Regional Entrepreneurship

by

Rolf Sternberg

• LAST REVIEWED: 12 January 2021
• LAST MODIFIED: 26 May 2021
• DOI: 10.1093/obo/9780199846740-0066

Introduction

Regional entrepreneurship (RE) is an emerging field within entrepreneurship research. It reflects Maryann Feldman’s frequently quoted notion that “entrepreneurship is primarily a regional event.” In this article “regional” is defined as subnational (i.e., below the country level). RE covers all issues related to the regional causes and regional impacts of entrepreneurial activities and government policies to support entrepreneurial activities. This article covers the most important contemporary theories dealing with regional entrepreneurship; it also provides an overview about important results of empirical studies on regional disparities and regional impact of entrepreneurial activities in subnational regions of various countries. It gives some insights into the role of government policies to support regional entrepreneurship. The above definition implicitly acknowledges that there are other spatial impacts of and causes for individuals’ entrepreneurial activities, namely at a supra-national (e.g., EU), national (e.g., a selected country such as Germany) or local (e.g., a specific area within an urban agglomeration) level. These other spatial perspectives on entrepreneurship are not considered in this article. Furthermore, this article considers regional entrepreneurship primarily from an economic and an economic geography perspective, while publications from other academic disciplines (e.g., management) are less often cited. As there is no single, generally accepted definition of entrepreneurship in the research community, this contribution considers two principal meanings essential. First, the occupational notion of entrepreneurship that refers to owning and managing a business on one’s own account and at one’s own risk. Its “practitioners” are called entrepreneurs, self-employed, or business owners. Within this concept of entrepreneurship, a dynamic perspective focuses on the creation of new businesses. Second, the behavioral notion of entrepreneurship refers to seizing an economic opportunity. I understand entrepreneurship as a combination of some elements of behavioral entrepreneurship with some aspects of the dynamic perspective of occupational entrepreneurship, making new venture creation the hallmark of entrepreneurship. More specific definitions that can be operationalized are needed for empirical work, however. I work on the assumption that entrepreneurship is about creating something new and that the definition of entrepreneurship according to the Global Entrepreneurship Monitor (GEM) is the best compromise between competing characteristics such as novelty, the availability of data, or interregional, intertemporal, and international comparability. GEM defines entrepreneurially active people as adults in the process of setting up a business if they will (partly) own and/or currently own and manage an operating young business.

General Overviews

Research on new businesses in a regional context has not only been the focus of some valuable monographs providing general overviews (e.g., Fritsch 2011, Sternberg 2009) but also of some articles and several special issues of leading journals. For example there are four special issues of Regional Studies, an important journal on the relationship between regional context and entrepreneurship, published in 1984, 1994, 2004, and 2014. Some clear improvements were made in these three decades: improved data, a heightened awareness of the role of both institutions and of “soft” factors such as social capital and the explicit consideration of region-specific attributes, such as clusters and others, as Sternberg and Rocha 2007 and Sternberg 2006 point out. Following Santarelli and Vivarelli 2007, Malecki 2018, and Saxenian 1994, entrepreneurship is now increasingly seen as a development process in which the decision to start a business is based on the experiences of individuals and groups, shaped by their regional environment, and with the explicit attention of policymakers (Brown and Mason 2017). Other highly relevant special issues have been published by Small Business Economics (issue 1 of Volume 30 in 2008) and Zeitschrift für Wirtschaftsgeographie [The German Journal of Economic Geography] (issue 3/4 in 2005). Additionally, mention must be made of the Global Entrepreneurship Monitor (GEM, see Introduction), the largest ongoing empirical study of entrepreneurial dynamics in the world. The 2019 survey covered fifty-five countries with results based on more than 150,000 interviews with representative parts of the adult population and almost 1,900 interviews with national entrepreneurship experts. See Reynolds, et al. 2005 and Bosma 2013 for methodological details, as well as the GEM website online. While GEM is focused on complete countries, it is possible for some countries to compare subnational regions with GEM data as well. Thus GEM is an important data source also for regional entrepreneurship analysis, in particular as such annual data for some countries have been available for about two decades.

• Bosma, N. “The Global Entrepreneurship Monitor (GEM) and Its Impact on Entrepreneurship Research.” Foundations and Trends in Entrepreneurship 9.2 (2013): 143–248.

  DOI: 10.1561/0300000033

  Up-to-date report about the history, the methods, and the data of GEM, written by one of the most intimate experts on GEM data. This paper provides a review of eighty-nine GEM-based academic publications in SSCI-listed journals with the objectives to highlight the particular advantages of GEM data, their quality and usability, as well as their limitations.

• Brown, R., and C. Mason. “Looking Inside the Spiky Bits: A Critical Review and Conceptualisation of Entrepreneurial Ecosystems.” Small Business Economics 49 (2017): 11–30.

  DOI: 10.1007/s11187-017-9865-7

  This paper offers one of the first substantial reviews of the relatively young concept of (regional) entrepreneurial ecosystems that has quickly established itself as one of the latest ‘fads’ both in entrepreneurship research and in entrepreneurship support policies in many parts of the world. Authors also provide a useful and innovative taxonomy of different archetypal ecosystems.

• Fritsch, M., ed. Handbook of Research on Entrepreneurship and Regional Development: National and Regional Perspectives. Cheltenham, UK: Edward Elgar, 2011.

  DOI: 10.4337/9780857936493

  The edited volume (nine contributions from fourteen authors) focuses on the regional factors affecting firm creation and the attendant consequences. Appropriate material for graduate students interested in (mainly) empirical research on the relationship between entrepreneurial activities, new firms, and regional development with evidence from different countries and continents.

• Malecki, E. J. “Entrepreneurs, Networks, and Economic Development: A Review of Recent Research.” Advances in Entrepreneurship, Firm Emergence and Growth 20 (2018): 71–116.

  DOI: 10.1108/S1074-754020180000020010

  Based on one of the earliest (more conceptual) contributions of economic geographers to the field of regional entrepreneurship published in 1997 and written by Malecki, this article provides a fresh update with a revised view on entrepreneurs and their relationship with (intraregional and interregional) networks and regional economic development.

• Reynolds, P. D., N. Bosma, E. Autio, et al. “Global Entrepreneurship Monitor: Data Collection and Implementation 1998–2003.” Small Business Economics 24 (2005): 205–231.

  DOI: 10.1007/s11187-005-1980-1

  Most relevant and informative academic paper about the first half-decade of the GEM project. Provides a description of the four major data collection activities required for empirical tests of the many relationships in the GEM model: adult population surveys, unstructured interviews with national experts, self-administered questionnaires completed by national experts, and assembly of relevant standardized measures from existing cross-national data sets.

• Santarelli, E., and M. Vivarelli. “Entrepreneurship and the Process of Firms Entry, Survival and Growth.” Industrial and Corporate Change 16.3 (2007): 455–488.

  DOI: 10.1093/icc/dtm010

  A good paper dealing with the impact of the regional context (and other spatial contexts) on the development of entrepreneurship during a firm’s life cycle.

• Saxenian, A. Regional Advantage. Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press, 1994.

  Now a standard work on the relevance of regional contexts for entrepreneurial activities, written by one of the most influential contemporary economic geographers. Contrasting the different regional framework conditions between the East and West Coasts of the United States, Saxenian argues that Silicon Valley was able to better cope with the crisis in that region at that time than its competitor region on the East Coast.

• Sternberg, R. Regional Dimensions of Entrepreneurship. Boston: Now, 2009.

  This introduction discusses the theoretical, the empirical, and the government policy perspective of regional entrepreneurship. This text considers work of different disciplines as long it focuses on the regional dimensions of entrepreneurship.

• Sternberg, R., ed. Deutsche Gründungsregionen. Berlin: Lit, 2006.

  Collates important publications on entrepreneurial regions in Germany. The twelve contributions are written by twenty-one, in some cases, now-influential economic geographers and regional economists and cover twelve German cities/regions. The contributions clearly reveal that entrepreneurship is a regional event, as the characteristics of entrepreneurship differ significantly from region to region as do their determinants. One conclusion for entrepreneurship support policies: there is no one-size-fits-all solution for every region; rather, every single region has to find its specific way to support entrepreneurship.

• Sternberg, R., and H. O. Rocha. “Why Entrepreneurship Is a Regional Event: Theoretical Arguments, Empirical Evidence, and Policy Consequences.” In Entrepreneurship: The Engine of Growth. Vol. 3, Place. Edited by M. P. Rice and T. G. Habbershon, 215–238. London: Praeger, 2007.

  Published in an edited volume within the four-part series “Entrepreneurship: The Engine of Growth” published by Praeger in 2007. Based upon Maryann Feldman’s popular quote that entrepreneurship is primarily a regional event, the authors develop theoretical and empirical arguments why this is really the case.