Cultural Amenities, Subcultures and Entrepreneurship

Abstract

Paradoxically, what powers knowledge-based economies is not knowledge. Rather, it is their capacity for creativity. Creativity transforms knowledge into valuable ideas and products, resulting in innovation and entrepreneurial activity. Previous research has stressed the relevance of creativity as a geographically-bounded source of spillovers where the culture provides an important stimulus. However, what specific kind of culture is actually needed and under which conditions it arises, remains both unknown and controversial. A rising stream of research has focused on the amenities offered, such as operas, museums and theaters, and how they affect local creativity and entrepreneurial outcomes – yet, with mixed results. This paper fills this important gap in the literature by positing that rather than culture it is subcultural life that explains why some places emerge as creative hotspots while others do not. We utilize explorative factor analysis to compare the impact of different proxies measuring subcultural amenities against measures which have traditionally been used to reflect mainstream culture on startup rates in German cities. Our findings confirm that the co-presence of subcultural amenities is positively associated to entrepreneurship. By contrast, culture has no significant impact on local startup rates. These findings make an important contribution to the recent controversy within the regional studies literature and provide insights and guidance for thought leaders in policy and urban planning.