Both business leaders and policymakers have long understood the potential of entrepreneurship to foster local development. From Kenya’s Silicon Savannah to business-driven revitalization efforts in Detroit, Baltimore, and other urban areas, programs abound to revive local economies through entrepreneurial training, investment, and accelerators.
Research: How Entrepreneurship Can Revitalize Local Communities
An eight-year study of two Detroit-based accelerators reveals the pitfalls of “scaling up” — and the promise of “scaling deep.”
January 17, 2022
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Summary.
Much has been written about the potential for entrepreneurship to spur economic growth — and yet time and time again, we’ve seen business-driven revitalization programs fail to make a real, lasting impact on their local communities. What will it take to foster ventures that actually revive the economies in which they’re founded? The authors discuss the results of an eight-year investigation into two organizations that took opposing approaches to supporting entrepreneurs in Detroit. They argue that if the goal is to harness the power of entrepreneurship to revitalize impoverished places, business leaders and policymakers must shift away from a focus on scaling up, and that they must instead encourage founders to “scale deep” — that is, to grow slowly and become strongly embedded into the local economy, rather than growing as quickly and broadly as possible. This means investing not only in ventures that offer strong financial returns, but also in those that lift up their communities to achieve sustained self-reliance.