Up-and-Coming: How Urbanization Sparks Entrepreneurship in Cities

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[We’re pleased to welcome Boyd Derek Cohen and Pablo Muñoz. Dr. Derek and Dr. Muñoz recently published an article in Organization & Environment, entitled Towards a Theory of Purpose-Driven Urban Entrepreneurship. ]

We have been studying the evolution of cities around the globe, the growth of smart cities and the changing face of entrepreneurship in urban environments. The world is urbanizing at a fast rate as rural and even suburban residents are increasingly drawn to the opportunities, cultural activities, public transit infrastructure and other perceived benefits of urban lifestyles. Yet the unprecedented rate of urbanization is posing significant challenges for cities and their residents as local governments are struggling to meet the transit, energy, housing, food and employment needs of the swelling populations. Moreover, over the past few years we have noticed a growth in entrepreneurship in cities that is unlike anything existing theory or research seemed to explain.

O&E_Mar_2012_vol26_no1_Cover_Final.inddSpecifically we were interested in understanding a type of entrepreneur that lives in cities and instead of looking for opportunities in market failures, seems to be more concerned with challenges affecting quality of life in their communities. But instead of starting a non-profit to solve such problems, this new breed of entrepreneur utilizes approaches to problem-solving that market-driven entrepreneurs do. Yet, purpose-driven urban entrepreneurs are embedded in the complex social and territorial cities in which they live.

These observations drove us to use a combination of insights gleaned from interviewing such entrepreneurship around the globe and to apply deductive approaches to theory building in the hopes of creating a model capable of understanding the process that purpose-driven urban entrepreneurs leverage to accomplish their goals.

We are hopeful that this research lays the groundwork for future scholars to expand the examination of purpose-based entrepreneurs embedded in social and territorial systems. We are also hopeful to continue this line of work and to reach practitioner audiences including local public policymakers who are keen to find ways to stimulate purpose-driven urban entrepreneurship as an approach to address some of the most pressing urban challenges facing cities today, through collaborative approaches between local governments, entrepreneurs, corporations and civil society. Boston’s New Urban Mechanics, Seoul’s Sharing City programs which provide funding to startups in the sharing economy, Amsterdam’s AMS Institute, and Barcelona’s BCN Open Challenge are all examples of this new proactive and collaborative approach between cities and urban entrepreneurs to encourage purpose-driven startups in their communities which can help resolve the complex challenges of urbanization around the globe. In order to reach this audience aside from this article, in 2016, we will be publishing a book entitled Urban Entrepreneurship which will highlight the convergence of major trends such as urbanization, collaboration and democratization of technology in driving the growth of urban tech entrepreneurs, independent entrepreneurs (on-demand), and purpose-driven urban entrepreneurship.

The abstract:

Inspired by Shrivastava and Kennelly, we aim to extend theory on place-based entrepreneurship by highlighting the uniqueness of cities and the interplay between purpose-driven entrepreneurs and the urban places where they operate. This article sets out to conceptualize a middle-range theoretical framework and establish the boundary conditions for purpose-driven urban entrepreneurship based on a combination of inductive reasoning and deductive theorizing. We draw from sustainability and territorial development literatures and the complexity science view of entrepreneurship to establish units, laws of interaction, boundaries, and system states of purpose-driven urban entrepreneurship across three geospatial layers, and elaborate a complexity model comprising sources of opportunities, context, and venturing process. We conclude with potential avenues for further theoretical and empirical development of the purpose-driven urban entrepreneurship construct.

You can read “Towards a Theory of Purpose-Driven Urban Entrepreneurship” from Organization & Environment free for the next two weeks by clicking here. Want to know about all the latest research from Organization & Environment? Click here to sign up for e-alerts!

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