David B. Audretsch

1
Entrepreneurship the Strategic Management of
Places

• David B. Audretsch
• Indiana University and Max Planck Institute,
  Entrepreneurship, Growth Public Policy

2
The Traditional Economy(Solow Model)
3
The Public Policy Dilemma

• Efficiency vs. Democracy
• Concentration vs. Decentralization
• Oliver Williamson, Economies as an Antitrust
  Defense The Welfare Tradeoffs, 1968
• Homogeneity

4
Public Policy Response Constraining Firms

• Public Ownership Sweden France
• Regulation Germany The Netherlands
• Antitrust United States
• Small Business Promotion Social Goal at an
  Economic Cost

5
Globalization
6
Strategic Response of Firms

• Complacency
• Substitute Technology Capital for Labor
• Decrease Wages
• Outward Foreign Direct Investment
• Shift to Knowledge

7
(No Transcript)
8
German Industries
Change in Employment in Germany and Foreign
Subsidiaries (1991-1995)
9
Stuttgart Region
10
Impact of Globalization

• De-linking Competitiveness of Firms from
  Competitiveness of Places

11
Rise in European Unemployment
12
Indiana Per Capita Income as a percent of US Per
Capita Income
13
Knowledge as Source of Competitiveness
14
The New Economy

• Endogenous Growth Model(Paul Romer)

15
Implications of Knowledge-Based Economy
(Limitations of Romer Model)

• Geography of Knowledge
• The Knowledge Filter Entrepreneurship as a
  Spillover Conduit

16
Why Is Knowledge Different?

• Hyper-Uncertainty
• Asymmetries
• High Transactions Costs
• Spillovers not Automatic (as Romer assumed)
• Results in Divergences in Valuation of Ideas

17
Economic Geography in the Knowledge Economy

• Knowledge vs. Information
• The Paradox of Globalization
• The Economic Value of Geographic Proximity
• Emergence of Local Knowledge Clusters
  Agglomerations Silicon Valley, Route 128,
  Munich,

18
The Role of Entrepreneurship Capital
19
Estimation of Growth Model
Table 3 Results of Estimation of the Production
Function Model
20
Estimation of Regional Labor Productivity
Table 4 Results of Estimation of the Model of
Labor Productivity
21
The Strategic Management of Places

• Entrepreneurship matters for growth
• Interpretation of new enabling entrepreneurship
  policies strategic management of places

22
Strategic Management of Places

• Entrepreneurial Economy
• Enabling
• Decentralized at Local Level
• Creation Commercialization of Knowledge

• Managed Economy
• Constraining
• Centralized at National Level
• Public Ownership, Regulation

23
Entrepreneurship Policies

• Universities as Engines of Economic Development
• Technology Transfer Commercialization
• Private-Public Partnerships

24
Examples from the U.S.

• The 21st Century Fund Indiana
• Austin, Texas
• Madison, Wisconsin

25
The U.S. Small Business Innovation (SBIR) Program

• Established by Congress in 1982 as a Response to
  U.S. Competitiveness Crisis
• Federal Agencies (Defense, NIH, NASA, Education,
  Energy) allocate 2.5 of budget for innovative
  small business
• 2 billion in 2004
• Goal Stimulate Innovation Entrepreneurship

26
SBIR Impact

• SBIR Firms Have Stronger Performance Examples
  Microsoft, Apple, Intel
• Create Entrepreneurial Career Paths of Scientists
  Engineers
• Create Entrepreneurial Culture

27

• What astonishes me in the United States is not
  so much the marvelous grandeur of some
  undertakings as the innumerable multitude of
  small ones.
• Alexis de Toqueville, 1835