National and Regional Perspectives
Elgar original reference
Edited by Michael Fritsch
Chapter 1: The Role of New Businesses in Regional Development: Introduction and Overview
Michael Fritsch FORMATION OF NEW BUSINESSES, POLICY, AND REGIONAL GROWTH Politicians expend a great deal of effort on attempting to reduce unemployment and stimulate economic growth. Policy programs specifically intended to create additional employment can be found at the regional, national, and supranational levels. Historically, such measures focused on the performance of large incumbent firms and more or less ignored the role that new businesses play in economic development. It was not until the late 1970s that policymakers became conscious of the important contributions that new businesses make to employment and growth. The last few decades have witnessed a considerable amount of empirical research on entrepreneurship, particularly on the formation and effects of new businesses, leading to substantial progress in this important field. One important result of recent research is that the factors that influence entrepreneurship vary considerably between nations and, particularly, between regions. Entrepreneurship is a regional event. Region-specific characteristics influence not only the level of new business formation, but also the type of new business that is created, for example innovative, knowledge-intensive, or high-growth start-ups. Moreover, the effects of entrepreneurship on development can also vary between nations and regions. In fact, in some countries or regions, new business formation is accompanied by significant employment growth, while the effect on employment may be negligible or even negative in other countries or regions. Currently, this variation in the effect of certain types of entrepreneurship on economic development and the role of the spatial environment are not well understood. OVERVIEW OF...