Edward L. Glaeser is an economics professor at Harvard. The
success of a city is tied to the area’s entrepreneurship, but
what explains why some places are more entrepreneurial than
others? The answer should matter for two reasons: local policy
makers are constantly looking for ways to rev the economic
engines of their cities, and the ingredients of success at the
local level can help inform national policy. Just as city-level
evidence on the connection between education and urban growth
helps build the case for a national schooling agenda, city-level
evidence on the determinants of entrepreneurship should help
guide federal policies toward new businesses. The modern
economic literature on cities and entrepreneurship has ancient
antecedents, like Adam Smith and Alfred Marshall, who used the
now slightly unfortunate term “undertaker” to describe
entrepreneurs. At the start of the 20th century, Frank Knight of
the University of Chicago, and Joseph Schumpeter of Vienna and
Harvard, emphasized and examined the ro