Stam’s article in Economic Geography marks an interesting exploration into the evolution of entrepreneurial ventures and their growth over time. For Stam, entrepreneurial ventures evolve through the following series of phases: start-up, initial survival, early growth, growth syndrome, and ending with accumulation. Each phase represents a particular period and set of circumstances for a budding venture.
According to Stam’s research, for the first two phases, start-up and initial survival, locational development was largely focused the origin of the entrepreneur(s) themselves. This is usually in large part in response to external factors such as finance or personal networks. During this time frame much of the initial focus is on providing value at the local or regional level. As the venture continues to grow, if it has made it through the initial survival phase, Stam argues that during the early growth phase, companies begin to expand outside their geographic home base. This is a point at which new offices are established either nationally, internationally or both. As resource acquisitions take place and profits continue to grow this is a time that is seen as good growth for the entrepreneur. However, with every peak there is a valley to follow and as ventures become fully established they achieve a point of max capacity causing a decline in the firms development. Stam points out that this phase in the company’s growth largely results in an overhaul or reframe of the organization’s management. The outcome of this typically is the closing of new offices with a company wide scale-back. Eventually, this growth syndrome phase gives way to expansion once more through accumulation. At this point, the venture has achieved enough capital to once again stabilize and focus purchasing assets or accumulating resources.
Throughout Stam’s evolutionary process, he emphasizes the idea of locational behavior, the changing of a venture as a result of developmental processes; and spacial organizations, the compiled capabilities that form the value generation of the venture. These two factors play a role in the decision-making processes for a venture to establish a new facility or move its entire home base to a new geographic region.
For my purposes, this is important in that, when explored alongside both Porter’s industry clusters and Wenger’s communities of practice, it is possible to analyze community’s assets and explore the possible cluster and growth nature of entrepreneurs. This model can thus be applied to further identify needed assets to facilitate venture growth and community stabilization.