Skip to main content

Advertisement

SpringerLink
Log in

Stickiness of entrepreneurs: an exploratory study of migration in two mid-sized US cities

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

What makes a place desirable is the subject of much debate. We conduct a mixed methods analysis on two mid-sized US cities—Indianapolis and Kansas City. We use a migration analysis to understand the flow of the general population, creative workers, and entrepreneurs, followed by an exploratory qualitative analysis of impactful entrepreneurs. Our migration analysis shows that these cities are gaining population overall as well as creative workers and entrepreneurs, and our exploratory qualitative analysis shows that entrepreneurs broadly value quality of life factors, including social and family reasons. Our analysis suggests that entrepreneurs are less mobile than the general population, and that they start companies where they live. We discuss the implications of our study for the broader debate on what makes cities attractive and for further refinement of multidimensionality in the urban amenities literature.

Plain English Summary

Entrepreneurs and creative workers are less mobile than the general population in two mid-sized American cities. We study migration trends of the general population, creative workers, and entrepreneurs in Indianapolis and Kansas City, supplemented with exploratory interviews of impactful entrepreneurs. We find that entrepreneurs are “sticky” in both contexts, and that the reasons for location can be tied to quality of life overall. Our findings have implications for research, which can further investigate the multidimensionality of attractiveness of place, and for policy, which can consider the needs of entrepreneurs and potential entrepreneurs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Examples of these creative class workers include super creatives such as science, engineering, programming, research, as well as arts and media workers, and creative professionals such as healthcare, legal, business/finance, and education workers.

  2. For example, creative workers can consist of 33% of the U.S. workforce (Peck, 2005), including accountants, lawyers, paralegals, purchasing agents, medical doctors, physician’s assistants, dental hygienists, semi-routine financial, and personal services providers.

  3. In an early ranking of creative cities, Kansas City ranked 19th and Indianapolis ranked 38th out of 43 large metropolitan areas (Florida, 2002, 355–357). In 2014, a Biz2Credit “Best Small Business Cities” ranked Indianapolis 14th and Kansas City did not appear on the list of 25 cities; a 2014 Milken Institute “Best Performing Large Cities” ranking placed Indianapolis 26th and Kansas City 77th. More recent rankings include WalletHub, 2019 “Best Large Cities to Start a Business,” which ranked Kansas City 27th and Indianapolis 50th out of 100 cities and Forbes 2019 “Best Places for Business and Careers,” which ranked Kansas City 51st and Indianapolis 58th. Such rankings suggest that these cities may face difficulty attracting talent. Yet, the data trend presents otherwise. At the metropolitan level, both have continuously gained population every decade in the Post War period, while other metropolitan areas in the mid and central regions such as Cleveland, Detroit, Milwaukee, and St. Louis, saw population decline.

  4. Compiling performance indicators to rank cities may be easier to digest than many pieces of data. Rankings can vary in rigor, construction, coverage, and content selection (see Fisher, 2005; Kolko et al. 2011) and there can be ideological debate about underlying assumptions. For more, see Ham et al., (2004) and Doshi et al., (2019).

  5. Of course, some professionals within each occupation may be creative, but others in the same occupation may not. For instance, some accountants can give strategic advice to management decisions, which involves creativity, but some may work on routinized tasks.

  6. In most cases, founders were available and in others, senior executives were interviewed (for example, when the founders were retired). With senior executives, we still asked about the origin of the company, as well as strategies and decision related to the location, and we found that senior executives were knowledgeable about the early origins of the business and founding situation.

  7. The life course approach in focus groups may have limitations related to not providing enough time or individual opportunity to share thoroughly. Also, people in group settings may alter behavior because they are in a group, e.g., preferring to highlight positive reasons for relocation, such as this is where I wanted to be and I found a job here, than reasons such as unemployment elsewhere.

References

  • Audretsch, D., Belitski, M., & Desai, S. (2015). Entrepreneurship and economic development in cities. Annals of Regional Science, 55(1), 33–60.

    Article  Google Scholar 

  • Audretsch, D., Belitski, M., & Desai, S. (2018) National business regulations and city entrepreneurship in Europe: A multi-level nested analysis. Entrepreneurship Theory and Practice, 43(6), 1148–1165.

  • Audretsch, D., Lehmann, E., & Seitz, N. (2019). Amenities, subcultures, and entrepreneurship (pp. 1–21). Small Business Economics.

  • Bartik, T. (2019). Making sense of incentives: Taming business incentives to promote prosperity. W.E. Upjohn Institute for Employment Research.

  • Bartik, T. (2020). Introduction to special issue: Learning more about incentives. Economic Development Quarterly, 34(2), 95–100.

    Article  Google Scholar 

  • Baumol, W. (1990). Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98(5), 893–921.

    Article  Google Scholar 

  • Becker, T. M., & Stern, R. N. (1973). Professionalism, professionalization, and bias in the commercial human relations consulting operation: A survey analysis. Journal of Business, 46(2), 230–257.

  • Bergstrom, J., Stoll, J., Titre, J., & Wright, V. (1990). Economic value of wetlands-based recreation. Ecological Economics, 2(2), 129–147.

    Article  Google Scholar 

  • Booi, H., & Boterman, W. (2020) Changing patterns in residential preferences for urban or suburban living of city dwellers. Journal of Housing and the Built Environment, 35(1), 93–123.

  • Boyle, M. (2006). Culture in the rise of tiger economies: Scottish expatriates in Dublin and the “creative class” thesis. International Journal of Urban and Regional Research, 30(2), 403–426.

    Article  Google Scholar 

  • Budig, M., & England, P. (2001). The wage penalty for motherhood. American Sociological Review, 66(2), 204–225.

    Article  Google Scholar 

  • Chi, G., & Marcouiller, D. (2013) Natural amenities and their effects on migration along the urban-rural continuum. Annals of Regional Science, 50, 861–883.

  • Clark, T. (2004). Urban amenities: Lakes, opera, and juice bars. Do they drive development? In A. M. McCright & T. N. Clark (Eds.), Research in urban policy. JAI Press/Elsevier.

  • Clark, T., Lloyd, R., Wong, K., & Jain, P. (2002). Amenities drive urban growth. Journal of Urban Affairs, 24(5), 493–515.

    Article  Google Scholar 

  • Cukrowska-Torzewska, E. and Matysiak, A. (2020) The motherhood wage penalty: A meta-analysis, Social Science Research, 88–89, May-July, 102416.

  • Dahl, M. & Sorenson, O. (2012). Home sweet home: Entrepreneurs’ location choices and the performance of their ventures. Management Science, 58(6), 1059–1071.

    Article  Google Scholar 

  • Dahl, M., & Sorenson, O. (2009). The embedded entrepreneur. European Management Review, 6(3), 172–181.

    Article  Google Scholar 

  • Davidsson, P., & Honig, B. (2003). The role of social and human capital among Nascent Entrepreneurs. Journal of Business Venturing, 18, 301–331.

  • De Jong, G., & Gardner, R. (2013). Migration decision making: Multidisciplinary approaches to microlevel studies in developed and developing countries. Pergamon.

  • Deller, S., Tsai, T., Marcouiller, D., & English, D. (2001) The role of amenities and quality of life in rural economic growth. American Journal of Agricultural Economics, 83(2), 352–365.

  • Dissart, J.-C., & Deller, S. C. (2000). Quality of life in the planning literature. Journal of Planning Literature, 15(1), 136–161.

  • Doshi, R., Kelley, J., & Simmons, B. (2019). The power of ranking: The ease of doing business indicator and global regulatory behavior. International Organization, 73(3), 611–643.

    Article  Google Scholar 

  • Dustmann, C., & Glitz, A. (2011). Migration and education. In E. A. Hanushek, S. Machin, & L. Woessmann (Eds.), Handbook of the economics of education (pp. 327–440). Elsevier.

  • Elder, G. H., Kirkpatrick Johnson, M., & Crosnoe, R. (2003). The emergence of development of life course theory. In Handbook of the life course (pp. 3–19). Kluwer Academic.

  • Fisher, P. (2005). Grading places: What do the business climate rankings really tell us? Economic Policy Institute.

  • Florida, R. (2002). The rise of the creative class: And how it’s transforming work, leisure, community and everyday life. Basic Books.

  • Florida, R. (2003). The economic geography of talent. Annals of the Association of American Geographers, 92(4), 743–755

  • Florida, R. (2005). Cities and the creative class. Routledge.

  • Florida, R., Mellander, C., & Stolarick, K. (2010). Talent, techology and tolerance in Canadian regional development. Canadian Geographer, 54(3), 277–304.

  • Florida, R. (2012). The rise of the creative class revisited: Revised and expanded. Basic Books.

  • Giele, J., & Elder, G. (1998). Life course research: Development of a field. In Methods of life course research: Qualitative and quantitative approaches (pp. 5–27). Sage.

  • Glaeser, E. (2005). Smart growth: Education, skilled workers and the future of cold-weather cities. Kennedy School Policy Brief 2005-1.

  • Glaeser, E., & Gottlieb, J. (2006). Urban resurgence and the consumer city. Harvard Institute of Economic Research Discussion Paper 2109.

  • Glaeser, E., & Shapiro, J. (2003). Urban growth in the 1990s: Is city living back? Journal of Regional Science, 43(1), 139–165.

    Article  Google Scholar 

  • Glaeser, E., & Tobio, K. (2007). The rise of the sunbelt. NBER Working Paper 13071.

  • Glaeser, E., Kolko, J., & Saiz, A. (2001). Consumer city. Journal of Economic Geography, 1(1), 27–50.

    Article  Google Scholar 

  • Glaeser, E., Gyourko, J., & Saks, R. (2006). Urban growth and housing supply. Journal of Economic Geography, 6, 71–89.

    Article  Google Scholar 

  • Glaeser, E., Rosenthal, S., & Strange, W. (2010). Urban economics and entrepreneurship. Journal of Urban Economics, 67(1), 1–14.

    Article  Google Scholar 

  • Glauber, R. (2019) The wage penalty for parental caregiving: Has it declined over time? Journal of Marriage and Family, 81(2), 415–433.

  • Guercini, S., & Ceccarelli, D. (2020). Passion driving entrepreneurship and lifestyle migration: Insights from the lutherie of Cremona. Journal of International Entrepreneurship, 18, 373–392.

  • Greenwood, M. (2013). Migration and labor market opportunities. In M. Fischer & P. Nijkamp (Eds.), Handbook of regional science (pp. 3–16). Springer.

  • Haapanen, M., & Bockerman, P. (2017). More educated, more mobile? Evidence from post-secondary education reform. Spatial Economic Analysis, 12(1), 8–26.

    Article  Google Scholar 

  • Ham, S., Levin, S., Zlot, A., Andrews, R., & Miles, R. (2004). Ranking of cities according to public health criteria: Pitfalls and opportunities. American Journal of Public Health, 94(4), 546–549.

    Article  Google Scholar 

  • Hansen, H., & Niedomysl, T. (2009). Migration of the creative class: Evidence from Sweden. Journal of Economic Geography, 9(2), 191–206.

    Article  Google Scholar 

  • Hansen, S., Ban, C., & Huggins, L. (2003). Explaining the “brain drain” from older industrial cities: The Pittsburgh region. Economic Development Quarterly, 17(2), 132–147.

    Article  Google Scholar 

  • Hartt, M., & Hollader, J. (2018). City size and academic focus. Canadian Journal of Urban Research, 27(1), 1–13.

    Google Scholar 

  • Houston, D., Findlay, A., Harrison, R., & Mason, C. (2008). Will attracting the “creative class” boost economic growth in old industrial regions? A case study of Scotland. Geografiska Annaler B, 90(2), 133–149.

  • IPUMS, Ruggles, S., Genadek, K., Goeken, R., Grover, J., & Sobek, M. (2019). Integrated public use microdata series: Version 7.0. https://doi.org/10.18128/D010.V7.0.

  • Jacobs, J. (1961). The death and life of great American cities. Vintage Books.

  • Judd, D., & Fainstein, S. (1999). The tourist city. Yale University Press.

  • Katona, G., & Morgan, J. (1952). The quantitative study of factors determining business decisions. Quarterly Journal of Economics, 66(1), 67–90.

    Article  Google Scholar 

  • Kendal, D., Egerer, M., Bryne, J., Jones, P., Marsh, P., Threlfall, C., Allegretto, G., Kaplan, H., Nguyen, H., Pearson, S., Wright, A., & Flies, E. (2020). City size bias in knowledge on the effects of urban nature on people and biodiversity. Environmental Research Letters, 15(12), 124035.

  • Kolko, J., Newmark, D., & Mejia, M. C. (2011). Public policy, state business climates, and economic growth (NBER Working Paper). National Bureau of Economic Research.

  • Koster, S., & Venhorst, V. (2014). Moving shop: Residential and business relocation by the highly educated self-employed. Spatial Economic Analysis, 9(4), 436–464.

    Article  Google Scholar 

  • Knapp, T., & Graves, P. (1989). On the role of amenities in models of migration and regional development. Journal of Regional Science, 29(1), 71–87.

  • Lloyd, R., & Clark, T. (2001). The city as an entertainment machine. In K. F. Gotham (Ed.), Critical perspectives on urban redevelopment (pp. 357–378). Emerald Publishing Group.

  • Machin, S., Salvanes, K., & Pelkonen, P. (2012). Education and mobility. Journal of the European Economic Association, 10(2), 417–450.

    Article  Google Scholar 

  • Malanga, S. (2004). The curse of the creative class. City Journal. https://www.city-journal.org/html/curse-creative-class-12491.html. Accessed 13 Sept 2018.

  • Markusen, A. (2006). Urban development and the politics of a creative class: Evidence from a study of artists. Environment and Planning A, 38(10), 1921–1940.

    Article  Google Scholar 

  • Martynovich, M. (2017). The role of local embeddedness and non-local knowledge in entrepreneurial activity. Small Business Economics, 49(4), 741–762.

    Article  Google Scholar 

  • Mayer, H., & Motoyama, Y. (2020). Entrepreneurship in small and medium-sized towns. Entrepreneurship and Regional Development, 32(7–8), 467–472.

    Article  Google Scholar 

  • Mayer, H., & Meili, R. (2016). New highlander entrepreneurs in the Swiss Alps. Mountain Research and Development, 36(3), 267–275.

  • Mayer, H., Habersetzer, A., & Meili, R. (2016). Rural-urban linkages and sustainable regional development: The role of entrepreneurs in linking peripheries and centers. Sustainability, 8(8), 745–758.

    Article  Google Scholar 

  • McGranahan, D., Wojan, T., & Lambert, D. (2011). The rural growth trifecta: Outdoor amenities, creative class and entrepreneurial context. Journal of Economic Geography, 11(3), 529–557.

    Article  Google Scholar 

  • Michelacci, C., & Silva, O. (2007). Why so many local entrepreneurs? The Review of Economics and Statistics, 89(4), 615–633.

    Article  Google Scholar 

  • Motoyama, Y., & Konczal, J. (2013). How can I create my favorite state ranking? Journal of Applied Research in Economic Development, 10, 1–17.

    Google Scholar 

  • Motoyama, Y., Henderson, C., Gladen, P., Fetsch, E., & Davis, S. (2017). A new frontier: Entrepreneurship ecosystems in Bozeman and Missoula, Montana. Report. Montana High Tech Business Alliance et al. https://mthightech.org/montana-entrepreneurship-ecosystems/. Accessed June 17, 2019.

  • OECD. (1999). Cultivating rural amenities: An economic development perspective. OECD Publishing.

  • Partridge, M., Schreiner, S., Tsvetkova, A., & Patrick, C. (2020). The effects of state and local economic incentives in the United States: County-level evidence. Economic Development Quarterly, 34(2), 171–187.

    Article  Google Scholar 

  • Peck, J. (2005). Struggling with the creative class. International Journal of Urban and Regional Research, 29(4), 740–770.

    Article  Google Scholar 

  • Puhani, P. (2001). Labour mobility—Ad adjustment mechanism in Euroland? Empirical evidence for Western Germany, France, and Italy. German Economic Review, 2(2), 127–140.

  • Reuschke, D. (2011). Self-employment and geographical mobility in Germany (SOEP Papers on Multidisciplinary Panel Data Research No. 417). German Institute for Economic Research.

  • Reuschke, D., & Van Ham, M. (2013). Testing the “residential rootedness” hypothesis of self-employment for Germany and the UK. Environment and Planning A, 45, 1219–1239.

    Article  Google Scholar 

  • Roback, J. (1982). Wages, rents, and the quality of life. Journal of Political Economy, 90(6), 1257–1278.

    Article  Google Scholar 

  • Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy, 82(1), 34–55.

  • Sanandaji, T. (2014). International mobility of billionaires. Small Business Economics, 42(2), 329–338.

    Article  Google Scholar 

  • Schumpeter, J. (1926). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Transaction Books.

  • Scott, A. (2006). Creative cities: Conceptual issues and policy questions. Journal of Urban Affairs, 28(1), 1–17.

    Article  Google Scholar 

  • Slattery, C., & Zidar, O. (2020). Evaluating state and local business tax incentives, NBER Working Paper 26603.

  • Stam, E. (2007). Why butterflies don’t leave: Locational behavior of entrepreneurial firms. Economic Geography, 83(1), 27–50.

    Article  Google Scholar 

  • Storper, M., & Scott, A. J. (2009). Rethinking human capital, creativity and urban growth. Journal of Economic Geography, 9(2), 147–167.

    Article  Google Scholar 

  • Strom, E. (2002). Converting pork into porcelain: Cultural institutions and downtown development. Urban Affairs Review, 38(1), 3–21.

    Article  Google Scholar 

  • Stuart, T., & Sorenson, O. (2003). The geography of opportunity: Spatial heterogeneity in founding rates and biotechnology firms. Research Policy, 32(3), 229–253.

    Article  Google Scholar 

  • Van Heur, B. (2010). Small cities and the geographic bias of creative industries research and policy. Journal of Policy Research in Tourism, Leisure and Events, 2(2), 189–192.

    Article  Google Scholar 

  • WalletHub. (2019). Best large cities to start a business. https://wallethub.com/edu/best-cities-to-start-a-business/2281/. Accessed July 27, 2019.

  • Weiss, C. (2015). Education and regional mobility in Europe. Economics of Education Review, 49, 129–141.

    Article  Google Scholar 

  • Zheng, L. (2016). What city amenities matter in attracting smart people? Papers in Regional Science, 95(2), 309–327.

    Article  Google Scholar 

  • Zimmermann, K. (2005). European labour mobility: Challenges and potentials. De Economist, 153, 425–450.

    Article  Google Scholar 

  • Zukin, S. (1982). Loft living as ‘historic compromise’ in the urban core: The New York experience. International Journal of Urban and Regional Research, 6(2), 256–267.

    Article  Google Scholar 

Download references

Funding

This project was partially funded by a grant from the Ewing Marion Kauffman Foundation.

Author information

Authors and Affiliations

  1. City and Regional Planning, Ohio State University, 275 W. Woodruff Ave, Columbus, OH, 43210, USA

    Yasuyuki Motoyama

  2. Paul O’Neill School of Public and Environmental Affairs, Indiana University, 1315 E. 10th St, Bloomington, 47405, IN, USA

    Sameeksha Desai

Authors
  1. Yasuyuki Motoyama
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sameeksha Desai
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Yasuyuki Motoyama.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Motoyama, Y., Desai, S. Stickiness of entrepreneurs: an exploratory study of migration in two mid-sized US cities. Small Bus Econ 58, 2139–2155 (2022). https://doi.org/10.1007/s11187-021-00504-6

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-021-00504-6

Keywords

JEL Classifications

Search

Navigation