West Virginia is considered one of the most rural states in the US characterized by high
levels of unemployment and poverty. Despite the expansion of the US economy in the past
decades, rural communities in West Virginia lagged behind in terms of social and economic
well-being of its population. Searching for new ways to alleviate poverty in rural areas, new
approaches are emerging that support smaller companies instead of the traditional pursuit of
large industries in the past. A consequence of this change is the increased importance
of entrepreneurship by creating economic value through the establishment of new or the
growth of existing firms. New businesses and self-employment contribute jobs at the start of
the business operation, resulting in higher income levels and increased wealth, and
enhanced market (Fritsch and Mueller, 2004; and Henderson, 2006). One of the most
obvious contributions of entrepreneurship to the increased welfare of society is the creation of
new jobs and additional income through multiplier effects (Robinson
et al., 2004). Entrepreneurs create new wealth for themselves and the communities by taking innovations to the
market and commercializing new ideas. Many scholars and professionals believe that
entrepreneurship is critical to maintaining an economy's health and that business creation in low income
areas is essential for economic development (Smilor, 1997; Goetz and Freshwater,
2001; Lichtenstein and Lyons, 2001; and Acs, 2006). Minniti (1999) argues that entrepreneurs
are catalysts for economic growth because they generate a networking externality that
promotes the creation of new ideas and new market formations.
Learning about entrepreneurship is important to understanding how it contributes
to economic growth and development, and how entrepreneurial capacity can further
the dimensions of economic development. Exploring entrepreneurship and its contribution to
the local economy can help develop a map in designing specific development policies.
These policies will include expanding and improving the status of community-based
characteristics that will support rural areas in creating new firms, retaining and expanding local
businesses, and expanding entrepreneurial development, and will eventually help in alleviating poverty. |