Implications for Economic Development_How Stakeholder Perceptions Influence Entrepreneurism

IMPLICATIONS FOR ECONOMIC DEVELOPMENT: HOW STAKEHOLDER

PERCEPTIONS INFLUENCE ENTREPRENEURISM

A Dissertation

Submitted to the Faculty of Argosy University, Sarasota

College of Business

In Partial Fulfillment of the Requirements for the Degree of

Doctor of Business Administration

by

Richard J. Ferner, Jr.

July, 2013

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IMPLICATIONS FOR ECONOMIC DEVELOPMENT: HOW STAKEHOLDER PERCEPTIONS INFLUENCE ENTREPRENEURISM

Copyright @ 2013


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IMPLICATIONS FOR ECONOMIC DEVELOPMENT: HOW STAKEHOLDER PERCEPTIONS INFLUENCE ENTREPRENEURISM

Abstract of Dissertation

Submitted to the Faculty of Argosy University, Sarasota

College of Business

In Partial Fulfillment of the Requirements for the Degree of

Doctor of Business Administration

by


Argosy University

July, 2013

Dr. Pender Noriega

Dr. Kathleen Cornett

Department: College of Business

v

ABSTRACT

To address the challenges associated with a local economy encumbered by the

aftershocks of the Great Recession, this research study was designed to analyze the roles

of stakeholders, resources, and economic development strategies in promoting a healthy

regional economy to set the stage for developing a methodology for conducting primary

research. To establish clarity, the author initially conducted a review of the supporting

academic literature to assess how stakeholder perceptions influence entrepreneurism in

St. Petersburg, Florida. The author relied on qualitative research methods that

incorporated a purposive proportional quota sample of business owners and managers in

the City of St. Petersburg, Florida, and used one-to-one interviews and a focus group.

After synthesizing primary and secondary research findings, a subsequent analysis

demonstrated the importance of: (a) connections and alliances; (b) knowledge spillovers;

(c) grass roots support; (d) avoiding public policy contradictions; (e) properly aligned

business assistance programs; (f) university support in the formation of human capital;

(g) adequate supply of highly specialized human capital; (h) maintaining sufficient

financial reserves; (i) establishing a niche in the local marketplace ; and (j) an inclusive

approach to economic development planning.

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TABLE OF CONTENTS

Page

TABLE OF APPENDICES ............................................................................................. viii

CHAPTER ONE: THE PROBLEM ....................................................................................1 The Problem .........................................................................................................................1 Research Question .............................................................................................................10 Purpose of the Study ..........................................................................................................10 Definition of Terms............................................................................................................11 Significance of the Study ...................................................................................................15

CHAPTER TWO: REVIEW OF THE LITERATURE .....................................................16 Uncertainty .........................................................................................................................17 Intellectual Capital .............................................................................................................20 Entrepreneurs .....................................................................................................................21 Government........................................................................................................................24 Business Assistance Programs ...........................................................................................27 Universities ........................................................................................................................32 Human Capital ...................................................................................................................36 Financial Capital ................................................................................................................39 Brand Promotion ................................................................................................................48 Economic Development Planning ......................................................................................52 Summary ............................................................................................................................73

CHAPTER THREE: METHODOLOGY ..........................................................................75 Research Design .................................................................................................................75

Population and Sampling Procedures ..........................................................................75 Instrumentation ............................................................................................................77 Procedures ....................................................................................................................79 Methodological Assumptions ......................................................................................84

Data Processing and Analysis ............................................................................................85 Limitations .........................................................................................................................85 Delimitations ......................................................................................................................86

CHAPTER FOUR: DATA ANALYSIS AND RESULTS ................................................87 One-to-One Interview Participation ...................................................................................87 One-to-One Interview Coding ...........................................................................................88 One-to-One Interview Data Analysis and Results .............................................................89

Frequency Analysis ......................................................................................................89 Uncertainty .............................................................................................................89 Intellectual capital ..................................................................................................89 Entrepreneurs .........................................................................................................90 Government............................................................................................................91 Business assistance programs. ...............................................................................92 Universities ............................................................................................................93

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Human capital ........................................................................................................93 Financial capital .....................................................................................................94 Brand promotion ....................................................................................................94 Economic development planning ...........................................................................95

Co-Occurrence Analysis ..............................................................................................96 Focus Group Participation ...............................................................................................100 Focus Group Coding ........................................................................................................101 Focus Group Data Analysis and Results ..........................................................................102

Frequency Analysis ....................................................................................................102 Uncertainty ...........................................................................................................102 Intellectual capital ................................................................................................102 Entrepreneurs .......................................................................................................104 Government..........................................................................................................104 Business assistance programs ..............................................................................105 Universities ..........................................................................................................106 Human capital ......................................................................................................106 Financial capital ...................................................................................................107 Brand promotion ..................................................................................................107 Economic development planning .........................................................................108

Co-Occurrence Analysis ............................................................................................109 Recent Local Econometric Trends and Research Results ................................................110

CHAPTER FIVE: DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS .112 Discussion ........................................................................................................................112

Uncertainty .................................................................................................................112 Intellectual Capital .....................................................................................................113 Entrepreneurs .............................................................................................................114 Government................................................................................................................115 Business Assistance Programs ...................................................................................115 Universities ................................................................................................................116 Human Capital ...........................................................................................................117 Financial Capital ........................................................................................................118 Brand Promotion ........................................................................................................119 Economic Development Planning ..............................................................................121

Conclusion .......................................................................................................................124 Research Question .....................................................................................................124 Research Goals ...........................................................................................................126

Recommendations ............................................................................................................127 Conclusion .......................................................................................................................129

REFERENCES ................................................................................................................131

viii

TABLE OF APPENDICES

Appendix Page

A. Vacancy Rate Figures ................................................................................................142

B. Establishments by NAICS Code ................................................................................144

C. One-to-One Interview Informed Consent Form ........................................................147

D. Focus Group Discussion Guide .................................................................................149

E. Focus Group Informed Consent Form .......................................................................152

F. One-on-One Interview Codes ....................................................................................154

G. One-to-One Interview Co-occurrence Model ............................................................157

H. Focus Group Codes ....................................................................................................159

I. Focus Group Co-occurrence Model ...........................................................................164

1

CHAPTER ONE: THE PROBLEM

The Problem

The 2012 3rd Quarter Florida Small Business Index Survey, incorporating the

responses from 807 participants, revealed 64% of small business owners worry they will

be adversely impacted by regulations, restrictions, and taxes (Florida Chamber of

Commerce Small Business Council, 2012). In the context of willingness to engage in

hiring employees, 31% of respondents planned to do so in the next 6 months. In addition,

41% of respondents identified economic uncertainty as an impediment discouraging them

from hiring new employees, while 37% stipulated a lack of sales revenue to be an

inhibitor. In the context of access to capital, 73% of respondents reported they were not

able to secure financing over the last 6 months, which was a significant increase from the

41% reported in March of 2012. In the context of confidence in lending institutions, 52%

felt it would be harder to secure financing in the next 6 months. In the context of the top

five important issues facing Florida small businesses, 33% selected economic

uncertainty, 26% access to capital, 9% growth management process, 8% government

regulations, and 5% taxes (Florida Chamber of Commerce Small Business Council,

2012). Three years prior to this survey, DeLisle (2009) predicted this sentiment by

stipulating the nation had shifted from a market-based economy to a political economy

and indicating uncertainty would prevail until a bipartisan solution could be

implemented. To illustrate the nature of this concern, DeLisle stated:

The result of all this negativity has been a collapse in business confidence levels, which has placed many businesses on the defensive. In order to turn the corner in this downward cycle, credit flows and business confidence will have to be restored and bear close monitoring. (p. 11)

2

Colvin (2012) corroborated the findings reported by the Florida Chamber of

Commerce Small Business Council (2012) and DeLisle (2009) by stating economists had

detected significantly higher levels in the index of policy uncertainty (developed by

Stanford University and the University of Chicago). Colvin concluded heightened

uncertainty over tax and regulatory issues had instilled a lack of confidence in the

stability of economic policies, causing investors and business leaders to postpone capital

investment and hiring. DuBois (2012) stipulated the lack of bipartisanship in

Washington had instilled a sense of paralysis among business leaders and it was unlikely

abatement in the current state of affairs would occur until certainty had been restored. To

illustrate the impact of business uncertainty about Washington, MacDonald (2012)

posited the impasse had increased the nation’s unemployment rate by at least one

percentage point since early 2008. To overcome such concerns, Koba (2012) contended

all levels of government could improve the confidence of the business community by

being more supportive of entrepreneurs and innovators through the provision of the right

mix of incentives and fewer barriers to market entry. In the event that government cannot

and will not play a supportive role, DuBois recommended business leaders diversify their

portfolios and focus on medium- and long-term business opportunities to promote

growth.

This author’s assessment of the level of support provided to entrepreneurs in the

St. Petersburg area revealed a loose agglomeration of business assistance programs, some

of which fall under the auspices of the St. Petersburg Business Alliance (SPBA).

Noteworthy business assistance programs within the City of St. Petersburg include

City of St. Petersburg Business Assistance Center,

3

St. Petersburg Area Chamber of Commerce;

SCORE (national non-profit organization);

Florida Small Business Development Center (SBDC) at the University of

South Florida; and

SBDC at Pinellas County Economic Development.

Each program provides a range of services, to include: (a) entrepreneur training,

(b) start-up resources, (c) financing assistance, (d) business planning assistance, (e)

accounting and tax guidance, and (f) mentorship (SBDC, 2012). Despite the leadership

provided by the SPBA and the resource integration of business assistance programs,

redundancies are prevalent and a unified strategy for building sustainable business

clusters remains elusive (Trigaux, 2011a). In contrast, Hamilton (2008) stipulated

effective economic development programs are reflected in the convergence of economic

and political stakeholders engaged in coordinated strategic initiatives intended to change

the institutional environment for innovation.

A National Association of Manufacturers and the Council of Competitiveness

(NAMCC) survey focused on determining the best states for conducting business

revealed the State of Florida had dropped from an overall 18th place in 2011 to 29th

place in 2012 (Cohn, 2012; Trigaux, 2012). From 2011 to 2012, in the context of access

to capital, education, and infrastructure and transportation, Florida dropped from 9th to

24th place, 35th to 42nd place, and 8th to 11th place, respectively (Cohn, 2012; Trigaux,

2012). In addition, Trigaux (2012) reported Florida ranked comparatively low in the cost

of doing business (39th) and in quality-of-life (30th), but performed well in terms of its

workforce (3rd; e.g., education level, availability of workers, etc.). Despite Florida’s

4

high ranking for the desirability of its workforce, a qualitative examination conducted by

the Florida Center for Research and Science, Technology, Engineering and Mathematics

revealed

Nearly half of high school graduates entering Florida’s community colleges

required remediation in mathematics.

Less than 25% of bachelor’s degrees awarded through Florida state

universities were in science, technology, engineering, and mathematics

(STEM) fields of study.

Industry leaders consistently reported a shortage of qualified professionals to

fill STEM positions (Trigaux, 2011b).

Relying on a report from the Brookings Institution, Harrington (2012) reported

the Tampa Bay area ranked 88th out of the top 100 largest metropolitan areas for

matching education levels with the education requirements of employers. To illustrate

how a lack of qualified human capital can adversely affect a community’s potential for

achieving economic growth, Rothwell (2012) stated, “Less educated regional labor

markets may lack entrepreneurs who start or expand businesses, leading to fewer overall

openings and fewer openings for less educated workers” (p. 1). Rothwell noted higher-

educated employees in high-tech and exporting business sectors have consistently

stimulated the demand for local service jobs that require fewer academic credentials and

employers with a college education were found to be more likely to hire others to help

operate their businesses. In addition, Dewey (2012) and Harrington (2012) stipulated that

narrowing the education gap serves as an essential component for rejuvenating the health

of a metropolitan economy, which is often evidenced by sustained lower unemployment

5

and more robust job creation. Ultimately, Rothwell reported unemployment rates are

often two percentage points higher in large metropolitan areas with a shortage of

educated workers relative to demand and have been higher since the onset of the Great

Recession.

In the context of meeting the demand to fill highly-skilled jobs, Mizuno,

Mizutani, and Nakayama (2006) suggested structural unemployment can be exacerbated

by a shortage in qualified human capital. To demonstrate the value of a highly-skilled

workforce, Mizuno et al. reported an increase in highly-educated people by 10%

contributes to a 1% decrease in the unemployment rate. This situation is further

complicated by Florida’s historical dependence on construction and tourism, which are

highly susceptible to market forces that contribute to cyclical and seasonal

unemployment (Mizuno et al., 2006). As a potential remedy, Mizuno et al. suggested a

higher ratio of manufacturing sectors to service sectors can contribute to a lower

unemployment rate by insulating a region from market forces that contribute to higher

cyclical and seasonal unemployment. This remedy, however, is no panacea as structural

unemployment can be exacerbated by insufficient job-training programs and high

mobility costs (e.g., costs associated with changing occupations, financial transactions

associated with the sale of a home, etc.; Mizuno et al., 2006). To demonstrate the long-

term impact of Florida’s structural unemployment challenges, Denslow and Dewey

(2008) reported the State of Florida had a disproportionate share of relatively low-skilled

jobs (e.g., serving retirees, sales, food preparation, etc.) and the only high-skill

occupation groups in which Florida had a greater employment share than the nation were

in the fields of healthcare and law.

6

Adams (2012) disputed concerns over structural unemployment by contending the

skills shortage was a myth fostered by employers who were reluctant to invest in

employees by offering in-house training (e.g., apprenticeships, etc.) or who had

established unrealistic expectations for identifying perfectly qualified employees. Such

circumstances were evidenced by a Society for Human Resource Management (SHRM)

study that revealed only 38% of companies cross-train their employees to develop skills

not directly related to their jobs, which was a significant decline from the 43% in 2011

and 55% in 2008 (as cited in Adams, 2012). Adams posited that companies are taking

advantage of their dominance in the workplace to keep wages low and are cutting training

budgets to promote short-term gains that will likely prove to be unsustainable. To

overcome the skills disconnect, Pofeldt (2012) recommended human resources

professionals help their employers identify their long-term hiring needs and recruit

employees who represent a teachable fit. An employee classified as a teachable fit may

lack certain skills essential for the job, though through partnerships with local community

colleges and technical schools, flexible individuals could overcome such shortcomings

and emerge as a valuable resource.

Unemployment throughout the United States, the State of Florida, and the Tampa-

St. Petersburg-Clearwater Metropolitan Statistical Area (MSA) remains a contentious

issue. For example, the U.S. Department of Labor (2012) reported the average monthly

unemployment rate from January 2012 to June 2012 for the nation, State of Florida, and

the Tampa-St. Petersburg-Clearwater MSA remained elevated at 8.2%, 9.0%, and 9.1%,

respectively. Furthermore, an analysis of monthly unemployment rates from 2007 to

2012 revealed the Tampa-St. Petersburg-Clearwater MSA’s average monthly

7

unemployment rate of 8.9% has trailed behind the nation’s 7.7% and State of Florida’s

8.5% average monthly unemployment rates. Prior to the Great Recession, the U.S.

Department of Labor reported the 2002 to 2006 Tampa-St. Petersburg-Clearwater MSA’s

average monthly unemployment rate of 4.5% outperformed the nation’s 5.4% and state’s

4.6% average monthly unemployment rates. In addition, Weidner and Williams (2011)

contended that prior to the Great Recession, the normal unemployment rate was 4.8%.

Following the Great Recession, the Congressional Budget Office (CBO) adjusted that

statistic to 5.2%, attributing this phenomenon to: (a) the extension of unemployment

benefits and the reduced incentive of the unemployed to seek less desirable jobs, (b) the

skills mismatch between job seekers and employers, and (c) the sizable increase in long-

term unemployed exacerbated by deteriorating skills and a weakening labor market

(Weidner & Williams, 2011).

In the context of the best cities for young professionals, the Tampa Bay region

was rated last (40th) among metropolitan areas by Forbes in 2008. This low ranking was

attributed to the service-oriented nature of the local economy, diminished tourism, the

prevalence of individuals living on a fixed income, and a lack of innovation (Woolsey,

2008a). In addition, Woolsey (2008b) reported employment opportunities for 25- to 35-

year-olds lagged due to an ongoing vicious cycle that was inhibiting the region’s ability

to attract top performing firms and the nation’s best young talent, which is best described

as a simultaneity problem. Woolsey posited the region had been put at a disadvantage in

terms of the research capabilities and reputation of local universities. Furthermore,

Woolsey stipulated it requires a critical mass of research universities on the level of

Stanford or Harvard to promote innovative companies and attract world-class

8

professionals. To illustrate the challenge of recruiting world-class professionals,

Woolsey reported Tampa ranked last (32nd) among major American cities in its ability to

attract 1998 graduates of Ivy League academic institutions.

In the context of Florida’s short-term workforce composition, Dewey (2012)

reported an unfavorable trend––between 2001 and 2008, low paying positions had

increased even as per capita income throughout the nation was on the rise. Likewise,

Dewey stipulated that if not for the construction industry’s growth during this period,

declining wages would have been more pronounced. In essence, Florida’s construction

boom over the past two decades had obscured this trend (Dewey, 2012). Furthermore,

Dewey posited Baby Boomer retirements, labor market polarization, and the tendency for

high skill jobs to cluster together would likely strengthen this trend.

Holt, Colburn, and Leverty (2012) corroborated Dewey’s (2012) findings by

predicting Florida’s pool of workers to retirees would decline from a ratio of three to one

to two to one by 2030. In contrast, the nation maintains a ratio of four to one. This

disparity is even more problematic for Florida because the government tax structure relies

heavily on an active workforce to deliver goods and services that are essential for

promoting a favorable quality-of-life, especially for an aging population dependent on

fixed or declining incomes (Holt et al., 2012).

Ammons and Morgan (2011) stipulated that low vacancy rates for existing office,

retail, and industrial facilities serve as a sign of economic vitality. Voith and Crone

(1988), relying on a sample of 17 central business districts (CBDs), reported an optimal

or natural vacancy rate to be greater than 7% for CBD markets in the South. In addition,

under normal circumstances, Voith and Crone posited the effects of market shocks on

9

vacancy rates dissipate rapidly in most markets. This does not appear to be the case for

the Tampa Bay region (Tampa-St. Petersburg-Clearwater MSA). Albright (2012)

reported that while the Tampa Bay region’s average retail vacancy rate had improved

from 11.5% in 2011 to 10.3% in 2012, it had been diminished by poorly performing

downtown areas in Tampa and St. Petersburg, overbuilt areas in Pasco County, and

neighborhoods laden with outdated strip centers. Despite this overall improvement,

Yeates and Montgomery (1999) warned this phenomenon could be more reflective of the

removal of commercial stock due to redevelopment or land-use adjustments as opposed

to improving economic conditions. Likewise, Yeates and Montgomery contended the

growth of big-box retailers and shopping centers can contribute to a declining

commercial vacancy rate. Similarly, from 2007 to 2012, St. Petersburg construction

permits increased 8% while paid business tax receipts declined 8.2%.

To demonstrate the local econometric performance of St. Petersburg, the City of

St. Petersburg (2012a) reported:

Downtown area office space vacancy rates increased from 11.9% in 2007 to

13.7% in 2012 (15.1% increase; See Appendix A).

Downtown area retail vacancy rates increased from 1.4% in 2007 to 11.9% in

2012 (750% increase).

Gateway area office vacancy rates increased from 12.4% in 2007 to 13.4% in

2012 (8.1% increase; See Appendix A).

Gateway area and Mid-Pinellas industrial and flex space vacancy rates

increased from 5.5% in 2007 to 9.6% in 2012 (74.5% increase).

10

Construction permits issued increased from 18,937 in 2007 to 20,446 in 2012

(8.0% increase).

Paid business tax receipts decreased from 17,344 in 2007 to 15,923 in 2012

(8.2% decrease).

In the context of a community’s market characteristics and commercial vacancy rates,

DeLisle (2009) contended the most adversely affected regions would be those classified

as secondary and tertiary markets that do not possess a competitive advantage.

Ultimately, Swider (2008) attributed this regional phenomenon to increased competition,

economic uncertainty, and corporate downsizing.

Research Question

How do stakeholder perceptions influence entrepreneurism in the City of St.

Petersburg, Florida?

Purpose of the Study

The purpose of this study was to promote a dialog among community

stakeholders and provide the impetus for the creation and implementation of a strategic

plan that can provide the foundation for renewed economic development initiatives in the

City of St. Petersburg, Florida. In addition, research participants were provided an

opportunity to learn more about how stakeholder perceptions influence entrepreneurism

and how they can use that knowledge to improve their strategic positioning for promoting

growth and improving communication with other influential members of the local

business community. In the context of the potential benefits to the professional audience

engaged in this research study, the author’s intention was to add to the collective

knowledge of business leadership studies that both positively and negatively impacts

11

entrepreneurism and economic development and therefore contributes to overall

leadership effectiveness. The goals for this research study were to

determine how economic, social, and environmental factors inspire or inhibit

entrepreneurism;

determine how stakeholder perceptions influence entrepreneurism; and

determine how the interactions of economic, social, and environmental

factors, as well as the perceptions of stakeholders, inspire or inhibit

entrepreneurism.

Definition of Terms

Angel investor. An investor who provides the financial backing for small start-

ups or entrepreneurs. Angel investors are usually found among an entrepreneur’s family

and friends. The capital they provide can be a one-time injection of seed money or

ongoing support to carry the company through difficult times. Angel investors give more

favorable terms than other lenders, as they are usually investing in the person rather than

the viability of the business. They are focused on helping the business succeed rather

than reaping a huge profit from their investment. Angel investors are essentially the

exact opposite of a venture capitalist (Investopedia, 2012a).

Business incubator. A firm engaged in fostering early-stage companies through

the developmental phases until such time as the company has sufficient financial, human,

and physical resources to sustain functional independence. The business incubator can be

either a non-profit or for-profit entity and can provide assistance through: (a) access to

financial capital through relationships with financial partners, (b) access to experienced

business consultants and management-level executives, (c) access to physical location

12

space and business hardware and software, and (d) access to informational and research

resources through relationships with local universities and government entities

(Investopedia, 2013).

Creative class. A fast growing, highly educated, and well compensated segment

of the workforce on whose efforts corporate profits and economic growth are increasingly

dependent. Members of the creative class perform a wide variety of tasks in a wide

variety of industries, from technology to entertainment, journalism to finance, and high-

end manufacturing to the arts. These individuals do not consciously think of themselves

as members of this class; however, they share a common ethos that holds creativity,

individuality, difference and merit in high regard (Florida, 2002).

Creative destroyer. Entrepreneurs who create new wealth through innovation

that, in turn, destroys existing market structures used by incumbents to promote

competitive advantage (“Creative destroyer,” 2004).

Cyclical unemployment. A factor of overall unemployment that relates to the

cyclical trends in growth and production that occur within the business cycle. When

business cycles are at their peak, cyclical unemployment will be low because total

economic output is being maximized. When economic output falls, as measured by the

gross domestic product (GDP), the business cycle is low and cyclical unemployment will

rise. Economists describe cyclical unemployment as the result of businesses not having

enough demand for labor to employ all those who are looking for work. The lack of

employer demand comes from a lack of spending and consumption in the overall

economy (Investopedia, 2012b).

13

Great Recession. A buzz word that describes the recession that started in

December of 2007 in terms of the Great Depression of the 1930s. Generally, the Great

Recession lasted longer and was more severe than prior recessions. However, the

severity of economic decline has not eclipsed the levels reached by the Great Depression

(Investopedia, 2012c).

Industrial recruitment. A competitive strategy employed by communities to

attract new business firms from other markets by relying principally on financial

incentives that can serve to lower production costs and increase competitive advantage

(Renski, 2009).

Normal employment rate. The unemployment rate that occurs in even a healthy

economy because workers are always coming and going, looking for a better job, and

often they are unemployed until they find that better job. The only way an economy

could have a 0% unemployment rate is if it was severely overheated. Even then, wages

would probably rise before there could actually be no unemployment (Amadeo, 2012).

North American Industry Classification System (NAICS). The standard relied

upon by federal statistical agencies in classifying business establishments for the purpose

of collecting, analyzing, and publishing data associated with the U.S. business economy

(U.S. Census Bureau, 2012).

Recency bias. The inclination to rely on a recent experience as the baseline for

what will happen in the future (Richards, 2012).

Return on investment. A performance measure used to evaluate the efficiency of

an investment or to compare the efficiency of a number of different investments. To

14

calculate ROI, the benefit (return) of an investment is divided by the cost of the

investment; the result is expressed as a percentage or a ratio (Investopedia, 2012d).

Seasonal unemployment. Periodic unemployment created by seasonal variations

in particular industries, especially industries such as construction that are affected by the

weather (“Seasonal unemployment,” n.d.).

Selectionism. Trying several alternative solutions and selecting the option that

demonstrates the potential for best ex post performance (Sommer, Loch, & Dong, 2009).

Structural unemployment. Unemployment resulting from changes in the basic

composition of the economy. These changes simultaneously open new positions for

trained workers. An example of structural unemployment is the technological revolution.

Computers may have eliminated jobs, but they also opened up new positions for those

who have the skills to operate computers (Investopedia, 2012e).

Trial-and-error learning. Actively searching for new information and

demonstrating flexibility by adjusting activities and targets when encountering new

findings. This method requires stakeholders to apply new and original problem-solving

methods as new information is acquired (Sommer et al., 2009).

Venture capital. Money provided by investors to start-up firms and small

businesses with perceived long-term growth potential. This is a very important source of

funding for start-ups that do not have access to capital markets. It typically entails high

risk for the investor but has the potential for above-average returns. Venture capital can

also include managerial and technical expertise. Most venture capital comes from a

group of wealthy investors, investment banks, and other financial institutions that pool

such investments or partnerships. This form of raising capital is popular among new

15

companies or ventures with limited operating history, as they cannot raise funds by

issuing debt. The downside for entrepreneurs is that venture capitalists usually get a say

in company decisions in addition to a portion of the equity (Investopedia, 2012f).

Significance of the Study

This dissertation research study is significant because it represents what the

author posits to be a departure from the routine examination of factors that influence

community economic development. Unlike quantitative research methods, the author

concluded that qualitative research methods would enable him to clarify how the lived

experiences of respondents shaped their perceptions and, ultimately, how those

perceptions influence entrepreneurism in the City of St. Petersburg. The audience who

will likely derive value from this dissertation research study includes business leaders,

managers, politicians, public administrators, representatives of non-governmental

organizations (NGOs), and academics.

16

CHAPTER TWO: REVIEW OF THE LITERATURE

Smedlund (2006) contended that healthy regional economies demonstrate the

capacity to maintain their critical mass of constant innovation and effective production as

a means of preventing slow decay. Furthermore, a healthy regional economy will inspire

confidence as evidenced by its ability to attract flows of capital, competent employees,

and multinational companies. By virtue of this type of performance, regional economies

will demonstrate the ability to compete against other regional economies (Smedlund,

2006). Since 1993, however, U.S. companies with at least 25,000 employees have

experienced a net drop in employment due to the propensity for large firms to engage in

downsizing, outsourcing, and off shoring (Corman, Lussier, & Nolan, 1996; Gupta &

York, 2008; Judd & McNeil, 2008). Dymski (1996) and Judd and McNeil (2008)

contended that large firms cannot be depended upon for job creation as they have likely

contributed to the diminished state of job and wealth structures. For example, Judd and

McNeil reported there was no net contribution in job creation from large firms from 1990

to 2003 as evidenced by their contribution of 40% of gross new jobs and 43.5% of gross

job loss. Exacerbating this situation, Judd and McNeil reported the formation of large

firms in certain areas of the nation actually discouraged the establishment of start-ups and

retarded the growth of existing firms, adversely impacting net economic performance.

Conversely, small firms have been recognized for their role as the nation’s

primary engine for job creation (Corman et al., 1996; Friar & Meyer, 2003; Gupta &

York, 2008; Hamilton, 2008; Henderson, 2002; Judd & McNeil, 2008). For example,

Judd and McNeil (2008) reported that from 1990 to 2003, small firms experienced job

losses of 24% and job growth of nearly 80%. In addition, Appelbaum and Kamal (2000)

17

reported small business firms (i.e., fewer than 100 employees) employ 60% of the U.S.

workforce and represent 45% of gross national product (GNP). Likewise, Judd and

McNeil reported family businesses (large, medium, and small) employ nearly 85% of the

U.S. workforce, generating nearly 49% of gross domestic product (GDP), creating 70%

to 80% of all new jobs, and representing an estimated 17 million to 23 million firms

operating in the United States.

To address the challenges associated with a local economy encumbered by the

aftershocks of the Great Recession, this author relied on a literature review to analyze the

roles stakeholders, resources, and economic development strategies play in promoting a

healthy regional economy and set the stage for developing a methodology for conducting

primary research. Ultimately, to establish clarity, the author evaluated how stakeholder

perceptions associated with (a) uncertainty, (b) intellectual capital, (c) entrepreneurs, (d)

government, (e) business assistance programs, (f) universities, (g) human capital, (h)

financial capital, (i) brand promotion, and (j) economic development planning influence

entrepreneurism in St. Petersburg, Florida.

Uncertainty

Koetse, Van der Vlist, and de Groot (2006) revealed that as uncertainty increases,

the benefits of delaying investment decisions can be especially acute when considering

the degree of irreversibility (e.g., sunk costs, long-term financial compacts, etc.) of an

investment. Large firms typically possess a greater advantage over smaller rivals when

considering the availability of information. Information derived from financial expertise

and resources enable larger firms to seize upon opportunities to hedge against risk and

uncertainty (Koetse et al., 2006). In addition, Koetse et al. contended that increased

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uncertainty often has a substantial effect on investment spending, especially for smaller

firms. Despite the advantages larger firms possess, unforeseen uncertainty can derail

even the best laid plans. Sommer et al. (2009) stipulated that even the most rigorous risk

planning methods are insufficient when it comes to the unexpected. To overcome this

challenge, both large and small firms should rely on selectionism and trial-and-error

learning to establish whether their product or service can demonstrate its true market

potential even when encumbered by complexity and uncertainty. Such methods are often

evidenced by the application of iterative testing cycles to identify and adapt to rapidly

changing technologies, changing customer tastes, and significant regulatory changes

(Sommer et al., 2009). For start-ups in an environment of moderate complexity and high

uncertainty, Sommer et al. recommended entrepreneurs develop a detailed plan, focus on

learning, and invest significant effort in identifying unknown factors as the best strategy

for reducing knowledge gaps.

Interestingly, Freel (2005) and Van Gelderen, Frese, and Thurik (2000) looked

upon uncertainty as a prerequisite for entrepreneurism and innovation. To illustrate this

position, Freel stated:

Accepted wisdom now holds uncertainty as a first principle – that is, as a cause, rather than a consequence, of entrepreneurship and innovation. The bounded rationality and knowledge imperfections of market participants (i.e., uncertainties in the relevant environment) create indeterminate opportunities for profit through the introduction of novelty. (p. 49)

As creative destroyers, entrepreneurs must develop measures to assess environmental

uncertainty to compensate for their own limited learning capabilities and lack of

knowledge about cause and effect relationships (Freel, 2005; Van Gelderen et al., 2000).

Freel (2005) recommended an emphasis on the following environmental

variables: (a) suppliers, (b) competitors, (c) customers, (d) financial markets, (e)

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government and regulatory agencies, and (f) trade unions. Even if business leaders have

sufficient experience to promote their innovations, a hostile environment and intense

competition can pressure firms to adopt strategies that favor financial conservation over

innovation. In many cases, environmental uncertainty can make funding new ventures

less attractive (Storrud-Barnes, Reed, & Jessup, 2010). Some firms, regardless of

economic conditions, will seek to distinguish themselves on the basis of product

differentiation (e.g., premium pricing, incremental improvements, etc.) as opposed to real

innovation (Freel, 2005). Despite such practices, the ability to innovate may ultimately

be contingent upon a firm’s ability to recruit and retain talented human capital.

Ultimately, promoting innovation may help foster a workplace that is perceived as less

hostile and more certain despite conditions in the competitive environment (Freel, 2005).

Liao and Gartner (2006) noted some level of business planning is essential to the

survival of new ventures. In fact, they contended nascent entrepreneurs who completed a

business plan were 2.6 times more likely to survive the initial stages of firm formation.

Early planning proved to be essential in the initial stages of start-up formation, especially

when operating in environments encumbered with financial uncertainty and significant

competitive pressures. Despite these initial findings, Liao and Gartner revealed some

nascent entrepreneurs planned late when they perceived less financial, competitive, and

operational (e.g., obtaining raw materials, attracting employees, and obtaining supplies)

uncertainty. In addition, some researchers advocate the abandonment of strategic

planning altogether when faced with uncertainty. Rather, under this philosophy, nascent

entrepreneurs would be better served by abandoning the strategic planning process and

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adopting a more adaptive method of responding to emerging challenges (Liao & Gartner,

2006).

Intellectual Capital

Doring, Knappitsch, and Aigner (2010) and Hamilton (2008) stipulated the

geographic or spatial agglomeration of businesses in metropolitan areas often results in

the production of knowledge spillover effects that contribute to economic growth and

higher per-capita value creation. Likewise, Firestone (2010) theorized that establishing

operations near another industry can serve to reduce innovation costs, and productivity

benefits from localized knowledge spillovers often outweigh an increase in congestion

costs, promoting equilibrium between diversity and productivity. To achieve this state of

equilibrium, Firestone indicated policy makers should attempt to establish technological

links (e.g., common knowledge base) between the current industrial base and targeted

industries in order to lower the subsidy thresholds necessary to attract new firms. In

addition, Firestone stipulated that when cities attain a state of equilibrium, the benefits

(e.g., offset congestion costs, lower transportation costs, lower commuting costs, etc.)

from cross-industry spillovers make the community more appealing to firms and

entrepreneurs.

Downtown areas often serve as the epicenter for business firm agglomeration and

knowledge spillovers. R. Baker (2011), a former mayor of the City of St. Petersburg,

illustrated this position by stating:

A downtown is more than a location on a map. It is where a city defines itself, and it is the prism through which the outside world views the city. Downtown is a city’s heart, so if a city is to thrive, its heart must be strong. A downtown with a large commercial, office, and residential base will contribute significantly to the tax rolls of the city with the effect of reducing the tax burden on residents in the city’s neighborhoods, helping residents throughout the city save money. But

21

downtown is more than just a revenue producer. The city center contains many of the community’s businesses, apartments, restaurants, parks, and museums. The major events typically occur there. When it works, downtown becomes the gathering place for the entire city and the surrounding areas. (p. 52)

In addition, R. Baker stipulated that companies and employees alike are attracted to

downtown areas with a higher perceived quality-of-life. Likewise, if vibrancy improves,

there is a significant likelihood that businesses will want to join the downtown

community (R. Baker, 2011). Ultimately, Florida (2012) contended human capital

clusters are responsible for the agglomeration of business firms, which in turn,

concentrate to seize upon the advantages that are derived from common labor pools, not

just to take advantage of linked networks and suppliers.

Entrepreneurs

Relying on quantitative data from 1990 to 2001, Gupta and York (2008) reported

areas of the United States with the highest entrepreneurial growth experienced 125%

higher employment growth, 58% higher wage growth, and 109% higher productivity. In

the context of facilitating conditions that foster job creation, Audretsch and Keilbach

(2005), Corman et al. (1996), Falcone and Wilson (2008), Florida (2012), Gupta and

York (2008), Lerner (2010), Renski (2009), and Yusuf (2010) contended it is essential for

local stakeholders to establish a culture of support to attract and anchor entrepreneurial

firms. To illustrate the importance of this position, Florida (2012) noted creative

individuals require a supportive environment comprising a broad array of social, cultural,

and economic stimuli. Likewise, Smedlund (2006) stipulated stakeholders can facilitate

this endeavor by promoting interconnected networks supported by the collaboration of

regionally embedded institutions (e.g., governments, chambers of commerce, employer’s

unions, banks, science parks, universities, and training centers).

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Acting as intermediaries, these institutions rely on interconnected networks to

facilitate knowledge transfers for the purpose of attracting financial and creative human

capital (Smedlund, 2006). To illustrate the importance of this issue, Gupta and York

(2008) stated:

Entrepreneurial climate is important not only in creating nascent entrepreneurs, but also in promoting the transition from entrepreneurial attitudes to firm formation and growth. As such, a key topic for entrepreneurship research is to understand what general populations, as well as small business owners’ attitudes are toward entrepreneurship and small business. (p. 349)

Henderson (2002) stipulated that entrepreneurial activity has been recognized for

up to a third of the difference in economic growth rates between nations, contributing

favorably to gross domestic product (GDP). Likewise, Doh (2000) stipulated

entrepreneurial firms demonstrate the following advantages: (a) proactive toward

marketplace opportunities, (b) risk tolerant, (c) innovative, and (d) adaptive to changing

economic conditions. To demonstrate the importance of entrepreneurism in the United

States, Yusuf (2010) reported 70% of the nation’s economic growth was derived from its

associated activity and 67% of all inventions and 95% of all radical innovations created

since World War II have been originated by this method for economic growth.

Bednarzik (2000) defined entrepreneurship as “any attempt at new business or new

venture creation, such as self-employment, a new business organization, or the expansion

of an existing business, by an individual, a team of individuals, or an established

business” (p. 14). Lichtenstein, Lyons, and Kutzhanova (2004) stipulated that

entrepreneurs often act in the capacity of a marriage broker––demonstrating what is

desirable from an economic (opportunity) perspective and what is possible from a

technological (innovation) perspective. Essentially, an entrepreneur’s primary goal is to

create or capitalize on new economic opportunities through the process of innovation.

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Entrepreneurs develop novel solutions to existing problems or establish connections

between existing solutions and unmet needs or new opportunities (Lichtenstein et al.,

2004). Likewise, Ho and Wong (2006) contended that entrepreneurs are motivated by

either marketplace opportunities or necessity––driven to self-employment by the absence

of alternative employment. In the context of what facets characterize entrepreneurial

start-ups, Falcone and Wilson (2008) contended:

Entrepreneurs often lack deep managerial or industry experience.

Businesses tend to be low investment, high uncertainty, have low potential for

profit, and lack start-up capital to secure large returns.

With limited start-up capital, high uncertainty, and minimal planning,

entrepreneurs must be adaptive.

Without a track record, entrepreneurs often have difficulty securing resources,

which requires them to make tradeoffs to gain the assistance of investors.

Entrepreneurs need to have a tolerance for ambiguity and possess a solid work

ethic in the initial stages of development.

Renski (2009) stipulated that entrepreneurship was the key to reinvigorating

communities in the United States as evidenced by its close ties to the formation of human

capital and regional economic growth. Likewise, Degan (2010) described entrepreneurs

as agents of creative destruction who promote innovation by rendering more expensive or

lower performing products or services as obsolete and introducing value added

alternatives that are less costly and more efficient. Lichtenstein et al. (2004) contended

human capital is the key element in developing an entrepreneurial society. Gupta and

York (2008) and Henderson (2002) reported that in the decade preceding the economic

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recession of 2007, entrepreneurs facilitated an estimated 75% of the 500,000 jobs created

on an annual basis.

Government

In the context of government’s role in facilitating start-ups and existing business

expansion, Corman et al. (1996) contended resources should be directed at the provision

of quality education programs (e.g., supporting the formation of a highly-skilled

workforce), reliable infrastructure (e.g., roads, transportation, utilities, etc.), and

efficiency and timeliness in helping firms make appropriate decisions (e.g.,

standardization of regulations, etc.). Despite the level of clarity encompassing local

government’s role in promoting favorable economic conditions, one of two approaches

are typically relied upon––local governments take no action and allow the marketplace to

resolve such challenges or they take an active role and engage in intervention. During

recessionary periods, however, intervention is often an essential strategy to sustain

businesses until the next expansionary period (Corman et al., 1996).

To illustrate the critical nature of government intervention during recessionary

periods, Corman et al. (1996) stated:

The need for capital during recessions was ranked fourth in difference between importance and satisfaction. However, during the expansion period, it dropped from the top 10 list of discrepancies between importance and satisfaction. An important consideration for public policy makers is to make capital available to small business owners during periods of recession a high priority and less of a priority during expansion periods. The Small Business Administration (SBA) is doing the opposite. During the recession the SBA was not making many loans, but in 1995 during the expansion the SBA determined that making loans was a top priority. Public policies were in contradiction. At the same time the SBA was making loans available to stimulate the economy, the Federal Reserve was raising interest rates to slow down economic growth. During periods of expansion, the emphasis should change from making loans and toward further development of the infrastructure and other factors listed. (p. 5)

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In the context of suitable intervention strategies, Corman et al. recommended

governments avoid public policy contradictions and cut taxes during recessionary periods

as a means of increasing consumer demand to stimulate sales. Likewise, small

businesses should establish reserves during expansion periods to compensate for capital

scarcity during recessionary periods (Corman et al., 1996). Doring et al. (2010)

recommended governments ensure their administrators remain flexible, timely, and

develop a well-functioning regional network (e.g., cooperation with the Chamber of

Commerce, regional academic research institutions, and decision-makers at all levels of

government). In contrast, Doring et al. revealed extensive subsidies for businesses,

comparatively high per capita expenditures for cultural and social activities, as well as

deficiencies in the industrial real estate management of a municipality adversely affect a

local economic climate. In the context of privatization of public services and targeting

businesses for existing industrial clusters strategies, Doring et al. found none of these

activities had a positive impact.

To achieve positive outcomes, Maloney and Wassall (2013) recommended

community partnerships between local leaders representing: (a) an intermediary

organization, (b) the local government, and (c) representatives of the cultural community

(through grant funding and technical assistance). In addition, Maloney and Wassall

stipulated local government, as a partner, should perform the following tasks:

direct services, by providing direct funding, signage, and infrastructure

improvements;

indirect services, by providing meeting space and marketing, communications,

and social media assistance; encouraging government employees and officials

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to attend meetings, speaking publically about the importance of the arts; and

giving the community opportunities to be heard; and

provide a local seal of approval by announcing local government support of

the arts and cultural projects.

In addition, Maloney and Wassall stipulated the most important factor in the success of

cultural economic development was the local government. In essence, local government

leaders, resources, and its innate ability to bring stakeholders together demonstrate the

importance of its influence in economic development partnerships. Ideally, an effective

partnership-based strategy would endeavor to: (a) increase attendance at cultural events,

(b) encourage people to visit the downtown area, (c) increase sales of cultural goods, (d)

encourage knowledge workers to relocate to the local community, and (e) increase

cultural tourism (Maloney & Wassall, 2013).

Schmitz (2013) recommended local governments establish cultural tax districts as

an effective policy tool for supporting the expansion of the local arts community.

Providing clarity, Schmitz contended the cultural tax districts support the investments in

local culture, increase direct local spending on the arts, and help develop an educated

workforce. Conversely, Pedroni and Sheppard (2013) criticized this approach by

stipulating that the link between culture and economic prosperity may have adverse

characteristics. As such, if too many resources are allocated to culture production, that

may inhibit investments in schools, roads, and other infrastructure. In essence, Pedroni

and Sheppard introduced the possibility that the production of culture may yield short-

term benefits, but there was little evidence of a causal connection to economic prosperity

in the long-run.

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Business Assistance Programs

Despite increasing demands for business assistance (government agencies,

business programs, and voluntary groups manage 74% of assistance programs studied),

Yusuf (2010) contended that support programs only meet entrepreneurs’ needs 26% of

the time. To illustrate the importance of a public agency’s role in fostering

entrepreneurial activity and business incubation, Henderson (2002) reported this method

of job creation costs $1,000 less per new position than alternative job creation strategies.

Yusuf stipulated that such programs are poorly aligned with entrepreneurs’ latent and

expressed needs. In addition, support programs and other forms of assistance are critical

to the success or failure of business start-ups, especially in the initial stages of

development.

Entrepreneurial assistance is the most common intervention method applied by

governments at all levels. Assistance often takes the form of training, information, and

advisory programs. These types of assistance are critical because they can provide the

impetus for helping entrepreneurs develop the capacity to engage in strategic planning,

which contributes favorably to the financial performance and survivability of small

businesses (Lussier, Sonfield, Corman, & McKinney, n.d.). For example, Jones and

Tullous (2002) revealed that one in four pre-venture entrepreneurs go into business after

receiving Small Business Development Center (SBDC) assistance counseling and among

those that actually establish operations, 86% remain in business after 2 years. In

addition, SBDC clients experience 106% sales growth and 93% full-time employment

growth as compared to 18% sales growth and 16% full-time employment growth for non-

SBDC clients (Jones & Tullous, 2002).

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In the absence of the right combination of resources (e.g., financial, human,

social, and social capital), entrepreneurs rely on assistance programs to provide guidance

for developing solutions (e.g., business plans, marketing plans, building management

teams, obtaining capital, etc.; Sherman, 1999; Yusuf, 2010). Sherman (1999) contended

firms that make use of such programs are likely to retain their assistance for up to 2.5

years, which is a sufficient amount of time for a successful start-up to establish itself as

an independent, self-sustaining business. In addition, Yusuf (2010) contended

entrepreneurial assistance programs are resource-intensive and considering the

implications of the failure rates of start-ups, it is essential that their effectiveness in

supporting the business community be evaluated. Evaluation criteria should include an

emphasis on:

attendance or participation;

participant satisfaction;

program referrals and reputation;

subjective assessments of overall program effectiveness;

attributions of tangible and specific program benefits; and

subsequent performance of participants in accordance start-up measures such

as propensity, survival, growth, and profitability (Yusuf, 2010).

In the context of what type of assistance entrepreneurs sought, Yusuf’s research

involving a sample of 66 entrepreneurs revealed:

21.2% sought advice on how to start or manage a new business;

18.1% wanted to learn about product, production, and market fundamentals;

16.7% wanted networking or referral assistance;

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16.7% wanted to receive general training or information;

4.5% sought guidance on legal, political, or administrative issues;

1.5% were attempting to fulfill goals or achieve satisfaction; and

21.2% were classified as other.

In the context of the actual support or assistance received, Yusuf’s research involving 66

entrepreneurs demonstrated:

24.2% received networking or referral assistance;

21.2% received training on how to start or manage a new business;

18.1% received general training or information;

13.6% learned about product, production, and market fundamentals;

3.0% received emotional support;

1.5% received guidance on legal, political, or administrative issues; and

18.2% were classified as other.

Yusuf’s (2010) research revealed only 30% of the entrepreneurs actually received

the assistance they sought. To demonstrate the nature of the misalignment, entrepreneurs

in the study stipulated the assistance they received from SBDCs was reflected in an

improper matching of the expertise and skills of the advisor who was assigned to meet

their needs (Yusuf, 2010). As an alternative explanation for the misalignment, Yusuf

posited that entrepreneurs shared some responsibility due to their inability to identify

their actual or latent needs in terms of resources and competencies. Essentially, their

expressed support needs were not in alignment with their actual needs due to their lack of

experience. Despite this misalignment, Yusuf reported the experiences of his study

30

participants were almost entirely positive (97%) and they would recommend the program

they encountered to others.

In the context of gender, Jones and Tullous’ (2002) research involving 133 pre-

venture entrepreneurs revealed similar misalignment issues among program participants

and consultants. Jones and Tullous reported female pre-venture entrepreneurs perceived

they required more financial and accounting assistance than did their male peers.

Conversely, consultants’ perceptions differed as they perceived male pre-venture

entrepreneurs were in greater need of financial and accounting assistance than their

female peers. In addition, Jones and Tullous reported females spend an average of 17

hours and males 12 hours with their assigned consultants, which demonstrates behavior

differences in seeking assistance. In the context of an explanation for this discontinuity,

Jones and Tullous posited females are socialized in ways that put them at a disadvantage

as it relates to self-confidence (in the areas of finance, firm creation, and managerial

performance) and indicated consultants should plan accordingly to address gender

differences in terms of providing assistance.

In the context of evaluating the effectiveness of business incubators, Sherman

(1999) reported these assistance programs contribute to business success and, ultimately,

job growth. Overall, Sherman estimated business incubators help create 6.8 jobs for each

firm that attains independence. Similarly, a survey administered to a sample of 70 firms

that graduated from business incubators in Michigan revealed sales growth of 192% from

1989 to 1994 in addition to a 307% increase in average payroll for the same time period

(Sherman, 1999). Despite this record of performance, Sherman, relying on a sample

derived from Pennsylvania business firms, acknowledged there were no significant

31

differences between incubated and non-incubated firms in the context of sales and

income growth rates. Conversely, Sherman did make the conclusion that based on the

inputs provided by the public sector, return on public investment in the context of tax

revenues was estimated to have exceeded $4 for every dollar provided through public

operating and capital subsidies. In the context of the determining outcomes associated

with firm performance, Sherman reported firms that completed business incubation

programs experienced large gains in return on investment, gross sales revenue, and total

annual payrolls. Ultimately, similar to Yusuf’s (2010) findings, Sherman reported a

majority (75% reported the incubation program was important to very important) of firm

managers in his sample expressed confidence in the program’s contribution to their firm’s

success.

Following the application of the success versus failure prediction model involving

a randomly selected sample of 120 Croatian businesses, Lussier and Pfeifer (2001)

determined the instrument correctly predicted 91% of successful businesses and 32% of

business failures. These results differed from Lussier’s (1995) earlier application of the

model for U.S. firms that correctly predicted 65% of successful businesses and 73% of

business failures. Taken together, these studies reveal education, staffing, professional

advice, and planning to be predictors of business success and failure in both the United

States and Croatia. Likewise, relying on a survey that recorded the perceptions of a

sample of 145 Chilean business owners, Lussier and Halabi’s (2008) findings revealed

entrepreneurs who relied on professional advice: (a) had greater access to capital, (b)

demonstrated better record keeping and financial control, (c) published more detailed

plans, (d) possessed higher levels of education, (e) tended to form partnerships, and (f)

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hired greater numbers of employees. In addition, a meta-analysis incorporating 25

research studies revealed planning was the most frequently cited factor for predicting

business success or failure (Lussier & Halabi, 2010). This finding was also consistent

with Lussier’s (1995) earlier research that revealed successful firms developed more

specific plans than those that failed.

Relying on a sample of 50 Georgia lenders, Hanks, Barnett, Durden, and

Woodrum (2011) revealed respondents had concluded weak management, poor business

plans, economic conditions, and undercapitalization (e.g., low working capital,

insufficient lines of credit, insufficient operating capital set aside for slow payables, over-

leveraging, etc.) were leading causes for business bankruptcies. Lussier and Halabi

(2010) augmented these findings by stipulating government policy makers should direct

additional resources to provide: (a) more low interest loans to help entrepreneurs avoid

undercapitalization, (b) more low cost or free professional advice, (c) an understanding of

the capital needs to start a business, (d) training on how to maintain records and financial

control, and (e) management training to develop a business plan for effective staffing and

marketing a business.

Universities

Hamilton (2008) warned that community leaders should not rely exclusively on

universities as the engine for job growth despite the pervasiveness of their influence.

Ideally, Bacdayan (2008) recommended universities should be relied upon for local

outreach needs and workforce development in the form of: (a) technical assistance (e.g.,

policy analysis, feasibility studies, etc.), (b) student recruitment, (c) placement services,

(d) service-learning field projects, and (e) guest speakers in the classroom. Interestingly,

33

university faculty ranked technical assistance last and degree-related teaching and basic

research first and second in terms of desired activities. Conversely, Chamber of

Commerce directors rated basic research last and technical assistance first in terms of

desired activities (Bacdayan, 2008).

In the context of establishing community-classroom links, Bacdayan’s (2008)

survey research incorporating responses from a sample of 138 university faculty and 142

Chamber of Commerce directors revealed strong universal support for degree programs

for working adults, class projects, and internships. Hamilton (2008) contended the best

method for inspiring economic growth was a coordinated strategy collectively

implemented by all stakeholder institutions. Falcone and Wilson (2008) recommended a

strategic approach to economic development, specifying such an endeavor was a heuristic

process that requires the formation of a business incubator that integrates the resources

and expertise of the local university, development organizations, government functions,

the local Chamber of Commerce, and private industry. Likewise, Bacdayan

recommended community stakeholders establish alliances that incorporate the expertise

and resources of universities, community colleges, economic development agencies, and

small business development centers to provide technical assistance, help identify export

markets, and provide skills training.

Despite the contention that institutions for higher learning should play a limited

role in economic development, Huffman and Quigley (2002) stipulated universities

should play a major role in attracting human capital and stimulating entrepreneurial talent

in the communities in which they reside. Huffman and Quigley’s research involving the

University of California (Berkley, Stanford University, and Silicon Valley) revealed

34

universities can influence geographic patterns of agglomerations of scientific firms and

contribute favorably to returns on government investment in terms of augmented human

capital stock that possess the skills innovative firms demand. Relying on historical

narrative, Huffman and Quigley stipulated the links between industry and universities

were initially established in the 1940s when Fredrick Terman, Dean of the Stanford

University School of Engineering, grew weary of watching talented students leave the

region upon graduation. Dr. Terman envisioned and initiated efforts to establish a center

of high technology in immediate proximity to the Stanford campus, which ultimately

became known as the Stanford Industrial Park. In addition, Stanford University offered

leases to encourage start-ups to establish operations and take advantage of: (a) access to

university research, (b) ongoing collaboration, and (c) improved access to graduate

students in the fields of physics and engineering. Ultimately, Stanford’s initiative would

serve to attract national aerospace, electronics, and semi-conductor firms, leading to the

inevitable transformation of the Santa Clara Valley to the more widely regarded Silicon

Valley region (Huffman & Quigley, 2002). To illustrate the significance of this

transformation, Huffman and Quigley stated:

The presence of two world-class scientific and research universities that were actively involved in Silicon Valley industry created a scientific milieu unparalleled elsewhere in the nation. The symbiosis between Silicon Valley and local universities has continued to generate economic benefits for the state and the nation. For example, by 1996, according to a Stanford Business School study, as many as 100 Stanford start-ups in Silicon Valley have generated more than $65 billion in economic output. (p. 406)

Inevitably, the University of California – Berkley (U.C. Berkley) would establish

businesses incubators that provided office space, equipment, and guidance from

professors and successful entrepreneurs to attract capital and promote the profitability of

local firms. In the context of establishing linkages with the business community, U.C.

35

Berkley relied on business plan competitions to encourage entrepreneurial activity,

establish networks, and secure funding sources. In addition, judges were often members

of venture capital firms or served as business consultants (Huffman & Quigley, 2002).

Huffman and Quigley’s quantitative research revealed business students with California

residence at the time of their application to U.C. Berkley were associated with a

statistically significant increase in the probability of living in California after their

graduation. In applied terms, these findings add substantial weight to the role universities

play in economic development and job growth. Ultimately, this phenomenon was

evidenced by Huffman and Quigley’s findings, which revealed the probability of

retaining talented human capital had been increased by an estimated 20 percentage

points, increasing California GDP by nearly $3.75 million for every five out-of-state

students who were attracted to U.C. Berkley and increasing tax revenues by nearly

$375,000.

In order for a university to serve as an effective contributor to economic growth,

Florida (2012) contended institutions for higher learning must play three interrelated

roles:

Technology: serve as centers for cutting-edge research in the fields of

software, biotechnology, etc.;

Talent: serve as talent magnets attracting eminent researchers, generating

spin-off companies, and encouraging other companies to relocate to the

region; and

Tolerance: foster progressive, open, and tolerant people who attract other

members of the creative class.

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Considering these roles, Florida (2012) stipulated that major research universities are

essential for the formation of a creative economy by serving as a hub for innovation and

knowledge spillovers.

Human Capital

Doring et al. (2010) contended the availability of a highly-qualified workforce is

essential for attaining benefits associated with knowledge spillovers and the close

proximity to universities and scientific research institutions can contribute favorably to

the formation of adequate human capital. Doring et al. revealed a positive correlation

between how an area is equipped with universities and academic research institutions and

the innovative capacity of local businesses engaged in knowledge production. To

illustrate the value of a highly-skilled workforce, Doring et al. stated:

Municipalities or regions with skilled labor and high levels of specialized human capital are more likely to attract innovative networks than less endowed areas. This position was confirmed by a survey of 84 businesses in the northeastern U.S. which found that the availability of skilled labor is the most important factor in influencing business site selection decisions. (p. 245)

For entrepreneurs to build and operate a sustainable business, they must acquire,

mobilize, and deploy the following resources: (a) financial capital, (b) access to markets,

and (c) availability of information (Sherman, 1999; Sriram, Mersha, & Herron, 2006).

Likewise, Appelbaum and Kamal (2000) and Earle (2003) stipulated entrepreneurs must

recruit and retain talented employees to remain competitive in an economic landscape

dominated by large global business enterprises. The successful recruitment and retention

of talented employees require firms to:

recruit, hire, and develop talented employees who are aligned with strategic

business goals;

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grow and adapt quickly to a rapidly changing business environment; and

develop ways to help employees balance workplace demands with the need

for work/life balance (Horwitz, Chan, & Quazi, 2003).

Failure to abide by these tenets may compromise the competiveness, intellectual

capital, cultural fabric, and institutional knowledge of the firm (Horwitz et al., 2003).

Because small businesses often lack the financial capital to match the compensation and

fringe benefits offered by their larger competitors for human capital, Appelbaum and

Kamal (2000) posited entrepreneurs must emphasize non-monetary benefits. Such

benefits may include: (a) job enrichment, (b) permitting relative autonomy, (c) employee

recognition, (d) internal salary equity among managers and supervisors, (e) enabling

resources such as new technologies, (f) training to enhance skills to promote internal and

external employability, and (g) opportunities to participate in interdisciplinary and cross-

functional projects (Appelbaum & Kamal, 2000; Earle, 2003; Horwitz et al., 2003).

R. Baker (2011) contended quality-of-life could serve as a powerful recruitment

tool to attract talented human capital. Specifically, R. Baker stipulated business firms

must recognize potential employees will be attracted to communities with a reputation for

a high quality-of-life and a progressive outlook. Employers who recognize such external

benefits are in effect expressing their commitment to existing and would-be employees

(R. Baker, 2011). In addition, R. Baker expressed the importance of community green

initiatives (e.g., bike paths, tree plantings, nature preserve expansion, etc.) as an essential

element in enhancing quality-of-life far and above the benefits associated with

conventional amenities.

38

Earle (2003) contended employers must recognize they must expend great effort

to establish an organizational identity that can be clearly distinguished from their larger

competitors. In effect, employers must gain an understanding of how various perks are

valued among employees and how the physical work environment can be engineered to

help shape a firm’s organizational culture, facilitate communication, promote teamwork,

and inspire creativity to help sustain a culture of continuous innovation. For example,

Earle noted office design is often relied upon to differentiate a firm in terms of its

competitiveness as an employer and indicated many employees prefer surroundings that

inspire creativity. Recognizing motivational differences in terms of cultural context,

demographic characteristics of the workforce, and generational differences can contribute

to a more effective recruitment and retention strategy. As such, compensation alone may

not inspire employees (Earle, 2003).

Under conditions where employers operate in a distressed economy, the ways in

which companies make use of workspace may be even more important. For example,

Earle (2003) contended salaries and benefits accounted for 78% of organizational costs,

while rent, operating, and maintenance costs accounted for 8%. In the context of perks,

employers should consider integrating value-added amenities, such as: (a) free exercise

classes, (b) chair massages, (c) an on-site health clinic, (d) a state-of-the-art fitness

facility, and (e) on-site child care. Leveraging the work environment to improve the

efficiency, motivation, and productivity of employees can help firms attain greater

returns on human capital costs. Employers must not presume a distressed economy will

keep talented employees anchored as they will always be in demand. As such, employers

must remain concerned about their firm’s reputation as this can influence employee

39

perceptions on how the actions of their employer affect its reputation. A firm’s leaders

must consider how the firm is perceived in terms of how it values employees in the

context of concern for well-being and quality-of-life in the workplace (Earle, 2003). To

demonstrate the importance of talented employees, Florida (2012) stated:

A company’s most important asset isn’t raw materials, real estate, machinery, transportation systems, or political influence. It is its creative capital – its arsenal of creative thinkers whose ideas can be turned into valuable products and services. Successful companies recognize that their most valuable assets walk out the door every evening; they dedicate their best efforts to ensuring that they come back and give their very best every morning. (p. 120)

Financial Capital

Sufficient access to capital is an essential element to new business formation,

expansion, and the survival of existing firms through refinancing options (Elston &

Audretsch, 2011; Kobeissi, 2009). Elston and Audretsch (2011) contended the riskiness

of borrowers often leads suppliers of financial capital to limit access to loans. This is

problematic because entrepreneurs are typically less risk adverse than are conventional

lending institutions. This phenomenon is evidenced by survey research that revealed

84% of entrepreneurs had experienced a shortage of capital at one time or another and

48% were currently experiencing liquidity constraints (Elston & Audretsch, 2011). In the

context of the different sources of capital that fund start-ups, Elston and Audretsch

reported entrepreneurs often relied on: (a) earnings from a second job (58%), (b) private

loans (21%), (c) credit cards (13%), (d) small business grants (9%), (e) inheritance (3%),

and (f) gifts (1%).

Recognizing the importance of capital availability and its role in facilitating

economic growth, the federal government introduced the Community Reinvestment Act

of 1977 (CRA), which was intended to boost federally insured financial institution

40

(excluding mortgage companies, finance companies, and credit unions) investment in

low-income communities. Under the Act, obligated financial institutions were

encouraged to identify borrowers in low- and moderate-income communities (Kobeissi,

2009). Despite the federal government’s intentions, bankers have resisted CRA

regulations, disputing advocates’ contentions that the community is a legitimate

stakeholder in affairs associated with economic growth. Bankers have regarded CRA

regulations as burdensome and costly, charging that such provisions have restricted

economic growth by forcing them to engage in unsafe and unprofitable investment

practices. Furthermore, bankers have contended their institutions can no longer be

regarded as local industries and should not be compelled to make investments in local

geographic areas where there are higher lending costs (Dymski, 1996; Kobeissi, 2009).

Advocates of the CRA contended the obligated financial institutions’ grievances

are unwarranted because the federal government offsets higher lending costs by

providing: (a) underpriced deposit insurance, (b) access to the Federal Reserve discount

window, and (c) barriers to entry (Kobeissi, 2009). Likewise, Kobeissi (2009) contended

numerous studies examining the effect of the CRA on bank financial performance

revealed no long-term adverse or favorable impacts on these institutions. Kobeissi

reported that in 2006, CRA obligated financial institutions extended 11.1 million micro

loans valued at $116.2 billion and 11.6 million small business loans (under $1 million)

valued at $289.8 billion. While there appeared to be no direct impact on financial

performance, other studies did suggest some potential indirect benefits associated with

CRA compliance. Indirect benefits associated with increased lending in concentrated

areas included: (a) improved lending application efficiency, (b) improved information

41

gathering and the ability to identify high-quality loans, and (c) improved externalities

such as increased property values (Kobeissi, 2009).

Kobeissi (2009) expressed concerns that geographic and product deregulations

and mergers and acquisitions of numerous financial institutions have had an adverse

impact on low- and moderate-income markets and households. Critics of the banking

industry have stipulated these larger banks charge higher prices, are less sensitive to

community impact, and are less willing to make small and less standardized loans. In

addition, critics charge that larger banks are devoting a smaller percentage of their

financial portfolios to small business lending and have engaged in widespread bank

consolidations and branch closings in low-income communities that have already been

underserved (Dymski, 1996; Kobeissi, 2009).

Ho and Wong (2006) and Kobeissi (2009) contended that commercial banks have

often been considered to be the most important supplier of credit to small business.

Relying on a 2003 survey, Kobeissi reported 60.4% of small business establishments

relied on traditional forms of credit (e.g., credit lines, loans, capital leases, etc.) and 68%

obtained credit from the banking industry. In the context of business start-ups, Ho and

Wong (2006), Kobeissi (2009), and Lerner (2010) stipulated that numerous studies have

established a link between credit availability and firm creation, suggesting liquidity

constraints among new businesses can have an adverse impact on entrepreneurism.

Ultimately, new firm and entrepreneur access to bank financing may be constrained by a

lack of collateral, a limited track record, and an inability to communicate current and

future capabilities (Ho & Wong, 2006).

42

Kobeissi’s (2009) quantitative research (relying on regression) demonstrated a

positive and significant relationship between CRA loans, bank deposits, per capita

income, market size (independent variables), and business start-ups (dependent variable).

Kobeissi proposed that new businesses generated by CRA loans would facilitate the

emergence of positive spillover effects, enhancing economic development, employment,

and economic growth. For example, a study commissioned by the Small Business

Administration entitled, The Innovation-Entrepreneurship Nexus: A National Assessment

of Entrepreneurship and Regional Economic Growth and Development, examined the

link between entrepreneurship and regional economic growth from 1990 to 2001 and

ultimately, revealed the most entrepreneurial regions, compared to the least ones,

experienced superior economic conditions (Kobeissi, 2009). Favorable economic

conditions were expressed by 125% higher employment growth, 58% higher wage

growth, and 109% higher productivity (Kobeissi, 2009). In addition, Kobeissi contended

financial institutions that maintain a close relationship with their small business

customers have a better understanding of the operating environments and prospects of

new businesses, managerial attributes of business owners, and customer needs and

resources. Ultimately, an improved understanding of the fundamentals that impact the

small business community can serve to mitigate the adverse impact of information

asymmetries (Kobeissi, 2009).

Lerner (2010) contended the recession that was officially declared in December of

2007 and the ongoing challenges in its aftermath have resulted in a substantial negative

effect on investors’ willingness to finance entrepreneurial ventures. For example, venture

capital investment had dropped by 30% in the fourth quarter of 2008, which was at its

43

lowest level since 2005. As of 2009, there was little evidence of a sustained economic

recovery (Lerner, 2010). In addition, Lerner contended investors (e.g., pension funds,

university endowments, and wealthy individual investors) were directing their investment

capital into existing portfolio companies as opposed to start-ups. Risk aversion is

prevalent and there is additional evidence to demonstrate investors are reneging on

existing commitments to new ventures. This situation is particularly problematic for the

U.S. economy because industry leadership has often been achieved through the efforts of

relatively young firms (e.g., Cisco, Intel, Microsoft, etc.) whose growth was facilitated

through public equity market financing (Lerner, 2010).

Lerner (2010) illustrated the importance of the role of small firms in the economy

by stating:

It appears that small and new firms not only have contributed an important share of research and development themselves, but they also have had in many cases a disproportionate influence by introducing fresh technologies and business models that incumbent firms have struggled to address. (p. 9)

In essence, small firms have outpaced established competitors in terms of meeting

customer needs and introducing new products. While established firms have innovated at

a higher rate (focusing on incremental technological improvements), they have

consistently lagged behind new ventures in developing products on the technological

frontier. Considering these implications, it is evident the nation’s and a local

community’s competitive positioning is highly dependent on the viability of

entrepreneurial ventures (Lerner, 2010).

In the context of the performance of public markets, Lerner (2010) contended

unreasonable swings in investment activity often contribute to over- and under-

investment in entrepreneurial finance options. Lerner stipulated that financial institutions

44

typically attempt to maintain a fixed percentage of their portfolios in each asset class. As

such, when public equity values increase, these institutions are more likely to allocate

more assets to venture capital. Unfortunately, overly optimistic valuations may lead to an

over-shooting phenomenon, directing excessive amounts of capital to business ventures

with poor fundamentals and depriving capital to firms with a stronger foundation (Lerner,

2010). In the context of the performance of venture capital, Lerner contended the most

effective policies were those that emphasized increased efficiency of private markets over

the long-term, rather than providing short-term funding to new firms during market boom

periods.

Kobeissi (2009) charged that financial institutions have failed to make sufficient

capital available to small business. Harmful practices such as redlining, discrimination,

and outright neglect have contributed significantly to deteriorating conditions (e.g.,

chronic poverty, unemployment, an unskilled labor force, high crime rates, and poor

infrastructure) in many underserved communities. Likewise, Dymski (1996) contended

that government programs for economic development have also failed to facilitate

economic growth. The failure of government programs was attributed to: (a)

fragmentation, (b) emphasis on individuals and firms rather than impacted areas, and (c)

confusing social goals with the necessity to establish profitability (Dymski, 1996).

Dymski charged that the government was a poor substitute for providing capital and

mainstream firms should be encouraged by the government to deliver smart subsidies

such as reduced capital gains taxes on venture capital equity investment in inner-city

firms. In light of such financing constraints, Keuschnigg (2004) and Ho and Wong

(2006) contended that informal investment (e.g., angel investors) may be the only

45

remaining form of financing that contributes significantly to entrepreneurial propensity

and innovation-based growth.

Holaday, Meltzer, and McCormick (2002) and Maula, Autio, and Arenius (2005)

stipulated that ideal angel investors often take the form of early-stage investors who are

locally-based, have personal familiarity with the entrepreneur, have practical industry

experience, have owned or managed firms, possesses the skills to start a new business,

have the time to share their expertise, and are willing to introduce entrepreneurs to

members (e.g., other angel investors, attorneys, accountants, etc.) of their network.

Ultimately, provided that entrepreneurs exhibit the potential for favorable returns on

investment, angel investors can introduce entrepreneurs to venture capitalists, who in turn

supply the next round of financing and guidance (Holaday et al., 2002).

Keuschnigg (2004) and Ley and Weaven (2011) contended that venture capital

plays an important role in enhancing a new firm’s ability to generate wealth and jobs.

For example, Keuschnigg reported an increase in the GNP share of venture capital by

0.075% would facilitate the reduction of a short-run unemployment rate by .025%, while

the long-term effect would result in a reduction in unemployment of 0.9% to 2.5%.

Likewise, the presence of an active venture capital sector can favorably impact the

macroeconomic performance of local economies and in terms of potency, venture capital

can deliver three times the performance in establishing new patents (Keuschnigg, 2004).

Ley and Weaven contended venture capital bridges the gap in access to financial capital

in an environment laden with information asymmetries, risk, a higher probability of

failure, and assets that are difficult to liquidate. Venture capitalists attain favorable

results by: (a) carefully screening firms, (b) structuring contracts to strengthen incentives,

46

and (c) closely monitoring firms. Engaging in such practices is likely to add value to new

firms, promote a sense of professionalism, insulate investors from the possibility of

business failure, and encourage entrepreneurs to be more aggressive in the competitive

marketplace. Venture capitalists provide sufficient start-up capital in exchange for an

equity stake and provide advice and expertise to help develop the firm. Venture

capitalists mitigate risks, ensure the firm enters the production stage, and sell their

interests to attain a favorable ROI. Ultimately, the equity share venture capitalists

demand is congruent with the level of effort they must expend in advising entrepreneurs

and the quality of their returns can be heavily influenced by government policy on capital

gains tax (Keuschnigg, 2004).

In the context of the criteria venture capitalists rely on to screen firms, Bishop and

Nixon (2006) contended analysts assess survivability by evaluating:

the entrepreneur’s familiarity with the proposed target market, leadership

ability, and track record (industry related competence);

the entrepreneur’s work ethic and level of market acceptance (market

education capability);

probability of significant growth in the target market timing of entry and

competitive rivalry);

the entrepreneur’s attention to detail and ability to evaluate and respond to

risks (key success factor stability); and

probability of proprietary or patent protection and the ability to attain returns

on investment (lead time and barriers to entry).

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Zacharakis, Meyer, and DeCastro (1999) stipulated the venture capital screening process

facilitates the superior performance of investment portfolios. For example, Zacharakis et

al. reported that only 18% of venture capital funded firms failed within 7 years of

establishing operations, while 75% of non-funded firms failed in the same time period.

Despite this survivability ratio, Zacharakis et al. (1999) reported that only 20% of

venture capital funded firms yield adequate returns. In the context of evaluating why

venture capital backed firms fail to perform, Zacharakis et al. theorized that as a firm

progresses through its life cycle, management skills become more important than

entrepreneurial skills. As such, entrepreneurs may reach their executive limit and fail to

manage their firms in ways that are essential for promoting growth. Such circumstances

are regarded as an internal cause for business failure as opposed to an external cause for

business failure, which are often manifested by adverse economic policies propagated by

the Federal Reserve and market volatility (Zacharakis et al., 1999). In the context of the

general performance of venture capital funded firms, Zacharakis et al. revealed that 89%

of entrepreneurs attributed business failure to internal factors, while 66% of venture

capitalists attributed failure to external factors. Interestingly, when considering the

performance of their own firm, 58% of entrepreneurs and 84% of venture capitalists cited

internal factors. Zacharakis et al. posited these results provide evidence of attribution

error on the part of entrepreneurs and venture capitalists at the onset of operations and the

cause of business failures were likely associated with management and its inability to

recognize the marketplace and develop the capacity to assess market size and

accessibility. These findings are consistent with the basic premise of attribution theory,

which stipulates individuals often attribute their failures to environmental conditions but

48

others’ failures to personal flaws. Ultimately, both entrepreneurs and venture capitalists

should rely on such experiences to improve their effectiveness in future ventures to avoid

undesirable outcomes (Zacharakis et al., 1999).

Brand Promotion

In the context of encouraging investment in start-ups and existing businesses,

Sneed, Runyan, Swinney, and Lim (2011) demonstrated positioning, image, and business

mix to be significant, positive predictors of patronage in downtown communities. To

illustrate the importance of place, Florida (2012) stated:

Place has become the central organizing unit of our time, taking on many of the functions that used to be played by firms and other organizations. Access to talented and creative people is to modern business what access to coal and iron ore was to steel making. It determines where companies will choose to locate and grow, and this in turn changes the way that cities must compete. (p. 8)

Conversely, Sneed et al. reported a significant, negative effect of sense-of-place on

patronage intention. Sneed et al.’s survey of 836 residents in four communities in

Michigan and four communities in Oklahoma was intended to examine and reveal

consumers’ perceptions of location as a brand and the influence of these perceptions on

their willingness to patronize those respective areas.

Sneed et al. (2011) stipulated a strong retail presence in a downtown area serves

as an essential element for promoting urban redevelopment strategies. Likewise, Judd

and McNeil (2008) contended the redevelopment of downtown areas will contribute to:

(a) job creation, (b) incubation of small businesses, (c) reduction of sprawl, (d) favorable

property values, and (e) increased options for goods and services. In downtown areas

adversely affected by an economic decline, Sneed et al. reported many communities have

relied on the following strategies: (a) pedestrian malls, (b) festival marketplaces, (c)

indoor shopping centers, and (d) mixed-use centers. Despite these efforts, time has

49

demonstrated such strategies are largely ineffective due to excessive sunk costs, recurring

maintenance costs, and the characteristics of isolated structures used for indoor shopping

centers and mixed-use centers that offer little economic benefit for downtown areas

(Sneed et al., 2011). To address these challenges, Judd and McNeil recommended the

following strategies:

develop a locally-based and flexible vision and strategy;

engineer and build a multi-function downtown;

establish partnerships between public, non-profit, and business entities; and

focus on developing the unique qualities of the downtown area and the larger

community.

Sneed et al. (2011) stipulated that a downtown’s brand comprises image and

positioning. Image is essentially the overall impression while positioning statements

often include symbols, slogans, logos, and any other communication methods that convey

the uniqueness of a brand in relation to competing alternatives. To illustrate the

importance of brand, Sneed et al. stated:

Downtowns perceived as having strong brand identities (as reported by downtown business owners), experienced greater success relative to competing retail venues (e.g., outlying strip centers, shopping malls, etc.), had fewer vacant downtown buildings, and its local businesses reported being successful. (p. 124)

Ultimately, Sneed et al. suggested reliance on brand reputation to be the most effective

method for expressing the quality of a product or service when it is difficult for

consumers to assess its quality or value among competitors.

Crombie (2011) contended that both cities and clusters should take branding as

seriously as companies, recognizing it should transcend tourism promotion and

emphasize economic development to attract relocating companies and entrepreneurs. In

50

essence, branding initiatives should seek to create an environment where diverse people

and companies alike feel integrated into the whole community, vision, or image for the

area (Crombie, 2011). For example, Crombie contended a city brand should provide a

voice or name to the municipality’s culture and social capital––providing the framework

and message for inspiring a more cohesive community. To maximize the city’s brand,

Crombie recommended enhancing its reputational capital by:

establishing a link to the social norms of the target audience, its values, or

valued images through symbols;

establishing a link to a feeling of solidarity with others; and

establishing a link to a position of prestige such as those with higher social

status or celebrities.

In addition, Crombie identified the following place branding challenges:

involves the efforts and resources of multiple stakeholders, often with

competing interests;

measuring effectiveness is difficult;

efforts are rarely under the control of a central authority;

marketers have little control over place brands due to the prevalence of

alternative communication channels (e.g., schools, media, purchases, tips from

friends and family, etc.); and

few government employees have the essential skill sets required to design and

implement major marketing campaigns.

To establish a competitive position among other communities, Crombie (2011)

recommended a holistic approach that places emphasis on: (a) design, (b) infrastructure,

51

(c) basic services, and (d) attractions. In the context of setting a community apart from

its rivals, Crombie recommended the following strategies: (a) advertising and promotion,

(b) large-scale physical redevelopment, (c) public art and civic statuary, (d) mega-events,

(e) cultural regeneration, and (f) public-private partnerships. In addition, Crombie

contended the following issues must be considered: (a) the city government’s branding

capabilities, (b) the demographic characteristics of the city, (c) the wisdom and long-term

perspective of the city government, and (d) the creative climate. Ultimately, to

implement a cluster branding campaign, Crombie recommended:

attaining an understanding of a cluster’s strengths and weaknesses to leverage

assets and minimize liabilities;

obtaining facts about the city, the population, economic growth, education

diversity, jobs, and start-ups to establish a starting point;

obtaining qualitative research associated with the city to establish how

individuals feel about the characteristics of the city;

creating a focused brand marketing strategy that results in communications

that are holistic, consistent, authentic, compelling, and memorable; and

identifying the public face of the communication of the brand.

Sneed et al. (2011) stipulated the attractiveness of a downtown can be influenced

by the concentration and mix of establishments in the area. In addition, the centralization

of a heterogeneous mix of establishments can serve to reduce the cost of time and travel

for the consumer, thereby increasing the area’s attractiveness as a venue. Similarly, these

benefits can be conveyed to entrepreneurs through the agglomeration of businesses,

which can lower hard costs by providing affordable access to raw materials, superior

52

accessibility to sales markets, and lower property prices (Doring et al., 2010). Sense-of-

place, composed of safe, pedestrian-friendly spaces and historic preservation, provides

the impetus for helping individuals feel connected to the community.

Despite the expectation that each component would be weighted significantly

when compared to other factors, it was revealed each was rated below competing

attributes, such as retail mix (Sneed et al., 2011). Sneed et al. (2011) concluded

excessive investments in preservation, safety, walkability, and culture may inhibit the

ROI for economic development. Policy makers are more likely to get better results if

they direct resources toward traditional marketing elements to improve the image of a

downtown area. Directing development funds for the formation of a diverse

concentration of entrepreneurs and macro-marketing programs will likely outperform an

emphasis on a well-developed attraction with some type of historical significance (Sneed

et al., 2011). Ultimately, R. Baker (2011) recommended the aggressive recruitment of

employers, conveying brand identity and backing it up by recruiting amenities (e.g.,

museums, galleries, and performing arts), and promoting events that enhance quality-of-

life and culture.

Economic Development Planning

Friar and Meyer (2003) recommended the following activities to encourage

entrepreneurialism: (a) stimulate the generation of entrepreneurs, (b) stimulate the

creation of networks, and (c) perform R&D to stimulate new technology. In the past, the

U.S. government relied on regional policies that led to the development of empowerment

zones to encourage business start-ups in impoverished and underserved communities by

providing tax incentives, guaranteed loans, and worker training. Despite the federal

53

government’s best efforts, a 4-year program review in Los Angeles revealed such

programs were largely ineffective, failing to create jobs and resulting in significant (32%)

loan default rates (Friar & Meyer, 2003). Friar and Meyer found start-ups were typically

classified as either micro-businesses or as high-growth ventures. A micro-business is

classified as an independently owned and operated establishment that does not dominate

its local community or the national marketplace and is generally intended to generate

income for the proprietor and their family. Typically, a micro-business operates with

fewer than 25 employees. Conversely, a high-growth venture endeavors to enhance its

profitability and growth potential. Management associated with this type of venture

relies on innovative strategic initiatives to achieve the firm’s goals. High-growth

ventures are credited with importing new jobs to an economy and do not cannibalize the

resources of other businesses. In addition, high-growth ventures often display an aptitude

for identifying and developing the capacity for meeting the needs of unserved market

niches (Friar & Meyer, 2003).

Friar and Meyer (2003) revealed the founders of high-growth ventures had two

distinct advantages: (a) advanced training in their respective fields/technologies, and (b)

business plans were submitted by committed teams of professionals with significant

industry experience rather than individuals. Other advantages included: (a) diverse

experience among team members, (b) a clear orientation for high-growth markets, and (c)

broad expertise across various functions. In addition, the clustering of the same type of

businesses within a region and government-sponsored university education initiatives

were determined to facilitate the formation of entrepreneurial capital and provide a

distinct advantage over conventional businesses (Friar & Meyer, 2003).

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Renski (2009) found some policy makers preferred to engage in economic

development strategies that fostered local entrepreneurial ventures as opposed to

industrial recruitment, which has been reflected by shrinking recruitment pools and

bidding wars that can diminish the value of their potential contribution to a local

economy. Weber (2002) contended the risks associated with industrial recruitment

through the price of incentives often outweighed the value of the public benefits

generated by the targeted firm’s contribution to economic development. To illustrate the

severity of this problem, Weber stated:

Lacking perfect competition, subsidized firms can influence the price at which the economic development is bought and sold. Firms can bluff and demand more than is really necessary because corporate management has access to relevant information about the firm’s own cost structure and hurdle rates to which the government is not privy. The financial gap firms seek to fill to make a project feasible may be much smaller than they would have the public sector believe. This information asymmetry makes it impossible for governments to know the minimum amount that would induce change in the firm’s location. It can produce a surplus for the sought-after firm that may or may not be passed on to potential employees as jobs or the winning locality as capital investment. (p. 44)

Weber (2002) contended that substantial transaction costs (e.g., accountability

mechanisms, failure to abide by environmental standards, etc.) can further diminish the

value of a firm’s contribution to economic development. Relying on a survey of local

economic development practitioners, Weber reported only 24% of respondents indicated

any systematic or quantitative means of analyzing the viability of deals between

governments and firms. Likewise, a cost-benefit analysis of economic development

programs in Indianapolis revealed it would take more than 4 years to secure a positive

return to the city. Ultimately, cities often rely on contracts to minimize transaction costs;

however, Weber concluded these accountability mechanisms were often too loosely

written and inadequately enforced to be effective.

55

In the context of how entrepreneurial communities can be distinguished by their

fundamental attributes, Lichtenstein et al. (2004) contended they must have achieved a

kind of critical mass of entrepreneurs who are committed to identifying and capturing

new market opportunities. In addition, groups of entrepreneurs are often regarded as a

distinctive element within a larger community. Ideally, the contributions of an

entrepreneurial community must operate at such a level as to continuously replace any

decline in aggregate economic activity from existing businesses. In order for a

community-at-large to reap the benefits of entrepreneurialism, stakeholders must develop

a holistic view and recognize the entire community must support such initiatives. Such

support can be garnered by the following actions: (a) providing loans to start-ups, (b)

passing favorable legislation, (c) formally welcoming new members, and (d) including

new entrants in economic and social networks (Degan, 2010; Gupta & York, 2008;

Lichtenstein et al., 2004). Likewise, Falcone and Wilson (2008) stipulated start-ups often

require assistance with articulating their business definition, while more mature firms

seeking to relocate to a more desirable location often require assistance in the form of

financing. In the context of enterprise development, non-profit, private, and public

organizations fulfill the role of service provider by providing assistance from the onset.

Examples include: (a) youth entrepreneurship programs, (b) microenterprise programs,

(c) business incubators, (d) manufacturing networks, (e) small business development

centers, (f) angel capital networks, and (g) venture capital clubs and funds (Lichtenstein

et al., 2004).

In the context of enterprise development, Lichtenstein et al. (2004) stipulated that

communities committed to economic development must recognize the following tenets:

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Enterprise development is a strategy that targets development, not simply for

the sake of growth itself.

The primary focus is for developing local companies in order to enhance local

wealth.

Develop economically sustainable communities by relying on local inputs,

exporting goods and services, and importing income to the community.

Lichtenstein et al. (2004) theorized entrepreneurial firms will remain loyal to the

community of origin if they are well supported and will be less likely to be lured away by

a rival community. Despite the level of support and resources a community may provide,

Lichtenstein et al. contended entrepreneurial needs are often difficult to determine.

Often, entrepreneurs do not know how to articulate their needs, may be reluctant to ask

essential questions, may be unwilling to confide in those individuals and organizations

with which they are unfamiliar, and may not be available or cooperative. Building a

trusting relationship between service providers and entrepreneurs may be compromised

by fragmented enterprise development efforts or the tendency to focus exclusively on

high-growth ventures, ignoring the potential for identifying developmental multipliers

and leaving gaps in the availability of numerous types of services. In addition, some

service providers may overemphasize providing resources and fail to recognize the

importance of helping entrepreneurs develop the capacity to implement their ideas and

develop practices that are sensitive to particular conditions (Lichtenstein et al., 2004). To

overcome such challenges, Husain (2009) recommended entrepreneurs be paired with

qualified mentors, who are: (a) credible, (b) willing to share details about their mistakes

to help those they consult avoid similar scenarios, (c) highly networked, (d) tolerant, and

57

(e) capable teachers. Rather than merely talking about their experiences, effective

mentors should provide direct and confidential assistance, provide access to their

networks, and play devil’s advocate to help entrepreneurs to vet their intentions (Husain,

2009).

In the context of building entrepreneurial communities, Lichtenstein et al. (2004)

contended purveyors of enterprise development programs must make the following

changes:

rely on a systematic approach to enterprise and community development

efforts by establishing a community-wide enterprise development system;

customize the enterprise development to the specific needs of the community;

emphasize and institutionalize efforts in developing a supply pipeline of

highly skilled entrepreneurs capable of establishing and sustaining successful

companies;

develop new roles, skills, and tools for managing and implementing the

enterprise development system; and

operate the system with the intent of transforming businesses, focusing first on

entrepreneurs, their businesses, and ultimately, the community’s economy.

Bednarzik’s (2000) and Friar and Meyer’s (2003) research findings corroborated

the findings of Corman et al. (1996) by reporting small businesses account for more than

85% of all establishments employing more than 20 employees. In addition, Bednarzik

stipulated employment levels often rise as establishment size increases, which is an

important implication when considering the role of new establishments in job creation.

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To illustrate the fundamental differences in the importance of establishing start-ups and

expanding existing businesses, Bednarzik stated:

Between 1995 and 1996, slightly more than a third of new jobs created were from the birth of new establishments. New companies, as an incubator for new jobs, did not change much in size, except for their lower share of new jobs in large establishments (500 or more employees). (p. 9)

Bednarzik found few new establishments could be considered big and a much smaller

percentage of jobs created were derived from these types of establishments.

Relying on research data from 1990 to 1995, Bednarzik (2000) reported the

highest net job creation rate was in the services industry––representing one-fifth of job

increases. Likewise, Renski (2009) reported new businesses were responsible for 20% of

all private sector jobs in the U.S. economy on an annual basis. Conversely, the

manufacturing industry lost employment for the same time period. Leading

entrepreneurial industries (43% of new jobs created) for the 1990 to 1995 period included

business services, health services, and eating and drinking establishments. Among small

new entries and large offshoots, Bednarzik found high death rates with one of seven

establishments closing their doors on an annual basis. This was attributed to firm size as

opposed to age. For example, Bednarzik found that very small establishments (i.e., one

to four employees) had much higher failure rates than their larger contemporaries.

Ultimately, Bednarzik concluded the cyclic nature of business trends served as an

important consideration when assessing the impact and sustainability of establishments

founded by entrepreneurs.

Renski’s (2009) research revealed entrepreneurial performance differed among

establishments founded in nonmetropolitan rural and urban core locales. Renski found

new firms established in central cities demonstrated higher failure rates due to more

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direct competition in the short-run and faster rates of employment growth in advanced

services. In addition, it was revealed that nonmetropolitan rural locales were

undersupplied with new high-tech and conventional advanced services (business and

professional services), firms (30% of total net job growth), and had lower growth rates in

both high-tech and conventional manufacturing (12% of private sector employment) and

advanced services. Conversely, suburbs, small cities, and rural segments of metropolitan

places (intermediate places) had relatively high rates of new firm entry, survival, and

growth, capturing 47% of entrants for high-tech advanced services and 43% of high-tech

manufacturing (Renski, 2009). Renski concluded lower new firm entry and survival rates

in urban core areas were likely attributed to higher costs, regulatory barriers, and a

greater propensity to engage in ventures with greater risk due to the potential for higher

growth.

In the context of high-tech manufacturing in urban core settings, Renski (2009)

reported the odds of failure were 24% higher than rural locales adjacent to metropolitan

areas, 18% higher than small cities, and 14% higher than suburban sites. Similar failure

rates were exhibited for conventional manufacturing industries (13% higher for small

cities, 8% higher for suburbs, and 7% higher for rural metropolitan areas) and advanced

services (6% higher for small cities, 16% higher for suburbs, and 8% higher for rural

metropolitan areas). Renski concluded suburban areas offered the most hospitable

environment for new firm survival despite their propensity for slower growth rates when

compared to urban core environments. Small cities, however, were found to have the

highest concentration of new entrants and the lowest failure rates among conventional

manufacturing firms, as well as the fastest growth rates among new firms in high-tech

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manufacturing. Similarly, Audretsch and Keilbach (2005) contended regions with greater

population density and their immediate neighboring regions exhibited stronger spatial

correlations with measures of entrepreneurship.

To promote growth, however, stakeholders must be cognizant of quality-of-life

concerns as they relate to a community’s image. In the context of a business case for

considering relocation, Corman et al. (1996) stipulated the crime rate directly affects

business performance. As such, consumers are not likely to engage in business

transactions in what is perceived as a high crime area. For example, if crime is more

prevalent during evening hours, businesses may shut down operations during those time

periods to reduce their liability and potential for victimization, thereby losing potential

sales (Corman et al., 1996). Garrett and Ott (2008) stipulated that economic development

stakeholders (especially in urban areas) must recognize increasing crime rates will inhibit

inbound residential and business migration. In addition, Garrett and Ott contended

changes in criminal activity were inversely related to changes in New York City wages.

Specific estimates revealed a 10% increase in the wage growth rate contributed to a 4%

to 6% decline in the crime growth rate (Garrett & Ott, 2008).

In reference to broken windows theory, Fulda (2010) stated, “The theory argues

that cracking down on minor infractions signals intolerance towards major infractions,

and that criminals respond to vigorous enforcement of that we now call quality-of-life

offenses by restrained behavior engendered by that official intolerance” (p. 101). To

illustrate the net benefit of a more assertive law enforcement response, business leaders,

speaking of New York Police Commissioner Ray Kelly’s record of improved public

safety outcomes, credited him for improved investor confidence and ultimately the

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reversal of capital flight (Whitford, 2012). In the context of reducing downtown blight

and improving a community’s image, Kotler, Haider, and Rein (1993) noted municipal

governments often create pedestrian malls and beautify surroundings to improve

perception. In an effort to attract tourists, government leaders often promote

conventions, subsidize hotels, and build convention facilities. Some communities go as

far as building research parks to facilitate start-ups and promote new technologies and

business incubators.

Despite an adherence to a “build it and they will come” ideology, many of these

commercial office buildings and retail sites remain vacant. In addition, poor regional

planning in urban areas to accommodate business expansion has contributed to traffic

gridlock, sprawl, excessive housing costs, pollution, rising taxes, and increasing

infrastructure costs. Poor planning can adversely impact the image of a community and

considering the nature of global competition, community leaders would likely find

themselves in a better position if they planned for avoiding hard times as opposed to

overcoming them. A proactive methodology to attract business interests could be

manifested as a place audit, which serves as a systematic examination of a community’s

economy, design, physical assets, quality-of-life, and residents to determine the strengths,

weaknesses, opportunities, and threats (SWOT analysis) confronting a community.

Ultimately, such planning must be adaptive in order to confront changing economic

conditions and take advantage of new opportunities (Kotler et al., 1993).

Falcone and Wilson (2008), Ho and Wong (2006), and Sriram et al. (2006)

contended that high taxes, utility costs, difficulty acquiring affordable insurance, crime, a

poorly educated workforce, a jobs mismatch, inadequate infrastructure (e.g.,

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transportation, etc.), burdensome regulations and permitting requirements, and

environmental pollution adversely affect a community’s ability to attract potential

employers. To illustrate the severity of this issue, Sriram et al. reported in 2004 it was

estimated that 50% to 75% of the City of Baltimore’s 18- to 35-year-olds had a criminal

history and issues with drug addiction, creating a significant employment barrier. This

situation was compounded by a lack of vehicle ownership (a third of Baltimore

households do not have access to a vehicle), inadequate public transportation, and the fact

that higher paying city jobs required a college education. The impact of this phenomenon

was evidenced by demographic statistics that demonstrated the 2002 median household

income for Baltimore ($30,600) had fallen relative to the State of Maryland ($58,600;

Sriram et al., 2006).

The results of these findings are controversial because historical research has

demonstrated inner cities often possess numerous advantages that can be leveraged to

overcome such challenges. For example, Sriram et al. (2006) contended inner cities are

typically endowed with an excellent location, large market demand due to a dense

population, untapped human capital, and superior infrastructure and economic resources.

Sriram et al. stipulated inner cities are often inhibited from leveraging their inherent

resources due to the failure of social models fostered by the U.S. government that have

emphasized poverty alleviation programs (e.g., food stamps, housing subsidies, welfare

programs, etc.) as opposed to dedicating resources to attracting private business

enterprises to inner-city communities for the purpose of job creation and community

revitalization. To ensure sustainable economic development and growth, inner-city

residents need more than jobs––they need to become business owners to promote

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stability. The formation of entrepreneurial ventures is even more critical in

disadvantaged communities because the failure rate among new enterprises is more than

20% within the first year, 50% within the first 5 years, and nearly 80% within 10 years,

and even higher among Black and Hispanic-owned establishments (Appelbaum &

Kamal, 2000; Sherman, 1999; Sriram et al., 2006; Yusuf, 2010; Zacharakis et al., 1999).

Government at all levels can provide assistance in such endeavors by making

capital available through low interest loans, training programs to enhance knowledge and

human capital formation, tax subsidies, and by establishing social and organizational

networks. Social networks may represent the greatest resource to which entrepreneurs

may have access, especially in ethnic communities where there is real and perceived bias

by formal lending institutions. Ultimately, such social networks have been recognized as

a source of informal finances and allow borrowers to secure financial capital at a lower

cost than offered by conventional lending institutions (Sherman, 1999; Sriram et al.,

2006).

To entice entrepreneurs and the financial capital they often attract, community

stakeholders must recognize the perceived business climate of a municipality closely

parallels quality-of-life perceptions and that improving the quality-of-life in poor

communities and maintaining it where it is favorable can have a significant impact on

decisions associated with business relocation, workforce composition and size, and

whether to reduce or expand operations (Corman et al., 1996). Florida (2002) contended

the ability of a community to facilitate economic growth was contingent upon the ability

to attract members of the creative class and to translate that advantage into creative

economic outcomes (e.g., new ideas, new high-tech businesses, and regional growth).

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To illustrate the importance of this market segment, Florida (2012) stipulated the

creative class had emerged as the most dominant and influential group of people in

American society. Likewise, to attract members of the creative class, Florida (2002)

argued communities should endeavor to create an environment that attracts significant

numbers of young people by supporting: (a) a thriving music scene, (b) ethnic and

cultural diversity, (c) tolerance, (d) outdoor recreation, and (e) a great nightlife. In

addition, Florida (2012) posited members of the creative class, more often than not, make

location choices primarily in accordance with their lifestyle interests as opposed to

conventional attractors such as standard quality-of-life amenities. To clarify his position,

Florida (2012) stated:

You can’t just enjoy a ballgame; you have to go to a “state-of-the-art” $500 million stadium for a multimedia circus that distracts you from the very game you paid to see. Many Creative Class people thus tend to shun the heavily packaged commercial venues they call generic – the chain restaurants and nightclubs, the stadiums with bells and whistles – or they patronize them but with a conscious sense of irony and camp, as in the obligatory trip to a business conference in Las Vegas. They prefer more authentic, indigenous, or organic venues that offer a wide range of options, places where they can have a hand in creating them. (p. 154)

Ultimately, Florida (2012) contended communities need to invest in people and business

climates, promote density, transit-oriented development, walkability, create green spaces

and other public spaces, encourage diversity, and build real quality of place.

Doring et al. (2010) and Judd and McNeil (2008) posited that communities with a

higher quality-of-life (e.g., recreational value, positive social climate, attractive inner

city, citizen friendly administration, adequate cultural and social institutions, etc.) have a

distinctive binding effect and attract creative individuals in greater numbers. For

example, Judd and McNeil, relying on a 2007 retail development survey administered to

residents of Marion, Indiana, reported 71% of respondents suggested additional retail

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establishments would improve their quality-of-life, 69% stipulated sales tax revenues

would increase, and 60% contended additional retail establishments would facilitate job

creation and prevent additional losses in employment opportunities.

In the context of developing an economic development plan for a downtown area

that would encourage recurring commerce, R. Baker (2011) suggested community

stakeholders should engage in the following efforts:

increase the frequency of recurring events;

develop and expand the fixed activity generators (e.g., medical complexes,

marine research, education, general business, hotels, shopping, and

restaurants);

support and expand cultural amenities;

establish a premier activity attractor (e.g., cafés, retail, etc.) and establish

connections to other activity centers;

improve access to and around the area; and

develop a focus on making the area a desirable place to live and work in an

effort to attract more residential living.

In addition, R. Baker contended recurring events could serve to: (a) increase commerce

and generate revenues, (b) enhance a city’s image, and (c) improve quality-of-life

perceptions among existing residents. Florida (2012) corroborated R. Baker’s position by

stating, “Personal lives and workplaces, whole industries and geographic regions are

beginning to operate on the principles of constant, dynamic, creative interaction” (p. 29).

To clarify his position, Florida (2012) contended members of the creative class rely on

extracurricular activities to help cultivate their interests, values, and identities in both the

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workplace and in their social lives. Ultimately, to illustrate the importance of attracting

the creative class, Florida (2012), referring to Labor Statistics projections, reported this

market segment was likely to add 5.4 million jobs by 2020.

To demonstrate why some business and community leaders have failed to attract

members of the creative class, Florida (2002) stated:

Stuck in old paradigms of economic development, cities like Buffalo, New Orleans, and Louisville struggled in the 1980s and 1990s to become the next Silicon Somewhere by building generic high-tech office parks or subsidizing professional sport teams. Yet they lost members of the creative class, and their economic dynamism, to places like Austin, Boston, Washington D.C., and Seattle – places more tolerant, diverse, and open to creativity. Because of this migration of the creative class, a new social and economic geography is emerging in America, one that does not correspond to old categories like East Coast versus West Coast or Sunbelt versus Frostbelt. Rather, it is more like the class divisions that have increasingly separated Americans by income and neighborhood, extended into the realm of city and region. (p. 17)

In addition, Florida (2002) divided the creative class into two segments: the super-

creative core and creative professionals. The super-creative core typically includes

scientists, engineers, university professors, poets, novelists, artists, entertainers, think-

tank researchers, and other opinion makers. Super-creative core members are principal

innovators who produce new forms or designs that are readily transferable and useful.

Creative professionals work in a wide-range of knowledge-intensive industries (e.g., high

tech sectors, financial services, legal, healthcare, business management, etc.). These

individuals are engaged in problem-solving and draw on a complex knowledge base to

confront modern challenges. Furthermore, creative professionals often possess a high

degree of formal education and human capital (Florida, 2002). Ultimately, Florida

(2002) posited that communities with a higher concentration of creative class individuals

(i.e., 30% to 35% of the workforce) often exhibited higher levels of economic growth.

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Florida (2002) contended that for communities to attract members of the creative

class, they must facilitate low entry barriers. To do so ensures new business firms and

people alike will encounter an environment where they are quickly accepted into

numerous social and economic arrangements and endeavors. Florida (2002) described

such destinations as plug-and-play communities, where creative individuals can find

opportunity, build support, be true to themselves, and not be forced into any singular

identity. To illustrate his position, Florida (2002) stated:

Cities and regions that attract lots of creative talent are also those with greater diversity and higher levels of quality of place. That’s because location choices of the creative class are based to a large degree on their lifestyle interests, and these go well beyond the standard quality-of-life amenities that most experts think are important. (p. 20)

In addition, Florida (2002) stipulated members of the creative class prefer active

participative recreation over institutionalized forms. For example, creative individuals

often find an authentic and indigenous street-level culture comprising cafés, sidewalk

musicians, small galleries, and bistros serves to stimulate their senses. Furthermore,

Florida’s (2002) research revealed creative individuals place a higher value on active

outdoor recreation (e.g., bicycling, jogging, kayaking, etc.), which serves to broaden their

creative lifestyles. Ultimately, Florida (2012) stipulated quality of place comprises three

dimensions:

What’s there: the combination of the built environment and the natural

environment.

Who’s there: the diverse kinds of people, interacting and providing cues that

anyone can make a life for themselves in the community.

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What’s going on: the vibrancy of street life, café culture, arts, music, and

people engaging in outdoor activities.

Markusen, Gadwa-Nicodemus, and Barbour (2013) introduced the business case

for Florida’s (2012) position on quality of place. Relying on consumption base theory,

which posits that investments in certain types of consumption base activity can contribute

favorably to employment growth and income, Markusen et al. stipulated this outcome

could be achieved by:

providing residents with more opportunities to spend a greater share of their

discretionary income on new locally produced goods and services;

seeding innovations that ultimately expand into export markets;

nurturing organizations and occupations that re-spend a greater share of their

earnings locally than their peers; and

attracting and retaining entrepreneurs, firms, and workers.

In contrast, relying on traditional export-based practices can inhibit a community’s

growth potential and simultaneously discourage advances in the arts and culture

(Markusen et al., 2013). To promote clarity, Markusen et al. (2013) stated:

Job center cities are more likely to host businesses whose owners, managers, and employees contribute to local arts and culture through patronage and contributions. Businesses may feel that strong arts and cultural offerings enhance employee motivation, help attract and keep employees, and encourage retail customers. (p. 47)

Audretsch and Keilbach (2005) stipulated a stakeholder approach is essential for

enhancing the social capital of entrepreneurs, which is necessary for encouraging bankers

and venture capital firms to share the risks and benefits associated with their initiatives.

In the context of opportunity costs and alternative investment opportunities, Audretsch

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and Keilbach’s research revealed the funding of entrepreneurship capital was

considerably more efficient than R&D funding. Audretsch and Keilbach suggested an

increase in entrepreneurship by a given percentage has the potential to deliver three to

four times the impact of R&D inputs by the same percentage. Ultimately, fostering

entrepreneurship in R&D-oriented industries may deliver a more sustainable impact than

other industry start-up types (Audretsch & Keilbach, 2005).

A 1995 survey of CEOs managing companies in the State of Massachusetts

revealed incentives for business expansion, the reduction of business and personal tax

liabilities, improvements in the education system, reductions in regulation, and the

improvement and expansion of the transportation system were essential factors for

improving a local business climate (Corman et al., 1996). Gupta and York (2008)

corroborated these findings by reporting their survey findings revealed 60% of the U.S.

general public and 75% of business owners thought there was too much government

intervention in business affairs and 48% of the general public and 69% of business

owners thought they were over taxed. In addition, Corman et al. (1996) revealed the

availability of capital and attitudes toward business were of primary concern during

recessionary periods.

In the context of the level of importance during periods of expansion and

improved profitability, concerns over personal taxes, crime, and the cost and quality of

telecommunications systems increased significantly. In addition, the 15 factors that

increased in the level of satisfaction during expansionary periods included: (a)

availability of capital, (b) cost of capital, (c) availability of investment tax credit, (d)

quality of public schools, (e) crime level, (f) adequacy of infrastructure, (g) housing

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costs, (h) cost of semi-skilled labor, (i) cost of low-skilled labor, (j) cost of worker’s

compensation insurance, (k) attitude toward business, (l) spending on education, (m)

business assistance programs, (n) demand for products and services, and (o) health

insurance costs (Corman et al., 1996).

Essential community policies for attracting and retaining desirable business

activity include: (a) investment in the education of skilled people and the development of

small businesses, (b) encouraging immigration from external communities, (c) providing

infrastructure for human and business development, and (d) initiatives that bring public

and non-profit sectors into the entrepreneurial mix (Bednarzik, 2000; Judd & McNeil,

2008; Lichtenstein et al., 2004). Similarly, Doring et al. (2010) reported a number of

empirical studies have demonstrated market development, proximity to major customers,

and flexibility of location to be major considerations when entrepreneurs evaluate the

competitiveness of a community. Conversely, soft locational factors, such as taxes and

subsidies, leisure value, climate, or network clusters, are only considered when hard

factors are adequate (Doring et al., 2010). Relying on econometric models to estimate

changes in employment and revenues, Weber (2002) determined there was a very low

correlation between local incentives (e.g., reduced taxes, targeted financial inducements,

etc.) and employment growth. For example, the State of Michigan’s passage of a $600

million annual tax incentive for manufacturers had failed to produce the desired

economic impact as nearly 700,000 jobs would likely depart the state with or without the

tax benefit (Judd & McNeil, 2008). Ultimately, Florida (2012) corroborated these

findings by stating:

The communities that creatives are attracted to do not thrive for traditional economic reasons, such as access to natural resources or proximity to major

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transportation routes. Nor is their economic success tied to tax breaks and other incentives designed to lure businesses. A big part of their success stems from the fact that they are places where creative people want to live. This circumvents the age-old chicken-and-egg problem of what comes first, jobs or people. The answer is simple: it is not either-or, but both. Creative centers provide the integrated ecosystem or habitat where all forms of creativity – artistic and cultural, technological and economic – can take root and flourish. (p. 186)

To illustrate the importance of regional politics in determining investment and

implementation strategies, Hamilton (2008) and Judd and McNeil (2008) warned that

poorly designed policies and programs could inhibit entrepreneurism, especially in the

context of technology innovation. In fact, Florida (2012) contended that in order to

achieve favorable economic outcomes, technology, talent, and tolerance must persist and

interact in ways that make them interdependent. To elaborate, Judd and McNeil posited

many economic development strategies do not account for how globalization of services

and production has impacted firm decision-making. At best, Judd and McNeil stipulated

traditional approaches to economic development should be regarded as a zero-sum game,

where economic regions battle for a share of an ever shrinking pie. In addition, Hamilton

theorized that regardless of political affiliation, local governments, if provided with

greater latitude in legislative control and when there was a higher ratio in program

funding, were less efficient in program management than private entities (e.g., local

entrepreneurs, firms, universities, etc.).

Hamilton (2008) recommended increased constraints be placed on elected

officials and more pervasive monitoring be done by independent groups to protect the

effectiveness of such programs, especially in the initial stages of development.

Furthermore, Campbell and Rogers (2007) warned that an over politicized economy is

inherently less free, and as such, expertise and resources are channeled away from the

mechanisms that inspire wealth creation leading to lower incomes and a lower rate of

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business formation. Campbell and Rogers recommended governments avoid intervention

and as an alternative, foster an environment that safeguards property rights, allows

entrepreneurs to enjoy the freedom to flourish, allows consumers to decide how to spend

their hard earned income, avoids policies that result in income redistribution, and

minimizes large payrolls.

Ho and Wong (2006) revealed that regulatory business costs (e.g., number of

procedures associated with starting a business, number of days to start a business, cost of

starting a business, and minimum paid up capital required to register a business) had a

negative and significant impact on opportunity driven entrepreneurs. Campbell and

Rogers (2007) revealed economic freedom (relying on the Economic Freedom Index of

North America index) had more than twice the marginal effect of a similar increase in

commercial lending and nearly three times the marginal effect of a similar increase in the

percentage of minority businesses. Judd and McNeil (2008) stipulated that in order for

communities to successfully compete in a global environment, economic development

planners must embrace 21st century thinking and promote programs that support business

start-ups and growth of existing businesses, and rely less on recruiting large firms with

tax breaks and other financial inducements. Ultimately, Judd and McNeil concluded the

best economic development strategy would be to emphasize the organic growth of

existing community firms as opposed to the recruitment of new enterprises.

In the context of evaluating the effectiveness of economic development programs,

Hamilton (2008) stipulated such assessments are problematic because: (a) outcomes can

only be achieved over the long-term, (b) identifying comparison groups is difficult, and

(c) a large number of factors can contribute to economic growth. To overcome these

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challenges, Hamilton recommended a qualitative approach relying on historical narrative

that incorporates the triangulation of data sources (e.g., archives, organizational

documents, interviews, quantitative data, etc.) to develop insights and evidence that can

help establish the dominance of certain factors or perceptions that promote economic

growth. For example, Hamilton’s research encompassing the Denver region in Colorado

revealed business incubators’ efforts to help diversify the local business community had a

favorable impact despite ongoing funding challenges.

Summary

After conducting an initial review of the academic literature, the author concluded

a more robust method of inquiry would be essential for clarifying how stakeholder

perceptions influence entrepreneurism in the City of St. Petersburg. To facilitate this

endeavor, the author concluded qualitative research methods incorporating one-to-one

interviews and a focus group would enable him to clarify how the lived experiences of

stakeholders shaped their perceptions. The author posited the primary research findings

and subsequent analyses would enable him to assess how stakeholder perceptions

associated with: (a) uncertainty, (b) intellectual capital, (c) entrepreneurs, (d)

government, (e) business assistance programs, (f) universities, (g) human capital, (h)

financial capital, (i) brand promotion, and (j) economic development planning influence

entrepreneurism in St. Petersburg, Florida. As such, the author posited an emphasis on

how the following factors would help facilitate the author’s efforts in establishing

sufficient clarity to address the research question and achieve the research goals: (a)

information asymmetries and risk mitigation; (b) intellectual capital and knowledge

spillovers; (c) grass support among community stakeholders; (d) public policy

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contradictions; (e) business assistance program alignment and access to intellectual

capital; (f) the role of universities in supporting the formation of human capital; (g)

specialized human capital supply and business site selection considerations; (h) access

and availability of financial capital; (i) the importance of distinguishing a community by

establishing marketplace niche; and (j) how quality of place advantages can be translated

to favorable economic outcomes.

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CHAPTER THREE: METHODOLOGY

Research Design

Due to the inherent inability of quantitative methods to help researchers recognize

the complex relationships that exist between individual behaviors, attitudes, external

structures, socio-cultural issues, and phenomena, the author determined a

phenomenological qualitative research design would serve as the best suited method of

inquiry. Advocates of qualitative research methods contend that associated findings

often: (a) exhibit richness in detail; (b) support holistic analysis; (c) increase the validity

and depth of descriptions; (d) promote open-ended inquiry; and (e) support the discovery

of underlying values, beliefs, and assumptions (Al-Hamdan & Anthony, 2010; Crossan,

2003; Johnson & Onwuegbuzie, 2004; Kelle, 2006; Yauch & Steudel, 2003). Ultimately,

the author posited a qualitative research design would help characterize the essence of

human experiences and, ultimately, how stakeholder perceptions influence

entrepreneurism in the City of St. Petersburg, Florida (Creswell, 2009).

Population and Sampling Procedures

When relying on qualitative research methods, Creswell (2009) stipulated

researchers typically involve a small number of subjects through extensive and prolonged

engagement to develop patterns and the relationships of meanings. Likewise, S. E. Baker

and Edwards (2012) stated:

A small number of cases or subjects, may be extremely valuable and represent adequate numbers for a research project. This is especially true for studying hidden or hard to access populations such as deviants or elites. Here, a relatively few people, such as between six and dozen, may offer us insights into such things as the stratification hierarchy of a drug-producing subculture, an outlaw motorcycle gang, or a corporate boardroom. (p. 8)

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S. E. Baker and Edwards recommended a minimum sample of 12 participants to satisfy

the requirements of an interpretative phenomenological analysis. As a result, the author

constructed a purposive proportional quota sample consisting of 12 business owners or

managers representing local City of St. Petersburg business establishments. Ultimately,

the author was confident empirical saturation would be achieved with this sample group.

In the context of economic resiliency, the author’s initial assessment of the City of

St. Petersburg’s composition of business establishments revealed six major business

clusters: (a) financial services; (b) marine and environmental sciences; (c) medical

technology and life sciences; (d) information technology; (e) manufacturing; and (f) arts,

culture, and events tourism (City of St. Petersburg, 2012b). While this broad assessment

was useful for orienting the author to the economic drivers of the city, it did not provide

adequate information for developing a defensible sample group. Relying on statistics

provided by CLRSearch.com (2010), the author determined the City of St. Petersburg had

a business establishment population of 6,320. After evaluating the composition of the

City of St. Petersburg business community, the author stratified the sample group by the

North American Industry Classification System (NAICS) to ensure it was aligned with

the major characteristics of the local business population and conformed to the

composition of the top eight (ranked by quantity) NAICS classified business

establishment types. The author established parity by optimizing composition ratios

between the sample group and the population (See Appendix B):

Professional, scientific, and technical services (N = 1,061 [20%], n = 3

[25%]);

Retail trade (N = 844 [16%], n = 2 [17%]);

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Health care and social assistance (N = 826 [16%], n = 2 [17%]);

Other services (except public administration; N = 589 [11%], n = 1 [8%]);

Finance and insurance (N = 554 [11%], n = 1 [8%])

Construction (N = 493 [9%], n = 1 [8%]);

Accommodation and food services (N = 454 [9%], n =1 [8%]); and

Administration, support, waste management, and remediation services (N =

391 [8%], n = 1 [8%]; CLRSearch.com, 2010).

The application of this sampling method was not intended to establish

generalizability with the business population but rather to: (a) reach the targeted sample

group quickly, (b) acquire a sufficient sample that would provide the opinions of the

target population, (c) offset the potential impact of overweighted subgroups and the

potential for selection bias, (d) avoid sampling bias, and (e) address time and cost

constraints (S. E. Baker & Edwards, 2012; Creswell, 2009).

Instrumentation

The author relied on one-to-one personal interviews and focus group participants

derived from the purposive proportional quota sample. The survey instrument was

designed to promote clarity and facilitate respondent input rather than the author’s.

Likewise, the author relied on 10 semi-structured questions for the foundation of the

focus group agenda. The 10 semi-structured questions were:

1. How would you characterize the current business climate in the City of St.

Petersburg (Uncertainty)?

2. What factors do you believe favorably impact business performance in St.

Petersburg (Intellectual Capital)?

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3. How would you characterize the level of support your business has been

provided by the St. Petersburg community (Entrepreneurs)?

4. How would you define the local municipal government’s role in supporting

business prosperity and economic growth (Government)?

5. How would you characterize the quality and effectiveness of business

assistance programs in St. Petersburg (Business Assistance Programs)?

6. How would you define the role that local universities play in promoting

economic growth (Universities)?

7. What is your assessment of the availability and quality of the local St.

Petersburg workforce (Human Capital)?

8. How would you characterize current conditions as it pertains to access to

capital (Financial Capital)?

9. How would you describe the effectiveness of City of St. Petersburg’s brand

promotion efforts in terms of its contribution to economic prosperity (Brand

Promotion)?

10. What is your assessment of government and business leader performance in

promoting economic growth (Economic Development Planning)?

The author relied on an electronic audio recording device to support transcription

and coding. While the questions were definitive, the author recognized improvisation

would be required when it was necessary to establish greater clarity in respondent

experiences, perceptions, and values. Improvised questions were recorded electronically.

To protect the anonymity and confidentiality of respondents, audio data were transferred

from the electronic audio recording device and stored on encrypted and password

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protected solid state media. All file naming conventions were encoded to ensure

deduction could not be relied upon to identify respondent identities. In the context of

reporting findings, the author relied on coded respondent identification numbers in lieu of

actual identities to protect anonymity and privacy. Likewise, the author relied on WinZip

to encrypt all transcripts when engaged in member checking. Only the author maintained

access to recorded one-to-one interviews, associated transcripts, and MAXQDA project

files. At the conclusion of this research study all associated records (e.g., one-to-one

interview recordings, transcripts, project files, etc.) were stored on secured solid state

media. In addition, all data will be maintained for 5 years. Prior to conducting one-to-

one interviews, each respondent was provided an Informed Consent Form (See Appendix

C). The only written documents distributed were the Informed Consent Form and

interview questions to facilitate the interviewing process.

Procedures

Recognizing the potential threats to internal and external validity and reliability,

the author conducted the following procedures: (a) checked transcripts to ensure they

were error-free, (b) ensured coding definitions remained consistent during the coding

process, (c) triangulated different data sources, (d) engaged in member checking and

follow-up, (e) conducted peer debriefing, and (f) facilitated transferability by providing

rich and thick descriptions to help readers interpret findings and reach their own

conclusions (Brown, 2005; Creswell, 2007, 2009; Key, 1997).

To support triangulation and member checking, the author conducted a focus

group to further clarify the analysis derived from the one-to-one interviews and to engage

in the exploratory aspects of the analysis. The focus group research method was intended

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to promote interaction between participants and serve as a supplementary source of data

(Morgan, 1997). Morgan (1997) contended group interaction is essential for producing

data and insight that are less accessible through more conventional research methods. In

the context of the comparative advantage among qualitative research methods, Morgan

posited group discussions provide direct evidence about similarities and differences in

respondent opinions and experiences. In contrast, conventional one-to-one interviews

elicit data that require researchers to reach conclusions from post-hoc analyses based on

separate statements. In addition, Morgan stipulated the combined use of qualitative

methods enables a researcher to attain a unique understanding of a phenomenon being

studied, promote validity, and strengthen the total research project.

In the context of maintaining control of the interactions, the author served as the

moderator. While some critics contend a moderator can unduly influence a group’s

interactions, Morgan (1997) contended there was little evidence that their impact on the

data is any greater than a researcher’s impact on individual interviews. Additional

concerns for focus groups included: (a) tendency toward conformity, and (b) tendency

toward polarization (extreme views; Morgan, 1997). To overcome these potential

weaknesses, the author as the moderator endeavored to keep the focus group on topic and

was prepared to respond accordingly should an argument emerge due to the highly

controversial nature of the research topic (Morgan, 1997). To minimize the likelihood of

participant disagreement, the author conducted a pretest among peers to identify sensitive

issues in advance. In turn, the author refined the topics for focus group discussion and

refined his own role and techniques for maintaining control of focus group participant

interactions. Ultimately, the author developed a Focus Group Discussion Guide that

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incorporated an agenda to provide the impetus for control without inhibiting the

willingness to share experiences among participants (See Appendix D). The Focus

Group Discussion Guide was intended to promote a natural progression across topics

with some overlap between topics to avoid artificial compartmentalization (Morgan,

1997).

In the context of the planning and research design for the focus group, the author

addressed privacy concerns by restricting access to audio recordings and transcripts. The

author maintained exclusive access to the focus group session recording, associated

transcripts, and MAXQDA project files. At the conclusion of this research study, all

associated records (e.g., focus group session recording, transcript, project files, etc.) were

stored on secured solid state media. All data will be maintained for 5 years. In addition,

focus group participant identities were expressed using the same method as employed for

the one-to-one interviews. Prior to conducting the focus group, each participant was

provided an Informed Consent Form using the same criteria as expressed in the one-to-

one interviews (See Appendix E). In terms of the focus group site, the author secured a

board room in the St. Petersburg Area Chamber of Commerce facility in Downtown St.

Petersburg. This facility provided privacy and is located in an area of the city that was

easily accessible and proved convenient for all participants. Focus group activities were

completed in 2 hours to satisfy administrative requirements and elicit the opinions,

perceptions, and experiences of participants (Morgan, 1997). Refreshments were

provided to each participant.

In the context of sample selection, the author solicited each respondent to

participate in the focus group at the conclusion of the one-to-one interview. Once the

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author determined which participants had agreed to participate, the author stratified the

sample group using the same criteria relied upon for selecting one-to-one interview

respondents. In the context of sample size, the author anticipated that six respondents

would actually participate in the focus group. In addition, the author over-recruited by

20% (two respondents) to compensate for cancellations (Morgan, 1997). The author,

relying upon the guidance of Morgan (1997), determined six participants was the optimal

size for this sample group. Morgan contended the rule of thumb size for a focus group

sample is between six and 10 participants. To illustrate his position, Morgan stated,

“Below 6, it may be difficult to sustain a discussion; above 10, it may be difficult to

control one” (p. 43).

In an effort to avoid groupthink and help contend with latecomers, the author as

the moderator encouraged each participant to make opening statements to express his or

her opinions and experiences prior to group interaction. In addition, the moderator

invoked discussion-starter questions due to the tendency of dissenters to suppress their

disagreements in favor of maintaining group consensus. These actions helped the

moderator: (a) establish a nominal group, (b) provide direct evidence about the amount of

consensus and diversity in the group, (c) determine the strength and breadth of the

consensus, and (d) avoid emphasizing the moderator’s manifest interests in favor of the

participants’ (Morgan, 1997). The moderator relied on discussion flags to initiate new

topics and redirect when necessary. In addition, the moderator allowed each participant

to make final statements to provide an opportunity to submit his or her perspective

without the fear of being challenged or interrupted (Morgan, 1997). Upon the completion

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of the focus group session transcription, a follow-up was conducted to provide an

additional opportunity for participants to conclude their remarks (Morgan, 1997).

Ihantola and Kihn (2011) recommended researchers make their paradigmatic

assumptions explicit to ensure they do not conduct their research under the influence of

their stated assumptions. Likewise, Creswell (2007) contended researchers should be

self-critical and rely on reflexivity to raise questions and challenges to ideas developed

while conducting research. Bracketing can also be employed to ensure that researchers

set aside their preconceptions to promote an unbiased understanding of the experiences

described by the respondents. Collectively, these forms of legitimization can help

researchers confront threats to internal and external validity, which could threaten the

credibility of the research and researcher (Creswell, 2007; Ihantola & Kihn, 2011). The

author relied on a reflexive analysis and bracketing to avoid the pitfalls associated with

bias and to enhance trustworthiness (Argosy University, 2011).

The author recognized his personal biases, values, and experiences could

overshadow the interview process. As such, the author’s self-assessment revealed his

long-standing residence and employment within the City of St. Petersburg could

influence his disposition. To counter this potential for researcher bias, the author did not

ask leading questions or share his literature review findings with respondents. In the

context of values, the author has embraced a pro-business sentiment throughout his adult

life, which is rooted in his family’s ownership of small business enterprises throughout

the region. Interestingly, throughout the author’s employment with the City of St.

Petersburg as an analyst, he has been compelled to participate in policy development and

enforcement initiatives intended to constrain and regulate the actions of certain members

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of the business establishment community. As such, the author has often felt conflicted,

especially when the city has engaged in punitive measures to enforce local ordinances. In

the context of experiences, the author’s affiliation with the city and the local Chamber of

Commerce could have been a source of bias; however, the author avoided actions that

could have influenced the disposition of the respondents. In addition, the author only

extended invitations to respondents with whom he had no personal affiliation.

Further steps to promote trustworthiness included: (a) administering a pilot survey

to colleagues to ensure the validity of the instrument, (b) soliciting feedback from the

author’s dissertation chair and the Argosy University Institutional Review Board (IRB)

approval process, (c) conducting private interviews in the respondents’ natural

environments where they experienced the phenomenon under discussion, (d) providing

respondents with Informed Consent Forms to ensure they were informed about the

researcher’s intent and their rights (e.g., privacy, confidentiality, anonymity, voluntary

participation, etc.) prior to interviews, and (e) seeking feedback for research findings

from peers to ensure information was accurate and complete (Creswell, 2009; Key, 1997;

Morgan, 1997).

Methodological Assumptions

In the context of the interview process, the author concluded the semi-structured

interview process offered the following advantages:

direct contact with qualified individuals can lead to specific and constructive

suggestions;

often serves as a good source of gathering detailed information; and

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fewer participants are required to gather rich and detailed data (Thomas,

2010).

Data Processing and Analysis

Recognizing this process as an exploratory form of research, the author engaged

in inductive data analysis, which is essential for identifying patterns, categories, and

themes. Working from the bottom up, the author organized themes in accordance with an

iterative learning process to ensure they were comprehensive and fully reflected the

meanings expressed by one-to-one interview respondents and focus group participants.

Relying on a qualitative codebook developed as a byproduct of MAXQDA’s (qualitative

analysis application) transcription and analysis capabilities, the author developed a

complete and complex picture of the research problem (Creswell, 2009).

Limitations

Advocates of qualitative research methods stipulate reality does not exist within a

vacuum and can be influenced by numerous factors (e.g., culture, gender, cultural beliefs,

etc.). In addition, researchers who rely on qualitative research methods recognize the

complex relationships that exist between individual behavior, attitudes, external

structures, socio-cultural issues, and phenomena. In addition, qualitative research

methods findings can exhibit richness in detail, support holistic analysis, increase the

validity and depth of descriptions, promote open-ended inquiry, and support the

discovery of underlying values, beliefs, and assumptions (Al-Hamdan & Anthony, 2010;

Crossan, 2003; Johnson & Onwuegbuzie, 2004; Kelle, 2006; Yauch & Steudel, 2003).

Likewise, Kelle (2006) contended the growing complexity and heterogeneity of modern

society has made it increasingly difficult to apply quantitative research methods. Despite

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these advantages, criticisms and disadvantages persist. Criticisms and weaknesses of

qualitative research methods include:

can be unduly influenced by the proximity of the researcher to the

investigation;

regarded as a collection of anecdotal and personal impressions and strongly

subject to researcher bias;

lacks reproducibility, which could lead to radically different conclusions;

lacks generalizability;

process is time consuming; and

important issues could be overlooked; observations and results depend on

interpretations of subjects (omitted variable bias) and participants have more

control over the process (Al-Hamdan & Anthony, 2010; Crossan, 2003; Kelle,

2006; Munck, 1998; Yauch & Steudel, 2003).

In the context of the limitations associated with this research study, the author

recognized there were cost and time constraints. As such, the author endeavored to

complete all one-to-one interviews and a focus group within 2 months of receiving

Argosy University IRB approval to proceed.

Delimitations

In the context of delimitations, the author restricted the sample selection to

owners and managers of business firms that officially operate within the city boundaries

of St. Petersburg. The author concluded the participants included in this sample group

were likely to possess information relevant to this research study and it was anticipated

the author would attain saturation by the time the last respondent was interviewed.

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CHAPTER FOUR: DATA ANALYSIS AND RESULTS

One-to-One Interview Participation

The author relied on numerous solicitation methods (e.g., direct mail, email,

telephone, referral, walk-in, etc.) to recruit respondents for one-to-one interviews. In

total, the author solicited 45 candidates and ultimately 10 agreed to participate (22%

response rate). Seven of the 10 respondents were referrals from members of the St.

Petersburg Area Chamber of Commerce. Despite not achieving the goal of 12

respondents, the author concluded the composition of the purposive proportional quota

sample group was sufficiently aligned with the population characteristics of St.

Petersburg business establishments to maximize the potential for saturation while

minimizing the potential for overrepresentation. To achieve the goal of 12 respondents

while maintaining the integrity of the composition of the purposive proportional quota

sample group, the author would have needed to secure the commitment of one

construction and one health care and social assistance business establishment (See

Appendix B).

One-to-one interviews were conducted on dates, at times, and at locations that

were conducive for respondents. Interview location characteristics varied, including

private offices, private residences, and public venues. Following the informed consent

discussion period, all respondents elected to participate fully in one-to-one interviews by

signing the informed consent forms. All one-to-one interviews were recorded digitally

and transcribed into a rich text file format accessible through Microsoft Word. To

facilitate member checking, transcripts were remitted to each respondent. Ultimately,

two respondents made changes to their transcripts to clarify their respective statements.

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In turn, all transcripts were imported into the MAXQDA application to facilitate coding

and data analysis.

One-to-One Interview Coding

Upon importing transcript documents into the MAXQDA application, the author

established a project file that incorporated a coded index based on stakeholder

perceptions (e.g., uncertainty, intellectual capital, entrepreneurs, government, business

assistance programs, universities, human capital, financial capital, brand promotion, and

economic development planning) that influence entrepreneurism. Following the

establishment of the coded index, the author relied on inductive analysis in conjunction

with an iterative review of the interview transcripts to develop sub codes.

From time to time, the author recognized it was necessary to apply sub code

linkages from questions other than those directly associated the code/sub code hierarchy

due to the interrelated nature of stakeholder perceptions. Working from the ground up,

50 sub codes were developed and aligned with index codes associated with the 10 one-to-

one interview questions. In terms of the frequency of responses in accordance with the

50 sub codes, the author coded and categorized 194 individual respondent statements

(See Appendix F). Ultimately, the author relied on the MAXQDA Code Relations

Browser and MAXMap co-occurrence analysis features to demonstrate where sub codes

intersected and exhibited relationships, providing the mechanism for identifying patterns,

categories, and themes.

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One-to-One Interview Data Analysis and Results

Frequency Analysis

Uncertainty. In the context of uncertainty, the author determined eight of 10

respondents felt the St. Petersburg local business climate was favorable and three of 10

respondents had observed increased risk taking among their peers. To provide clarity,

one respondent stipulated the mindset among business owners had changed and it was her

belief that people had grown weary of the media’s negative outlook on the economy and

had come to the realization that conditions were not as bad as they has been led to

believe. In essence, business leaders had taken the initiative to escape the paralysis

described by the respondent as a duck and cover mentality. One respondent stipulated

lower unemployment was contributing to favorable economic conditions. Conversely,

two respondents expressed concern that the local business climate remained fragile and

vulnerable. Ultimately, three of 10 respondents stipulated businesses that make

connections with other stakeholders have an influence in local affairs. Such efforts can

be perceived as a mechanism for mitigating risk and uncertainty through the formation of

alliances that promote informed decision-making (See Appendix F).

Intellectual capital. The emphasis on intellectual capital overwhelmingly

revealed most respondents (nine of 10) recognized Downtown St. Petersburg served as

the foundation of the city’s economic activity. In addition, five respondents contended

the downtown area’s quality-of-life (e.g., amenities, beaches, community and national

events, downtown nightlife, festivals, livability, restaurants, weather, etc.) served as a

major selling point for attracting visitors and would-be residents and businesses.

Likewise, four respondents attributed the city’s culture (e.g., exhibits, galleries,

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museums, theaters for performing arts, etc.) to this phenomenon. Taken together,

downtown was recognized as the epicenter for promoting the city’s quality-of-life and

culture value proposition. In fact, one respondent stipulated the downtown area

demonstrated its viability by describing it as an ideal setting for living, working, and

playing.

In the context of the characteristics of intellectual capital, one respondent

recognized there were few large-scale employers throughout the city (with the exception

of hospitals and universities). In addition, two respondents described the downtown area

as an agglomeration of small- and medium-sized businesses. One respondent attributed

this phenomenon to office space constraints in the downtown area. Likewise, two

respondents stipulated decreased demand had promoted more reasonable rates for cost of

space, improving the competitiveness of the downtown area as the city’s center for

economic and cultural activity. Despite overwhelmingly favorable perceptions, two

respondents expressed concern over tax incentives provided to certain business

establishments, calling into question the efficacy of this practice. Finally, one respondent

expressed concern over the transience of business establishments along the Central

Avenue business corridor (See Appendix F).

Entrepreneurs. In the context of entrepreneurs, nine of 10 respondents

concluded the local community was supportive. To provide greater clarity, eight of 10

respondents concluded grass roots support from fellow business owners was strong. In

fact, one respondent credited such support for her financial success. Another respondent

stipulated it was not uncommon for new businesses to be welcomed to the area, even by

their direct competition. This same respondent clarified this position by stipulating

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business stakeholders have come to realize strong grass roots support is the most

effective strategy for promoting the economic and social viability of an area and for

minimizing information asymmetries. Conversely, one respondent, acknowledging the

importance of grass roots support, stipulated that most of her business derived from

outside the local market and the only reason she operated within the city was to take

advantage of the area’s quality-of-life value proposition. In essence, this business owner

voluntarily elected not to pursue positions of influence among local stakeholders because

doing so offered few benefits and could be counterproductive to her business interests

(See Appendix F).

Government. In the context of government, five of 10 respondents stipulated the

administration was business friendly. To provide clarity, four of those respondents

indicated the administration was approachable if the business owner took the initiative to

reach out. In fact, one respondent emphasized the contributions of the current and former

city mayors. Former Mayor Rick Baker, in particular, was recognized for his efforts in

supporting the arts (e.g., the Dali Museum, etc.) and facilitating economic growth by

hosting and organizing local and national events (e.g., Honda Grand Prix of St.

Petersburg, etc.) that brought the city international acclaim. Conversely, four of 10

respondents contended they believed the local government was controlled by special

interests. Likewise, three of those four respondents indicated they had not experienced

the direct impact from government activity. In addition, two of those respondents

indicated they considered the local government to be a hindrance due to the assertive

nature of parking enforcement in the downtown area. Additional points of concern

expressed by individual respondents included the local municipal government’s: (a)

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inability to communicate, (b) lack of a regional perspective, (c) inability to manage its

transportation infrastructure, and (d) lack of visibility in supporting cultural endeavors

(See Appendix F).

Business assistance programs. In the context of business assistance programs,

five of 10 respondents reported they had no knowledge of city business assistance

programs. Similarly, two additional respondents indicated they had knowledge of

business assistance programs but voluntarily chose not to utilize such services. When the

author inquired as to why they made this election, both respondents indicated their

organizations had sufficient embedded organic experience and had no need for external

assistance. Conversely, three respondents reported they had utilized the services

provided by city and Chamber business assistance programs and one respondent

preferred the services offered by WorkNet Pinellas (Pinellas County). One respondent, in

an effort to promote clarity, contended that city and Chamber business assistance

programs provided essential access to intellectual capital in the form of training programs

and mentoring. In addition, this respondent indicated business assistance programs

supported networking efforts and ultimately helped promote ongoing business

relationships and business expansion. In the context of a recommendation, the same

respondent recommended business assistance programs reevaluate their curriculum to

make delineations along particular business classifications (e.g., professional, retail, etc.)

to improve program efficiency and impact. Ultimately, only one respondent was critical

of the Chamber’s business assistance programs, stipulating some guidance that was

provided in the past was poor (See Appendix F).

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Universities. In the context of universities, nine of 10 respondents indicated

institutions of higher learning served as an important resource for supporting the

formation of human capital. Likewise, two respondents contended universities were

essential for supporting innovation. Despite overwhelming support for universities, two

respondents indicated they should initiate efforts to improve their partnerships with the

business community. In an effort to clarify this position, one respondent stipulated

universities should consult with the business community to develop curriculum with

greater relevance in order to address soft skills (e.g., teamwork, communication, etc.)

deficiencies observed among recent graduates. Ultimately, only one respondent indicated

he did not detect the efforts of universities in the St. Petersburg area (See Appendix F).

Human capital. To segue from an emphasis on universities to human capital,

three respondents reported employees and candidates for employment often lacked soft

skills. In addition, two respondents contended candidates for employment also lacked

essential information technology and quantitative analysis skills. To illustrate the

seriousness of such concerns, five of 10 respondents stipulated there was an inherent

shortage of qualified employment candidates in the city. Despite such concerns, seven of

10 respondents reported there was a sufficient number of qualified employment

candidates in the Tampa Bay market area. In essence, despite concerns over the

availability of qualified human capital residing in St. Petersburg, respondents as

employers reported they had no difficulty pursing talent in the larger marketplace. In

fact, two respondents acknowledged some local businesses had opened offices in other

markets as a means of pursuing qualified human capital that was not available locally

(See Appendix F).

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Financial capital. In the context of financial capital, five of 10 respondents

stipulated traditional forms of business financing remained constrained. Despite such

concerns, four of 10 respondents reported access to financial capital was improving. To

provide clarity, two of those respondents attributed this phenomenon to the observed

expansion of local community banks throughout the city. Interestingly, four of 10

respondents (two of whom had indicated financial capital remained constrained)

indicated they had been conservative with on-hand financial capital throughout the

recessionary period, a strategy that better positioned their respective companies to

weather the economic downturn. To clarify their position, those respondents credited

their own experience with past recessions as helping them recognize the importance of

maintaining sufficient reserves of financial capital to mitigate such risks (See Appendix

F).

Brand promotion. In the context of the city government’s brand promotion

efforts, three of 10 respondents contended the administration was effective in promoting

local events. Likewise, two of those three respondents stipulated the administration was

effective in promoting the city’s value proposition outside of the local market.

Furthermore, four of 10 respondents reported they had absolutely no knowledge of the

administration’s brand promotion efforts. After deliberating, however, the same

respondents acknowledged they were not surprised by this development, because in all

likelihood they were not the intended audience and did not expect to be the direct

beneficiary of such efforts (See Appendix F).

In the context of criticism of the city’s brand promotion efforts, seven of 10

respondents contended that establishing a niche in the local marketplace had been a

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persistent challenge. Likewise, two respondents provided clarity by stipulating the city’s

brand promotion efforts were disingenuous because the administration had not followed

through on its brand promise of fostering an inclusive environment for all stakeholders.

In addition, five of 10 respondents stipulated more resources should be directed to

support brand promotion efforts. One respondent clarified this position by

recommending the administration consider the implications of a chicken/egg conundrum,

which can be described as the “if you build it - will come” ideology. In essence, this

theory stipulates there must first be economic prosperity before it can be promoted

(simultaneity problem). To prove the existence of economic prosperity, the respondent

recommended success stories from prominent business leaders be integrated into

promotion efforts as a method to convey the business case for establishing and growing

businesses in the city. Furthermore, two respondents expressed concern that

homelessness was having an adverse impact on the city’s image. Ultimately, regardless

of perceived brand promotion performance, six of 10 respondents contended the city’s

culture was its greatest advantage in terms of a value proposition (See Appendix F).

Economic development planning. In the context of economic development

planning, seven of 10 respondents contended government and business leaders must

become more adept at emphasizing the importance of living, working, and playing in the

city. To fully develop an effective economic development plan, four of 10 respondents

stipulated the business community needed to fully participate in the process of

developing a viable strategy. To build and sustain a viable local economy, three of 10

respondents indicated an emphasis on attracting individuals who may or may not identify

themselves as members of the creative class would facilitate business start-ups, business

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expansion, and efforts in establishing a niche in both the local marketplace and region. In

essence, the position of these respondents controverts the simultaneity problem by

emphasizing the importance of attracting a workforce that will provide the engine for

sustainable business growth by attracting fellow members of the creative class and

business interests that are seeking a competitive advantage by increasing human capital

and improving access to sophisticated consumers (See Appendix F).

Co-Occurrence Analysis

Utilizing MAXQDA’s Code Relations Browser and MAXMap capabilities, the

author relied on co-occurrence analysis to identify patterns, categories, and themes. In

the context of patterns, an analysis of the relationships among coded one-to-one interview

responses revealed stakeholder perceptions associated with intellectual capital,

universities, brand promotion, and economic development planning demonstrated

significantly more intersections among several of their respective sub codes than other

perceptions (e.g., uncertainty, entrepreneurs, government, business assistance programs,

human capital, and financial capital). The author relied on the demonstrated occurrence

of two or more sub code intersections to detect interdependencies. In the context of

themes, the author relied on this analysis to determine which stakeholder perceptions

predominately influence entrepreneurism in the City of St. Petersburg.

In the context of co-occurrence analysis, the author determined four stakeholder

perceptions demonstrated more than two intersections among their respective sub codes:

(a) intellectual capital, (b) universities, (c) brand promotion, and (d) economic

development planning. In descending order (based on the aggregate number of

intersections), sub code intersections included:

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Intellectual Capital/Culture and Brand Promotion/Culture is the City’s

Greatest Advantage (11 intersections)

Intellectual Capital/Culture and Economic Development Planning/Importance

of Living, Working, and Playing in the City (8 intersections)

Intellectual Capital/Quality of Life and Economic Development

Planning/Importance of Living, Working, and Playing in the City (8

intersections)

Intellectual Capital/Ideal Location for Living, Working, and Playing and

Economic Development Planning/Importance of Living, Working, and

Playing in the City (7 intersections)


Intellectual Capital/Quality of Life (6 intersections)


Intellectual Capital/Culture (6 intersections)

Brand Promotion/Culture is the City’s Greatest Advantage and Economic

Development Planning/Importance of Living, Working, and Playing in the

City (6 intersections)

Intellectual Capital/Quality of Life and Intellectual Capital/Culture (5

intersections)


Intellectual Capital/Downtown (3 intersections)


Universities/Support Formation of Human Capital (3 intersections)

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Economic Development Planning/Creative Class and Brand

Promotion/Culture is the City’s Greatest Advantage (3 intersections)

Brand Promotion/Establishing a Market Niche has been a Challenge and

Brand Promotion/Culture is the City’s Greatest Advantage (3 intersections)


Economic Development Planning/Creative Class (2 intersections)

Intellectual Capital/Culture and Universities/Support Formation of Human

Capital (2 intersections)

Intellectual Capital/Culture and Economic Development Planning/Creative

Class (2 intersections)

Intellectual Capital/Downtown and Intellectual Capital/Culture (2

intersections)

Brand Promotion/Establishing a Market Niche has been a Challenge and

Intellectual Capital/Culture (2 intersections)

Brand Promotion/Culture is the City’s Greatest Advantage and Intellectual

Capital/Quality of Life (2 intersections)

Brand Promotion/Culture is the City’s Greatest Advantage and Intellectual

Capital/Ideal Location for Living, Working, and Playing (2 intersections)


Playing in the City and Intellectual Capital/Downtown (2 intersections)


Playing in the City and Brand Promotion/Establishing a Market Niche has

been a Challenge (2 intersections)

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Playing in the City and Brand Promotion/More Resources for Promotion is

Required (2 intersections; See Appendix G)

In the context of themes, the author posits respondent (i.e., stakeholder)

perceptions of intellectual capital as related to culture were highly interdependent with

brand promotion efforts as related to the recognition that culture is the city’s greatest

advantage and economic development planning as it relates to the importance of living,

working, and playing in the city. In the context of universities and their role in

supporting the formation of human capital, respondents concluded institutions for higher

learning were most effective in supporting intellectual capital as related to making the

city an ideal place to live, work, and play and for their role in attracting and retaining

members of the creative class as related to economic development planning. In addition,

interdependencies were detected between intellectual capital as related to culture,

universities as related to supporting the formation of human capital, brand promotion as

related to the challenges of establishing a market niche, and economic development

planning as related to the creative class (See Appendix G).

Interdependencies were also detected between brand promotion as it related to

culture as the city’s greatest advantage and intellectual capital as related to quality-of-life

and as an ideal location for living, working, and playing (with observed

interdependencies among intellectual capital variables of the ideal location for living,

working, and playing and quality of life, culture, and downtown). Likewise,

interdependencies were detected between economic development planning as related to

the importance of living, working, and playing in the city and intellectual capital as

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related to downtown, brand promotion as related to the challenges of establishing a

market niche, and brand promotion as related to the need for more resources. Following

the co-occurrence analysis, the author determined the overriding theme was the formation

and maintenance of intellectual capital in both the city and its downtown area maintains

an interdependent relationship with universities, brand promotion, and economic

development planning. Ultimately, the author contends co-occurrence analysis findings

demonstrated business leaders and the local government administration must endeavor to

establish a market niche that emphasizes why the city and the downtown area in

particular is an ideal location to live, work, and play by virtue of its quality-of-life and

culture value proposition. In the context of economic development planning, an

emphasis on the creative class will help community leaders refine the city’s market niche

and effectively support promotion efforts directed at this market segment (See Appendix

G).

Focus Group Participation

After recruiting all 10 one-to-one interview respondents for the focus group

session, three respondents communicated their intent to participate. Ultimately, two of

the three respondents elected to participate by virtue of their attendance at the focus

group session. Neither participant demonstrated familiarity and represented different

industries. In terms of the characteristics of the focus group, the author concluded it

should be classified as a dyad due to its inherent size. Despite the group’s size, the

author proceeded with the focus group discussion. The rationale for this decision was

based on the author’s determination that a lively and uninhibited discussion could be

sustained by these participants by virtue of their respective industry experience, insights,

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and passion for entrepreneurism (Kiernan, 2011). In effect, the author was confident in

each participant’s ability to make a valuable contribution to this study. As planned, the

focus group session was conducted in a private board room at the St. Petersburg Area

Chamber of Commerce. A catered lunch was provided in advance of the discussion. In

addition, informed consent was administered to each participant and the focus group

session was digitally recorded in its entirety. The author served as the moderator and

used the 10 one-to-one interview questions for the foundation for the agenda. The author,

as the moderator, relied on those questions to lead an open discussion on how stakeholder

perceptions influence entrepreneurism. The focus group session discussion was

completed in 1 hour and 2 minutes. The author transcribed the recording and forwarded

transcripts to each participant to provide them with an opportunity to verify the accuracy

of the record. No transcripts were returned for editing.

Focus Group Coding

Upon importing the focus group session transcript document into the MAXQDA

application, the author repeated the steps relied upon to establish a coded index for the

one-to-one interview transcripts. Building upon that foundation, the author relied on

inductive analysis to develop sub codes that could augment, contradict, and reinforce the

findings derived from one-to-one interviews. Working from the ground up, nine new sub

codes were developed and integrated with predecessors derived from the one-to-one

interviews. In terms of the frequency of responses in accordance with the nine sub codes,

the author coded and categorized 50 individual statements from the two focus group

participants (See Appendix H). Ultimately, the author relied on the MAXQDA Code

Relations Browser and MAXMap feature to demonstrate where sub codes intersected and

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exhibited relationships (co-occurrence analysis), providing the mechanism for identifying

patterns, categories, and themes.

Focus Group Data Analysis and Results

Frequency Analysis

Uncertainty. Both participants were in agreement that local economic conditions

were favorable. In addition, both participants stipulated increased risk taking among

business establishments was evident. One participant reaffirmed the importance of

businesses making connections to promote their influence in local affairs (See Appendix

H).

In the context of uncertainty, the author concluded focus group participant

responses were largely consistent with those provided by one-to-one interview

respondents. A majority of one-to-one interview respondents and both focus group

participants contended that in the context of uncertainty, the local business climate was

favorable with some evidence of increased risk taking. In addition, both groups (one-to-

one interview respondents and focus group participants) stressed the importance of

making connections in terms of having influence. While neither of the focus group

participants indicated there was any perception of fragility as related to the local business

climate within the context of the first question emphasizing uncertainty, they did express

their concerns during the discussion associated with intellectual capital as related to

economic prosperity outside of the downtown area (See Appendix H).

Intellectual capital. One participant reaffirmed the importance of downtown as a

symbol of economic viability and both participants emphasized the advantage of the

city’s quality-of-life value proposition. Both participants were in agreement as to the

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importance of culture in the city. To provide more clarity, one respondent reaffirmed the

importance of downtown in terms of it representing an ideal location for living, working,

and playing. One respondent also emphasized the benefits of the downtown area’s

reasonable rates on cost of space, while simultaneously reporting this phenomenon was

largely attributed to lower demand for office space. The respondent stipulated mobility

technologies had enabled employees to work from any location, significantly reducing

the need for conventional office space (See Appendix H).

Interestingly, despite each participant’s operating tenure in the city, neither could

demonstrate any familiarity with economic conditions outside of the downtown area.

One participant, however, after deliberating, indicated he had observed other areas of the

city appeared to be in economic decline. Interestingly, both respondents agreed there was

a need to establish a viable central business corridor to link and then extend the

downtown area’s prosperity to other contiguous areas of the city (See Appendix H).

In the context of intellectual capital, the author concluded focus group participant


respondents. Specifically, perceptions associated with: (a) the downtown area; (b)

quality-of-life; (c) culture; (d) the ideal location for living, working, and playing; and (e)

the reasonableness of the cost of space were consistent. Points of criticism were not

expressed within the context of the second question. This position, however, changed

during the discussion of the local government’s role (Question # 4) when one participant

criticized the administration for not providing sufficient infrastructure to accommodate

local businesses’ parking requirements (See Appendix H).

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Entrepreneurs. Both participants reaffirmed their position on the importance of

a supportive community in addition to confirming that was an experience they shared.

One participant reaffirmed the position that grass roots support remains strong and

credited both the local government administration and the St. Petersburg Area Chamber

of Commerce for their efforts in facilitating this advantage. In fact, the participant

contended the relationship between the city and the Chamber had been strained in the

past; however, communication had significantly improved in recent months due to the

installment of a new Chief Executive Officer at the Chamber (See Appendix H).

In the context of entrepreneurs, the author concluded focus group participant


respondents. Both groups consistently expressed their perception that the local

community was supportive of entrepreneurs and grass roots support among businesses

was strong (See Appendix H).

Government. Both participants reaffirmed their position that the local

government administration was business friendly. One participant reinforced the position

that government leadership is accessible if an individual or business took the initiative to

reach out for assistance. Elaborating on the parking challenges in the downtown area,

one participant stipulated insufficient parking capacity for local businesses was a source

of dissatisfaction. The other participant appeared surprised by this response. Ultimately,

the discussion revealed there were segments of the downtown area business community

that were underserved in terms of parking capacity (See Appendix H).

In the context of government, the author concluded focus group participant

responses were fairly consistent with those provided by one-to-one interview

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respondents. Specifically, half of the one-to-one interview respondents felt the

government administration was business friendly, while both focus group participants

were in agreement with this perception. In the context of government leadership

accessibility, four of 10 one-to-one interview respondents and one of the two focus group

participants had offered praise. In the context of special interest influence, however, four

of 10 one-to-one interview respondents and none of the focus group participants

expressed concern (See Appendix H).

Business assistance programs. Both participants were in agreement that

business assistance programs served as a viable mechanism for providing stakeholders

access to intellectual capital. One participant elaborated by contending business

assistance programs were useful for networking, establishing and sustaining

relationships, and supporting efforts to engage in business expansion by leveraging

connections (See Appendix H).

In the context of business assistance programs, the author concluded focus group

participant responses were fairly consistent with those provided by one-to-one interview

respondents who had actually utilized the services or had some indirect knowledge of the

benefits of such resources. Specifically, one of three one-to-one interview respondents

who made use of services provided by city business assistance programs and both focus

group participants recognized that such resources could provide access to intellectual

capital. Likewise, one one-to-one interview respondent and one focus group participant

reaffirmed business assistance programs were useful for networking, relationships, and

business expansion (See Appendix H).

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Universities. Both participants reaffirmed their position that universities

effectively supported the formation of human capital. In addition, one participant

reaffirmed the position that universities support innovation. Likewise, both respondents

were in agreement that today’s students are more driven than in the past. This was a

noteworthy development, as one of the participants had been more critical of students and

recent graduates during the one-to-one interview session (See Appendix H).

In the context of universities, the author concluded focus group participant


respondents. Specifically, nine of 10 one-to-one interview respondents and both focus

group participants concluded that universities served as a valuable resource for the

formation of human capital. Likewise, three of 10 one-to-one interview respondents and

one of the focus group participants acknowledged that universities served an important

role in supporting innovation (See Appendix H).

Human capital. To segue from the discussion on universities as the source of

human capital and innovation, both participants were in agreement that quality was

improving. Ultimately, universities were credited for this development (See Appendix

H).

In the context of human capital, the author concluded focus group participant

responses were not entirely consistent with those provided by one-to-one interview

respondents. One of the two focus group participants reversed her position, indicating

the quality of human capital had improved in recent months and attributed this

development to the actions of local universities (See Appendix H).

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Financial capital. One focus group participant reaffirmed the position that

access to financial capital was improving by stipulating the expansion of local

community banks served as evidence of this phenomenon. Neither participant could

validate whether lending conditions had improved. In fact, both participants contended

they were conservative with on-hand financial capital and had no need to pursue

financing. There was, however, no evidence that financial capital had been constrained

as both participants had retained access to lines of credit (See Appendix H).

In the context of financial capital, the author concluded focus group participant

responses were fairly consistent with those provided by one-to-one interview

respondents. Specifically, one of the focus group participants and four of the 10 one-to-

one interview respondents concluded access to financial capital was improving.

Conversely, neither of the focus group participants acknowledged access to financial

capital remained constrained, albeit both had stipulated they were conservative with on-

hand capital and had no need for external financing. In that regard, if comparing group

responses along the lines of those who indicated they were conservative with on-hand

financial capital, greater consistency among responses was detected (See Appendix H).

Brand promotion. One focus group participant stipulated the local government

administration was effective in promoting local events in the downtown area. In

addition, both participants acknowledged the local government administration was

effective in promoting the city outside of the market as evidenced by observed

attendance, especially visitors who hail from other regions of the continental United

States and foreign shores. Furthermore, both respondents were in agreement that culture

is the city’s greatest advantage and city leaders should endear themselves to exploit that

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advantage. In fact, both participants concluded business and local government leaders

should collaborate to overcome the ongoing challenge in establishing a market niche for

the city. Both participants concluded the city’s value proposition, as directed to those

aspiring to establish a business, should include efforts to promote the city as a business

friendly community (See Appendix H).

In the context of brand promotion, the author concluded focus group participant

responses were somewhat consistent with those provided by one-to-one interview

respondents. Specifically, one focus group participant acknowledged the local

government was effective in promoting events, which was consistent with the three one-

to-one interview respondents who expressed the same position. Both focus group

participants reaffirmed their position on the government’s effectiveness in promoting

outside of the city. Neither of the focus group participants were critical of the

government’s performance in this area; however, they did recommend the local

government administration should consider emphasizing the friendliness of the local

business community in conjunction with the city’s cultural advantages. In the context of

culture as the city’s greatest advantage, both focus group participants and six of 10 one-

to-one interview respondents were consistent in their perceptions (See Appendix H).

Economic development planning. In the context of economic development

planning, both participants reaffirmed their position that the business community needs to

participate in the process. In fact, one focus group participant elaborated by stipulating

economic development planning should emphasize the importance of attracting and

retaining individuals and sub cultures that identify themselves as part of the creative class

(See Appendix H).

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In the context of economic development planning, the author concluded focus

group participant responses were fairly consistent with those provided by one-to-one

interview respondents. Specifically, while focus group participants did not directly

express the importance of living, working, and playing in the city, one participant

reaffirmed the importance of the creative class by indirectly implying this market

segment values those dimensions as it relates to culture as a value proposition. In the

context of business community participation, both focus group participants acknowledged

its importance, while four of 10 one-to-one interview participants shared this perception

(See Appendix H).

Co-Occurrence Analysis

Utilizing MAXQDA’s Code Relations Browser and MAXMap, the author

conducted co-occurrence analysis of the focus group transcript to identify patterns,

categories, and themes. In the context of patterns, an analysis of the relationships among

coded focus group session responses demonstrated interdependencies among stakeholder

perceptions associated with entrepreneurs and business assistance programs. The author

relied on the demonstrated occurrence of two or more sub code intersections in an effort

to detect interdependencies. In the context of themes, the author relied on this analysis to

determine which stakeholder perceptions predominately influence entrepreneurism in the

City of St. Petersburg and to support triangulation of data sources.

Relying on the criteria that required a minimum of two intersections among sub

codes, the author determined entrepreneurs as related to grass roots support as a source of

strength had two intersections with business assistance programs as related to its

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usefulness for networking, and relationships had two intersections with business

expansion related to access to intellectual capital (See Appendix I).

In the context of themes, the focus group discussion added clarity on the

importance of grass roots support among businesses and how such relationships can be

forged and then enhanced by participation in business assistance programs. In fact, the

co-occurrence analysis demonstrated business assistance programs can serve as a useful

instrument for networking, building relationships, and leveraging those connections to

engage in business expansion. In addition, the co-occurrence analysis demonstrated

business assistance programs can serve as an access point to leverage the underlying

knowledge and experience of the business community (See Appendix I).

Recent Local Econometric Trends and Research Results

After evaluating one-to-one interview respondent and focus group participant

statements, the author concluded there was some discontinuity between stakeholder

perceptions and the City of St. Petersburg’s (2012a) local econometric performance

indicators. For example, eight of 10 one-to-one interview respondents and both focus

group participants contended the local business climate was favorable. Conversely, from

2007 to 2012, downtown area office vacancy rates increased 15.1%, Gateway area and

Mid-Pinellas Industrial and Flex Space vacancy rates increased 74.5%, and business tax

receipts paid declined 8.2%. In an effort to resolve the discontinuity, the author

considered the possibility of recency bias. In turn, the author reviewed the short-term

annual trends among these metrics and determined that from 2011 to 2012, downtown

area office vacancy rates had declined 18.5%, Gateway area and Mid-Pinellas Industrial

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and Flex Space vacancy rates had declined 13.5%, and business tax receipts paid

increased 5.4%.

Considering these findings, the author concluded it was more likely the one-to-

one interview respondents and focus group participants were relying on short-term

observations for their sense of optimism. In the context of focus group participant

perceptions of other areas of the city that were alleged to be in decline, the short-term

(i.e., 2011-2012) statistical trend indicated Gateway area office vacancy rates had

increased 4.7% (12.8% in 2011 to 13.4% in 2012). This finding demonstrated the

continuation of the 2007 to 2012 trend that revealed the 8.1% increase in Gateway area

office vacancy rates (City of St. Petersburg, 2012a). Ultimately, focus group participant

concerns over the economic performance of areas outside of downtown appeared to be

justified.

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CHAPTER FIVE: DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS

Discussion

This chapter is intended to compare and contrast the author’s primary research

findings with the body of literature supporting this research study for the purpose of

developing a valid response to the research question and satisfying research goals. As

expressed in Chapter 2, the author assessed how stakeholder perceptions associated with

(a) uncertainty, (b) intellectual capital, (c) entrepreneurs, (d) government, (e) business

assistance programs, (f) universities, (g) human capital, (h) financial capital, (i) brand

promotion, and (j) economic development planning influence entrepreneurism in St.

Petersburg, Florida.

Uncertainty

While the majority of one-to-one interview respondents and both focus group

participants (i.e., stakeholders) expressed favorable perceptions of the local business

climate, they also demonstrated their understanding of the importance of minimizing

information asymmetries. To achieve that end, several stakeholders stipulated making

connections and forming alliances with influential community stakeholders can help

mitigate risk and ultimately promote informed decision-making. In addition, the author

found the perceptions of these stakeholders were consistent with results of previous

studies. Koetse et al. (2006) indicated the availability of information (e.g., financial

expertise) and resources could enable firms to seize upon opportunities to hedge against

risk and uncertainty. Likewise, Liao and Gartner (2006) stressed the importance of

business planning in the early stages of firm formation as a means of preserving viability.

Despite the fact that Koetse et al. was emphasizing the advantages of large firms, the

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author in the current study posited this type of advantage could be emulated by smaller

firms if they leverage their access to networks comprised of experienced, informed, and

influential community stakeholders.

Intellectual Capital

Overwhelmingly, a majority of stakeholders recognized the value of the city’s

downtown area as the foundation for municipal economic activity, despite the revelation

among focus group participants that the economic prosperity in this area may not extend

to other contiguous areas of the municipality. Several stakeholders recognized the

importance of the city’s quality-of-life and culture value proposition (as an ideal setting

for living, working, and playing), especially in the downtown area. Interestingly, two

stakeholders contended this value proposition had contributed to the agglomeration of

business firms in downtown. In addition, two stakeholders challenged the efficacy of tax

incentives to attract businesses and ultimately, the formation of intellectual capital. This

position was consistent with Florida (2012), Judd and McNeil (2008), and Weber (2002),

who stipulated that recruiting large companies through tax subsidies and financial

incentives was less effective than promoting organic growth. Rather, co-occurrence

analysis demonstrated favorable outcomes could be better achieved by directing

resources to brand promotion and emphasizing the advantages of the city’s culture.

While stakeholders recognized quality-of-life as an important component of the city’s

value proposition, co-occurrence analysis demonstrated culture is a central feature that

distinguishes St. Petersburg from many of its regional competitors (e.g., Tampa,

Clearwater, etc.). In addition, this author posited stakeholders recognized the importance

of culture as a major factor in how favorable perceptions can support the spatial

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agglomeration of creative individuals, businesses, and associated knowledge spillovers

that promote economic growth and by extension inhibit uncertainty through reduced

innovation costs and higher productivity (Doring et al., 2010; Firestone, 2010).

Entrepreneurs

The majority of stakeholders recognized the importance of a supportive

community and emphasized the roles of influential community stakeholders (e.g.,

government, the Chamber, business firms, etc.) in promoting economic growth.

Interestingly, the majority of stakeholders credited grass roots support for much of the

progress in fostering economic prosperity. This author posited these findings were

consistent with those expressed in the literature by Audretsch and Keilbach (2005),

Corman et al. (1996), Falcone and Wilson (2008), Florida (2012), Gupta and York

(2008), Lerner (2010), Renski (2009), and Yusuf (2010), who contended a culture of

support is essential for attracting and anchoring entrepreneurial firms. Likewise, Florida

(2012) and Smedlund (2006) reinforced this position by emphasizing the importance of

promoting interconnected networks through the collaboration of regionally embedded

institutions (e.g., governments, Chambers of Commerce, etc.) and their role in:

serving as intermediaries in the transfer of knowledge among community

stakeholders;

promoting stimuli from a broad array of social, cultural and economic

institutions; and

attracting financial and creative human capital.

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Government

Many of the participating stakeholders recognized the importance of the local

government administration’s leadership in promoting economic prosperity. In fact, many

stakeholders contended the government administration was friendly to business interests

and was approachable if stakeholders demonstrated the initiative. Despite the recognition

of the government’s role in promoting economic prosperity, several stakeholders

expressed concern over the influence of special interests in the city and how the

government administration established priorities. Linking this perception to stakeholder

concerns over the efficacy of government tax subsidies and other financial incentives, the

author posited the perceptions of stakeholders closely paralleled the positions of Doring

et al. (2010) and Florida (2012). Both contended extensive subsidies for businesses can

adversely affect a local economic climate. Rather, some stakeholders recommended the

government administration invest resources in infrastructure, human capital, brand

promotion, and the clarification of policies. In addition, stakeholder perceptions were

consistent with the position of Corman et al. (1996), who emphasized the importance of

the government’s role in promoting human capital through quality education programs,

building and sustaining reliable infrastructure, and minimizing information asymmetries

by standardizing regulations and avoiding public policy contradictions.

Business Assistance Programs

While a minority of stakeholders reported utilizing business assistance programs,

one stakeholder clarified her position by stipulating such programs provided essential

access to intellectual capital through training programs, mentoring, networking,

sustaining relationships, and supporting business expansion. In addition, this stakeholder

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credited her success to the access provided by business assistance programs to intellectual

capital. Ultimately, the author found this stakeholder’s perceptions were consistent with

the findings of Lussier (1995), Lussier and Pfeifer (2001), and Lussier and Halabi (2008),

who stipulated that education, staffing, professional advice, and planning were predictors

of business success (e.g., greater access to capital, superior capital management, more

partnerships and more hiring). As a point of criticism, two stakeholders expressed

concern over the efficacy of such programs, calling into question whether such programs

adequately assess the capabilities and needs of entrepreneurs in conjunction with the

expertise of advisors and mentors. This finding was consistent with the position of Yusuf

(2010), who stipulated business assistance programs were often poorly aligned with

entrepreneurs’ latent and expressed needs.

Universities

An overwhelming majority of stakeholders demonstrated institutions for higher

learning served as an important resource for supporting the formation of human capital,

while a minority of stakeholders expressed the conviction they were essential for

innovation. To improve their standing in the local community, several stakeholders

recommended universities engage the business community in partnerships for the

development of academic programs that promote human capital by addressing soft skills

essential to workplace success. In addition, Huffman and Quigley’s (2002) research

findings were consistent with perceptions described by participating stakeholders.

Specifically, Huffman and Quigley contended universities should play a major role in the

formation of human capital while stimulating talented entrepreneurs. Likewise, Florida

(2012) stipulated universities must fulfill three interrelated roles that emphasize: (a)

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technology innovation, (b) the pooling of talented creative individuals and business firms,

and (c) fostering a tolerant and progressive agenda to promote diversity. Ultimately,

Florida’s (2012) and Huffman and Quigley’s (2002) research revealed universities can

serve as business incubators by providing access to office space, equipment, guidance,

financial capital, and knowledge.

Human Capital

Several stakeholders conveyed their concern the city had a shortage of qualified

employment candidates. Nonetheless, a majority of stakeholders stipulated qualified

employment candidates could be recruited from other areas in the region. In addition,

two stakeholders reported some local businesses had opened offices in other markets as a

means of pursuing qualified human capital. These findings demonstrate businesses

recognize the importance of a highly-qualified workforce. The author posits the

perceptions of these stakeholders were consistent with the findings of Doring et al.

(2010), who contended municipalities or regions with an ample supply of highly

specialized human capital were more likely to attract innovative networks. In addition,

Doring et al. stipulated the availability of skilled labor is the most important

consideration for influencing decisions associated with business site selection.

In the context of recruiting and retaining talented human capital, several

stakeholders expressed the importance of universities and their role in the formation of

creative human capital. The author posited these stakeholder perceptions were consistent

with the literature. For example, R. Baker’s (2011) position that quality-of-life serves as

a powerful employee recruitment and retention tool in both direct and indirect ways was

consistent with stakeholder perceptions. Likewise, Florida’s (2012) position on creative

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capital was mirrored by a stakeholder who indicated there were business firms that would

go to extraordinary lengths (e.g., opening offices in other markets, etc.) to secure access

to the human capital they needed to remain competitive.

Financial Capital

In the context of financial capital, half of the stakeholders indicated access

remained constrained even as conditions appeared to be improving. Four stakeholders

indicated conservative handling of financial resources during the economic downturn had

enabled their businesses to weather adversity. One respondent clarified his position by

revealing he had relied on experience with prior recessions to develop a strategic

response. Specifically, this stakeholder’s business firm elected to maintain reserves of

financial capital to mitigate foreseen and unforeseen risks. In the context of the literature,

these findings were consistent with the positions of Elston and Audretsch (2011) and

Kobeissi (2009), who contended that sufficient access to capital was an essential element

to new business formation, expansion, and firm survival. In addition, stakeholder

perceptions associated with new local bank openings appear to buttress the position that

access to financial capital had improved in recent months. Similarly, Kobeissi contended

the prevalence of local banking institutions is of great importance because it enables

financial institutions to gain a better understanding of the operating environments and

prospects of new businesses, helping these stakeholders minimize information

asymmetries. In turn, Kobeissi’s research revealed there is a significant relationship

between loans, bank deposits, per capita income and market size, and the number of

business start-ups.

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Brand Promotion

Three of the 10 stakeholders disclosed a favorable opinion of the government

administration’s brand promotion efforts, while seven reported establishing a niche in the

local marketplace had been a persistent challenge. Likewise, additional concerns were

raised about inclusiveness and whether the government administration was allocating

sufficient resources to support brand promotion initiatives that effectively conveyed the

business case for establishing and growing businesses in the city. In addition, a majority

of stakeholders contended the city’s culture was its greatest advantage, distinguishing it

from other regional competitors. In context of business support, stakeholders clarified

their position by emphasizing the friendliness of the local business community. Taken

together, culture and the friendliness of the city appeared to provide the foundation for a

market niche. Two stakeholders did express their satisfaction with the government

administration’s efforts in promoting local and national events in the downtown area as

evidenced by what appeared to stakeholders as the increased attendance of individuals

from other regions and foreign shores. To preserve its reputational capital, however, two

stakeholders contended the government administration must confront homelessness and

its adverse impact on the city’s image.

In the context of the supporting literature, the author concluded stakeholder

perceptions were consistent with the research findings of Sneed et al. (2011), who

suggested positioning, image, and business mix are significant, positive predictors of

patronage in downtown communities. Likewise, Judd and McNeil’s (2008) position that

the redevelopment of downtown areas contributes to job creation, incubation of small

businesses, reduction of sprawl, favorable property values, and increased options for

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goods and services was consistent with the perceptions expressed by several stakeholders.

Ultimately, stakeholders revealed perceived increased patronage in the downtown area

associated with local and national events provided an indirect benefit in terms of

communicating the city’s culture, brand identity, and reputation (Sneed et al., 2011).

Not unlike Sneed et al. (2011), Crombie (2011) and Florida (2012) stressed the

importance of reputational capital product/service differentiation. Recommending a

holistic approach for distinguishing a community, Crombie (2011) emphasized design,

infrastructure, basic services, and attractions. In the context of strategic measures in

support of brand promotion, Crombie stipulated that advertising and promotion, large-

scale physical redevelopment, public art and civic statuary, mega events, cultural

regeneration, and public-private partnerships were essential components for

distinguishing a community. Likewise, R. Baker (2011) and Florida (2012) emphasized

quality of place as a major determinant of where business firms choose to locate and

engage in expansion. Ultimately, Sneed et al. (2011) contended that directing resources

to the formation of a diverse concentration of entrepreneurs and macro-marketing

programs would yield a superior ROI than more conventional economic development

initiatives, such as a well-developed attraction. Ultimately, this author concluded the

combined positions of Sneed et al. (2011), Crombie (2011), R. Baker (2011), and Florida

(2012) were reflected in the perceptions expressed among many of the stakeholders,

establishing the critical nature of brand promotion in establishing and disseminating the

business case for business firm relocation and expansion.

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Economic Development Planning

A majority of stakeholders contended that influential community leaders

(government and business) must become more adept at emphasizing the importance of

living, working, and playing in the downtown area and throughout the city. Furthermore,

several stakeholders recommended an inclusive approach in developing a viable

economic development strategy. In particular, stakeholders stipulated that establishing a

market niche could be predicated on attracting members of the creative class. In essence,

attracting members of the creative class could help promote sustainable business growth

by increasing human capital and improving access to a greater number of affluent and

sophisticated consumers.

In the context of the literature, the author found the perceptions of stakeholders

were largely consistent with Corman et al. (1996), Florida (2002), and Judd and McNeil

(2008). Corman et al. noted community stakeholders must recognize the importance of

the business climate as it relates to quality-of-life perceptions and indicated those

perceptions can impact decisions associated with business relocation, workforce

composition and size, and whether to expand or contract operations. In addition, Judd

and McNeil posited communities with a higher perceived quality-of-life possess a

distinctive binding effect among creative individuals. Florida (2002) provided further

clarity by stipulating economic growth was contingent upon a community’s ability to

attract members of the creative class. In turn, attracting sufficient numbers of the creative

class can help stakeholders translate a market niche advantage into favorable economic

outcomes (e.g., higher human capital, superior economic growth, higher level of quality

of place, etc.). In addition, R. Baker (2011), Florida (2012), and Markusen et al. (2013)

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emphasized the importance of location choices associated with quality of place as it

relates to lifestyle interests. Again, the author posits the perceptions of stakeholders were

consistent in the context of the broader interdependencies exhibited between intellectual

capital (e.g., culture, quality-of-life, downtown, etc.) and economic development

planning (e.g., importance of living, working, and playing in the city and the creative

class).

In the context of the government’s role in economic development planning, half

of the stakeholders recognized the positive aspects of the administration’s relationship

with the business community, while several others expressed concern over special

interest influence in public affairs. Despite these findings, three stakeholders stipulated

they had not personally experienced the direct impact from government activity. With

the exclusion of concerns associated with the assertive nature of parking enforcement in

the downtown area, several stakeholders inferred the local government administration

was largely passive when considering the implications of leading economic development

initiatives.

In the context of the literature, Renski (2009) and Weber (2002) warned against

economic development strategies that emphasize industrial recruitment due to the

prevalence of adverse outcomes (e.g., shrinking recruitment pools, bidding wars, etc.)

that can diminish the value of a firm’s contribution to economic growth. Specifically,

Weber, demonstrating a low correlation between local incentives and employment

growth, warned that the price of incentives often outweighs the value of the public

benefits generated by targeted firm’s contribution to economic development. Similarly,

Gupta and York’s (2008) research revealed that 60% of the U.S. general public and 75%

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of business owners had concluded there was an excessive amount of government

intervention in business affairs. In addition, Florida (2012) corroborated these findings

by discrediting tax incentives and recommending an emphasis on improving quality of

place as means of attracting creative human capital and, ultimately, promoting an

integrated creative ecosystem.

Hamilton (2008) warned that community stakeholders would be wise to apply

increased constraints on elected officials and monitoring by independent groups to

protect the integrity of economic development programs. Rather than relying on

subsidies to attract business firms, Bednarzik (2000), Lichtenstein et al. (2004), and Judd

and McNeil (2008) recommended community stakeholders: (a) invest in the education of

skilled individuals and the development of small business firms, (b) encourage

immigration from external communities, (c) provide infrastructure for human and

business development, and (d) foster initiatives that bring public and non-profit sectors

into the entrepreneurial mix. Likewise, Campbell and Rogers (2007), Ho and Wong

(2006), and Judd and McNeil (2008) recommended lower levels of government

intervention in an effort to minimize transaction costs, promote economic freedom, and

stimulate organic growth of local businesses. Ultimately, when considering stakeholder

perceptions of government administration passivity and the recommendations expressed

in the literature, this author posits local government leadership may have deliberately

chosen to minimize direct intervention efforts. As such, the author posits the local

government administration has recognized the value of economic development

partnerships and has summarily elected to assume a supporting role in deference to the

124

expertise exhibited by intermediaries, business leaders, and other influential community

stakeholders who are not inhibited by information asymmetries.

Conclusion

The conclusion section summarizes the author’s response to the research question

and expresses to the reader whether the research goals of this research study were

satisfied.

Research Question

After evaluating the research problem, the author determined this research study

should serve as an investigative tool for determining how stakeholder perceptions

influence entrepreneurism in the City of St. Petersburg, Florida. Relying on a review of

the academic literature, primary research themes derived from one-to-one interviews and

a focus group, and the synthesis of primary and secondary research findings, subsequent

analysis revealed the following:

Information asymmetries that promote uncertainty can be mitigated by

making connections and forming alliances with experienced, informed, and

influential community stakeholders (Koetse et al., 2006; Liao & Gartner,

2006).

The spatial agglomeration of intellectual capital and subsequent knowledge

spillovers are best facilitated by distinctive community quality-of-life and

cultural attributions (Doring et al., 2010; Firestone, 2010; Florida, 2012; Judd

& McNeil, 2008; Weber, 2002).

A culture of grass roots support among community stakeholders reinforced by

interconnected networks and facilitated by knowledge transfer intermediaries

125

is essential for attracting and anchoring entrepreneurial firms (Audretsch &

Keilbach, 2005; Corman et al.,1996; Falcone & Wilson, 2008; Florida, 2012;

Gupta & York, 2008; Lerner, 2010; Renski, 2009; Smedlund, 2006; Yusuf,

2010).

Local government can best serve the community by investing resources in

quality education programs, sustainable infrastructure, and avoiding public

policy contradictions that can be exacerbated by the administration of public

subsidies with efficacy implications (Bednarzik, 2000; Campbell & Rogers,

2007; Corman et al., 1996; Doring et al., 2010; Florida, 2012; Hamilton, 2008;

Ho & Wong, 2006; Judd & McNeil, 2008; Lichtenstein et al., 2004; Rogers,

2007).

Business assistance programs provide access to intellectual capital and enable

entrepreneurs to avoid the pitfalls associated with information asymmetries,

provided they are properly aligned with latent and expressed needs (Lussier,

1995; Lussier & Halabi, 2008; Yusuf, 2010).

Universities support the formation of human capital, stimulate talented

entrepreneurs, and can serve as business incubators if they engage the

business community through partnerships (Florida, 2012; Huffman &

Quigley, 2002).

Communities with an ample supply of highly specialized human capital (i.e.,

creative individuals) are better positioned to influence decisions associated

with business site selection (R. Baker, 2011; Doring et al., 2010; Florida,

2012).

126

Maintaining sufficient financial reserves in good times and bad is an essential

component in new business firm formation, expansion, and survival (Elston &

Audretsch, 2011; Kobeissi, 2009).

A holistic approach to brand promotion will enable stakeholders to distinguish

the reputational capital of their community by establishing a niche in the local

marketplace, contributing favorably to economic growth (R. Baker, 2011;

Crombie, 2011; Florida, 2002, 2012; Judd & McNeil, 2008; Sneed et al.,

2011).

An inclusive approach to economic development planning will enable

community stakeholders to promote a value proposition that translates quality

of place advantages (e.g., quality-of-life, culture, etc.) into favorable

economic outcomes (e.g., lower transaction costs, economic freedom, and

organic growth; R. Baker, 2011; Corman et al., 1996; Florida, 2012; Judd &

McNeil, 2008; Markusen et al., 2013).

Research Goals

In determining how economic, social, and environmental factors inspire or inhibit

entrepreneurism, the author concluded information asymmetries and financial capital

constraints represent the most formidable barriers to business entry. To overcome these

barriers, entrepreneurs must establish connections with experienced and influential

community stakeholders and be prepared to leverage knowledge spillovers and reciprocal

transaction benefits as they arise. In the context of financial capital constraints,

entrepreneurs, at the earliest opportunity, must establish a conservative approach to

maintaining sufficient reserves of financial capital if they expect to survive cyclical

127

economic downturns (Doring et al., 2010; Elston & Audretsch, 2011; Firestone, 2010;

Florida, 2012; Judd & McNeil, 2008; Kobeissi, 2009; Koetse et al., 2006; Liao &

Gartner, 2006; Weber, 2002).

When trying to make the determination of how stakeholder perceptions influence

entrepreneurism, the author concluded favorable perceptions of quality of place can have

a significant impact on business relocation decisions. Likewise, grass roots support of

new and organic business firms can help mitigate information asymmetries and buttress

the reputational capital of the community (Audretsch & Keilbach, 2005; R. Baker, 2011;

Corman et al., 1996; Falcone & Wilson, 2008; Florida, 2012; Gupta & York, 2008; Judd

& McNeil, 2008; Lerner, 2010; Markusen et al., 2013; Renski, 2009; Smedlund, 2006;

Yusuf, 2010).

When making the determination of how interactions of economic, social,

environmental factors, and perceptions of stakeholders inspire or inhibit entrepreneurism,

the author concluded brand promotion and economic development planning are essential

elements for improving the appeal and resiliency of a community. Ultimately, a holistic

and inclusive approach is essential for the formation of a community’s identity that

demonstrates a high level of quality of place that is authentic, sustainable, and appealing

to both creative individuals and business firms (R. Baker, 2011; Corman et al., 1996;

Crombie, 2011; Florida, 2002, 2012; Judd & McNeil, 2008; Markusen et al., 2013; Sneed

et al., 2011).

Recommendations

Despite answering the research question and satisfying the research goals for this

research study, the author concluded there were two fundamental deficiencies in the

128

supporting literature that could benefit from further study. First, the ongoing controversy

regarding the efficacy of tax subsidies and other financial incentives and business

relocation decisions is often a source of division among community stakeholders. In

particular, Weber (2002) warned of a low correlation between local incentives and

employment growth and as such, stipulated the price of such incentives outweighed the

value of benefits derived from economic development. This author posits a mixed-

methods research methodology should be employed in a research study to help reveal

how information asymmetries between local governments and business interests can be

minimized by establishing which factors contribute more readily to sustained economic

growth.

Second, Pedroni and Sheppard (2013) stipulated the academic community had not

sufficiently addressed the existence of a causal connection between culture production

and local economic performance indicators such as gross domestic product (GDP). This

concern is based on Pedroni and Sheppard’s narrative regarding the amount of resources

being developed for culture production and how such investments affect other forms of

infrastructure (e.g., schools, roads, etc.) investment in the long-run. To resolve this issue,

this author recommends a qualitative methods research study incorporating several

sample groups of community stakeholders from cities that have been recognized as

leading centers for creative capital be conducted to establish which combination of

factors underlying economic growth offers the best outcomes in terms of ROI and gains

in reputational capital.

In the context of recommendations for economic development practitioners, the

author recommends a stakeholder approach (partnership) for addressing concerns

129

associated with entrepreneurism. After considering the research findings of Bacdayan

(2008) and Sherman (1999), the author recommends community stakeholders consider

establishing an intermediary organization (e.g., business incubator) to facilitate business

assistance, brand promotion, and economic development planning initiatives. Such an

organization should be led by individuals representing a cross-section of community

stakeholders (e.g., local government, Chamber of Commerce, universities, neighborhood

associations, etc.) and staffed with full-time qualified professionals to ensure all interests

are represented and considered. Under the umbrella of this intermediary organization,

communities could minimize duplicity and ensure qualified expertise and sufficient

resources are employed in ways that generate favorable long-term economic outcomes.

Representing the common interests of community stakeholders, this intermediary

organization would be uniquely qualified to shape a community’s identity for the purpose

of promoting the economic and quality of place advantages that will help recruit and

retain creative individuals who have a propensity to engage in entrepreneurial ventures

and contribute to economic growth.

Conclusion

Considering the recommendations to redress the deficiencies in the supporting

academic literature and those directed to economic development practitioners, the author

contends community stakeholders must confront information asymmetries by establishing

interconnected networks, and ultimately rely on intermediary organizations to advise,

plan, implement, and evaluate brand promotion and economic development planning

initiatives. In the context of the City of St. Petersburg, the author posits such an

organization comprised of qualified representatives of community stakeholder

130

organizations would develop the capacity to: (a) establish an authentic marketplace niche

that distinguishes the city from its rivals, (b) promote quality of place benefits to attract

and retain creative individuals with high levels of human capital, (c) engage in economic

development planning that emphasizes organic growth and the recruitment of business

firms that do not adversely impact net economic performance, (d) assume a holistic view

to facilitate an equitable approach in infrastructure investment, and (e) serve as a business

incubator in partnership with other community stakeholders to assist new start-ups and

entrepreneurs persevere by providing access to intellectual capital, thereby enhancing the

city’s image as a business friendly community to promote a healthy regional economy.

131

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APPENDICES

142

APPENDIX A

Vacancy Rate Figures

143

Figure A1. Downtown development projects (September 2011).

Figure A2. Gateway area development projects (June 2011).

144

APPENDIX B

Establishments by NAICS Code

145

Table B1 2010 Establishments by NAICS Code

St. Petersburg,

Florida Florida United States

Establishments, Total (by Place of Work) 6,320 522,727 7,700,385

Forestry, Fishing, Hunting, and Agriculture Support 2 0.03% 1,068 0.20% 23,642 0.31%

Mining 2 0.03% 266 0.05% 25,112 0.33%

Utilities 10 0.16% 618 0.12% 16,658 0.22%

Construction 493 7.80% 59,486 11.38% 813,323 10.56

%

Manufacturing 149 2.36% 14,265 2.73% 331,456 4.31%

Wholesale Trade 229 3.62% 32,232 6.17% 431,433 5.60%

Retail Trade 844 13.35

% 73,578 14.08% 1,125,6

19 14.62

%

Transportation and Warehousing 77 1.22% 13,377 2.56% 220,006 2.86%

Information 118 1.87% 8,487 1.62% 143,188 1.86%

Finance and Insurance 554 8.77% 35,604 6.81% 506,488 6.58%

Real Estate and Rental and Leasing 349 5.52% 33,214 6.35% 380,839 4.95%

Professional, Scientific and Technical Services 1,061

16.79% 70,461 13.48% 868,363

11.28%

Management of Companies and Enterprises 37 0.59% 2,504 0.48% 50,541 0.66%

Admin, Support, Waste Mgt, Remediation Services 391 6.19% 32,645 6.25% 383,618 4.98%

Educational Services 64 1.01% 5,497 1.05% 86,867 1.13%

Health Care and Social Assistance 826 13.07

% 51,726 9.90% 785,864 10.21

%

Arts, Entertainment and Recreation 71 1.12% 7,691 1.47% 125,329 1.63%

Accommodation and Food Services 454 7.18% 34,904 6.68% 634,204 8.24%

Other Services (Except Public Administration) 589 9.32% 45,104 8.63% 746,427 9.70%

Note. North American Industry Classification System (NAICS): NAICS is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. business economy. Adapted from Establishments by Business Type, 2012, CLRsearch.com, Retrieved from http://www.clrsearch.com/Saint_Petersburg_Demographics/FL/Establishment-Statistics-by-NAICS-Code

146

Table B2 Establishments Sample Group Composition by NAICS Code

St. Petersburg, Florida

N % n % Respondent

s

Establishments, Total (St. Petersburg, Florida) 5,212 12 10

Professional, Scientific and Technical Services 1,06

1 20% 3 25% 3

Retail Trade 844 16% 2 17% 2

Health Care and Social Assistance 826 16% 2 17% 1

Construction 493 9% 1 8% 0

Finance and Insurance 554 11% 1 8% 1

Admin, Support, Waste Mgt, Remediation Services 391 8% 1 8% 1

Accommodation and Food Services 454 9% 1 8% 1

Other Services (Except Public Administration) 589 11% 1 8% 1

Note. Ten (10) respondents agreed to participate in the one-to-one interviews. The researcher's goal was twelve (12). The author was unable to secure the participation of two (2) respondents (1 each) from the following two NAICS Code establishment types: Construction and Health Care and Social Assistance.

147

APPENDIX C

One-to-One Interview Informed Consent Form

148

Informed Consent Form

You are cordially invited to participate in a doctoral level business management research study. The purpose of this research study is to interview managers or owners of City of St. Petersburg business establishments to understand: (a) how economic, social, and environmental factors inspire or inhibit entrepreneurism (as reported by the participants), (b) how stakeholder perceptions influence entrepreneurism, and (c) how interactions of economic, social, and environmental factors and perceptions of stakeholders inspire or inhibit entrepreneurism. If you participate in this research, you will be asked to respond to interview questions while being audio taped so the researcher can ensure your answers are completely understood. The tapes will only be reviewed by the researcher and never anyone else. Your participation will take approximately 30 minutes on one occasion that will be scheduled with you on advanced notice for your convenience. Your participation in this research is strictly voluntary. You may refuse to participate at all, or choose to stop your participation at any point in the research, without fear of penalty or negative consequences of any kind. The information/data you provide for this research will be treated confidentially, and all raw data will be kept in a secured file by the researcher. Results of the research will be reported as aggregate summary data only, and no individually identifiable information will be presented. You also have the right to review the results of the research if you wish to do so. A copy of the results may be obtained by contacting the researcher at the address below:

Richard J. Ferner, Jr. 9845 50th Street Circle East Parrish, Florida 34219

There will be no direct or immediate personal benefits from your participation in this research. The results of the study will be shared as an aggregate so as to share the leadership aspects to promote any organizational learning that may arise. I have read and understand the information explaining the purpose of this research and my rights and responsibilities as a participant. My signature below designates my consent to participate in this research study, according to the terms and conditions outlined above.

Signature Date Print Name:

149

APPENDIX D

Focus Group Discussion Guide

150

Focus Group Discussion Guide

Greetings focus group participants. I wanted to begin by thanking each of you for participating in the one-to-one interview process. Your contribution to this research initiative has proven invaluable. With that said, I would like to welcome each of you to this lunchtime focus group session. The intent is to continue the discussion in a group setting among professionals. As before, statements made during this event will be recorded and will remain confidential. A transcript will be provided to each participant. Informed Consent Forms will be disseminated prior to the initiation of the moderated discussion. Despite these formalities, this is an informal event, which will provide each of you with an opportunity to network with fellow business leaders from the City of St. Petersburg. Lunch, which will be provided by Orange Blossom Catering, is free of charge. The parking expense will be fully reimbursed at the conclusion of the event. The focus group session will take approximately one hour. I recognize that your time is valuable, however, I think you will find this event worthwhile, providing each of you with a rare opportunity to be heard. At the very least, this event may help each of you establish a sense of clarity that could not be achieved conventionally.

Following lunch, we will proceed with the focus group session. I, Rick Ferner, will serve as the focus group session moderator. We will rely on the original ten one-to-one interview questions for the foundation for the discussion. The moderator’s role is to provide structure, enhancing our ability to remain on task by initiating and concluding each discussion topic. As we proceed, I want to remind all participants that we are all professionals and each of you has something valuable to say, so please, be courteous to your peers and respect their insights and opinions. Thank you.

Focus Group Discussion Topics

(Uncertainty) Q1: How would you characterize the current business climate in the City

of St. Petersburg?

(Intellectual Capital) Q2: What factors do you believe favorably impact business

performance in St. Petersburg?

(Entrepreneurs) Q3: How would you characterize the level of support your business has

been provided by the St. Petersburg community?

151

(Government) Q4: How would you define the local municipal government’s role in

supporting business prosperity and economic growth?

(Business Assistance Programs) Q5: How would you characterize the quality and

effectiveness of business assistance programs in St. Petersburg?

(Universities) Q6: How would you define the role that local universities play in

promoting economic growth?

(Human Capital) Q7: What is your assessment of the availability and quality of the local

St. Petersburg workforce?

(Financial Capital) Q8: How would you characterize current conditions as it pertains to

access to capital?

(Brand Promotion) Q9: How would you describe the effectiveness of City of St.

Petersburg’s brand promotion efforts in terms of its contribution to economic prosperity?

(Economic Development Planning) Q10: What is your assessment of government and

business leader performance in promoting economic growth?

152

APPENDIX E

Focus Group Informed Consent Form

153

Informed Consent Form

You are cordially invited to participate in a doctoral level business management research study. The purpose of this research study is to interview managers or owners of City of St. Petersburg business establishments to understand: (a) how economic, social, and environmental factors inspire or inhibit entrepreneurism (as reported by the participants), (b) how stakeholder perceptions influence entrepreneurism, and (c) how interactions of economic, social, and environmental factors and perceptions of stakeholders inspire or inhibit entrepreneurism. If you participate in this research, you will be asked to participate in a focus group discussion while being audio taped so the researcher can ensure your answers are completely understood. The tapes will only be reviewed by the researcher and never anyone else. Your participation will take approximately one hour on Thursday, March 28, 2013 at the St. Petersburg Area Chamber of Commerce. Your participation in this research is strictly voluntary. You may refuse to participate at all, or choose to stop your participation at any point during the focus group discussion, without fear of penalty or negative consequences of any kind. The information/data you provide for this research will be treated confidentially, and all raw data will be kept in a secured file by the researcher. Results of the research will be reported as aggregate summary data only, and no individually identifiable information will be presented. You also have the right to review the results of the research if you wish to do so. A copy of the results may be obtained by contacting the researcher at the address below:

Richard J. Ferner, Jr. 9845 50th Street Circle East Parrish, Florida 34219

There will be no direct or immediate personal benefits from your participation in this research. The results of the study will be shared as an aggregate so as to share the leadership aspects to promote any organizational learning that may arise. I have read and understand the information explaining the purpose of this research and my rights and responsibilities as a participant. My signature below designates my consent to participate in this research study, according to the terms and conditions outlined above.

Signature Date Print Name:

154

APPENDIX F

One-on-One Interview Codes

155

Table F1 Codebook and Sub Code Response Frequencies for Survey Respondents

Question #

Code System Sub Codes 194

1 Uncertainty

Favorable Business Climate 8

Increased Risk Taking 3

Lower Unemployment 1

Perceived Fragility of Business Climate 2

Businesses Who Make Connections Have Influence 3

2 Intellectual

Capital

Downtown 9

Quality of Life 5

Culture 4

Ideal Location for Living, Working and Playing 1

Few Large Employers 1

Agglomeration of Small and Medium Sized Businesses 2

Downtown Office Space Constraints 1

Reasonable Rates on Cost of Space 2

Tax Incentives Lack Efficacy 2

Concern Over Transience of Business Establishments 1

3 Entrepreneurs

Supportive Community 9

Grass Roots Support is Strong 8

Credited Grass Roots Support for Financial Success 1

Not Uncommon for Direct Competitors to Welcome New Businesses

1

Most Business Derived from Outside of Local Market 1

4 Government

Business Friendly Administration 5

Government Leadership is Accessible if You Reach Out 4

Government is Controlled by Special Interests 4

No Impact Felt from Government Activity 3

Parking Enforcement is a Hindrance 3

Government Does Not Communicate Well 1

Government Lacks a Regional Perspective 1

Transportation Infrastructure is Poor 1

Government Should Do More to Support Culture 1

156

5 Business

Assistance Programs

No Knowledge of City Business Assistance Programs 5

Does not Use Business Assistance Programs 2

Makes Use of City Business Assistance Programs 3

Makes Use of County Business Assistance Programs 1

Provides Access to Intellectual Capital 1

Useful for Networking, Relationships and Business Expansion

1

Reevaluate Programs to Delineate Curriculum 1

6 Universities

Support Formation of Human Capital 9

Support Innovation 3

Need for Improvement in Partnerships with Business Community

3

Students Need Training in Teamwork 1

Did Not Detect Efforts 1

7 Human Capital

Employees Often Lack Soft Skills 3

Employees Often Lack IT Skills 2

Insufficient Quantity of Qualified Applicants in City 5

Sufficient Quantity of Qualified Applicants in Market 7

8 Financial Capital

Access to Financial Capital Remains Constrained 5

Access to Financial Capital is Improving 4

Expansion of Community Banks 2

Conservative with On Hand Financial Capital 4

9 Brand

Promotion

Government is Effective in Promoting Events 3

Government is Effective in Promoting Outside of Market 2

No Knowledge of Promotion Efforts 4

Establishing a Market Niche has been a Challenge 7

More Resources for Promotion is Required 5

Homelessness is Compromising the City's Brand 2

Culture is the City's Greatest Advantage 6

10 Economic

Development Planning

Importance of Living, Working and Playing in the City 7

Business Community Needs to Participate 4

Creative Class 3

Note. The code system is indexed in accordance with the 10 stakeholder perceptions that influence entrepreneurism. Sub codes were developed through inductive data analysis in conjunction with an iterative review of one-to-one interview transcripts.

157

APPENDIX G

One-to-One Interview Co-occurrence Model

158

Figure G1. MAXMap one-to-one interview co-occurrence model. This analysis is intended to demonstrate where sub codes intersect, demonstrating relationships among stakeholder perceptions. For example, Intellectual Capital/Culture and Brand Promotion/Culture is the City’s Greatest Advantage sub codes demonstrated eleven (11) intersections. Similarly, Intellectual Capital/Culture and Economic Development/Importance of Living, Working and Playing demonstrated eight (8) intersections; Intellectual Capital/Quality of Life and Economic Development Planning/Importance of Living, Working and Playing in the City demonstrated eight (8) intersection; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City demonstrated seven (7) intersections; Brand Promotion/Culture is the City’s Greatest Advantage and Economic Development Planning/Importance of Living, Working and Playing in the City demonstrated six (6) intersections; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City and Intellectual Capital/Quality of Life demonstrated six (6) intersections; Intellectual Capital/Ideal Location for Living, Working, and Playing in the City and Intellectual Capital/Culture demonstrated six (6) intersections, and; Intellectual Capital/Quality of Life and Intellectual Capital/Culture demonstrated five (5) intersections.

159

APPENDIX H

Focus Group Codes

160

Table H1 Codebook and Sub Code Response Frequencies for Survey Respondents and Focus Group Participants

Survey Focus Group

Question Code System Sub Codes 194 50

1 Uncertainty

Favorable Business Climate 8 2

Increased Risk Taking 3 2

Lower Unemployment 1 0

Perceived Fragility of Business Climate 2 0

Businesses Who Make Connections Have Influence

3 1

2 Intellectual

Capital

Downtown 9 1

Quality of Life 5 2

Culture 4 2

Ideal Location for Living, Working and Playing 1 1

Few Large Employers 1 0

Agglomeration of Small and Medium Sized Businesses

2 0

Downtown Office Space Constraints 1 0

Reasonable Rates on Cost of Space 2 1

Tax Incentives Lack Efficacy 2 0

Concern Over Transience of Business Establishments

1 0

Declining Need for Office Space 0 1

No Knowledge of Economic Performance Outside of Downtown

0 2

Other Areas of the City are in Decline 0 1

Need for Central Business Corridor 0 2

161

3 Entrepreneurs

Supportive Community 9 2

Grass Roots Support is Strong 8 1

Credited Grass Roots Support for Financial Success

1 0

Communication between City and Chamber has Improved

0 1

Not Uncommon for Direct Competitors to Welcome New Businesses

1 0

Most Business Derived from Outside of Local Market

1 0

4 Government

Business Friendly Administration 5 2

Government Leadership is Accessible if You Reach Out

4 1

Government is Controlled by Special Interests 4 0

No Impact Felt from Government Activity 3 0

Parking Enforcement is a Hindrance 3 0

Insufficient Parking for Businesses 0 1

Government Does Not Communicate Well 1 0

Government Lacks a Regional Perspective 1 0

Transportation Infrastructure is Poor 1 0

Government Should Do More to Support Culture

1 0

5 Business

Assistance Programs

No Knowledge of City Business Assistance Programs

5 0

Does not Use Business Assistance Programs 2 0

Makes Use of City Business Assistance Programs

3 1

Makes Use of County Business Assistance Programs

1 0

Provides Access to Intellectual Capital 1 2

Useful for Networking, Relationships and Business Expansion

1 1

Reevaluate Programs to Delineate Curriculum 1 0

162

6 Universities

Support Formation of Human Capital 9 2

Support Innovation 3 1

Students are More Driven 0 1

Need for Improvement in Partnerships with Business Community

3 0

Students Need Training in Teamwork 1 0

Did Not Detect Efforts 1 0

7 Human Capital

Employees Often Lack Soft Skills 3 0

Employees Often Lack IT Skills 2 0

Insufficient Quantity of Qualified Applicants in City

5 0

Sufficient Quantity of Qualified Applicants in Market

7 0

Quality is Improving 0 2

8 Financial Capital

Access to Financial Capital Remains Constrained

5 0

Access to Financial Capital is Improving 4 1

Expansion of Community Banks 2 1

Conservative with On Hand Financial Capital 4 2

9 Brand

Promotion

Government is Effective in Promoting Events 3 1

Government is Effective in Promoting Outside of Market

2 2

No Knowledge of Promotion Efforts 4 0

Establishing a Market Niche has been a Challenge

7 0

More Resources for Promotion is Required 5 0

Homelessness is Compromising the City's Brand

2 0

Culture is the City's Greatest Advantage 6 2

Promote Friendliness of the Business Community

0 2

163

10 Economic

Development Planning

Importance of Living, Working and Playing in the City

7 0

Business Community Needs to Participate 4 2

Creative Class 3 1

Note. The code system is indexed in accordance with the 10 stakeholder perceptions that influence entrepreneurism. Sub codes were developed through inductive data analysis in conjunction with an iterative review of one-to-one interview and focus group session transcripts.

164

APPENDIX I

Focus Group Co-occurrence Model

165

Figure I1. MAXQDA MAXMap Focus Group Co-occurance Model. This analysis is intended to demonstrate where sub codes intersect, demonstrating relationships among stakeholder perceptions. In this model, Entrepreneurs/Grass Roots Support demonstrated two (2) intersections with Business Assistance Programs/Useful for Networking, Relationships and Business Expansion and two (2) intersections with Business Assistance Programs/Provides Acces to Intellectual Capital.

Implications for Economic Development_How Stakeholder Perceptions Influence Entrepreneurism

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