The story of two entrepreneurs: One urban, another rural – (Based on true research)

October 5, 2010

Along other projects, I have been working on a paper (so far) titled: “Geography and the Entrepreneurial Profile
– A Study of Rural and Urban Populations in Denmark”. It is coauthored with Kristian Nielsen, a great economist from the Business Department. He’s like me, a PhD candidate, but he has many more skills, including the crucial econometric and statistical analysis. We have done a paper based on a survey conducted to more than 2000 people, of which 3/4 were successful entrepreneurs and the other 1/4 were employees.

Today there is a huge debate about the importance of living in the city vs. living in the country and its influence in entrepreneurship. We wanted to see if they had any difference in their networks, identity and start-up motivation. More or less the question we rise is: Where do you have more differences: between the urban and rural population, or the entrepreneurs and employees (regardless of geography)?. We have asked this in two conferences we have presented the paper the DRUID and the AAG, and answers are split. What do you think?

At the end of the paper, we wrote a fictional story, but based on true research! to summarize our findings. Here I share with you the story, which probably will not be in the paper for space and copyright reasons. The paper? Soon in your best journal :) If you want to give us some feedback (before we send it to the journal!) we could send it to you, I guess.

The Story

To illustrate some of our main findings regarding entrepreneurs we will present a simple example. – Imagine you have two friends, Ruben and Urban. Ruben is from a rural area, and Urban is from a big city. You talk with each one of them once in a while. You are an equally important friend for each one of them, since they have around the same number of friends. Ruben, earned a three-year technical degree and Urban got a university degree. When you hang out with Urban and his friends you talk about ideas for businesses. He is a very creative guy. – Some time passes – Urban is about to get married, and Ruben, although slightly younger, already has. Interestingly, they both started a business in the service sector. Urban proposed that you and another friend join him in his business adventure. You did not join. Urban borrowed some money from family and friends. – A few more years pass, and both of your friends have become successful entrepreneurs – By reading the results of this paper, you know that you are equally as likely to receive a call from either of them to have a drink. But you are more likely to have Urban ask you for help, with for instance, a computer problem. If you do not help him, you should not worry a lot; he’s the type of person who will soon call an IT professional or another friend. It’s not that Ruben won’t have a problem with the computer, but he would not bother you about it. Ruben would probably ended up spending a few days fixing it himself.

This was a didactic example based on some of our results, overemphasizing the main differences. The differences between age, marriage, and education of these characters can probably be explained by socio-economic and cultural values for each region. Whether this is true for the difference in personal traits and work values could be important to further investigate. Also, the reason for the different use of networks is unclear, however, this behavior is probably related to geographical proximity and/or agglomeration issues. It seems that, while much has changed over the last centuries, in today’s economy the rural entrepreneurs still share a certain resemblance to the rural tradition of surviving without division of labour. This behavior was pointed out in the introduction, with the examples by Adam Smith and the ancient Greeks.

Another main finding of our research is that entrepreneurs are similar, regardless of geography, when compared to wage earners. Going back to the fictional case of the story of our two friends; – The most interesting thing happens the day you introduce Ruben and Urban. They start talking about their businesses, and get along very well. They talked about their employees, and complain about the routine problems of their providers, customers and government bureaucrats. However, they both agree on how much they like having the freedom of being their own boss. They exchange cards and comment on how many things they have in common. – And they are right; these guys have always been one of a kind.

L.C. Freire-Gibb and K. Nielsen, forthcoming


2 Responses to “The story of two entrepreneurs: One urban, another rural – (Based on true research)”

  1. […] This post was mentioned on Twitter by Judy Durbin, Carlos Freire-Gibb. Carlos Freire-Gibb said: Blog update: The story of two entrepreneurs (#urban vs. #rural) – Based on true research #entrepreneurship #geography […]

  2. Jason Says:

    Did you look at the cost and how much they made? If Ruben had less business not spendingthe money may have been the better use of his time. In some ways I think I have some Ruben in that I can pay for house issues but I’m developing that skill myself.

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