128R_Entrepreneurship in cities (research summary)

Are you interested in how cities and entrepreneurship are connected? Summary of the article titled Entrepreneurship in cities from 2021 by Sam Tavassoli, Martin Oschonka, and David B. Audretsch, published in the Research Policy journal. Since we are investigating the future of cities, I thought it would be interesting to see how cities influence entrepreneurship and vice versa. This article presents which are the best performing cities in terms of knowledge spillovers and economic performance. As the most important things, I would like to highlight 3 aspects: The extent of density and diversity matters greatly in shaping economic vitality – meaning quality entrepreneurship. It is not just firms and industries that matter for knowledge spillovers, but ultimately the people who differ from one another not just in terms of human capital but in their personalities too, which is a key ingredient driving knowledge spillovers. What may really matter is how people in cities unlock their agentic tendencies to help turn a favourable city environment into economic outputs. You can find the article through this link. Abstract: Impactful, growth-oriented entrepreneurship is a major research and policy focus. Building on arguments put forward by Jane Jacobs more than 50 years ago, we propose that local knowledge spillovers in a city are enhanced by human agency in that city (e.g. local psychological openness). This effect is critically amplified by the catalyst function of a favorable structural city environment that not only connects these agentic people (via urban density), but also facilitates the production and flow of new knowledge for these connected agentic people (via a diverse industry mix). This three-way interaction effect was confirmed in our empirical investigation of quality entrepreneurship across the MSAs (cities) in the US, using a large-scale dataset of the psychological profiles of millions of people. Local openness shows a robust positive effect on the level of quality entrepreneurship. This effect is further strengthened by a favorable structural city environment (i.e. high density and diversity) by up to 35%. Reviving Jacobs’ people focus, the results indicate that the best performing cities in terms of knowledge spillovers and economic performance are those that are not only home to, and attract, agentic people, but also empower these people by means of a physical and industrial city landscape that enables them to act in more innovative and entrepreneurial ways, as envisioned by Jacobs. We discuss the policy implications of our findings and an agenda for future research. Connecting episodes you might be interested in: No.090 - Interview with Professor Matthew McCartney about economic sides of cities; No.108 - Interview with Dr Anthony Kent about economic geography; No.129 - Interview with Alan Donegan about entrepreneurship and city connections; You can find the transcript through this link. What wast the most interesting part for you? What questions did arise for you? Let me know on Twitter @WTF4Cities or on the wtf4cities.com website where the shownotes are also available. I hope this was an interesting episode for you and thanks for tuning in. Music by Lesfm from Pixabay