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1.7 Entrepreneurial Environments

Birch’s study also showed that new firms, which take the place of older ones, tend to relocate and use a different workforce, and other resources such as needs of capital, transportation, governmental services, education, recreation, and energy. In fact, Birch’s study offered a preview of where next “business hot beds” were likely to emerge. One such was Austin, Texas, which discuss later in this chapter regarding an interesting mix of technology and artistic entrepreneurship. Birch showed that small firms and entrepreneurs were important for economic development of regions and subsequent studies confirmed this finding as well. Some of the best known examples are Silicon Valley and Route 128 that became models for similar examples worldwide. We are seeing entrepreneurial revival in rust belt cities like Detroit who have had to reinvent themselves.

For a thorough discussion encounter of the importance of regional developments in these areas, please read Saxenian’s (1994) book Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Regional agglomerations of business activities and communities exist everywhere and tend to be specialized to certain industries or ecosystems. For example, today these even have their own annual trade shows like SXSW (South by Southwest) attracting all major actors in the industries of internet, interactive digital technology, music, and films. Another is the Consumer Electronics Show held annually in Las Vegas where cutting-edge technology usually launches. One need only think of how the Detroit Auto Show still dominates the automobile industry or how the Paris Air Show does in aircraft.

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