IMPLICATIONS FOR ECONOMIC DEVELOPMENT: HOW STAKEHOLDER PERCEPTIONS INFLUENCE ENTREPRENEURISM A Dissertation Submitted to the Faculty of Argosy University, Sarasota College of Business In Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration by Richard J. Ferner, Jr. July, 2013
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Implications for Economic Development_How Stakeholder Perceptions Influence Entrepreneurism
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IMPLICATIONS FOR ECONOMIC DEVELOPMENT: HOW STAKEHOLDER
PERCEPTIONS INFLUENCE ENTREPRENEURISM
A Dissertation
Submitted to the Faculty of Argosy University, Sarasota
College of Business
In Partial Fulfillment of the Requirements for the Degree of
Doctor of Business Administration
by
Richard J. Ferner, Jr.
July, 2013
All rights reserved
INFORMATION TO ALL USERSThe quality of this reproduction is dependent upon the quality of the copy submitted.
In the unlikely event that the author did not send a complete manuscriptand there are missing pages, these will be noted. Also, if material had to be removed,
business assistance programs; (f) university support in the formation of human capital;
(g) adequate supply of highly specialized human capital; (h) maintaining sufficient
financial reserves; (i) establishing a niche in the local marketplace ; and (j) an inclusive
approach to economic development planning.
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TABLE OF CONTENTS
Page
TABLE OF APPENDICES ............................................................................................. viii
CHAPTER ONE: THE PROBLEM ....................................................................................1 The Problem .........................................................................................................................1 Research Question .............................................................................................................10 Purpose of the Study ..........................................................................................................10 Definition of Terms............................................................................................................11 Significance of the Study ...................................................................................................15
CHAPTER TWO: REVIEW OF THE LITERATURE .....................................................16 Uncertainty .........................................................................................................................17 Intellectual Capital .............................................................................................................20 Entrepreneurs .....................................................................................................................21 Government........................................................................................................................24 Business Assistance Programs ...........................................................................................27 Universities ........................................................................................................................32 Human Capital ...................................................................................................................36 Financial Capital ................................................................................................................39 Brand Promotion ................................................................................................................48 Economic Development Planning ......................................................................................52 Summary ............................................................................................................................73
CHAPTER THREE: METHODOLOGY ..........................................................................75 Research Design .................................................................................................................75
Population and Sampling Procedures ..........................................................................75 Instrumentation ............................................................................................................77 Procedures ....................................................................................................................79 Methodological Assumptions ......................................................................................84
Data Processing and Analysis ............................................................................................85 Limitations .........................................................................................................................85 Delimitations ......................................................................................................................86
CHAPTER FOUR: DATA ANALYSIS AND RESULTS ................................................87 One-to-One Interview Participation ...................................................................................87 One-to-One Interview Coding ...........................................................................................88 One-to-One Interview Data Analysis and Results .............................................................89
Frequency Analysis ......................................................................................................89 Uncertainty .............................................................................................................89 Intellectual capital ..................................................................................................89 Entrepreneurs .........................................................................................................90 Government............................................................................................................91 Business assistance programs. ...............................................................................92 Universities ............................................................................................................93
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Human capital ........................................................................................................93 Financial capital .....................................................................................................94 Brand promotion ....................................................................................................94 Economic development planning ...........................................................................95
Co-Occurrence Analysis ..............................................................................................96 Focus Group Participation ...............................................................................................100 Focus Group Coding ........................................................................................................101 Focus Group Data Analysis and Results ..........................................................................102
Frequency Analysis ....................................................................................................102 Uncertainty ...........................................................................................................102 Intellectual capital ................................................................................................102 Entrepreneurs .......................................................................................................104 Government..........................................................................................................104 Business assistance programs ..............................................................................105 Universities ..........................................................................................................106 Human capital ......................................................................................................106 Financial capital ...................................................................................................107 Brand promotion ..................................................................................................107 Economic development planning .........................................................................108
Co-Occurrence Analysis ............................................................................................109 Recent Local Econometric Trends and Research Results ................................................110
CHAPTER FIVE: DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS .112 Discussion ........................................................................................................................112
Uncertainty .................................................................................................................112 Intellectual Capital .....................................................................................................113 Entrepreneurs .............................................................................................................114 Government................................................................................................................115 Business Assistance Programs ...................................................................................115 Universities ................................................................................................................116 Human Capital ...........................................................................................................117 Financial Capital ........................................................................................................118 Brand Promotion ........................................................................................................119 Economic Development Planning ..............................................................................121
Conclusion .......................................................................................................................124 Research Question .....................................................................................................124 Research Goals ...........................................................................................................126
A. Vacancy Rate Figures ................................................................................................142
B. Establishments by NAICS Code ................................................................................144
C. One-to-One Interview Informed Consent Form ........................................................147
D. Focus Group Discussion Guide .................................................................................149
E. Focus Group Informed Consent Form .......................................................................152
F. One-on-One Interview Codes ....................................................................................154
G. One-to-One Interview Co-occurrence Model ............................................................157
H. Focus Group Codes ....................................................................................................159
I. Focus Group Co-occurrence Model ...........................................................................164
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CHAPTER ONE: THE PROBLEM
The Problem
The 2012 3rd Quarter Florida Small Business Index Survey, incorporating the
responses from 807 participants, revealed 64% of small business owners worry they will
be adversely impacted by regulations, restrictions, and taxes (Florida Chamber of
Commerce Small Business Council, 2012). In the context of willingness to engage in
hiring employees, 31% of respondents planned to do so in the next 6 months. In addition,
41% of respondents identified economic uncertainty as an impediment discouraging them
from hiring new employees, while 37% stipulated a lack of sales revenue to be an
inhibitor. In the context of access to capital, 73% of respondents reported they were not
able to secure financing over the last 6 months, which was a significant increase from the
41% reported in March of 2012. In the context of confidence in lending institutions, 52%
felt it would be harder to secure financing in the next 6 months. In the context of the top
five important issues facing Florida small businesses, 33% selected economic
uncertainty, 26% access to capital, 9% growth management process, 8% government
regulations, and 5% taxes (Florida Chamber of Commerce Small Business Council,
2012). Three years prior to this survey, DeLisle (2009) predicted this sentiment by
stipulating the nation had shifted from a market-based economy to a political economy
and indicating uncertainty would prevail until a bipartisan solution could be
implemented. To illustrate the nature of this concern, DeLisle stated:
The result of all this negativity has been a collapse in business confidence levels, which has placed many businesses on the defensive. In order to turn the corner in this downward cycle, credit flows and business confidence will have to be restored and bear close monitoring. (p. 11)
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Colvin (2012) corroborated the findings reported by the Florida Chamber of
Commerce Small Business Council (2012) and DeLisle (2009) by stating economists had
detected significantly higher levels in the index of policy uncertainty (developed by
Stanford University and the University of Chicago). Colvin concluded heightened
uncertainty over tax and regulatory issues had instilled a lack of confidence in the
stability of economic policies, causing investors and business leaders to postpone capital
investment and hiring. DuBois (2012) stipulated the lack of bipartisanship in
Washington had instilled a sense of paralysis among business leaders and it was unlikely
abatement in the current state of affairs would occur until certainty had been restored. To
illustrate the impact of business uncertainty about Washington, MacDonald (2012)
posited the impasse had increased the nation’s unemployment rate by at least one
percentage point since early 2008. To overcome such concerns, Koba (2012) contended
all levels of government could improve the confidence of the business community by
being more supportive of entrepreneurs and innovators through the provision of the right
mix of incentives and fewer barriers to market entry. In the event that government cannot
and will not play a supportive role, DuBois recommended business leaders diversify their
portfolios and focus on medium- and long-term business opportunities to promote
growth.
This author’s assessment of the level of support provided to entrepreneurs in the
St. Petersburg area revealed a loose agglomeration of business assistance programs, some
of which fall under the auspices of the St. Petersburg Business Alliance (SPBA).
Noteworthy business assistance programs within the City of St. Petersburg include
City of St. Petersburg Business Assistance Center,
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St. Petersburg Area Chamber of Commerce;
SCORE (national non-profit organization);
Florida Small Business Development Center (SBDC) at the University of
South Florida; and
SBDC at Pinellas County Economic Development.
Each program provides a range of services, to include: (a) entrepreneur training,
government, (e) business assistance programs, (f) universities, (g) human capital, (h)
financial capital, (i) brand promotion, and (j) economic development planning influence
entrepreneurism in St. Petersburg, Florida.
Uncertainty
Koetse, Van der Vlist, and de Groot (2006) revealed that as uncertainty increases,
the benefits of delaying investment decisions can be especially acute when considering
the degree of irreversibility (e.g., sunk costs, long-term financial compacts, etc.) of an
investment. Large firms typically possess a greater advantage over smaller rivals when
considering the availability of information. Information derived from financial expertise
and resources enable larger firms to seize upon opportunities to hedge against risk and
uncertainty (Koetse et al., 2006). In addition, Koetse et al. contended that increased
18
uncertainty often has a substantial effect on investment spending, especially for smaller
firms. Despite the advantages larger firms possess, unforeseen uncertainty can derail
even the best laid plans. Sommer et al. (2009) stipulated that even the most rigorous risk
planning methods are insufficient when it comes to the unexpected. To overcome this
challenge, both large and small firms should rely on selectionism and trial-and-error
learning to establish whether their product or service can demonstrate its true market
potential even when encumbered by complexity and uncertainty. Such methods are often
evidenced by the application of iterative testing cycles to identify and adapt to rapidly
changing technologies, changing customer tastes, and significant regulatory changes
(Sommer et al., 2009). For start-ups in an environment of moderate complexity and high
uncertainty, Sommer et al. recommended entrepreneurs develop a detailed plan, focus on
learning, and invest significant effort in identifying unknown factors as the best strategy
for reducing knowledge gaps.
Interestingly, Freel (2005) and Van Gelderen, Frese, and Thurik (2000) looked
upon uncertainty as a prerequisite for entrepreneurism and innovation. To illustrate this
position, Freel stated:
Accepted wisdom now holds uncertainty as a first principle – that is, as a cause, rather than a consequence, of entrepreneurship and innovation. The bounded rationality and knowledge imperfections of market participants (i.e., uncertainties in the relevant environment) create indeterminate opportunities for profit through the introduction of novelty. (p. 49)
As creative destroyers, entrepreneurs must develop measures to assess environmental
uncertainty to compensate for their own limited learning capabilities and lack of
knowledge about cause and effect relationships (Freel, 2005; Van Gelderen et al., 2000).
Freel (2005) recommended an emphasis on the following environmental
from cross-industry spillovers make the community more appealing to firms and
entrepreneurs.
Downtown areas often serve as the epicenter for business firm agglomeration and
knowledge spillovers. R. Baker (2011), a former mayor of the City of St. Petersburg,
illustrated this position by stating:
A downtown is more than a location on a map. It is where a city defines itself, and it is the prism through which the outside world views the city. Downtown is a city’s heart, so if a city is to thrive, its heart must be strong. A downtown with a large commercial, office, and residential base will contribute significantly to the tax rolls of the city with the effect of reducing the tax burden on residents in the city’s neighborhoods, helping residents throughout the city save money. But
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downtown is more than just a revenue producer. The city center contains many of the community’s businesses, apartments, restaurants, parks, and museums. The major events typically occur there. When it works, downtown becomes the gathering place for the entire city and the surrounding areas. (p. 52)
In addition, R. Baker stipulated that companies and employees alike are attracted to
downtown areas with a higher perceived quality-of-life. Likewise, if vibrancy improves,
there is a significant likelihood that businesses will want to join the downtown
community (R. Baker, 2011). Ultimately, Florida (2012) contended human capital
clusters are responsible for the agglomeration of business firms, which in turn,
concentrate to seize upon the advantages that are derived from common labor pools, not
just to take advantage of linked networks and suppliers.
Entrepreneurs
Relying on quantitative data from 1990 to 2001, Gupta and York (2008) reported
areas of the United States with the highest entrepreneurial growth experienced 125%
higher employment growth, 58% higher wage growth, and 109% higher productivity. In
the context of facilitating conditions that foster job creation, Audretsch and Keilbach
(2005), Corman et al. (1996), Falcone and Wilson (2008), Florida (2012), Gupta and
York (2008), Lerner (2010), Renski (2009), and Yusuf (2010) contended it is essential for
local stakeholders to establish a culture of support to attract and anchor entrepreneurial
firms. To illustrate the importance of this position, Florida (2012) noted creative
individuals require a supportive environment comprising a broad array of social, cultural,
and economic stimuli. Likewise, Smedlund (2006) stipulated stakeholders can facilitate
this endeavor by promoting interconnected networks supported by the collaboration of
regionally embedded institutions (e.g., governments, chambers of commerce, employer’s
unions, banks, science parks, universities, and training centers).
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Acting as intermediaries, these institutions rely on interconnected networks to
facilitate knowledge transfers for the purpose of attracting financial and creative human
capital (Smedlund, 2006). To illustrate the importance of this issue, Gupta and York
(2008) stated:
Entrepreneurial climate is important not only in creating nascent entrepreneurs, but also in promoting the transition from entrepreneurial attitudes to firm formation and growth. As such, a key topic for entrepreneurship research is to understand what general populations, as well as small business owners’ attitudes are toward entrepreneurship and small business. (p. 349)
Henderson (2002) stipulated that entrepreneurial activity has been recognized for
up to a third of the difference in economic growth rates between nations, contributing
favorably to gross domestic product (GDP). Likewise, Doh (2000) stipulated
entrepreneurial firms demonstrate the following advantages: (a) proactive toward
marketplace opportunities, (b) risk tolerant, (c) innovative, and (d) adaptive to changing
economic conditions. To demonstrate the importance of entrepreneurism in the United
States, Yusuf (2010) reported 70% of the nation’s economic growth was derived from its
associated activity and 67% of all inventions and 95% of all radical innovations created
since World War II have been originated by this method for economic growth.
Bednarzik (2000) defined entrepreneurship as “any attempt at new business or new
venture creation, such as self-employment, a new business organization, or the expansion
of an existing business, by an individual, a team of individuals, or an established
business” (p. 14). Lichtenstein, Lyons, and Kutzhanova (2004) stipulated that
entrepreneurs often act in the capacity of a marriage broker––demonstrating what is
desirable from an economic (opportunity) perspective and what is possible from a
technological (innovation) perspective. Essentially, an entrepreneur’s primary goal is to
create or capitalize on new economic opportunities through the process of innovation.
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Entrepreneurs develop novel solutions to existing problems or establish connections
between existing solutions and unmet needs or new opportunities (Lichtenstein et al.,
2004). Likewise, Ho and Wong (2006) contended that entrepreneurs are motivated by
either marketplace opportunities or necessity––driven to self-employment by the absence
of alternative employment. In the context of what facets characterize entrepreneurial
start-ups, Falcone and Wilson (2008) contended:
Entrepreneurs often lack deep managerial or industry experience.
Businesses tend to be low investment, high uncertainty, have low potential for
profit, and lack start-up capital to secure large returns.
With limited start-up capital, high uncertainty, and minimal planning,
entrepreneurs must be adaptive.
Without a track record, entrepreneurs often have difficulty securing resources,
which requires them to make tradeoffs to gain the assistance of investors.
Entrepreneurs need to have a tolerance for ambiguity and possess a solid work
ethic in the initial stages of development.
Renski (2009) stipulated that entrepreneurship was the key to reinvigorating
communities in the United States as evidenced by its close ties to the formation of human
capital and regional economic growth. Likewise, Degan (2010) described entrepreneurs
as agents of creative destruction who promote innovation by rendering more expensive or
lower performing products or services as obsolete and introducing value added
alternatives that are less costly and more efficient. Lichtenstein et al. (2004) contended
human capital is the key element in developing an entrepreneurial society. Gupta and
York (2008) and Henderson (2002) reported that in the decade preceding the economic
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recession of 2007, entrepreneurs facilitated an estimated 75% of the 500,000 jobs created
on an annual basis.
Government
In the context of government’s role in facilitating start-ups and existing business
expansion, Corman et al. (1996) contended resources should be directed at the provision
of quality education programs (e.g., supporting the formation of a highly-skilled
workforce), reliable infrastructure (e.g., roads, transportation, utilities, etc.), and
efficiency and timeliness in helping firms make appropriate decisions (e.g.,
standardization of regulations, etc.). Despite the level of clarity encompassing local
government’s role in promoting favorable economic conditions, one of two approaches
are typically relied upon––local governments take no action and allow the marketplace to
resolve such challenges or they take an active role and engage in intervention. During
recessionary periods, however, intervention is often an essential strategy to sustain
businesses until the next expansionary period (Corman et al., 1996).
To illustrate the critical nature of government intervention during recessionary
periods, Corman et al. (1996) stated:
The need for capital during recessions was ranked fourth in difference between importance and satisfaction. However, during the expansion period, it dropped from the top 10 list of discrepancies between importance and satisfaction. An important consideration for public policy makers is to make capital available to small business owners during periods of recession a high priority and less of a priority during expansion periods. The Small Business Administration (SBA) is doing the opposite. During the recession the SBA was not making many loans, but in 1995 during the expansion the SBA determined that making loans was a top priority. Public policies were in contradiction. At the same time the SBA was making loans available to stimulate the economy, the Federal Reserve was raising interest rates to slow down economic growth. During periods of expansion, the emphasis should change from making loans and toward further development of the infrastructure and other factors listed. (p. 5)
25
In the context of suitable intervention strategies, Corman et al. recommended
governments avoid public policy contradictions and cut taxes during recessionary periods
as a means of increasing consumer demand to stimulate sales. Likewise, small
businesses should establish reserves during expansion periods to compensate for capital
scarcity during recessionary periods (Corman et al., 1996). Doring et al. (2010)
recommended governments ensure their administrators remain flexible, timely, and
develop a well-functioning regional network (e.g., cooperation with the Chamber of
Commerce, regional academic research institutions, and decision-makers at all levels of
government). In contrast, Doring et al. revealed extensive subsidies for businesses,
comparatively high per capita expenditures for cultural and social activities, as well as
deficiencies in the industrial real estate management of a municipality adversely affect a
local economic climate. In the context of privatization of public services and targeting
businesses for existing industrial clusters strategies, Doring et al. found none of these
activities had a positive impact.
To achieve positive outcomes, Maloney and Wassall (2013) recommended
community partnerships between local leaders representing: (a) an intermediary
organization, (b) the local government, and (c) representatives of the cultural community
(through grant funding and technical assistance). In addition, Maloney and Wassall
stipulated local government, as a partner, should perform the following tasks:
direct services, by providing direct funding, signage, and infrastructure
improvements;
indirect services, by providing meeting space and marketing, communications,
and social media assistance; encouraging government employees and officials
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to attend meetings, speaking publically about the importance of the arts; and
giving the community opportunities to be heard; and
provide a local seal of approval by announcing local government support of
the arts and cultural projects.
In addition, Maloney and Wassall stipulated the most important factor in the success of
cultural economic development was the local government. In essence, local government
leaders, resources, and its innate ability to bring stakeholders together demonstrate the
importance of its influence in economic development partnerships. Ideally, an effective
partnership-based strategy would endeavor to: (a) increase attendance at cultural events,
(b) encourage people to visit the downtown area, (c) increase sales of cultural goods, (d)
encourage knowledge workers to relocate to the local community, and (e) increase
cultural tourism (Maloney & Wassall, 2013).
Schmitz (2013) recommended local governments establish cultural tax districts as
an effective policy tool for supporting the expansion of the local arts community.
Providing clarity, Schmitz contended the cultural tax districts support the investments in
local culture, increase direct local spending on the arts, and help develop an educated
workforce. Conversely, Pedroni and Sheppard (2013) criticized this approach by
stipulating that the link between culture and economic prosperity may have adverse
characteristics. As such, if too many resources are allocated to culture production, that
may inhibit investments in schools, roads, and other infrastructure. In essence, Pedroni
and Sheppard introduced the possibility that the production of culture may yield short-
term benefits, but there was little evidence of a causal connection to economic prosperity
in the long-run.
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Business Assistance Programs
Despite increasing demands for business assistance (government agencies,
business programs, and voluntary groups manage 74% of assistance programs studied),
Yusuf (2010) contended that support programs only meet entrepreneurs’ needs 26% of
the time. To illustrate the importance of a public agency’s role in fostering
entrepreneurial activity and business incubation, Henderson (2002) reported this method
of job creation costs $1,000 less per new position than alternative job creation strategies.
Yusuf stipulated that such programs are poorly aligned with entrepreneurs’ latent and
expressed needs. In addition, support programs and other forms of assistance are critical
to the success or failure of business start-ups, especially in the initial stages of
development.
Entrepreneurial assistance is the most common intervention method applied by
governments at all levels. Assistance often takes the form of training, information, and
advisory programs. These types of assistance are critical because they can provide the
impetus for helping entrepreneurs develop the capacity to engage in strategic planning,
which contributes favorably to the financial performance and survivability of small
businesses (Lussier, Sonfield, Corman, & McKinney, n.d.). For example, Jones and
Tullous (2002) revealed that one in four pre-venture entrepreneurs go into business after
receiving Small Business Development Center (SBDC) assistance counseling and among
those that actually establish operations, 86% remain in business after 2 years. In
(d) service-learning field projects, and (e) guest speakers in the classroom. Interestingly,
33
university faculty ranked technical assistance last and degree-related teaching and basic
research first and second in terms of desired activities. Conversely, Chamber of
Commerce directors rated basic research last and technical assistance first in terms of
desired activities (Bacdayan, 2008).
In the context of establishing community-classroom links, Bacdayan’s (2008)
survey research incorporating responses from a sample of 138 university faculty and 142
Chamber of Commerce directors revealed strong universal support for degree programs
for working adults, class projects, and internships. Hamilton (2008) contended the best
method for inspiring economic growth was a coordinated strategy collectively
implemented by all stakeholder institutions. Falcone and Wilson (2008) recommended a
strategic approach to economic development, specifying such an endeavor was a heuristic
process that requires the formation of a business incubator that integrates the resources
and expertise of the local university, development organizations, government functions,
the local Chamber of Commerce, and private industry. Likewise, Bacdayan
recommended community stakeholders establish alliances that incorporate the expertise
and resources of universities, community colleges, economic development agencies, and
small business development centers to provide technical assistance, help identify export
markets, and provide skills training.
Despite the contention that institutions for higher learning should play a limited
role in economic development, Huffman and Quigley (2002) stipulated universities
should play a major role in attracting human capital and stimulating entrepreneurial talent
in the communities in which they reside. Huffman and Quigley’s research involving the
University of California (Berkley, Stanford University, and Silicon Valley) revealed
34
universities can influence geographic patterns of agglomerations of scientific firms and
contribute favorably to returns on government investment in terms of augmented human
capital stock that possess the skills innovative firms demand. Relying on historical
narrative, Huffman and Quigley stipulated the links between industry and universities
were initially established in the 1940s when Fredrick Terman, Dean of the Stanford
University School of Engineering, grew weary of watching talented students leave the
region upon graduation. Dr. Terman envisioned and initiated efforts to establish a center
of high technology in immediate proximity to the Stanford campus, which ultimately
became known as the Stanford Industrial Park. In addition, Stanford University offered
leases to encourage start-ups to establish operations and take advantage of: (a) access to
university research, (b) ongoing collaboration, and (c) improved access to graduate
students in the fields of physics and engineering. Ultimately, Stanford’s initiative would
serve to attract national aerospace, electronics, and semi-conductor firms, leading to the
inevitable transformation of the Santa Clara Valley to the more widely regarded Silicon
Valley region (Huffman & Quigley, 2002). To illustrate the significance of this
transformation, Huffman and Quigley stated:
The presence of two world-class scientific and research universities that were actively involved in Silicon Valley industry created a scientific milieu unparalleled elsewhere in the nation. The symbiosis between Silicon Valley and local universities has continued to generate economic benefits for the state and the nation. For example, by 1996, according to a Stanford Business School study, as many as 100 Stanford start-ups in Silicon Valley have generated more than $65 billion in economic output. (p. 406)
Inevitably, the University of California – Berkley (U.C. Berkley) would establish
businesses incubators that provided office space, equipment, and guidance from
professors and successful entrepreneurs to attract capital and promote the profitability of
local firms. In the context of establishing linkages with the business community, U.C.
35
Berkley relied on business plan competitions to encourage entrepreneurial activity,
establish networks, and secure funding sources. In addition, judges were often members
of venture capital firms or served as business consultants (Huffman & Quigley, 2002).
Huffman and Quigley’s quantitative research revealed business students with California
residence at the time of their application to U.C. Berkley were associated with a
statistically significant increase in the probability of living in California after their
graduation. In applied terms, these findings add substantial weight to the role universities
play in economic development and job growth. Ultimately, this phenomenon was
evidenced by Huffman and Quigley’s findings, which revealed the probability of
retaining talented human capital had been increased by an estimated 20 percentage
points, increasing California GDP by nearly $3.75 million for every five out-of-state
students who were attracted to U.C. Berkley and increasing tax revenues by nearly
$375,000.
In order for a university to serve as an effective contributor to economic growth,
Florida (2012) contended institutions for higher learning must play three interrelated
roles:
Technology: serve as centers for cutting-edge research in the fields of
software, biotechnology, etc.;
Talent: serve as talent magnets attracting eminent researchers, generating
spin-off companies, and encouraging other companies to relocate to the
region; and
Tolerance: foster progressive, open, and tolerant people who attract other
members of the creative class.
36
Considering these roles, Florida (2012) stipulated that major research universities are
essential for the formation of a creative economy by serving as a hub for innovation and
knowledge spillovers.
Human Capital
Doring et al. (2010) contended the availability of a highly-qualified workforce is
essential for attaining benefits associated with knowledge spillovers and the close
proximity to universities and scientific research institutions can contribute favorably to
the formation of adequate human capital. Doring et al. revealed a positive correlation
between how an area is equipped with universities and academic research institutions and
the innovative capacity of local businesses engaged in knowledge production. To
illustrate the value of a highly-skilled workforce, Doring et al. stated:
Municipalities or regions with skilled labor and high levels of specialized human capital are more likely to attract innovative networks than less endowed areas. This position was confirmed by a survey of 84 businesses in the northeastern U.S. which found that the availability of skilled labor is the most important factor in influencing business site selection decisions. (p. 245)
For entrepreneurs to build and operate a sustainable business, they must acquire,
mobilize, and deploy the following resources: (a) financial capital, (b) access to markets,
and (c) availability of information (Sherman, 1999; Sriram, Mersha, & Herron, 2006).
Likewise, Appelbaum and Kamal (2000) and Earle (2003) stipulated entrepreneurs must
recruit and retain talented employees to remain competitive in an economic landscape
dominated by large global business enterprises. The successful recruitment and retention
of talented employees require firms to:
recruit, hire, and develop talented employees who are aligned with strategic
business goals;
37
grow and adapt quickly to a rapidly changing business environment; and
develop ways to help employees balance workplace demands with the need
for work/life balance (Horwitz, Chan, & Quazi, 2003).
Failure to abide by these tenets may compromise the competiveness, intellectual
capital, cultural fabric, and institutional knowledge of the firm (Horwitz et al., 2003).
Because small businesses often lack the financial capital to match the compensation and
fringe benefits offered by their larger competitors for human capital, Appelbaum and
Kamal (2000) posited entrepreneurs must emphasize non-monetary benefits. Such
R. Baker (2011) contended quality-of-life could serve as a powerful recruitment
tool to attract talented human capital. Specifically, R. Baker stipulated business firms
must recognize potential employees will be attracted to communities with a reputation for
a high quality-of-life and a progressive outlook. Employers who recognize such external
benefits are in effect expressing their commitment to existing and would-be employees
(R. Baker, 2011). In addition, R. Baker expressed the importance of community green
initiatives (e.g., bike paths, tree plantings, nature preserve expansion, etc.) as an essential
element in enhancing quality-of-life far and above the benefits associated with
conventional amenities.
38
Earle (2003) contended employers must recognize they must expend great effort
to establish an organizational identity that can be clearly distinguished from their larger
competitors. In effect, employers must gain an understanding of how various perks are
valued among employees and how the physical work environment can be engineered to
help shape a firm’s organizational culture, facilitate communication, promote teamwork,
and inspire creativity to help sustain a culture of continuous innovation. For example,
Earle noted office design is often relied upon to differentiate a firm in terms of its
competitiveness as an employer and indicated many employees prefer surroundings that
inspire creativity. Recognizing motivational differences in terms of cultural context,
demographic characteristics of the workforce, and generational differences can contribute
to a more effective recruitment and retention strategy. As such, compensation alone may
not inspire employees (Earle, 2003).
Under conditions where employers operate in a distressed economy, the ways in
which companies make use of workspace may be even more important. For example,
Earle (2003) contended salaries and benefits accounted for 78% of organizational costs,
while rent, operating, and maintenance costs accounted for 8%. In the context of perks,
employers should consider integrating value-added amenities, such as: (a) free exercise
classes, (b) chair massages, (c) an on-site health clinic, (d) a state-of-the-art fitness
facility, and (e) on-site child care. Leveraging the work environment to improve the
efficiency, motivation, and productivity of employees can help firms attain greater
returns on human capital costs. Employers must not presume a distressed economy will
keep talented employees anchored as they will always be in demand. As such, employers
must remain concerned about their firm’s reputation as this can influence employee
39
perceptions on how the actions of their employer affect its reputation. A firm’s leaders
must consider how the firm is perceived in terms of how it values employees in the
context of concern for well-being and quality-of-life in the workplace (Earle, 2003). To
demonstrate the importance of talented employees, Florida (2012) stated:
A company’s most important asset isn’t raw materials, real estate, machinery, transportation systems, or political influence. It is its creative capital – its arsenal of creative thinkers whose ideas can be turned into valuable products and services. Successful companies recognize that their most valuable assets walk out the door every evening; they dedicate their best efforts to ensuring that they come back and give their very best every morning. (p. 120)
Financial Capital
Sufficient access to capital is an essential element to new business formation,
expansion, and the survival of existing firms through refinancing options (Elston &
Audretsch, 2011; Kobeissi, 2009). Elston and Audretsch (2011) contended the riskiness
of borrowers often leads suppliers of financial capital to limit access to loans. This is
problematic because entrepreneurs are typically less risk adverse than are conventional
lending institutions. This phenomenon is evidenced by survey research that revealed
84% of entrepreneurs had experienced a shortage of capital at one time or another and
48% were currently experiencing liquidity constraints (Elston & Audretsch, 2011). In the
context of the different sources of capital that fund start-ups, Elston and Audretsch
reported entrepreneurs often relied on: (a) earnings from a second job (58%), (b) private
loans (21%), (c) credit cards (13%), (d) small business grants (9%), (e) inheritance (3%),
and (f) gifts (1%).
Recognizing the importance of capital availability and its role in facilitating
economic growth, the federal government introduced the Community Reinvestment Act
of 1977 (CRA), which was intended to boost federally insured financial institution
40
(excluding mortgage companies, finance companies, and credit unions) investment in
low-income communities. Under the Act, obligated financial institutions were
encouraged to identify borrowers in low- and moderate-income communities (Kobeissi,
2009). Despite the federal government’s intentions, bankers have resisted CRA
regulations, disputing advocates’ contentions that the community is a legitimate
stakeholder in affairs associated with economic growth. Bankers have regarded CRA
regulations as burdensome and costly, charging that such provisions have restricted
economic growth by forcing them to engage in unsafe and unprofitable investment
practices. Furthermore, bankers have contended their institutions can no longer be
regarded as local industries and should not be compelled to make investments in local
geographic areas where there are higher lending costs (Dymski, 1996; Kobeissi, 2009).
Advocates of the CRA contended the obligated financial institutions’ grievances
are unwarranted because the federal government offsets higher lending costs by
providing: (a) underpriced deposit insurance, (b) access to the Federal Reserve discount
window, and (c) barriers to entry (Kobeissi, 2009). Likewise, Kobeissi (2009) contended
numerous studies examining the effect of the CRA on bank financial performance
revealed no long-term adverse or favorable impacts on these institutions. Kobeissi
reported that in 2006, CRA obligated financial institutions extended 11.1 million micro
loans valued at $116.2 billion and 11.6 million small business loans (under $1 million)
valued at $289.8 billion. While there appeared to be no direct impact on financial
performance, other studies did suggest some potential indirect benefits associated with
CRA compliance. Indirect benefits associated with increased lending in concentrated
areas included: (a) improved lending application efficiency, (b) improved information
41
gathering and the ability to identify high-quality loans, and (c) improved externalities
such as increased property values (Kobeissi, 2009).
Kobeissi (2009) expressed concerns that geographic and product deregulations
and mergers and acquisitions of numerous financial institutions have had an adverse
impact on low- and moderate-income markets and households. Critics of the banking
industry have stipulated these larger banks charge higher prices, are less sensitive to
community impact, and are less willing to make small and less standardized loans. In
addition, critics charge that larger banks are devoting a smaller percentage of their
financial portfolios to small business lending and have engaged in widespread bank
consolidations and branch closings in low-income communities that have already been
underserved (Dymski, 1996; Kobeissi, 2009).
Ho and Wong (2006) and Kobeissi (2009) contended that commercial banks have
often been considered to be the most important supplier of credit to small business.
Relying on a 2003 survey, Kobeissi reported 60.4% of small business establishments
relied on traditional forms of credit (e.g., credit lines, loans, capital leases, etc.) and 68%
obtained credit from the banking industry. In the context of business start-ups, Ho and
Wong (2006), Kobeissi (2009), and Lerner (2010) stipulated that numerous studies have
established a link between credit availability and firm creation, suggesting liquidity
constraints among new businesses can have an adverse impact on entrepreneurism.
Ultimately, new firm and entrepreneur access to bank financing may be constrained by a
lack of collateral, a limited track record, and an inability to communicate current and
future capabilities (Ho & Wong, 2006).
42
Kobeissi’s (2009) quantitative research (relying on regression) demonstrated a
positive and significant relationship between CRA loans, bank deposits, per capita
income, market size (independent variables), and business start-ups (dependent variable).
Kobeissi proposed that new businesses generated by CRA loans would facilitate the
emergence of positive spillover effects, enhancing economic development, employment,
and economic growth. For example, a study commissioned by the Small Business
Administration entitled, The Innovation-Entrepreneurship Nexus: A National Assessment
of Entrepreneurship and Regional Economic Growth and Development, examined the
link between entrepreneurship and regional economic growth from 1990 to 2001 and
ultimately, revealed the most entrepreneurial regions, compared to the least ones,
experienced superior economic conditions (Kobeissi, 2009). Favorable economic
conditions were expressed by 125% higher employment growth, 58% higher wage
growth, and 109% higher productivity (Kobeissi, 2009). In addition, Kobeissi contended
financial institutions that maintain a close relationship with their small business
customers have a better understanding of the operating environments and prospects of
new businesses, managerial attributes of business owners, and customer needs and
resources. Ultimately, an improved understanding of the fundamentals that impact the
small business community can serve to mitigate the adverse impact of information
asymmetries (Kobeissi, 2009).
Lerner (2010) contended the recession that was officially declared in December of
2007 and the ongoing challenges in its aftermath have resulted in a substantial negative
effect on investors’ willingness to finance entrepreneurial ventures. For example, venture
capital investment had dropped by 30% in the fourth quarter of 2008, which was at its
43
lowest level since 2005. As of 2009, there was little evidence of a sustained economic
university endowments, and wealthy individual investors) were directing their investment
capital into existing portfolio companies as opposed to start-ups. Risk aversion is
prevalent and there is additional evidence to demonstrate investors are reneging on
existing commitments to new ventures. This situation is particularly problematic for the
U.S. economy because industry leadership has often been achieved through the efforts of
relatively young firms (e.g., Cisco, Intel, Microsoft, etc.) whose growth was facilitated
through public equity market financing (Lerner, 2010).
Lerner (2010) illustrated the importance of the role of small firms in the economy
by stating:
It appears that small and new firms not only have contributed an important share of research and development themselves, but they also have had in many cases a disproportionate influence by introducing fresh technologies and business models that incumbent firms have struggled to address. (p. 9)
In essence, small firms have outpaced established competitors in terms of meeting
customer needs and introducing new products. While established firms have innovated at
a higher rate (focusing on incremental technological improvements), they have
consistently lagged behind new ventures in developing products on the technological
frontier. Considering these implications, it is evident the nation’s and a local
community’s competitive positioning is highly dependent on the viability of
entrepreneurial ventures (Lerner, 2010).
In the context of the performance of public markets, Lerner (2010) contended
unreasonable swings in investment activity often contribute to over- and under-
investment in entrepreneurial finance options. Lerner stipulated that financial institutions
44
typically attempt to maintain a fixed percentage of their portfolios in each asset class. As
such, when public equity values increase, these institutions are more likely to allocate
more assets to venture capital. Unfortunately, overly optimistic valuations may lead to an
over-shooting phenomenon, directing excessive amounts of capital to business ventures
with poor fundamentals and depriving capital to firms with a stronger foundation (Lerner,
2010). In the context of the performance of venture capital, Lerner contended the most
effective policies were those that emphasized increased efficiency of private markets over
the long-term, rather than providing short-term funding to new firms during market boom
periods.
Kobeissi (2009) charged that financial institutions have failed to make sufficient
capital available to small business. Harmful practices such as redlining, discrimination,
and outright neglect have contributed significantly to deteriorating conditions (e.g.,
chronic poverty, unemployment, an unskilled labor force, high crime rates, and poor
infrastructure) in many underserved communities. Likewise, Dymski (1996) contended
that government programs for economic development have also failed to facilitate
economic growth. The failure of government programs was attributed to: (a)
fragmentation, (b) emphasis on individuals and firms rather than impacted areas, and (c)
confusing social goals with the necessity to establish profitability (Dymski, 1996).
Dymski charged that the government was a poor substitute for providing capital and
mainstream firms should be encouraged by the government to deliver smart subsidies
such as reduced capital gains taxes on venture capital equity investment in inner-city
firms. In light of such financing constraints, Keuschnigg (2004) and Ho and Wong
(2006) contended that informal investment (e.g., angel investors) may be the only
45
remaining form of financing that contributes significantly to entrepreneurial propensity
and innovation-based growth.
Holaday, Meltzer, and McCormick (2002) and Maula, Autio, and Arenius (2005)
stipulated that ideal angel investors often take the form of early-stage investors who are
locally-based, have personal familiarity with the entrepreneur, have practical industry
experience, have owned or managed firms, possesses the skills to start a new business,
have the time to share their expertise, and are willing to introduce entrepreneurs to
members (e.g., other angel investors, attorneys, accountants, etc.) of their network.
Ultimately, provided that entrepreneurs exhibit the potential for favorable returns on
investment, angel investors can introduce entrepreneurs to venture capitalists, who in turn
supply the next round of financing and guidance (Holaday et al., 2002).
Keuschnigg (2004) and Ley and Weaven (2011) contended that venture capital
plays an important role in enhancing a new firm’s ability to generate wealth and jobs.
For example, Keuschnigg reported an increase in the GNP share of venture capital by
0.075% would facilitate the reduction of a short-run unemployment rate by .025%, while
the long-term effect would result in a reduction in unemployment of 0.9% to 2.5%.
Likewise, the presence of an active venture capital sector can favorably impact the
macroeconomic performance of local economies and in terms of potency, venture capital
can deliver three times the performance in establishing new patents (Keuschnigg, 2004).
Ley and Weaven contended venture capital bridges the gap in access to financial capital
in an environment laden with information asymmetries, risk, a higher probability of
failure, and assets that are difficult to liquidate. Venture capitalists attain favorable
and (c) closely monitoring firms. Engaging in such practices is likely to add value to new
firms, promote a sense of professionalism, insulate investors from the possibility of
business failure, and encourage entrepreneurs to be more aggressive in the competitive
marketplace. Venture capitalists provide sufficient start-up capital in exchange for an
equity stake and provide advice and expertise to help develop the firm. Venture
capitalists mitigate risks, ensure the firm enters the production stage, and sell their
interests to attain a favorable ROI. Ultimately, the equity share venture capitalists
demand is congruent with the level of effort they must expend in advising entrepreneurs
and the quality of their returns can be heavily influenced by government policy on capital
gains tax (Keuschnigg, 2004).
In the context of the criteria venture capitalists rely on to screen firms, Bishop and
Nixon (2006) contended analysts assess survivability by evaluating:
the entrepreneur’s familiarity with the proposed target market, leadership
ability, and track record (industry related competence);
the entrepreneur’s work ethic and level of market acceptance (market
education capability);
probability of significant growth in the target market timing of entry and
competitive rivalry);
the entrepreneur’s attention to detail and ability to evaluate and respond to
risks (key success factor stability); and
probability of proprietary or patent protection and the ability to attain returns
on investment (lead time and barriers to entry).
47
Zacharakis, Meyer, and DeCastro (1999) stipulated the venture capital screening process
facilitates the superior performance of investment portfolios. For example, Zacharakis et
al. reported that only 18% of venture capital funded firms failed within 7 years of
establishing operations, while 75% of non-funded firms failed in the same time period.
Despite this survivability ratio, Zacharakis et al. (1999) reported that only 20% of
venture capital funded firms yield adequate returns. In the context of evaluating why
venture capital backed firms fail to perform, Zacharakis et al. theorized that as a firm
progresses through its life cycle, management skills become more important than
entrepreneurial skills. As such, entrepreneurs may reach their executive limit and fail to
manage their firms in ways that are essential for promoting growth. Such circumstances
are regarded as an internal cause for business failure as opposed to an external cause for
business failure, which are often manifested by adverse economic policies propagated by
the Federal Reserve and market volatility (Zacharakis et al., 1999). In the context of the
general performance of venture capital funded firms, Zacharakis et al. revealed that 89%
of entrepreneurs attributed business failure to internal factors, while 66% of venture
capitalists attributed failure to external factors. Interestingly, when considering the
performance of their own firm, 58% of entrepreneurs and 84% of venture capitalists cited
internal factors. Zacharakis et al. posited these results provide evidence of attribution
error on the part of entrepreneurs and venture capitalists at the onset of operations and the
cause of business failures were likely associated with management and its inability to
recognize the marketplace and develop the capacity to assess market size and
accessibility. These findings are consistent with the basic premise of attribution theory,
which stipulates individuals often attribute their failures to environmental conditions but
48
others’ failures to personal flaws. Ultimately, both entrepreneurs and venture capitalists
should rely on such experiences to improve their effectiveness in future ventures to avoid
undesirable outcomes (Zacharakis et al., 1999).
Brand Promotion
In the context of encouraging investment in start-ups and existing businesses,
Sneed, Runyan, Swinney, and Lim (2011) demonstrated positioning, image, and business
mix to be significant, positive predictors of patronage in downtown communities. To
illustrate the importance of place, Florida (2012) stated:
Place has become the central organizing unit of our time, taking on many of the functions that used to be played by firms and other organizations. Access to talented and creative people is to modern business what access to coal and iron ore was to steel making. It determines where companies will choose to locate and grow, and this in turn changes the way that cities must compete. (p. 8)
Conversely, Sneed et al. reported a significant, negative effect of sense-of-place on
patronage intention. Sneed et al.’s survey of 836 residents in four communities in
Michigan and four communities in Oklahoma was intended to examine and reveal
consumers’ perceptions of location as a brand and the influence of these perceptions on
their willingness to patronize those respective areas.
Sneed et al. (2011) stipulated a strong retail presence in a downtown area serves
as an essential element for promoting urban redevelopment strategies. Likewise, Judd
and McNeil (2008) contended the redevelopment of downtown areas will contribute to:
(a) job creation, (b) incubation of small businesses, (c) reduction of sprawl, (d) favorable
property values, and (e) increased options for goods and services. In downtown areas
adversely affected by an economic decline, Sneed et al. reported many communities have
relied on the following strategies: (a) pedestrian malls, (b) festival marketplaces, (c)
indoor shopping centers, and (d) mixed-use centers. Despite these efforts, time has
49
demonstrated such strategies are largely ineffective due to excessive sunk costs, recurring
maintenance costs, and the characteristics of isolated structures used for indoor shopping
centers and mixed-use centers that offer little economic benefit for downtown areas
(Sneed et al., 2011). To address these challenges, Judd and McNeil recommended the
following strategies:
develop a locally-based and flexible vision and strategy;
engineer and build a multi-function downtown;
establish partnerships between public, non-profit, and business entities; and
focus on developing the unique qualities of the downtown area and the larger
community.
Sneed et al. (2011) stipulated that a downtown’s brand comprises image and
positioning. Image is essentially the overall impression while positioning statements
often include symbols, slogans, logos, and any other communication methods that convey
the uniqueness of a brand in relation to competing alternatives. To illustrate the
importance of brand, Sneed et al. stated:
Downtowns perceived as having strong brand identities (as reported by downtown business owners), experienced greater success relative to competing retail venues (e.g., outlying strip centers, shopping malls, etc.), had fewer vacant downtown buildings, and its local businesses reported being successful. (p. 124)
Ultimately, Sneed et al. suggested reliance on brand reputation to be the most effective
method for expressing the quality of a product or service when it is difficult for
consumers to assess its quality or value among competitors.
Crombie (2011) contended that both cities and clusters should take branding as
seriously as companies, recognizing it should transcend tourism promotion and
emphasize economic development to attract relocating companies and entrepreneurs. In
50
essence, branding initiatives should seek to create an environment where diverse people
and companies alike feel integrated into the whole community, vision, or image for the
area (Crombie, 2011). For example, Crombie contended a city brand should provide a
voice or name to the municipality’s culture and social capital––providing the framework
and message for inspiring a more cohesive community. To maximize the city’s brand,
Crombie recommended enhancing its reputational capital by:
establishing a link to the social norms of the target audience, its values, or
valued images through symbols;
establishing a link to a feeling of solidarity with others; and
establishing a link to a position of prestige such as those with higher social
status or celebrities.
In addition, Crombie identified the following place branding challenges:
involves the efforts and resources of multiple stakeholders, often with
competing interests;
measuring effectiveness is difficult;
efforts are rarely under the control of a central authority;
marketers have little control over place brands due to the prevalence of
alternative communication channels (e.g., schools, media, purchases, tips from
friends and family, etc.); and
few government employees have the essential skill sets required to design and
implement major marketing campaigns.
To establish a competitive position among other communities, Crombie (2011)
recommended a holistic approach that places emphasis on: (a) design, (b) infrastructure,
51
(c) basic services, and (d) attractions. In the context of setting a community apart from
its rivals, Crombie recommended the following strategies: (a) advertising and promotion,
(b) large-scale physical redevelopment, (c) public art and civic statuary, (d) mega-events,
(e) cultural regeneration, and (f) public-private partnerships. In addition, Crombie
contended the following issues must be considered: (a) the city government’s branding
capabilities, (b) the demographic characteristics of the city, (c) the wisdom and long-term
perspective of the city government, and (d) the creative climate. Ultimately, to
implement a cluster branding campaign, Crombie recommended:
attaining an understanding of a cluster’s strengths and weaknesses to leverage
assets and minimize liabilities;
obtaining facts about the city, the population, economic growth, education
diversity, jobs, and start-ups to establish a starting point;
obtaining qualitative research associated with the city to establish how
individuals feel about the characteristics of the city;
creating a focused brand marketing strategy that results in communications
that are holistic, consistent, authentic, compelling, and memorable; and
identifying the public face of the communication of the brand.
Sneed et al. (2011) stipulated the attractiveness of a downtown can be influenced
by the concentration and mix of establishments in the area. In addition, the centralization
of a heterogeneous mix of establishments can serve to reduce the cost of time and travel
for the consumer, thereby increasing the area’s attractiveness as a venue. Similarly, these
benefits can be conveyed to entrepreneurs through the agglomeration of businesses,
which can lower hard costs by providing affordable access to raw materials, superior
52
accessibility to sales markets, and lower property prices (Doring et al., 2010). Sense-of-
place, composed of safe, pedestrian-friendly spaces and historic preservation, provides
the impetus for helping individuals feel connected to the community.
Despite the expectation that each component would be weighted significantly
when compared to other factors, it was revealed each was rated below competing
attributes, such as retail mix (Sneed et al., 2011). Sneed et al. (2011) concluded
excessive investments in preservation, safety, walkability, and culture may inhibit the
ROI for economic development. Policy makers are more likely to get better results if
they direct resources toward traditional marketing elements to improve the image of a
downtown area. Directing development funds for the formation of a diverse
concentration of entrepreneurs and macro-marketing programs will likely outperform an
emphasis on a well-developed attraction with some type of historical significance (Sneed
et al., 2011). Ultimately, R. Baker (2011) recommended the aggressive recruitment of
employers, conveying brand identity and backing it up by recruiting amenities (e.g.,
museums, galleries, and performing arts), and promoting events that enhance quality-of-
life and culture.
Economic Development Planning
Friar and Meyer (2003) recommended the following activities to encourage
entrepreneurialism: (a) stimulate the generation of entrepreneurs, (b) stimulate the
creation of networks, and (c) perform R&D to stimulate new technology. In the past, the
U.S. government relied on regional policies that led to the development of empowerment
zones to encourage business start-ups in impoverished and underserved communities by
providing tax incentives, guaranteed loans, and worker training. Despite the federal
53
government’s best efforts, a 4-year program review in Los Angeles revealed such
programs were largely ineffective, failing to create jobs and resulting in significant (32%)
loan default rates (Friar & Meyer, 2003). Friar and Meyer found start-ups were typically
classified as either micro-businesses or as high-growth ventures. A micro-business is
classified as an independently owned and operated establishment that does not dominate
its local community or the national marketplace and is generally intended to generate
income for the proprietor and their family. Typically, a micro-business operates with
fewer than 25 employees. Conversely, a high-growth venture endeavors to enhance its
profitability and growth potential. Management associated with this type of venture
relies on innovative strategic initiatives to achieve the firm’s goals. High-growth
ventures are credited with importing new jobs to an economy and do not cannibalize the
resources of other businesses. In addition, high-growth ventures often display an aptitude
for identifying and developing the capacity for meeting the needs of unserved market
niches (Friar & Meyer, 2003).
Friar and Meyer (2003) revealed the founders of high-growth ventures had two
distinct advantages: (a) advanced training in their respective fields/technologies, and (b)
business plans were submitted by committed teams of professionals with significant
industry experience rather than individuals. Other advantages included: (a) diverse
experience among team members, (b) a clear orientation for high-growth markets, and (c)
broad expertise across various functions. In addition, the clustering of the same type of
businesses within a region and government-sponsored university education initiatives
were determined to facilitate the formation of entrepreneurial capital and provide a
distinct advantage over conventional businesses (Friar & Meyer, 2003).
54
Renski (2009) found some policy makers preferred to engage in economic
development strategies that fostered local entrepreneurial ventures as opposed to
industrial recruitment, which has been reflected by shrinking recruitment pools and
bidding wars that can diminish the value of their potential contribution to a local
economy. Weber (2002) contended the risks associated with industrial recruitment
through the price of incentives often outweighed the value of the public benefits
generated by the targeted firm’s contribution to economic development. To illustrate the
severity of this problem, Weber stated:
Lacking perfect competition, subsidized firms can influence the price at which the economic development is bought and sold. Firms can bluff and demand more than is really necessary because corporate management has access to relevant information about the firm’s own cost structure and hurdle rates to which the government is not privy. The financial gap firms seek to fill to make a project feasible may be much smaller than they would have the public sector believe. This information asymmetry makes it impossible for governments to know the minimum amount that would induce change in the firm’s location. It can produce a surplus for the sought-after firm that may or may not be passed on to potential employees as jobs or the winning locality as capital investment. (p. 44)
Weber (2002) contended that substantial transaction costs (e.g., accountability
mechanisms, failure to abide by environmental standards, etc.) can further diminish the
value of a firm’s contribution to economic development. Relying on a survey of local
economic development practitioners, Weber reported only 24% of respondents indicated
any systematic or quantitative means of analyzing the viability of deals between
governments and firms. Likewise, a cost-benefit analysis of economic development
programs in Indianapolis revealed it would take more than 4 years to secure a positive
return to the city. Ultimately, cities often rely on contracts to minimize transaction costs;
however, Weber concluded these accountability mechanisms were often too loosely
written and inadequately enforced to be effective.
55
In the context of how entrepreneurial communities can be distinguished by their
fundamental attributes, Lichtenstein et al. (2004) contended they must have achieved a
kind of critical mass of entrepreneurs who are committed to identifying and capturing
new market opportunities. In addition, groups of entrepreneurs are often regarded as a
distinctive element within a larger community. Ideally, the contributions of an
entrepreneurial community must operate at such a level as to continuously replace any
decline in aggregate economic activity from existing businesses. In order for a
community-at-large to reap the benefits of entrepreneurialism, stakeholders must develop
a holistic view and recognize the entire community must support such initiatives. Such
support can be garnered by the following actions: (a) providing loans to start-ups, (b)
passing favorable legislation, (c) formally welcoming new members, and (d) including
new entrants in economic and social networks (Degan, 2010; Gupta & York, 2008;
Lichtenstein et al., 2004). Likewise, Falcone and Wilson (2008) stipulated start-ups often
require assistance with articulating their business definition, while more mature firms
seeking to relocate to a more desirable location often require assistance in the form of
financing. In the context of enterprise development, non-profit, private, and public
organizations fulfill the role of service provider by providing assistance from the onset.
(c) business incubators, (d) manufacturing networks, (e) small business development
centers, (f) angel capital networks, and (g) venture capital clubs and funds (Lichtenstein
et al., 2004).
In the context of enterprise development, Lichtenstein et al. (2004) stipulated that
communities committed to economic development must recognize the following tenets:
56
Enterprise development is a strategy that targets development, not simply for
the sake of growth itself.
The primary focus is for developing local companies in order to enhance local
wealth.
Develop economically sustainable communities by relying on local inputs,
exporting goods and services, and importing income to the community.
Lichtenstein et al. (2004) theorized entrepreneurial firms will remain loyal to the
community of origin if they are well supported and will be less likely to be lured away by
a rival community. Despite the level of support and resources a community may provide,
Lichtenstein et al. contended entrepreneurial needs are often difficult to determine.
Often, entrepreneurs do not know how to articulate their needs, may be reluctant to ask
essential questions, may be unwilling to confide in those individuals and organizations
with which they are unfamiliar, and may not be available or cooperative. Building a
trusting relationship between service providers and entrepreneurs may be compromised
by fragmented enterprise development efforts or the tendency to focus exclusively on
high-growth ventures, ignoring the potential for identifying developmental multipliers
and leaving gaps in the availability of numerous types of services. In addition, some
service providers may overemphasize providing resources and fail to recognize the
importance of helping entrepreneurs develop the capacity to implement their ideas and
develop practices that are sensitive to particular conditions (Lichtenstein et al., 2004). To
overcome such challenges, Husain (2009) recommended entrepreneurs be paired with
qualified mentors, who are: (a) credible, (b) willing to share details about their mistakes
to help those they consult avoid similar scenarios, (c) highly networked, (d) tolerant, and
57
(e) capable teachers. Rather than merely talking about their experiences, effective
mentors should provide direct and confidential assistance, provide access to their
networks, and play devil’s advocate to help entrepreneurs to vet their intentions (Husain,
2009).
In the context of building entrepreneurial communities, Lichtenstein et al. (2004)
contended purveyors of enterprise development programs must make the following
changes:
rely on a systematic approach to enterprise and community development
efforts by establishing a community-wide enterprise development system;
customize the enterprise development to the specific needs of the community;
emphasize and institutionalize efforts in developing a supply pipeline of
highly skilled entrepreneurs capable of establishing and sustaining successful
companies;
develop new roles, skills, and tools for managing and implementing the
enterprise development system; and
operate the system with the intent of transforming businesses, focusing first on
entrepreneurs, their businesses, and ultimately, the community’s economy.
Bednarzik’s (2000) and Friar and Meyer’s (2003) research findings corroborated
the findings of Corman et al. (1996) by reporting small businesses account for more than
85% of all establishments employing more than 20 employees. In addition, Bednarzik
stipulated employment levels often rise as establishment size increases, which is an
important implication when considering the role of new establishments in job creation.
58
To illustrate the fundamental differences in the importance of establishing start-ups and
expanding existing businesses, Bednarzik stated:
Between 1995 and 1996, slightly more than a third of new jobs created were from the birth of new establishments. New companies, as an incubator for new jobs, did not change much in size, except for their lower share of new jobs in large establishments (500 or more employees). (p. 9)
Bednarzik found few new establishments could be considered big and a much smaller
percentage of jobs created were derived from these types of establishments.
Relying on research data from 1990 to 1995, Bednarzik (2000) reported the
highest net job creation rate was in the services industry––representing one-fifth of job
increases. Likewise, Renski (2009) reported new businesses were responsible for 20% of
all private sector jobs in the U.S. economy on an annual basis. Conversely, the
manufacturing industry lost employment for the same time period. Leading
entrepreneurial industries (43% of new jobs created) for the 1990 to 1995 period included
business services, health services, and eating and drinking establishments. Among small
new entries and large offshoots, Bednarzik found high death rates with one of seven
establishments closing their doors on an annual basis. This was attributed to firm size as
opposed to age. For example, Bednarzik found that very small establishments (i.e., one
to four employees) had much higher failure rates than their larger contemporaries.
Ultimately, Bednarzik concluded the cyclic nature of business trends served as an
important consideration when assessing the impact and sustainability of establishments
founded by entrepreneurs.
Renski’s (2009) research revealed entrepreneurial performance differed among
establishments founded in nonmetropolitan rural and urban core locales. Renski found
new firms established in central cities demonstrated higher failure rates due to more
59
direct competition in the short-run and faster rates of employment growth in advanced
services. In addition, it was revealed that nonmetropolitan rural locales were
undersupplied with new high-tech and conventional advanced services (business and
professional services), firms (30% of total net job growth), and had lower growth rates in
both high-tech and conventional manufacturing (12% of private sector employment) and
advanced services. Conversely, suburbs, small cities, and rural segments of metropolitan
places (intermediate places) had relatively high rates of new firm entry, survival, and
growth, capturing 47% of entrants for high-tech advanced services and 43% of high-tech
manufacturing (Renski, 2009). Renski concluded lower new firm entry and survival rates
in urban core areas were likely attributed to higher costs, regulatory barriers, and a
greater propensity to engage in ventures with greater risk due to the potential for higher
growth.
In the context of high-tech manufacturing in urban core settings, Renski (2009)
reported the odds of failure were 24% higher than rural locales adjacent to metropolitan
areas, 18% higher than small cities, and 14% higher than suburban sites. Similar failure
rates were exhibited for conventional manufacturing industries (13% higher for small
cities, 8% higher for suburbs, and 7% higher for rural metropolitan areas) and advanced
services (6% higher for small cities, 16% higher for suburbs, and 8% higher for rural
metropolitan areas). Renski concluded suburban areas offered the most hospitable
environment for new firm survival despite their propensity for slower growth rates when
compared to urban core environments. Small cities, however, were found to have the
highest concentration of new entrants and the lowest failure rates among conventional
manufacturing firms, as well as the fastest growth rates among new firms in high-tech
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manufacturing. Similarly, Audretsch and Keilbach (2005) contended regions with greater
population density and their immediate neighboring regions exhibited stronger spatial
correlations with measures of entrepreneurship.
To promote growth, however, stakeholders must be cognizant of quality-of-life
concerns as they relate to a community’s image. In the context of a business case for
considering relocation, Corman et al. (1996) stipulated the crime rate directly affects
business performance. As such, consumers are not likely to engage in business
transactions in what is perceived as a high crime area. For example, if crime is more
prevalent during evening hours, businesses may shut down operations during those time
periods to reduce their liability and potential for victimization, thereby losing potential
sales (Corman et al., 1996). Garrett and Ott (2008) stipulated that economic development
stakeholders (especially in urban areas) must recognize increasing crime rates will inhibit
inbound residential and business migration. In addition, Garrett and Ott contended
changes in criminal activity were inversely related to changes in New York City wages.
Specific estimates revealed a 10% increase in the wage growth rate contributed to a 4%
to 6% decline in the crime growth rate (Garrett & Ott, 2008).
In reference to broken windows theory, Fulda (2010) stated, “The theory argues
that cracking down on minor infractions signals intolerance towards major infractions,
and that criminals respond to vigorous enforcement of that we now call quality-of-life
offenses by restrained behavior engendered by that official intolerance” (p. 101). To
illustrate the net benefit of a more assertive law enforcement response, business leaders,
speaking of New York Police Commissioner Ray Kelly’s record of improved public
safety outcomes, credited him for improved investor confidence and ultimately the
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reversal of capital flight (Whitford, 2012). In the context of reducing downtown blight
and improving a community’s image, Kotler, Haider, and Rein (1993) noted municipal
governments often create pedestrian malls and beautify surroundings to improve
perception. In an effort to attract tourists, government leaders often promote
conventions, subsidize hotels, and build convention facilities. Some communities go as
far as building research parks to facilitate start-ups and promote new technologies and
business incubators.
Despite an adherence to a “build it and they will come” ideology, many of these
commercial office buildings and retail sites remain vacant. In addition, poor regional
planning in urban areas to accommodate business expansion has contributed to traffic
gridlock, sprawl, excessive housing costs, pollution, rising taxes, and increasing
infrastructure costs. Poor planning can adversely impact the image of a community and
considering the nature of global competition, community leaders would likely find
themselves in a better position if they planned for avoiding hard times as opposed to
overcoming them. A proactive methodology to attract business interests could be
manifested as a place audit, which serves as a systematic examination of a community’s
economy, design, physical assets, quality-of-life, and residents to determine the strengths,
weaknesses, opportunities, and threats (SWOT analysis) confronting a community.
Ultimately, such planning must be adaptive in order to confront changing economic
conditions and take advantage of new opportunities (Kotler et al., 1993).
Falcone and Wilson (2008), Ho and Wong (2006), and Sriram et al. (2006)
contended that high taxes, utility costs, difficulty acquiring affordable insurance, crime, a
poorly educated workforce, a jobs mismatch, inadequate infrastructure (e.g.,
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transportation, etc.), burdensome regulations and permitting requirements, and
environmental pollution adversely affect a community’s ability to attract potential
employers. To illustrate the severity of this issue, Sriram et al. reported in 2004 it was
estimated that 50% to 75% of the City of Baltimore’s 18- to 35-year-olds had a criminal
history and issues with drug addiction, creating a significant employment barrier. This
situation was compounded by a lack of vehicle ownership (a third of Baltimore
households do not have access to a vehicle), inadequate public transportation, and the fact
that higher paying city jobs required a college education. The impact of this phenomenon
was evidenced by demographic statistics that demonstrated the 2002 median household
income for Baltimore ($30,600) had fallen relative to the State of Maryland ($58,600;
Sriram et al., 2006).
The results of these findings are controversial because historical research has
demonstrated inner cities often possess numerous advantages that can be leveraged to
overcome such challenges. For example, Sriram et al. (2006) contended inner cities are
typically endowed with an excellent location, large market demand due to a dense
population, untapped human capital, and superior infrastructure and economic resources.
Sriram et al. stipulated inner cities are often inhibited from leveraging their inherent
resources due to the failure of social models fostered by the U.S. government that have
programs, etc.) as opposed to dedicating resources to attracting private business
enterprises to inner-city communities for the purpose of job creation and community
revitalization. To ensure sustainable economic development and growth, inner-city
residents need more than jobs––they need to become business owners to promote
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stability. The formation of entrepreneurial ventures is even more critical in
disadvantaged communities because the failure rate among new enterprises is more than
20% within the first year, 50% within the first 5 years, and nearly 80% within 10 years,
and even higher among Black and Hispanic-owned establishments (Appelbaum &
Kamal, 2000; Sherman, 1999; Sriram et al., 2006; Yusuf, 2010; Zacharakis et al., 1999).
Government at all levels can provide assistance in such endeavors by making
capital available through low interest loans, training programs to enhance knowledge and
human capital formation, tax subsidies, and by establishing social and organizational
networks. Social networks may represent the greatest resource to which entrepreneurs
may have access, especially in ethnic communities where there is real and perceived bias
by formal lending institutions. Ultimately, such social networks have been recognized as
a source of informal finances and allow borrowers to secure financial capital at a lower
cost than offered by conventional lending institutions (Sherman, 1999; Sriram et al.,
2006).
To entice entrepreneurs and the financial capital they often attract, community
stakeholders must recognize the perceived business climate of a municipality closely
parallels quality-of-life perceptions and that improving the quality-of-life in poor
communities and maintaining it where it is favorable can have a significant impact on
decisions associated with business relocation, workforce composition and size, and
whether to reduce or expand operations (Corman et al., 1996). Florida (2002) contended
the ability of a community to facilitate economic growth was contingent upon the ability
to attract members of the creative class and to translate that advantage into creative
economic outcomes (e.g., new ideas, new high-tech businesses, and regional growth).
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To illustrate the importance of this market segment, Florida (2012) stipulated the
creative class had emerged as the most dominant and influential group of people in
American society. Likewise, to attract members of the creative class, Florida (2002)
argued communities should endeavor to create an environment that attracts significant
numbers of young people by supporting: (a) a thriving music scene, (b) ethnic and
cultural diversity, (c) tolerance, (d) outdoor recreation, and (e) a great nightlife. In
addition, Florida (2012) posited members of the creative class, more often than not, make
location choices primarily in accordance with their lifestyle interests as opposed to
conventional attractors such as standard quality-of-life amenities. To clarify his position,
Florida (2012) stated:
You can’t just enjoy a ballgame; you have to go to a “state-of-the-art” $500 million stadium for a multimedia circus that distracts you from the very game you paid to see. Many Creative Class people thus tend to shun the heavily packaged commercial venues they call generic – the chain restaurants and nightclubs, the stadiums with bells and whistles – or they patronize them but with a conscious sense of irony and camp, as in the obligatory trip to a business conference in Las Vegas. They prefer more authentic, indigenous, or organic venues that offer a wide range of options, places where they can have a hand in creating them. (p. 154)
Ultimately, Florida (2012) contended communities need to invest in people and business
climates, promote density, transit-oriented development, walkability, create green spaces
and other public spaces, encourage diversity, and build real quality of place.
Doring et al. (2010) and Judd and McNeil (2008) posited that communities with a
higher quality-of-life (e.g., recreational value, positive social climate, attractive inner
city, citizen friendly administration, adequate cultural and social institutions, etc.) have a
distinctive binding effect and attract creative individuals in greater numbers. For
example, Judd and McNeil, relying on a 2007 retail development survey administered to
residents of Marion, Indiana, reported 71% of respondents suggested additional retail
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establishments would improve their quality-of-life, 69% stipulated sales tax revenues
would increase, and 60% contended additional retail establishments would facilitate job
creation and prevent additional losses in employment opportunities.
In the context of developing an economic development plan for a downtown area
that would encourage recurring commerce, R. Baker (2011) suggested community
stakeholders should engage in the following efforts:
increase the frequency of recurring events;
develop and expand the fixed activity generators (e.g., medical complexes,
marine research, education, general business, hotels, shopping, and
restaurants);
support and expand cultural amenities;
establish a premier activity attractor (e.g., cafés, retail, etc.) and establish
connections to other activity centers;
improve access to and around the area; and
develop a focus on making the area a desirable place to live and work in an
effort to attract more residential living.
In addition, R. Baker contended recurring events could serve to: (a) increase commerce
and generate revenues, (b) enhance a city’s image, and (c) improve quality-of-life
perceptions among existing residents. Florida (2012) corroborated R. Baker’s position by
stating, “Personal lives and workplaces, whole industries and geographic regions are
beginning to operate on the principles of constant, dynamic, creative interaction” (p. 29).
To clarify his position, Florida (2012) contended members of the creative class rely on
extracurricular activities to help cultivate their interests, values, and identities in both the
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workplace and in their social lives. Ultimately, to illustrate the importance of attracting
the creative class, Florida (2012), referring to Labor Statistics projections, reported this
market segment was likely to add 5.4 million jobs by 2020.
To demonstrate why some business and community leaders have failed to attract
members of the creative class, Florida (2002) stated:
Stuck in old paradigms of economic development, cities like Buffalo, New Orleans, and Louisville struggled in the 1980s and 1990s to become the next Silicon Somewhere by building generic high-tech office parks or subsidizing professional sport teams. Yet they lost members of the creative class, and their economic dynamism, to places like Austin, Boston, Washington D.C., and Seattle – places more tolerant, diverse, and open to creativity. Because of this migration of the creative class, a new social and economic geography is emerging in America, one that does not correspond to old categories like East Coast versus West Coast or Sunbelt versus Frostbelt. Rather, it is more like the class divisions that have increasingly separated Americans by income and neighborhood, extended into the realm of city and region. (p. 17)
In addition, Florida (2002) divided the creative class into two segments: the super-
creative core and creative professionals. The super-creative core typically includes
scientists, engineers, university professors, poets, novelists, artists, entertainers, think-
tank researchers, and other opinion makers. Super-creative core members are principal
innovators who produce new forms or designs that are readily transferable and useful.
Creative professionals work in a wide-range of knowledge-intensive industries (e.g., high
tech sectors, financial services, legal, healthcare, business management, etc.). These
individuals are engaged in problem-solving and draw on a complex knowledge base to
confront modern challenges. Furthermore, creative professionals often possess a high
degree of formal education and human capital (Florida, 2002). Ultimately, Florida
(2002) posited that communities with a higher concentration of creative class individuals
(i.e., 30% to 35% of the workforce) often exhibited higher levels of economic growth.
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Florida (2002) contended that for communities to attract members of the creative
class, they must facilitate low entry barriers. To do so ensures new business firms and
people alike will encounter an environment where they are quickly accepted into
numerous social and economic arrangements and endeavors. Florida (2002) described
such destinations as plug-and-play communities, where creative individuals can find
opportunity, build support, be true to themselves, and not be forced into any singular
identity. To illustrate his position, Florida (2002) stated:
Cities and regions that attract lots of creative talent are also those with greater diversity and higher levels of quality of place. That’s because location choices of the creative class are based to a large degree on their lifestyle interests, and these go well beyond the standard quality-of-life amenities that most experts think are important. (p. 20)
In addition, Florida (2002) stipulated members of the creative class prefer active
participative recreation over institutionalized forms. For example, creative individuals
often find an authentic and indigenous street-level culture comprising cafés, sidewalk
musicians, small galleries, and bistros serves to stimulate their senses. Furthermore,
Florida’s (2002) research revealed creative individuals place a higher value on active
outdoor recreation (e.g., bicycling, jogging, kayaking, etc.), which serves to broaden their
creative lifestyles. Ultimately, Florida (2012) stipulated quality of place comprises three
dimensions:
What’s there: the combination of the built environment and the natural
environment.
Who’s there: the diverse kinds of people, interacting and providing cues that
anyone can make a life for themselves in the community.
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What’s going on: the vibrancy of street life, café culture, arts, music, and
people engaging in outdoor activities.
Markusen, Gadwa-Nicodemus, and Barbour (2013) introduced the business case
for Florida’s (2012) position on quality of place. Relying on consumption base theory,
which posits that investments in certain types of consumption base activity can contribute
favorably to employment growth and income, Markusen et al. stipulated this outcome
could be achieved by:
providing residents with more opportunities to spend a greater share of their
discretionary income on new locally produced goods and services;
seeding innovations that ultimately expand into export markets;
nurturing organizations and occupations that re-spend a greater share of their
earnings locally than their peers; and
attracting and retaining entrepreneurs, firms, and workers.
In contrast, relying on traditional export-based practices can inhibit a community’s
growth potential and simultaneously discourage advances in the arts and culture
(Markusen et al., 2013). To promote clarity, Markusen et al. (2013) stated:
Job center cities are more likely to host businesses whose owners, managers, and employees contribute to local arts and culture through patronage and contributions. Businesses may feel that strong arts and cultural offerings enhance employee motivation, help attract and keep employees, and encourage retail customers. (p. 47)
Audretsch and Keilbach (2005) stipulated a stakeholder approach is essential for
enhancing the social capital of entrepreneurs, which is necessary for encouraging bankers
and venture capital firms to share the risks and benefits associated with their initiatives.
In the context of opportunity costs and alternative investment opportunities, Audretsch
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and Keilbach’s research revealed the funding of entrepreneurship capital was
considerably more efficient than R&D funding. Audretsch and Keilbach suggested an
increase in entrepreneurship by a given percentage has the potential to deliver three to
four times the impact of R&D inputs by the same percentage. Ultimately, fostering
entrepreneurship in R&D-oriented industries may deliver a more sustainable impact than
other industry start-up types (Audretsch & Keilbach, 2005).
A 1995 survey of CEOs managing companies in the State of Massachusetts
revealed incentives for business expansion, the reduction of business and personal tax
liabilities, improvements in the education system, reductions in regulation, and the
improvement and expansion of the transportation system were essential factors for
improving a local business climate (Corman et al., 1996). Gupta and York (2008)
corroborated these findings by reporting their survey findings revealed 60% of the U.S.
general public and 75% of business owners thought there was too much government
intervention in business affairs and 48% of the general public and 69% of business
owners thought they were over taxed. In addition, Corman et al. (1996) revealed the
availability of capital and attitudes toward business were of primary concern during
recessionary periods.
In the context of the level of importance during periods of expansion and
improved profitability, concerns over personal taxes, crime, and the cost and quality of
telecommunications systems increased significantly. In addition, the 15 factors that
increased in the level of satisfaction during expansionary periods included: (a)
availability of capital, (b) cost of capital, (c) availability of investment tax credit, (d)
quality of public schools, (e) crime level, (f) adequacy of infrastructure, (g) housing
70
costs, (h) cost of semi-skilled labor, (i) cost of low-skilled labor, (j) cost of worker’s
The communities that creatives are attracted to do not thrive for traditional economic reasons, such as access to natural resources or proximity to major
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transportation routes. Nor is their economic success tied to tax breaks and other incentives designed to lure businesses. A big part of their success stems from the fact that they are places where creative people want to live. This circumvents the age-old chicken-and-egg problem of what comes first, jobs or people. The answer is simple: it is not either-or, but both. Creative centers provide the integrated ecosystem or habitat where all forms of creativity – artistic and cultural, technological and economic – can take root and flourish. (p. 186)
To illustrate the importance of regional politics in determining investment and
implementation strategies, Hamilton (2008) and Judd and McNeil (2008) warned that
poorly designed policies and programs could inhibit entrepreneurism, especially in the
context of technology innovation. In fact, Florida (2012) contended that in order to
achieve favorable economic outcomes, technology, talent, and tolerance must persist and
interact in ways that make them interdependent. To elaborate, Judd and McNeil posited
many economic development strategies do not account for how globalization of services
and production has impacted firm decision-making. At best, Judd and McNeil stipulated
traditional approaches to economic development should be regarded as a zero-sum game,
where economic regions battle for a share of an ever shrinking pie. In addition, Hamilton
theorized that regardless of political affiliation, local governments, if provided with
greater latitude in legislative control and when there was a higher ratio in program
funding, were less efficient in program management than private entities (e.g., local
entrepreneurs, firms, universities, etc.).
Hamilton (2008) recommended increased constraints be placed on elected
officials and more pervasive monitoring be done by independent groups to protect the
effectiveness of such programs, especially in the initial stages of development.
Furthermore, Campbell and Rogers (2007) warned that an over politicized economy is
inherently less free, and as such, expertise and resources are channeled away from the
mechanisms that inspire wealth creation leading to lower incomes and a lower rate of
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business formation. Campbell and Rogers recommended governments avoid intervention
and as an alternative, foster an environment that safeguards property rights, allows
entrepreneurs to enjoy the freedom to flourish, allows consumers to decide how to spend
their hard earned income, avoids policies that result in income redistribution, and
minimizes large payrolls.
Ho and Wong (2006) revealed that regulatory business costs (e.g., number of
procedures associated with starting a business, number of days to start a business, cost of
starting a business, and minimum paid up capital required to register a business) had a
negative and significant impact on opportunity driven entrepreneurs. Campbell and
Rogers (2007) revealed economic freedom (relying on the Economic Freedom Index of
North America index) had more than twice the marginal effect of a similar increase in
commercial lending and nearly three times the marginal effect of a similar increase in the
percentage of minority businesses. Judd and McNeil (2008) stipulated that in order for
communities to successfully compete in a global environment, economic development
planners must embrace 21st century thinking and promote programs that support business
start-ups and growth of existing businesses, and rely less on recruiting large firms with
tax breaks and other financial inducements. Ultimately, Judd and McNeil concluded the
best economic development strategy would be to emphasize the organic growth of
existing community firms as opposed to the recruitment of new enterprises.
In the context of evaluating the effectiveness of economic development programs,
Hamilton (2008) stipulated such assessments are problematic because: (a) outcomes can
only be achieved over the long-term, (b) identifying comparison groups is difficult, and
(c) a large number of factors can contribute to economic growth. To overcome these
73
challenges, Hamilton recommended a qualitative approach relying on historical narrative
that incorporates the triangulation of data sources (e.g., archives, organizational
documents, interviews, quantitative data, etc.) to develop insights and evidence that can
help establish the dominance of certain factors or perceptions that promote economic
growth. For example, Hamilton’s research encompassing the Denver region in Colorado
revealed business incubators’ efforts to help diversify the local business community had a
the author posited a qualitative research design would help characterize the essence of
human experiences and, ultimately, how stakeholder perceptions influence
entrepreneurism in the City of St. Petersburg, Florida (Creswell, 2009).
Population and Sampling Procedures
When relying on qualitative research methods, Creswell (2009) stipulated
researchers typically involve a small number of subjects through extensive and prolonged
engagement to develop patterns and the relationships of meanings. Likewise, S. E. Baker
and Edwards (2012) stated:
A small number of cases or subjects, may be extremely valuable and represent adequate numbers for a research project. This is especially true for studying hidden or hard to access populations such as deviants or elites. Here, a relatively few people, such as between six and dozen, may offer us insights into such things as the stratification hierarchy of a drug-producing subculture, an outlaw motorcycle gang, or a corporate boardroom. (p. 8)
76
S. E. Baker and Edwards recommended a minimum sample of 12 participants to satisfy
the requirements of an interpretative phenomenological analysis. As a result, the author
constructed a purposive proportional quota sample consisting of 12 business owners or
managers representing local City of St. Petersburg business establishments. Ultimately,
the author was confident empirical saturation would be achieved with this sample group.
In the context of economic resiliency, the author’s initial assessment of the City of
St. Petersburg’s composition of business establishments revealed six major business
clusters: (a) financial services; (b) marine and environmental sciences; (c) medical
technology and life sciences; (d) information technology; (e) manufacturing; and (f) arts,
culture, and events tourism (City of St. Petersburg, 2012b). While this broad assessment
was useful for orienting the author to the economic drivers of the city, it did not provide
adequate information for developing a defensible sample group. Relying on statistics
provided by CLRSearch.com (2010), the author determined the City of St. Petersburg had
a business establishment population of 6,320. After evaluating the composition of the
City of St. Petersburg business community, the author stratified the sample group by the
North American Industry Classification System (NAICS) to ensure it was aligned with
the major characteristics of the local business population and conformed to the
composition of the top eight (ranked by quantity) NAICS classified business
establishment types. The author established parity by optimizing composition ratios
between the sample group and the population (See Appendix B):
Professional, scientific, and technical services (N = 1,061 [20%], n = 3
[25%]);
Retail trade (N = 844 [16%], n = 2 [17%]);
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Health care and social assistance (N = 826 [16%], n = 2 [17%]);
Other services (except public administration; N = 589 [11%], n = 1 [8%]);
Finance and insurance (N = 554 [11%], n = 1 [8%])
Construction (N = 493 [9%], n = 1 [8%]);
Accommodation and food services (N = 454 [9%], n =1 [8%]); and
Administration, support, waste management, and remediation services (N =
391 [8%], n = 1 [8%]; CLRSearch.com, 2010).
The application of this sampling method was not intended to establish
generalizability with the business population but rather to: (a) reach the targeted sample
group quickly, (b) acquire a sufficient sample that would provide the opinions of the
target population, (c) offset the potential impact of overweighted subgroups and the
potential for selection bias, (d) avoid sampling bias, and (e) address time and cost
constraints (S. E. Baker & Edwards, 2012; Creswell, 2009).
Instrumentation
The author relied on one-to-one personal interviews and focus group participants
derived from the purposive proportional quota sample. The survey instrument was
designed to promote clarity and facilitate respondent input rather than the author’s.
Likewise, the author relied on 10 semi-structured questions for the foundation of the
focus group agenda. The 10 semi-structured questions were:
1. How would you characterize the current business climate in the City of St.
Petersburg (Uncertainty)?
2. What factors do you believe favorably impact business performance in St.
Petersburg (Intellectual Capital)?
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3. How would you characterize the level of support your business has been
provided by the St. Petersburg community (Entrepreneurs)?
4. How would you define the local municipal government’s role in supporting
business prosperity and economic growth (Government)?
5. How would you characterize the quality and effectiveness of business
assistance programs in St. Petersburg (Business Assistance Programs)?
6. How would you define the role that local universities play in promoting
economic growth (Universities)?
7. What is your assessment of the availability and quality of the local St.
Petersburg workforce (Human Capital)?
8. How would you characterize current conditions as it pertains to access to
capital (Financial Capital)?
9. How would you describe the effectiveness of City of St. Petersburg’s brand
promotion efforts in terms of its contribution to economic prosperity (Brand
Promotion)?
10. What is your assessment of government and business leader performance in
promoting economic growth (Economic Development Planning)?
The author relied on an electronic audio recording device to support transcription
and coding. While the questions were definitive, the author recognized improvisation
would be required when it was necessary to establish greater clarity in respondent
experiences, perceptions, and values. Improvised questions were recorded electronically.
To protect the anonymity and confidentiality of respondents, audio data were transferred
from the electronic audio recording device and stored on encrypted and password
79
protected solid state media. All file naming conventions were encoded to ensure
deduction could not be relied upon to identify respondent identities. In the context of
reporting findings, the author relied on coded respondent identification numbers in lieu of
actual identities to protect anonymity and privacy. Likewise, the author relied on WinZip
to encrypt all transcripts when engaged in member checking. Only the author maintained
access to recorded one-to-one interviews, associated transcripts, and MAXQDA project
files. At the conclusion of this research study all associated records (e.g., one-to-one
interview recordings, transcripts, project files, etc.) were stored on secured solid state
media. In addition, all data will be maintained for 5 years. Prior to conducting one-to-
one interviews, each respondent was provided an Informed Consent Form (See Appendix
C). The only written documents distributed were the Informed Consent Form and
interview questions to facilitate the interviewing process.
Procedures
Recognizing the potential threats to internal and external validity and reliability,
the author conducted the following procedures: (a) checked transcripts to ensure they
were error-free, (b) ensured coding definitions remained consistent during the coding
process, (c) triangulated different data sources, (d) engaged in member checking and
follow-up, (e) conducted peer debriefing, and (f) facilitated transferability by providing
rich and thick descriptions to help readers interpret findings and reach their own
Despite answering the research question and satisfying the research goals for this
research study, the author concluded there were two fundamental deficiencies in the
128
supporting literature that could benefit from further study. First, the ongoing controversy
regarding the efficacy of tax subsidies and other financial incentives and business
relocation decisions is often a source of division among community stakeholders. In
particular, Weber (2002) warned of a low correlation between local incentives and
employment growth and as such, stipulated the price of such incentives outweighed the
value of benefits derived from economic development. This author posits a mixed-
methods research methodology should be employed in a research study to help reveal
how information asymmetries between local governments and business interests can be
minimized by establishing which factors contribute more readily to sustained economic
growth.
Second, Pedroni and Sheppard (2013) stipulated the academic community had not
sufficiently addressed the existence of a causal connection between culture production
and local economic performance indicators such as gross domestic product (GDP). This
concern is based on Pedroni and Sheppard’s narrative regarding the amount of resources
being developed for culture production and how such investments affect other forms of
infrastructure (e.g., schools, roads, etc.) investment in the long-run. To resolve this issue,
this author recommends a qualitative methods research study incorporating several
sample groups of community stakeholders from cities that have been recognized as
leading centers for creative capital be conducted to establish which combination of
factors underlying economic growth offers the best outcomes in terms of ROI and gains
in reputational capital.
In the context of recommendations for economic development practitioners, the
author recommends a stakeholder approach (partnership) for addressing concerns
129
associated with entrepreneurism. After considering the research findings of Bacdayan
(2008) and Sherman (1999), the author recommends community stakeholders consider
establishing an intermediary organization (e.g., business incubator) to facilitate business
assistance, brand promotion, and economic development planning initiatives. Such an
organization should be led by individuals representing a cross-section of community
stakeholders (e.g., local government, Chamber of Commerce, universities, neighborhood
associations, etc.) and staffed with full-time qualified professionals to ensure all interests
are represented and considered. Under the umbrella of this intermediary organization,
communities could minimize duplicity and ensure qualified expertise and sufficient
resources are employed in ways that generate favorable long-term economic outcomes.
Representing the common interests of community stakeholders, this intermediary
organization would be uniquely qualified to shape a community’s identity for the purpose
of promoting the economic and quality of place advantages that will help recruit and
retain creative individuals who have a propensity to engage in entrepreneurial ventures
and contribute to economic growth.
Conclusion
Considering the recommendations to redress the deficiencies in the supporting
academic literature and those directed to economic development practitioners, the author
contends community stakeholders must confront information asymmetries by establishing
interconnected networks, and ultimately rely on intermediary organizations to advise,
plan, implement, and evaluate brand promotion and economic development planning
initiatives. In the context of the City of St. Petersburg, the author posits such an
organization comprised of qualified representatives of community stakeholder
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organizations would develop the capacity to: (a) establish an authentic marketplace niche
that distinguishes the city from its rivals, (b) promote quality of place benefits to attract
and retain creative individuals with high levels of human capital, (c) engage in economic
development planning that emphasizes organic growth and the recruitment of business
firms that do not adversely impact net economic performance, (d) assume a holistic view
to facilitate an equitable approach in infrastructure investment, and (e) serve as a business
incubator in partnership with other community stakeholders to assist new start-ups and
entrepreneurs persevere by providing access to intellectual capital, thereby enhancing the
city’s image as a business friendly community to promote a healthy regional economy.
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APPENDICES
142
APPENDIX A
Vacancy Rate Figures
143
Figure A1. Downtown development projects (September 2011).
Figure A2. Gateway area development projects (June 2011).
144
APPENDIX B
Establishments by NAICS Code
145
Table B1 2010 Establishments by NAICS Code
St. Petersburg,
Florida Florida United States
Establishments, Total (by Place of Work) 6,320 522,727 7,700,385
Forestry, Fishing, Hunting, and Agriculture Support 2 0.03% 1,068 0.20% 23,642 0.31%
Mining 2 0.03% 266 0.05% 25,112 0.33%
Utilities 10 0.16% 618 0.12% 16,658 0.22%
Construction 493 7.80% 59,486 11.38% 813,323 10.56
Arts, Entertainment and Recreation 71 1.12% 7,691 1.47% 125,329 1.63%
Accommodation and Food Services 454 7.18% 34,904 6.68% 634,204 8.24%
Other Services (Except Public Administration) 589 9.32% 45,104 8.63% 746,427 9.70%
Note. North American Industry Classification System (NAICS): NAICS is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. business economy. Adapted from Establishments by Business Type, 2012, CLRsearch.com, Retrieved from http://www.clrsearch.com/Saint_Petersburg_Demographics/FL/Establishment-Statistics-by-NAICS-Code
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Table B2 Establishments Sample Group Composition by NAICS Code
St. Petersburg, Florida
N % n % Respondent
s
Establishments, Total (St. Petersburg, Florida) 5,212 12 10
Professional, Scientific and Technical Services 1,06
Other Services (Except Public Administration) 589 11% 1 8% 1
Note. Ten (10) respondents agreed to participate in the one-to-one interviews. The researcher's goal was twelve (12). The author was unable to secure the participation of two (2) respondents (1 each) from the following two NAICS Code establishment types: Construction and Health Care and Social Assistance.
147
APPENDIX C
One-to-One Interview Informed Consent Form
148
Informed Consent Form
You are cordially invited to participate in a doctoral level business management research study. The purpose of this research study is to interview managers or owners of City of St. Petersburg business establishments to understand: (a) how economic, social, and environmental factors inspire or inhibit entrepreneurism (as reported by the participants), (b) how stakeholder perceptions influence entrepreneurism, and (c) how interactions of economic, social, and environmental factors and perceptions of stakeholders inspire or inhibit entrepreneurism. If you participate in this research, you will be asked to respond to interview questions while being audio taped so the researcher can ensure your answers are completely understood. The tapes will only be reviewed by the researcher and never anyone else. Your participation will take approximately 30 minutes on one occasion that will be scheduled with you on advanced notice for your convenience. Your participation in this research is strictly voluntary. You may refuse to participate at all, or choose to stop your participation at any point in the research, without fear of penalty or negative consequences of any kind. The information/data you provide for this research will be treated confidentially, and all raw data will be kept in a secured file by the researcher. Results of the research will be reported as aggregate summary data only, and no individually identifiable information will be presented. You also have the right to review the results of the research if you wish to do so. A copy of the results may be obtained by contacting the researcher at the address below:
Richard J. Ferner, Jr. 9845 50th Street Circle East Parrish, Florida 34219
There will be no direct or immediate personal benefits from your participation in this research. The results of the study will be shared as an aggregate so as to share the leadership aspects to promote any organizational learning that may arise. I have read and understand the information explaining the purpose of this research and my rights and responsibilities as a participant. My signature below designates my consent to participate in this research study, according to the terms and conditions outlined above.
Signature Date Print Name:
149
APPENDIX D
Focus Group Discussion Guide
150
Focus Group Discussion Guide
Greetings focus group participants. I wanted to begin by thanking each of you for participating in the one-to-one interview process. Your contribution to this research initiative has proven invaluable. With that said, I would like to welcome each of you to this lunchtime focus group session. The intent is to continue the discussion in a group setting among professionals. As before, statements made during this event will be recorded and will remain confidential. A transcript will be provided to each participant. Informed Consent Forms will be disseminated prior to the initiation of the moderated discussion. Despite these formalities, this is an informal event, which will provide each of you with an opportunity to network with fellow business leaders from the City of St. Petersburg. Lunch, which will be provided by Orange Blossom Catering, is free of charge. The parking expense will be fully reimbursed at the conclusion of the event. The focus group session will take approximately one hour. I recognize that your time is valuable, however, I think you will find this event worthwhile, providing each of you with a rare opportunity to be heard. At the very least, this event may help each of you establish a sense of clarity that could not be achieved conventionally.
Following lunch, we will proceed with the focus group session. I, Rick Ferner, will serve as the focus group session moderator. We will rely on the original ten one-to-one interview questions for the foundation for the discussion. The moderator’s role is to provide structure, enhancing our ability to remain on task by initiating and concluding each discussion topic. As we proceed, I want to remind all participants that we are all professionals and each of you has something valuable to say, so please, be courteous to your peers and respect their insights and opinions. Thank you.
Focus Group Discussion Topics
(Uncertainty) Q1: How would you characterize the current business climate in the City
of St. Petersburg?
(Intellectual Capital) Q2: What factors do you believe favorably impact business
performance in St. Petersburg?
(Entrepreneurs) Q3: How would you characterize the level of support your business has
been provided by the St. Petersburg community?
151
(Government) Q4: How would you define the local municipal government’s role in
supporting business prosperity and economic growth?
(Business Assistance Programs) Q5: How would you characterize the quality and
effectiveness of business assistance programs in St. Petersburg?
(Universities) Q6: How would you define the role that local universities play in
promoting economic growth?
(Human Capital) Q7: What is your assessment of the availability and quality of the local
St. Petersburg workforce?
(Financial Capital) Q8: How would you characterize current conditions as it pertains to
access to capital?
(Brand Promotion) Q9: How would you describe the effectiveness of City of St.
Petersburg’s brand promotion efforts in terms of its contribution to economic prosperity?
(Economic Development Planning) Q10: What is your assessment of government and
business leader performance in promoting economic growth?
152
APPENDIX E
Focus Group Informed Consent Form
153
Informed Consent Form
You are cordially invited to participate in a doctoral level business management research study. The purpose of this research study is to interview managers or owners of City of St. Petersburg business establishments to understand: (a) how economic, social, and environmental factors inspire or inhibit entrepreneurism (as reported by the participants), (b) how stakeholder perceptions influence entrepreneurism, and (c) how interactions of economic, social, and environmental factors and perceptions of stakeholders inspire or inhibit entrepreneurism. If you participate in this research, you will be asked to participate in a focus group discussion while being audio taped so the researcher can ensure your answers are completely understood. The tapes will only be reviewed by the researcher and never anyone else. Your participation will take approximately one hour on Thursday, March 28, 2013 at the St. Petersburg Area Chamber of Commerce. Your participation in this research is strictly voluntary. You may refuse to participate at all, or choose to stop your participation at any point during the focus group discussion, without fear of penalty or negative consequences of any kind. The information/data you provide for this research will be treated confidentially, and all raw data will be kept in a secured file by the researcher. Results of the research will be reported as aggregate summary data only, and no individually identifiable information will be presented. You also have the right to review the results of the research if you wish to do so. A copy of the results may be obtained by contacting the researcher at the address below:
Richard J. Ferner, Jr. 9845 50th Street Circle East Parrish, Florida 34219
There will be no direct or immediate personal benefits from your participation in this research. The results of the study will be shared as an aggregate so as to share the leadership aspects to promote any organizational learning that may arise. I have read and understand the information explaining the purpose of this research and my rights and responsibilities as a participant. My signature below designates my consent to participate in this research study, according to the terms and conditions outlined above.
Signature Date Print Name:
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APPENDIX F
One-on-One Interview Codes
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Table F1 Codebook and Sub Code Response Frequencies for Survey Respondents
Question #
Code System Sub Codes 194
1 Uncertainty
Favorable Business Climate 8
Increased Risk Taking 3
Lower Unemployment 1
Perceived Fragility of Business Climate 2
Businesses Who Make Connections Have Influence 3
2 Intellectual
Capital
Downtown 9
Quality of Life 5
Culture 4
Ideal Location for Living, Working and Playing 1
Few Large Employers 1
Agglomeration of Small and Medium Sized Businesses 2
Downtown Office Space Constraints 1
Reasonable Rates on Cost of Space 2
Tax Incentives Lack Efficacy 2
Concern Over Transience of Business Establishments 1
3 Entrepreneurs
Supportive Community 9
Grass Roots Support is Strong 8
Credited Grass Roots Support for Financial Success 1
Not Uncommon for Direct Competitors to Welcome New Businesses
1
Most Business Derived from Outside of Local Market 1
4 Government
Business Friendly Administration 5
Government Leadership is Accessible if You Reach Out 4
Government is Controlled by Special Interests 4
No Impact Felt from Government Activity 3
Parking Enforcement is a Hindrance 3
Government Does Not Communicate Well 1
Government Lacks a Regional Perspective 1
Transportation Infrastructure is Poor 1
Government Should Do More to Support Culture 1
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5 Business
Assistance Programs
No Knowledge of City Business Assistance Programs 5
Does not Use Business Assistance Programs 2
Makes Use of City Business Assistance Programs 3
Makes Use of County Business Assistance Programs 1
Provides Access to Intellectual Capital 1
Useful for Networking, Relationships and Business Expansion
1
Reevaluate Programs to Delineate Curriculum 1
6 Universities
Support Formation of Human Capital 9
Support Innovation 3
Need for Improvement in Partnerships with Business Community
3
Students Need Training in Teamwork 1
Did Not Detect Efforts 1
7 Human Capital
Employees Often Lack Soft Skills 3
Employees Often Lack IT Skills 2
Insufficient Quantity of Qualified Applicants in City 5
Sufficient Quantity of Qualified Applicants in Market 7
8 Financial Capital
Access to Financial Capital Remains Constrained 5
Access to Financial Capital is Improving 4
Expansion of Community Banks 2
Conservative with On Hand Financial Capital 4
9 Brand
Promotion
Government is Effective in Promoting Events 3
Government is Effective in Promoting Outside of Market 2
No Knowledge of Promotion Efforts 4
Establishing a Market Niche has been a Challenge 7
More Resources for Promotion is Required 5
Homelessness is Compromising the City's Brand 2
Culture is the City's Greatest Advantage 6
10 Economic
Development Planning
Importance of Living, Working and Playing in the City 7
Business Community Needs to Participate 4
Creative Class 3
Note. The code system is indexed in accordance with the 10 stakeholder perceptions that influence entrepreneurism. Sub codes were developed through inductive data analysis in conjunction with an iterative review of one-to-one interview transcripts.
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APPENDIX G
One-to-One Interview Co-occurrence Model
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Figure G1. MAXMap one-to-one interview co-occurrence model. This analysis is intended to demonstrate where sub codes intersect, demonstrating relationships among stakeholder perceptions. For example, Intellectual Capital/Culture and Brand Promotion/Culture is the City’s Greatest Advantage sub codes demonstrated eleven (11) intersections. Similarly, Intellectual Capital/Culture and Economic Development/Importance of Living, Working and Playing demonstrated eight (8) intersections; Intellectual Capital/Quality of Life and Economic Development Planning/Importance of Living, Working and Playing in the City demonstrated eight (8) intersection; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City demonstrated seven (7) intersections; Brand Promotion/Culture is the City’s Greatest Advantage and Economic Development Planning/Importance of Living, Working and Playing in the City demonstrated six (6) intersections; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City and Intellectual Capital/Quality of Life demonstrated six (6) intersections; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City and Intellectual Capital/Culture demonstrated six (6) intersections, and; Intellectual Capital/Quality of Life and Intellectual Capital/Culture demonstrated five (5) intersections.
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APPENDIX H
Focus Group Codes
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Table H1 Codebook and Sub Code Response Frequencies for Survey Respondents and Focus Group Participants
Survey Focus Group
Question Code System Sub Codes 194 50
1 Uncertainty
Favorable Business Climate 8 2
Increased Risk Taking 3 2
Lower Unemployment 1 0
Perceived Fragility of Business Climate 2 0
Businesses Who Make Connections Have Influence
3 1
2 Intellectual
Capital
Downtown 9 1
Quality of Life 5 2
Culture 4 2
Ideal Location for Living, Working and Playing 1 1
Few Large Employers 1 0
Agglomeration of Small and Medium Sized Businesses
2 0
Downtown Office Space Constraints 1 0
Reasonable Rates on Cost of Space 2 1
Tax Incentives Lack Efficacy 2 0
Concern Over Transience of Business Establishments
1 0
Declining Need for Office Space 0 1
No Knowledge of Economic Performance Outside of Downtown
0 2
Other Areas of the City are in Decline 0 1
Need for Central Business Corridor 0 2
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3 Entrepreneurs
Supportive Community 9 2
Grass Roots Support is Strong 8 1
Credited Grass Roots Support for Financial Success
1 0
Communication between City and Chamber has Improved
0 1
Not Uncommon for Direct Competitors to Welcome New Businesses
1 0
Most Business Derived from Outside of Local Market
1 0
4 Government
Business Friendly Administration 5 2
Government Leadership is Accessible if You Reach Out
4 1
Government is Controlled by Special Interests 4 0
No Impact Felt from Government Activity 3 0
Parking Enforcement is a Hindrance 3 0
Insufficient Parking for Businesses 0 1
Government Does Not Communicate Well 1 0
Government Lacks a Regional Perspective 1 0
Transportation Infrastructure is Poor 1 0
Government Should Do More to Support Culture
1 0
5 Business
Assistance Programs
No Knowledge of City Business Assistance Programs
5 0
Does not Use Business Assistance Programs 2 0
Makes Use of City Business Assistance Programs
3 1
Makes Use of County Business Assistance Programs
1 0
Provides Access to Intellectual Capital 1 2
Useful for Networking, Relationships and Business Expansion
1 1
Reevaluate Programs to Delineate Curriculum 1 0
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6 Universities
Support Formation of Human Capital 9 2
Support Innovation 3 1
Students are More Driven 0 1
Need for Improvement in Partnerships with Business Community
3 0
Students Need Training in Teamwork 1 0
Did Not Detect Efforts 1 0
7 Human Capital
Employees Often Lack Soft Skills 3 0
Employees Often Lack IT Skills 2 0
Insufficient Quantity of Qualified Applicants in City
5 0
Sufficient Quantity of Qualified Applicants in Market
7 0
Quality is Improving 0 2
8 Financial Capital
Access to Financial Capital Remains Constrained
5 0
Access to Financial Capital is Improving 4 1
Expansion of Community Banks 2 1
Conservative with On Hand Financial Capital 4 2
9 Brand
Promotion
Government is Effective in Promoting Events 3 1
Government is Effective in Promoting Outside of Market
2 2
No Knowledge of Promotion Efforts 4 0
Establishing a Market Niche has been a Challenge
7 0
More Resources for Promotion is Required 5 0
Homelessness is Compromising the City's Brand
2 0
Culture is the City's Greatest Advantage 6 2
Promote Friendliness of the Business Community
0 2
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10 Economic
Development Planning
Importance of Living, Working and Playing in the City
7 0
Business Community Needs to Participate 4 2
Creative Class 3 1
Note. The code system is indexed in accordance with the 10 stakeholder perceptions that influence entrepreneurism. Sub codes were developed through inductive data analysis in conjunction with an iterative review of one-to-one interview and focus group session transcripts.
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APPENDIX I
Focus Group Co-occurrence Model
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Figure I1. MAXQDA MAXMap Focus Group Co-occurance Model. This analysis is intended to demonstrate where sub codes intersect, demonstrating relationships among stakeholder perceptions. In this model, Entrepreneurs/Grass Roots Support demonstrated two (2) intersections with Business Assistance Programs/Useful for Networking, Relationships and Business Expansion and two (2) intersections with Business Assistance Programs/Provides Acces to Intellectual Capital.