvious proposition, it represents something of a departure from past thinking about how local, state, or regional economies grow. Historically, state and local policymakers have put their energies into trying to attract existing firms from somewhere else, either to relocate to a particular area or to build new facilities there. Such smokestack chasing - or, in this cleaner era, simply firm chasing - often has degenerated into what is essentially a zero-sum game for the national economy. When one city or state offers tax breaks or other financial inducements to encourage firms to locate new plants or headquarters, and succeeds, some other city or state loses out in the process. Local, state, and regional economic development centered on entrepreneurship, however, is a fundamentally different phenomenon. The formation and growth of new firms, especially those built around new products or ways of doing things, wherever this occurs, is clearly a positive sum game, not just for the locality, but for the nation as a whole. This essay provides a guide to policymakers and citizens to what is known about the effects of various local and state policies aimed at fostering entrepreneurially driven growth. There is also much we do not know; thus, the essay identifies subjects that require further research.

Keywords: entrepreneurship, policy, urban, city, local, state, regional, roadmap, economy

Suggested Citation

Acs, Zoltan J. and Glaeser, Edward L. and Litan, Robert E. and Fleming, Lee and Goetz, Stephan J. and Kerr, William R. and Klepper, Steven and Rosenthal, Stuart S. and Sorenson, Olav and Strange, William C., Entrepreneurship and Urban Success: Toward a Policy Consensus (January 2008). Available at SSRN: https://ssrn.com/abstract=1092493 or http://dx.doi.org/10.2139/ssrn.1092493

Zoltan J. Acs

Schar School of Policy and Government ( email )

Founders Hall
3351 Fairfax Dr.
Arlington, VA 22201
United States
703-993-1780 (Phone)

HOME PAGE: http://home.ubalt.edu/zacs

Edward L. Glaeser

Harvard University - John F. Kennedy School of Government, Department of Economics ( email )

Littauer Center
Room 315A
Cambridge, MA 02138
United States
617-496-2150 (Phone)
617-496-1722 (Fax)

Brookings Institution

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert E. Litan (Contact Author)

Ewing Marion Kauffman Foundation ( email )

4801 Rockhill Road
Kansas City, MO 64110
United States

AEI-Brookings Joint Center for Regulatory Studies

1150 17th Street, N.W.
Washington, DC 20036
United States

Lee Fleming

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States
617 495 6613 (Phone)
617 496 5265 (Fax)

Stephan J. Goetz

Pennsylvania State University - The Northeastern Regional Center for Rural Development ( email )

7E Armsby Building
University Park, PA 16802
United States
814-863-4656 (Phone)
814-863-0586 (Fax)

HOME PAGE: http://www.cas.nercrd.psu.edu

William R. Kerr

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Steven Klepper

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3235 (Phone)
412-268-6938 (Fax)

Stuart S. Rosenthal

Syracuse University - Department of Economics ( email )

426 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-3809 (Phone)

Olav Sorenson

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

William C. Strange

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada

HOME PAGE: http://www.rotman.utoronto.ca/%7Ewstrange/

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