Entrepreneurship in Depleted Communities Essay

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The article “Entrepreneurship in Depleted Communities: High Growth Firms in Declining Regions”, written by Dr. Doug Lionais, mainly discusses the entrepreneurial process of a group of high growth firms operating in depleted communities. Depleted communities are places that lack economic growth mechanisms, but to which people maintain social valuations and place attachment. The paper analyzes the entrepreneurial process from two aspects: firstly the article explores the decision factors that lead to the choice of location in depleted communities; secondly it discusses the challenges and advantages of the location experienced by the entrepreneurs, and also explores how the firms, once located, overcome the obstacles associated with their geographic location. Location decisions in depleted communities: One key question is raised based on the location decisions: “Why would an entrepreneur choose to locate in a depleted community?” Traditional location theories which are based on minimizing input and output costs of locations cannot explain the answer to this question, because entrepreneurial decision making is influenced by a broad range of internal and external factors, and not just based on the economic advantages. In order to answer this question, Dr. Lionais had conducted a study that targeted high-growth enterprises operating in a depleted community: Cape Breton, Nova Scotia. The entrepreneurs were asked to rank a list of 31 factors that influenced their location decisions. The results of the survey were that quality of life ranked the highest of all the location decision factors. Places that provided a safe area for families, proximity to extended family, cultural ties and natural beauty ranked high for those entrepreneurs. The study shows that personal factors, rather than business-related factors are the most significant concerns for those entrepreneurs

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