This chapter reviews the empirical evidence concerning the regional emergence of innovative new businesses. It is argued that analyses using aggregate data that focus on the regional level and do not account for career patterns of innovative founders are of limited value in guiding policy that is aimed at fostering the emergence of innovative new businesses. Progress can be mainly expected from research that investigates the family backgrounds, education, and employment careers of potential founders. Moreover, it would be helpful to develop clearer empirical definitions of what constitutes an innovative new business, and the distinctions between different types of innovative businesses.
National and Regional Perspectives
Edited by Michael Fritsch
Michael Fritsch and Michael Wyrwich
Emerging literature shows that spatial differences in entrepreneurship tend to persist over longer periods of time. A potential mechanism underlying this pronounced persistence is that high levels of start-up activity lead to the emergence of a regional culture and a supporting environment in favor of entrepreneurship that particularly involves social capital. This chapter summarizes the available empirical evidence on the regional persistence of entrepreneurship and elaborates in detail how different elements of such a culture, such as social capital, can exert an influence on the level of new business formation and self-employment. As a demonstration for the relevance of a regional entrepreneurship culture for new business formation, we highlight the case of Germany where we find pronounced persistence of start-up activity despite radical structural and institutional shocks over the course of the twentieth century. The German case suggests that there is a long-lasting local culture of entrepreneurship that can survive disruptive changes. We discuss the relationship between place-specific social capital and a regional culture of entrepreneurship and draw policy conclusions.
Michael Fritsch and Alina Sorgner
It has widely been recognized that creativity plays an immense role not only in arts, sciences and technology, but also in entrepreneurship, innovation and, thus, economic growth. We analyze the extent and the determinants of self-employment in creative professions at the level of individuals. The analysis is based on the representative micro data of the German Socio-Economic Panel (SOEP). The findings suggest that people in creative professions are more likely to be self-employed. Moreover, a high regional share of people in the creative class increases an individual's likelihood of being an entrepreneur. Investigating the determinants of entrepreneurship within the creative class as compared with non-creative professions reveals several differences.
Michael Fritsch, Alina Sorgner and Michael Wyrwich
This chapter investigates the relationship between job satisfaction and age for self-employed persons as compared to paid employees. While, on average, there are higher levels of job satisfaction in self-employment as compared to paid employment, we find that an individual’s age is an important moderator in this relationship. Specifically, the probability of the self-employed experiencing high levels of job satisfaction is quite similar across all age cohorts, but the job satisfaction of paid employees varies significantly with age. The degree to which self-employed people are more satisfied with their work than paid employees, therefore, is affected by the age of the individuals involved. We find that only those paid employees at the final stage of their working life have the same probability of experiencing a high level of job satisfaction as a self-employed person with comparable individual characteristics.
Martin Obschonka, Michael Fritsch and Michael Stuetzer
This chapter provides an introduction into the key concepts entrepreneurial culture and regional differences in entrepreneurship. It explains why regional differences in entrepreneurial activity and success represents an important research field, and why traditional research focusing on formal institutions and economic infrastructure cannot fully explain such regional differences. It also provides a brief overview over the field of geographical psychology and the promising implications for entrepreneurship research. The chapter concludes with an integrative definition of the geography of entrepreneurial psychology.