Posted by Dr Olmo Silva, SERC and LSE
Since the writings of Marshall
and Schumpeter around a hundred years ago, entrepreneurs are
considered a crucial ‘ingredient’ in promoting and sustaining economic growth.
Paradoxically, the link between local entrepreneurship and economic dynamism is
even more pronounced in today’s highly globalized world – dense local clusters
of entrepreneurship are the real powerhouses of local modern economies, capable
of leveraging knowledge spillovers and agglomeration forces to produce the
‘next big thing’ and project it into a global reach.
Despite its crucial importance to
policy making and a deeper understanding of the functioning of our economic
activities, relatively little economics research has focused on measuring and
modeling entrepreneurship, and not enough is known about what role
entrepreneurs play in fostering agglomeration and urban economies.
Increasing
our understanding of this crucial issue is the aim of a new network which looks
to bring the ‘entrepreneur’ into urban and spatial economics.
A
first workshop took place at the University of Stirling a few weeks ago. The
local organizers were Stephan Heblich (one of our SERC affiliates) and George Panos. With the help of Stephan and
George, we managed to put together a gathering of academics working on the
economics of entrepreneurship, policy makers and local small-business
entrepreneurs.
During our first meeting, we heard a
number of interesting pieces on the actual importance of entrepreneurs for the
functioning and performance of their business; on the role of risk aversion in
determining who chooses to be an entrepreneur and when; and on the role of
entrepreneurial education.
The debate that followed revealed
once again how little we know about these issues. Although entrepreneurs are
clearly important and capable of taking on more risk, we have little evidence
that education can really make random individuals more entrepreneurial and more
risk-tolerant.
Fortunately, the entrepreneurs
attending the meeting brought to the table some very interesting and somewhat
more practical remarks: though we all agree it’s hard to make people
entrepreneurial, we can set in place the conditions that ‘unleash’ the most
entrepreneurial spirits. Surprisingly, credit availability was barely
mentioned. What seems important instead is a tight network of other
entrepreneurs with whom to share ideas, expertise, and information about market
opportunities, needed inputs and motivated workers looking for job
opportunities. That is, entrepreneurs really seem to benefit from being in a highly
agglomerated urban environment.
To
sum up, it is definitely time to bring back entrepreneurship back from the cold
and into our research on clustering and agglomeration
economies. This is what this network aims to do.
We
are hoping to organize another meeting in 2013 and two more in 2014. If you
want to be kept in the loop, simply let me know by dropping me an email!
