Danie Francois Toerien
Research over the last two decades has revealed that the functional properties of cities vary in a scale invariant way from the largest to the smallest. Order is prevalent in the demographic-socioeconomic nexus of cities within urban systems. Two questions arise: (i) does order extend to entrepreneurship and its constituent parts in urban systems, and, (ii) does historic, cultural, geographical and climatic diversity of regions or nations moderate or cancel the demographic-socioeconomic order?
Different ethnic, cultural, historical, geomorphological, climatic and other influences have shaped the state of Texas. Applicable information about its more than 250 counties enabled investigation of the following null hypothesis: despite the multi-dimensional diversity of Texas, there is significant order in the demographic-socioeconomic-entrepreneurial domain of the counties of the state.
Power law (log-log) analyses were chosen to test the null hypothesis. Extensive population-based demographic and socioeconomic order was recorded in the counties despite the diversity of Texas. Attributes such as county GDP, total county income, employment, the number of degreed persons and the number of poor people scale logarithmically with county population sizes. Most exponents were close to linear except for employment, which had a super-linear exponent. Employment is disproportionately higher in more populous counties. There is also an almost linear correlation between population and enterprise numbers.
The entrepreneurial domain of the Texas counties received intensive scrutiny. Seventeen business sectors based on 2-digit business classifications of the North American Industrial Classification System (NAICS) were used to classify county enterprises. Based on total enterprise numbers (as a measure of total entrepreneurship), extensive orderliness in the form of logarithmic scaling was revealed in the entrepreneurial domain of the counties. For instance, new entrepreneurship (the ability to conceive business opportunities for enterprise types not yet present), existing entrepreneurship (the ability to conceive more enterprises of types already present) and entrepreneurship in a range of business sectors correlate with total entrepreneurship. In some of the business sectors, the power law exponents are super-linear (e.g., real estate services, professional and scientific services, health care and assistance, administrative and support services, and educational services) and indicate disproportionate concentration of these entrepreneurs in larger counties. In others (e.g., arts and recreation services, information services, other services, and transport and warehousing), the exponents are sub-linear and indicate disproportionate concentration of these entrepreneurs in smaller counties. In a number of sectors (e.g., financial and insurances services, accommodation and food services, manufacturing, construction services and trade services) sector entrepreneurship correlates linearly with total entrepreneurship, and consequently, with population size.
The null hypothesis was accepted. Despite the multi-dimensional historical, cultural, geographical and climatic diversity of Texas, there is significant order in its complex entrepreneurial system. The properties of the entrepreneurial system trump the impacts of diversities. The entrepreneurial system is not monolithic. It has subtle variations resulting in some entrepreneurial types being more prevalent in larger counties and others in smaller counties. The power laws that were recorded offer extensive predictive capabilities.