Introduction
When the term entrepreneurship comes to mind, many instantly think of Silicon Valley and the popular buzz surrounding promising tech startups. Although a formal, cohesive definition of entrepreneurship has yet to emerge from academics studying the issue, the association of newly formed businesses with innovation and economic growth has been widely studied. Joseph Schumpeter’s early work describes the role of the entrepreneur as an innovator, contributing to a process of creative destruction that disrupts incumbents and fosters economic growth. Further evidence suggests that more specifically, high growth potential entrepreneurship is most significantly associated with fueling economic growth.
Given these established links between entrepreneurship and economic growth, recent research has suggested that economic activity, as well as entrepreneurial activity, tend to cluster in geographic regions. The economic rationale underlying this observed phenomenon is that entrepreneurs tend to cluster in the same regions because a larger supply of entrepreneurs is associated with lower fixed costs for engaging in entrepreneurial activity in that location. A subsequent study reviewed existing research on the clustering of entrepreneurship and innovation and examined the ramifications this evidence might have upon policy interventions designed to affect local entrepreneurial activity. In this study, researchers cautioned that the roots and effects of entrepreneurial clustering are yet to be fully understood, and it is unclear whether governments can actually create entrepreneurship. Nonetheless, policymakers across the globe are still increasingly intrigued by the notion that policy can potentially be leveraged as a tool to stimulate the economic growth that often coincides with increased levels entrepreneurship and innovation.
Despite a lack of evidence on what policy interventions actually work, funding of public infrastructure to support entrepreneurial activity and startups has become a popular policy suggestion. Similar to how governments invest in highways or railroads as infrastructure to support economic activity, some researchers have suggested policies that publicly fund a type of infrastructure that can support entrepreneurial activity. Although literature evaluating different types of interventions is scant, recent research has suggested the startup accelerator model as a viable avenue for establishing this infrastructure and supporting the conditions for entrepreneurship. In the next section, I will provide a brief overview of startup and seed accelerators and the existing academic literature studying them.
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