Introduction: Entrepreneurship in Community Development

Abstract

Community development has become a complex endeavor as local public officials and public officials strive to respond to changes in economic activity and the needs of an increasingly diverse population. While the specific issues differ, successful community development is important in both urban and rural areas. Also important, however, is a recognition that the approaches and opportunities for local development have changed markedly during the past several decades. A major focus in urban or regional development has been on immediate job creation. Downtown development was high on the list of activities when many, if not most, cities were either local or regional retail centers. Increases in transportation availability and shifts in retail marketing to shopping centers, discount stores, and the Internet have changed the economic development roles of many smaller communities, placing more pressure on community leaders to find other business opportunities. On a broader scale after WWII, traditional economic development efforts focused more on creating manufacturing employment with fiscal incentives and lower wages as southern states lured manufacturing from northern states. This "smokestack chasing" approach used by many developers, when successful, offered relatively quick and large employment increases, often with relatively higher wages than offered by retail or consumer service industries. The emphasis on economic development shifted in the 1970s with the findings by Birch and others that small businesses, rather than large corporations, were responsible for a majority of the employment growth (Birch, 1987). This interest in small businesses and start-ups spawned many business development and enhancement services such as the Small Business Development Network, Procurement Centers, business incubators, and other institutions aimed at helping potential entrepreneurs create business plans, seek start-up capital, and otherwise launch and promote their businesses. Also apparent was that retaining current businesses was equally or even more important in generating employment than attracting businesses. Interest then turned to finding ways in which existing and new businesses could collaborate to reduce costs, open additional markets, and otherwise be more competitive. "Third Wave" policies based partly on experiences in northern Italy and Scandinavian countries led to flexible manufacturing networks and other models built on the need to foster an environment and policies that enable businesses to be more competitive. These approaches also built on the work of Porter (1990) on clusters. The importance of community assets and business environment was recognized, more and more, as an essential ingredient in job creation and retention. More intense competition for manufacturing by off-shore locations forced many development practitioners to find innovative ways to compete for what seemed to be a smaller number of businesses seeking to relocate. Making businesses more competitive in the market and finding ways to increase the entrepreneurial spirit in a community were key to long-term economic development. Thus, practitioners realized that local prosperity had at least three general strategies. Traditional industrial attraction approaches form the basis for economic development in many communities, especially large cities with a staff that is able to market the cities to businesses. Second, business enhancement and development programs are still very common and are aimed at growth, or at least replacement, of smaller companies. In the past several years, approaches to development have shifted more to processes associated with economic change and business creation with specific attention paid to finding ways to increase the entrepreneurial climate and process within a region. The creation of entrepreneurship centers and associated agencies to support the outreach efforts of the Small Business Development Centers and other agencies emphasizes a need to specifically identify potential entrepreneurs and potential business opportunities. …