Cases and Policies
Edited by Charlie Karlsson
Chapter 18: The Entrepreneurial Event Revisited: Firm Formation in a Regional Context
18 The entrepreneurial event revisited: ﬁrm formation in a regional context Maryann P. Feldman 1 Introduction Entrepreneurship and new ﬁrm formation is central to current thinking about economic growth, especially at the regional level and speciﬁcally in the formation of regional clusters of industrial innovation. Startup ﬁrms are the embodiment of innovation, especially for radical new technologies that are not easily absorbed into existing ﬁrms (Audretsch, 1995). New industries such as semiconductors, microcomputers, biotechnology, and information and communications technologies (ICT) have largely developed in geographically deﬁned clusters, and although this phenomenon is certainly not new, places with such colourful names as Silicon Valley, Medical Alley or Research Triangle have captured the public imagination as the vehicle for industrial change and economic development. A focal point for development policy is creating attributes that mimic the characteristics of successful locations. Typically, government policy aims to leverage the presence of local research universities, increase the availability of venture capital, encourage a culture of risk taking, and create strong local informational and business development networks. Once established, industrial clusters beneﬁt from virtuous, self-reinforcing processes. A critical question is how these entrepreneurial processes begin, take hold and transform a regional economy. Conditions that we observe in deﬁned clusters tell us how these systems function and the policy prescriptions that follow from studying these environments may not be appropriate for regions that are trying to development an entrepreneurial environment.1 Dubini (1989) characterized environment for entrepreneurship as either muniﬁcent or sparse. An...
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