Geography and Entrepreneurship

A Harvard Rappaport Institute for Greater Boston has been sponsoring a series of talks on geography and entrepreneurship. Now, it has released aPolicy Brief that explores the question of “Why are some metropolitan areas so much more entrepreneurial than others?” For example, startups can be found on every block in Silicon Valley, while in declining Rust Belt cities startups are far and few between.

Authors Edward Glaeser and William Kerr report that high levels of entrepreneurship are closely correlated with regional economic growth. This means that “state and local policymakers may well want to do more to encourage entrepreneurship in their communities.” They offer a few tentative policy insights:

  • Investing too much in attracting large, mature firms may not be good policy. 
  • “There is little reason to have much faith in the ability of local governments to play venture capitalist.”
  • Policymakers should focus on the quality of life policies that can attract smart, entrepreneurial people.
  • Good universities have faculty members who are involved in local start-ups and train students to be entrepreneurial.

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