Do Accelerators Promote Regional Entrepreneurship?
Accelerator programs are a popular tool to help entrepreneurs launch new innovative businesses, and entrepreneurs now have options to participate in programs located nearby or at a greater distance. As regional policymakers emphasize the importance of new businesses to economic development and growth, little is known about accelerators’ potential role as a catalyst for local investment and hiring. A research report prepared for the Office of Advocacy by Sheryl Winston Smith, “How Accelerators Promote Regional Entrepreneurship,” finds that startups located in the same region as their accelerator are more likely to experience positive economic outcomes–such as attracting follow-on venture capital investment and hiring employees–compared to startups whose founders travel to a different region to participate in an accelerator. Using a novel data set on startups in prominent accelerator programs from 2005 to 2011, the analysis explores the relevance of the distance between startups and their accelerators to the likelihood of achieving economic milestones. A summary of the research is also available.