New Measures of Rural Entrepreneurship

Economists at the Federal Reserve Bank of Kansas City have been working for some time to develop new ways to track rural entrepreneurship activity.

A recent article in The Main Street Economist, by Kansas City Fed researcher Sarah Low, summarizes some of this work. Low argues that understanding regional entrepreneurial activity requires that we measure both the breadth and depth of entrepreneurial activity. Breadth is measured by a region’s ratio of self-employment to total employment; depth can be measured by both average self-employed income and the ratio of self-employed income to receipts. Low further notes that rural America typically has high breadth and low depth of entrepreneurship.

In other words, rural regions have many entrepreneurs, but they are not as engaged in high-value-added activities as their urban counterparts.

Regional Asset Indicators: Entrepreneurship Breadth and Depth, by Sarah Low, appears in the September 2004 edition of The Main Street Economist and is available at http://www.kc.frb.org/RuralCenter/mainstreet/MSE_0904.pdf

*************

Welcome to the National Dialogue on Entrepreneurship, an initiative of the Public Forum Institute made possible by a grant from the Kauffman Foundation of Kansas City. Through NDE-news, we bring you short summaries and analyses of various trends driving the innovation economy. Current and archived issues of are available online at http://www.publicforuminstitute.org/nde/news/nde-news.htm. To subscribe, visit http://www.publicforuminstitute.org/nde/join/