Regional Policies for Entrepreneurial Economic Growth

A new paper from the Ewing Marion Kauffman Foundation provides a roadmap for how regional economies can grow by forming and cultivating new firms rather than chasing after existing ones. While more and more regions are coming to agree with the assessment that �smokestack chasing� is largely a zero sum game in fostering economic growth, the new challenge centers on what policies officials can implement to encourage the formation of entrepreneurial business clusters. While the effectiveness of any single policy approach to creating a business cluster is relatively modest, the Kauffman Foundation research finds that the strongest consensus supports streamlining local regulatory approvals to forming new businesses and discouraging progressive taxation at the state and local levels. The least attractive options involve policies that target spending either on research programs or on particular industries or particular firms. Localities rarely have the requisite expertise required to make good decisions in this area, the report says.

In total, the report addresses seven areas of government policy that affect entrepreneurial activity including: education, local policies toward crime and amenities, physical infrastructure spending, legal infrastructure, general and targeted aspects of the tax code and targeted spending on entrepreneurial activities.

Access a copy of the paper, �Entrepreneurship and Urban Success: Toward a Policy Consensus.� Periodic updates to this document will be posted online at this location.

http://www.kauffman.org/pdf/state_local_roadmap_022608.pdf