Young Firms and Regional Economic Growth demonstrates how knowledge-intensive and Main Street entrepreneurs are critical to long-term economic success. Metropolitans and micropolitans that started with stronger entrepreneurial ecosystems, as measured by the share of total employment at firms age five years or fewer (young firm employment share) and by the share of employment at those young firms with a bachelor’s degree or higher (young firm knowledge intensity), saw notably faster employment growth between 2010 and 2017 in the United States.
Most Heartland communities did not participate fully in entrepreneurial-driven job growth. There are multiple causes for the subpar rate of job creation in the Heartland besides low engagement in entrepreneurial activities; lower educational attainment with less emphasis placed on innovation tied to research and development stands out among them. However, no other single factor can claim a higher explanatory power than entrepreneurial activities.
Huge financial incentives to lure manufacturing facilities or other operations into a region is no longer cost-effective. The key to long-term economic success lies in developing environments that are conducive for entrepreneurs to start and scale up their firms.
Read the rest of the piece at Heartland Forward.
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