Incubators in Rural Environments: A Preliminary Analysis

State policy makers and local leaders have long placed a high priority on local economic development (Isserman 1993; Pulver 1989; Ekstrom and Leistritz 1988), but the changing structure of traditional industries and the impact of those changes on local communities have challenged the efficacy of established policies and strategies. Many of the forces responsible for past economic changes continue to have an impact. One of these changes was the emergence of computer-based technology in production, administration and information, which has reduced the role of economies of scale in many sectors. Studies by Loveman and Sengenberger (1991) and Acs and Audretsch (1993), for example, have shown a shift in industry structure toward decentralization and an increased role for small firms. This was mainly due to changes in production technology, consumer demand, labor supply, and the pursuit of flexibility and efficiency. These factors led to the restructuring and downsizing of large enterprises and the entry of new firms. Brock and Evans (1989) provide extensive documentation of the changing role of small businesses in the US economy, which are likely the result of responses to structural adjustments.