“Impact of Startups on Local Economy”

Course Code: Bus498

Semester: Summer’2023

Submitted to
Sunny Saha
Senior Lecturer
Department of Business Administration
East West University

Prepared by
Tanzina Islam
ID: 2019-2-10-087
Major in Marketing

Date of submission: 12th September, 2023

Declaration

I hereby declare that,

The project report submitted naming “Impact of Startups on Local Economy”
A study on Impact of Startups on Local Economy to identify the economic issue is my
original work while completing BBA degree at East West University.
This report never has been, and never will be reproduced for any other BBA course or any
other purpose. This report does not contain material previously published or written by a third
party, except where this is appropriately cited through full and accurate referencing. I have
completed my report beneath my honorable teacher Sunny Saha’s supervision.

Student’s Full Name & Signature:

___________________________________________

Tanzina Islam
ID: 2019-2-10-087
East West University

Supervisor’s Full Name & Signature:

___________________________________________

Sunny Saha
Senior Lecturer
Department of Business Administration
East West University
Letter of Transmittal

Sunny Saha
Senior Lecturer
Department of Business Administration
East West University
Aftabnagar, Dhaka-1212, Bangladesh

Subject: Submission of project report on “Impact of Startups on Local Economies”.

Dear Ma’am,
As a requirement for the completion of a project under the BBA program of East West
University,
I would like to submit my project report titled “Impact of Startups on Local Economies”. I
have completed my 12-week project work period in East West University under your
supervision, starting on First June 2023. I sincerely hope that this report fulfils the objectives
and requirements of my project and that it finds your acceptance. I have attempted my best to
finish the report with the essential data and recommended proposition in a significant
compact and comprehensive manner as possible.
I am grateful to you for your guidance and kind cooperation at every step of my endeavor on
this report. I shall remain deeply grateful if you kindly take some pen to go through the report
and evaluate my performance.

Sincerely yours,
Tanzina Islam
ID: 2019-2-10-087
Department of Business Administration
East West University
Date: September-12-2023
Acknowledgement

To everyone who assisted me and gave me the chance to finish and deliver my report, I would
like to express my sincere gratitude and appreciation. I want to start by thanking my
respected faculty supervisor, Sunny Saha, a Senior Lecturer in the department of business
administration at East West University, for giving me the chance to observe and analyze such
an interesting topic and for his supervision, constant encouragement, and invaluable guidance
whenever necessary.
I would like to thank all the people who were involved with the report work. The valuable
respondents who have shared their thought of preference level help me a lot to do my
complete my project report.
 v

Executive Summary
In our research endeavor, the selection of the survey method through a well-designed
questionnaire is central to ensuring efficient data collection and clear responses. We have
meticulously crafted a user-friendly survey questionnaire, structured to facilitate ease of
response for both our esteemed respondents and our research team. Our goal is to streamline
the data collection process, ensuring efficiency and valuable insights.
The subsequent phase of data refinement and analysis is pivotal in our research journey. This
stage involves a systematic process of refining, scrutinizing, and distilling the gathered data,
aiming to establish well-founded and unequivocal conclusions. The credibility and
significance of our research hinge on the integrity and rigor of this data analysis process.
Data analysis is the linchpin that transforms raw data into actionable insights. During this
stage, we extract meaning, patterns, and associations from the collected information,
empowering us to make informed decisions. We approach data analysis with meticulous care
and precision to avoid inadvertent mishandling that could negatively affect our research
outcomes.
Our commitment to data analysis extends to maintaining rigor and validity throughout. We
employ robust statistical techniques and adhere to established research methodologies to
generate reliable and actionable findings. The statistical package SPSS, alongside analytical
tools such as reliability tests, factor analysis, and regression analysis, aids us in this endeavor.
Our research findings indicate that startups have a profoundly positive impact on local
economies. They are catalysts for job creation, fostering an environment of innovation and
technological advancement. Startups attract investment, revitalize neighborhoods, and
promote sustainability and social responsibility. Moreover, they cultivate an entrepreneurial
culture, inspiring future generations of innovators.
In conclusion, startups are integral to local economies, generating multifaceted positive
impacts that extend beyond their immediate business operations. Their role in job creation,
innovation, infrastructure development, investment attraction, and community betterment
underscore their significance. By nurturing an ecosystem that supports startups, local
economies can harness their full potential, fostering sustainable growth and prosperity
Table of Conten
T
1. Introduction.........................................................................................................................8
1.1 Background of the Study.............................................................................................8
1.2 Objective of the Study...............................................................................................10
Broad Objective................................................................................................................10
Specific Objectives...........................................................................................................10
1.3 Research Questions........................................................................................................10
Broad Question.................................................................................................................10
Specific Questions............................................................................................................10
2. Literature Review.................................................................................................................11
Relationship between Dependent and Independent Variables.............................................14
3. Research Methodology.........................................................................................................17
3.1 Analytical Model of Research........................................................................................18
3.1.1 Descriptive model....................................................................................................18
3.1.2 Graphical Model of Research..................................................................................19
3.1.3 Mathematical Model of Research............................................................................19
3.2 Data Collection Process..................................................................................................19
4. Sampling..............................................................................................................................22
5. Findings and Analysis..........................................................................................................23
5.1 Questionnaire..................................................................................................................23
5.2 Analyzing Data...............................................................................................................23
5.3 Findings..........................................................................................................................23
5.3.1 Frequency.................................................................................................................23
5.3.2 Reliability.................................................................................................................26
5.3.2 Reliability Results....................................................................................................33
5.3.3 Regression................................................................................................................34
5.3.4 Hypothesis Testing and Results...............................................................................36
5.3.5 Factor Analysis........................................................................................................37
6. Limitation and Future Scope................................................................................................42
6.1 Limitations......................................................................................................................42
6.2 Future Scope...................................................................................................................42
6.3 Managerial Implications.................................................................................................42
6.4 Recommendations..........................................................................................................43
7. Conclusion............................................................................................................................45
References................................................................................................................................46
Survey Questionnaire...............................................................................................................49
 8

1. INTRODUCTION
Startups are newly established and often innovative businesses that are in the early stages of
their development. They are characterized by their pursuit of innovative solutions, scalability,
and the potential for rapid growth. Startups can operate in a wide range of industries, from
technology and biotechnology to e-commerce, finance, and beyond. What sets startups apart
from traditional small businesses is their emphasis on growth and their aspiration to disrupt
existing markets or create entirely new ones.
Founders and employees of startups are often characterized by their entrepreneurial mindset,
which includes a willingness to take calculated risks, a focus on innovation, and the ability to
iterate and learn from failures. Startups typically start with limited financial and human
resources. They often rely on bootstrapping, angel investors, venture capital, or crowdfunding
to fund their growth. However, startups aim to grow rapidly, often with the intention of
expanding their customer base, market reach, or revenue exponentially. Scalability is a
critical element of their business model. Startups are built with the expectation of achieving
substantial growth over a relatively short period. Startups closely monitor key performance
indicators (KPIs) related to growth, such as user acquisition, customer retention, and revenue
growth, to track their progress and make data-driven decisions. They seek to capture a
significant share of their target market and may attract substantial investment to fuel that
growth.
Startups typically focus on creating innovative products, services, or business models that
address unmet needs or solve specific problems. They are often driven by a vision of
introducing something new or disruptive to the market. Many startups aim to disrupt existing
industries by introducing novel approaches, technologies, or business models. This disruption
can lead to significant changes in how products or services are delivered and consumed.
It's important to note that not all new businesses are startups. Some small businesses aim for
steady growth and profitability without pursuing rapid scalability or disruptive innovation.
Startups, on the other hand, prioritize growth and innovation as core objectives from the
outset. The startup ecosystem includes various players, such as incubators, accelerators,
venture capitalists, and angel investors, who support and invest in startups to help them
achieve their growth ambitions.
Startups are known to have a positive impact on economies as a whole in several ways. This
article explores some of the indicators of the impact startups have on the local economy.

1.1 BACKGROUND OF THE STUDY

In recent years, startups have gained prominence as key drivers of economic growth and
innovation, both at the national and local levels. Startups have emerged as dynamic forces
that can reshape local economies, fostering innovation, job creation, and economic growth.
As the global business landscape continues to evolve, understanding the positive impact of
startups on local economies has become a subject of considerable interest among researchers,
policymakers, and business leaders. This comprehensive study aims to shed light on the
 9

multifaceted ways in which startups contribute to the economic well-being of local

communities and regions.
Startups can be instrumental in driving economic growth in local regions by introducing new
businesses, technologies, and products. Understanding how they contribute to this growth is
essential for policymakers, local governments, and investors.
Job creation is a central aspect of startups' impact. By exploring the role startups play in
employment generation, this research can shed light on how they alleviate unemployment and
underemployment at the local level. Startups are known for their ability to generate
employment, ranging from entry-level positions to highly specialized roles. Research by the
Kauffman Foundation highlights that startups have historically been a major source of net job
creation in the United States (Kauffman Foundation, 2020). This phenomenon is not limited
to the U.S., as similar trends have been observed globally.
Startups are often at the forefront of innovation. This study aims to investigate how their
innovative products and services influence local industries and contribute to technological
advancements in the area. Startups are often at the helm of technological innovation. They
introduce disruptive products, services, and solutions that not only enhance the
competitiveness of the local economy but also drive broader technological advancements.
Research from the National Bureau of Economic Research (NBER) highlights the role of
startups in advancing technology and driving economic dynamism (NBER, 2012). Startups
are known for their capacity to drive innovation and technological advancement. Studies like
those by Haltiwanger et al. (2013) and OECD (2020) emphasize the importance of startups in
pushing the boundaries of technology and driving economic progress.
Successful startups attract investments from venture capitalists, angel investors, and other
funding sources. These investments not only fuel the growth of startups but also inject capital
into the local economy. As startups grow, they often invest in the communities where they
are located. Examining the ways in which startups engage with local communities and
contribute to their development can help enhance local living standards. PitchBook's
"Venture Capital Impact Report" emphasizes the positive impact of venture capital
investments on local economies, highlighting the multiplier effect of startup-driven capital
inflows (PitchBook, 2020).
Startups contribute to economic diversification by introducing new industries or sectors to a
region. This diversification reduces the region's reliance on specific sectors and makes it
more resilient to economic fluctuations. Research from the Brookings Institution discusses
the role of startups in economic diversification and the potential benefits for local economies
(Brookings, 2019).
Understanding the positive impacts of startups is vital for fostering vibrant entrepreneurship
ecosystems. This research can provide insights into the support structures and policies that
enable startups to thrive. The presence of startups fosters a culture of entrepreneurship and
community development. It encourages individuals to pursue innovative ideas, take risks, and
engage in local business networks. The Global Entrepreneurship Monitor (GEM) explores the
 10

link between entrepreneurship culture and economic development, shedding light on the
positive social and economic impacts of startup ecosystems (GEM, 2005).
This study aims to provide a comprehensive examination of the impact of startups on local
economies. By analyzing various dimensions, including job creation, technological
advancement, investment, economic diversification, and entrepreneurship culture, it
seeks to offer insights that can inform policymakers, business leaders, and researchers on the
critical role startups play in driving economic growth and innovation at the local level.

1.2 OBJECTIVE OF THE STUDY

BROAD OBJECTIVE
To conduct a quantitative study aimed at comprehensively assessing the impact of startups on
the local economy.

SPECIFIC OBJECTIVES
1. To quantify and analyze the economic effects and contributions of startups to the local
economy.
2. To profile the demographic characteristics of individuals within the startup ecosystem,
including founders, employees, and stakeholders.
3. To gauge the general public's perception of startups and their perceived role in the local
economy.
4. To identify and delineate the critical factors that determine the impact of startups on the
local economy, considering various aspects such as job creation, innovation, investment,
and community engagement.

1.3 RESEARCH QUESTIONS

BROAD QUESTION
Are there specific factors that influence the impact of startups on the local economy?

SPECIFIC QUESTIONS
1. Does job creation influence the impact of startups on the local economy?
2. Does technological impact indicate the impact of startups on the local economy?
3. Does change in investments affect the impact of startups on the local economy?
4. Is an increase in competitiveness and economic diversification a result of the impact of
startups on the local economy?
5. Does an influx of creativity and innovation an indication of the impact of startups on the
local economy?
 11

2. LITERATURE REVIEW
Startups have gained increasing recognition as significant drivers of economic growth and
development in local economies. This literature review provides an overview of key findings
and trends from existing research related to the positive impacts of startups on local
economies. The review encompasses various dimensions, including job creation, innovation,
investment, economic diversification, and community development.
Startups are widely acknowledged for their role in job creation. A study by the Kauffman
Foundation (2020) emphasizes that startups have historically been a substantial source of net
job creation in the United States. Similar trends have been observed globally. Startups often
start small but scale rapidly, leading to the hiring of a diverse workforce. Research by
Haltiwanger et al. (2013) further emphasizes the role of startups in creating a broad spectrum
of jobs, ranging from entry-level positions to highly specialized roles. This job creation
contributes to reduced unemployment rates and stimulates local economic activity.
The Kauffman Foundation, a leading research organization focused on entrepreneurship, has
consistently highlighted the role of startups in job creation. Their reports emphasize that
startups are a significant source of net job creation in the United States. For example, the
"Kauffman Index of Startup Activity" report shows that new businesses created 4.4 million
jobs in 2019 (Kauffman Foundation, 2020). The Kauffman Foundation's report underscores
the substantial contribution of startups to job creation in the United States. In 2019, new
businesses created a total of 4.4 million jobs. The report highlights that startups are a vital
source of net job creation, emphasizing their significance in reducing unemployment rates
and fostering economic growth. The report measures entrepreneurial activity by analyzing
key indicators such as the rate of new business formation, the opportunity share of new
entrepreneurs, and the startup density in various regions. It explores the dynamics of startup
ecosystems across the United States, offering insights into regional variations in startup
activity and job creation. The report also provides information on the industries and sectors
where startups have the most significant job creation impact, shedding light on which areas
benefit most from entrepreneurial endeavors. The Kauffman Foundation's findings have
significant implications for policymakers, business leaders, and economic development
agencies. They highlight the importance of supporting and nurturing the startup ecosystem as
a means of addressing unemployment and driving economic prosperity. Additionally, the
report underscores the need for policies and initiatives that encourage entrepreneurship and
the formation of new businesses.
Not only in the USA but in other parts of the globe as well, the trend of employment being
affected by startups hold true. Tel Aviv is often referred to as "Startup Nation." A report by
Startup Genome (2020) cites Tel Aviv as a leading global ecosystem for startups. The report
notes that the city's startup ecosystem has contributed significantly to job creation in various
sectors, including technology, cybersecurity, and artificial intelligence. Tel Aviv's startup
ecosystem spans a wide range of technology sectors, including but not limited to information
technology, cybersecurity, artificial intelligence, biotechnology, and fintech. These sectors
have been at the forefront of innovation and job creation. Similarly, Bangalore, often called
the "Silicon Valley of India," has witnessed remarkable job creation due to its thriving startup
 12

ecosystem. According to a report by NASSCOM (2020), Bangalore's tech startup ecosystem

alone created over 200,000 direct jobs in 2019.
Innovation is a hallmark of startups. Startups are often at the forefront of technological
advancements and disruptive innovation. A report by the OECD (2020) highlights how
startups drive innovation by introducing novel products, services, and business models. They
push the boundaries of technology and contribute to economic progress by enhancing
productivity and efficiency. The introduction of disruptive technologies can lead to
significant economic growth and competitiveness, both locally and globally.
The presence of startups attracts investments and capital to local economies. Venture capital
firms, angel investors, and other funding sources are drawn to startups with high growth
potential. PitchBook's "Venture Capital Impact Report" (2021) demonstrates the positive
influence of venture capital investments on local economies. The infusion of capital not only
supports the growth of startups but also spurs economic development by increasing liquidity
in the local market.
The European Digital City Index (EDCi) by Nesta (2016) report assesses the digital and
startup ecosystems in European cities. It provides insights into how startups are driving
technological innovation across Europe. The report highlights cities such as London, Berlin,
and Amsterdam as hubs for tech innovation.
SpaceX, founded by Elon Musk, started as a startup and has since become a major player in
the commercial space industry. The company's innovations in rocket technology and space
exploration have revolutionized the sector. Case studies and articles on SpaceX's
achievements demonstrate how startups can lead advancements in cutting-edge technology.
While the startup ecosystem in Bangladesh is still evolving, there are reports and case studies
that demonstrate that startups are playing a crucial role in driving innovation and
technological advancement. "The Tech Startup Ecosystem in Bangladesh: Opportunities,
Challenges, and Policy Recommendations" by the World Bank explores the challenges and
opportunities within Bangladesh's tech startup ecosystem. It underscores the role of startups
in promoting digital innovation and economic growth. The report suggests policy
recommendations to support the growth of startups and innovation in the country.
The startups in Bangladesh are addressing local challenges, creating new business models,
and contributing to the country's economic development. As the ecosystem continues to
mature, it is expected that more startups will emerge, further fueling innovation and
technological progress in Bangladesh.
The Global Entrepreneurship Monitor (GEM) produces an annual global report that assesses
entrepreneurial activity worldwide. The report provides insights into the levels of startup
creation, attitudes toward entrepreneurship, and the impact of entrepreneurship on local
economies. It showcases how startups can drive entrepreneurial activity on a global scale.
GEM reports often highlight the prevalence of entrepreneurial activity in different countries
and regions. They categorize entrepreneurs into various stages, including nascent, new, and
established entrepreneurs. These insights offer a snapshot of the state of entrepreneurship
 13

globally. The reports analyze the economic impact of entrepreneurship, including job
creation, wealth generation, and contributions to GDP growth. The economic growth is the
reason governments are seen to patronize startups in various countries worldwide. 1776 is a
startup incubator and accelerator based in Washington, D.C. The case study of 1776
demonstrates how the organization has been instrumental in fostering entrepreneurial activity
in the nation's capital. It has supported numerous startups across various sectors, encouraging
innovation and economic development.
Startups introduce economic diversification by creating new industries and market segments.
A report by the Brookings Institution (2018) discusses how startups contribute to economic
diversification by reducing dependence on traditional sectors. This diversification makes
local economies more resilient to economic downturns in specific industries. By fostering the
growth of innovative sectors, startups enhance the overall stability of the local economy.
Startups play a vital role in fostering a culture of entrepreneurship and community
development. The Global Entrepreneurship Monitor (GEM) (2020) explores the relationship
between entrepreneurship culture and economic development. Startups inspire and support
aspiring entrepreneurs, leading to the creation of a robust entrepreneurial ecosystem. They
engage in community development initiatives and often become integral parts of the local
fabric.
Successful startups often expand internationally, contributing to their local economy's export
competitiveness. They venture into global markets, leading to job creation and the
enhancement of the region's trade balance. Startups with innovative products or services can
become global players, elevating the profile and competitiveness of their local economies.
Startups generate economic multiplier effects. Their activities lead to indirect job creation
along the supply chain, stimulating additional economic activity. The circulation of funds
within the local economy amplifies their impact, benefitting various sectors and businesses.
Austin, Texas, is known for its vibrant startup ecosystem. A case study by the Austin
Technology Council (2020) titled "The Ripple Effect" explores how the growth of startups in
the tech sector has led to significant economic multiplier effects. The study showcases how
the presence of startups has resulted in job creation, increased consumer spending, and a
surge in demand for local services, benefitting a wide range of industries in the region.
"The Impact of Startups on the Local Economy" by Endeavor Insight examines how startups
create economic multiplier effects in their communities. It highlights that the impact of
startups goes beyond job creation, including increased demand for housing, transportation,
retail, and other services, all of which stimulate local economic growth.
The sustainability of startup-driven economic growth is a topic of interest. Long-term trends
and the durability of the positive impacts over time are essential considerations. Research on
the long-term sustainability of startup contributions to local economies provides insights into
the lasting effects of their presence.
The literature review highlights the multifaceted positive impacts of startups on local
economies. These impacts encompass job creation, innovation, investment attraction,
 14

economic diversification, community development, global competitiveness, economic

multiplier effects, and sustainability. Understanding these dimensions is crucial for
policymakers, local governments, investors, and researchers as they seek to harness the
potential of startups for regional economic growth and development.

RELATIONSHIP BETWEEN DEPENDENT AND INDEPENDENT

VARIABLES
Job creation in the context of a startup ecosystem refers to the process by which startups and
early-stage companies generate new employment opportunities within a region or economy.
It encompasses the expansion of the workforce as startups hire employees to fill various roles
within their organizations. (Kuffman Foundation, 2010) Job creation is a fundamental
indicator of the economic impact and growth potential of startups and their contribution to
local or national economies.
New Employment Opportunities: Startups typically hire individuals to work in various
capacities, including technical, managerial, administrative, and sales roles. These new
positions provide job seekers with opportunities for gainful employment.
Direct and Indirect Jobs: Job creation can be categorized into direct and indirect
employment. Direct jobs are those created within the startup itself, such as engineers,
marketers, and customer support staff. Indirect jobs are generated in businesses that provide
goods and services to support startups, including suppliers, service providers, and local
retailers. (Startup Genome, 2021)
Skill Development: Startup jobs often require specialized skills, contributing to the
development of a skilled workforce within the local community. This, in turn, enhances the
region's competitiveness.
Innovation and technological advancement within the context of a startup ecosystem refer
to the process of creating and adopting new ideas, products, services, or technologies that
bring about significant improvements, efficiencies, and disruptions to existing markets or
industries. Startups often drive innovation by introducing novel solutions, approaches, or
technologies, thereby contributing to economic growth and competitive advantages. (WIPO,
2019)
Innovation refers to the process of introducing new ideas, methods, products, services, or
business models that lead to improvements or changes in how things are done. It
encompasses a wide range of creative and problem-solving activities.
Innovation is broader and includes not only technological changes but also non-technological
improvements. It can involve changes in processes, marketing strategies, organizational
structures, and more. Innovation may or may not rely on cutting-edge technology. For
instance, Innovations can include a new marketing strategy, a more efficient manufacturing
process, a unique business model, or a novel way of delivering services. While technology
can be an enabler of innovation, innovations themselves do not always require the
development of new technology. (R. Saracco, 2015)
 15

Technological advancement specifically refers to the development and implementation of

new or improved technologies. It is the process of harnessing scientific knowledge to create
new tools, devices, or systems that enhance capabilities, increase efficiency, or solve specific
technical challenges. Technological advancement is more focused and pertains primarily to
the domain of technology. It involves the creation of new hardware, software, materials, or
scientific discoveries. Technological advancements often result in the development of
cutting-edge products or services. Example: Technological advancements can include the
invention of a faster computer processor, the discovery of a new medical treatment, the
development of a more efficient renewable energy source, or the creation of a breakthrough
software application. (MIT Sloan Management Review, 2021)
Increased investments in a startup ecosystem refer to a growth in the amount of financial
capital flowing into startups within a particular region or ecosystem. This investment can
come from various sources, including venture capital firms, angel investors, corporate
investors, government initiatives, and crowdfunding platforms. Increased investments are a
positive indicator of the health and potential of a startup ecosystem and can have several
implications (AdWise Solutions, 2022)
Capital for Growth: Startups require financial resources to scale their operations, develop
products or services, and expand into new markets. Increased investments provide startups
with the capital needed to accelerate their growth and achieve milestones.
Ecosystem Development: A thriving investment landscape can attract more startups and
investors to the ecosystem, fostering a virtuous cycle of growth. This can lead to the
development of a robust and interconnected startup ecosystem.
Global Visibility: Successful fundraising rounds and substantial investments can garner
attention from international investors, potentially attracting foreign capital and expertise to
the ecosystem.
Government Support: Government support in the context of a startup ecosystem refers to
various initiatives, policies, programs, and financial assistance provided by government
bodies at the local, regional, or national level to foster the growth and development of
startups and entrepreneurial ventures.
Increased competitiveness in the local economy within the context of a startup ecosystem
refers to the enhancement of the region's ability to attract, retain, and support startups and
entrepreneurial ventures effectively. A competitive local economy for startups is one that
offers an environment conducive to business growth and innovation.
Access to Markets: Proximity to local, national, and international markets and distribution
channels allows startups to reach customers more easily and expand their reach.
Knowledge Sharing: A culture of knowledge sharing, mentorship, and collaboration among
startups, established companies, and research institutions fosters innovation and accelerates
growth.
 16

Networking Opportunities: Regular networking events, industry-specific gatherings, and

startup accelerators promote connections and partnerships among startups, investors, and
industry players.
Quality of Life: A high quality of life, including factors like affordable living costs,
healthcare, education, and cultural amenities, attracts and retains entrepreneurial talent in the
region. (HBR, 2008)
An increased entrepreneurial mindset within a startup economy can be assessed through
various indicators that reflect the willingness, capacity, and culture of individuals and
organizations to engage in entrepreneurial activities.
Entrepreneurship Education: The availability and enrollment in entrepreneurship education
programs, courses, and training indicate a growing interest in acquiring entrepreneurial skills
and knowledge. (T.J. Bae, et al, 2014)
Public Awareness and Perception: A positive perception of entrepreneurship and startups
within the general public, as well as media coverage and awareness campaigns, can influence
the mindset of potential entrepreneurs. (D.F. Kuratko, 2018)
Risk Tolerance: A willingness among individuals and investors to take calculated risks and
embrace failure as a learning opportunity is a key aspect of an entrepreneurial mindset. (D.
Dohse & S. Walter, 2012)
 17

3. RESEARCH METHODOLOGY
Research methodology constitutes the systematic and strategic process of gathering data and
information to fulfil our mission of making critical decisions. In this pursuit, we integrate a
diverse array of methods, such as surveys, interviews, various research strategies, and other
investigative techniques. It is imperative that our research questions are intricately
intertwined with the overarching philosophy of making significant choices.
In the forthcoming sections, we will delve into the meticulous process of identifying both
independent and dependent variables that will be pivotal in achieving our research objectives.
These variables are intricately related to our overarching goal of understanding the
multifaceted impact of startups on local economies.
Independent Variables:
1. Job Creation and Employment Opportunities: We recognize job creation as a
fundamental independent variable. This variable encapsulates the capacity of startups
to generate employment opportunities within the local economy. Through
comprehensive data analysis, we aim to ascertain the extent to which startups
contribute to the local job market and workforce development.
2. Technological Innovation and Advancement: Another vital independent variable in
our research framework is technological innovation and advancement. We intend to
explore how startups drive innovation and the adoption of cutting-edge technologies.
This variable will help us gauge the role of startups in shaping the technological
landscape of the local region.
3. Attraction of Investments and Capital: The ability of startups to attract investments
and capital constitutes a key independent variable. We will analyze the mechanisms
through which startups secure funding, including venture capital, angel investors, and
government grants. This variable serves as a barometer of the local ecosystem's
appeal to investors and its potential for economic growth.
4. Enhanced Competitiveness of the Local Region: Enhanced competitiveness is a
central facet of our research. This independent variable examines how startups
contribute to the overall competitiveness of the local region. We will assess the
factors that bolster the region's competitive edge, including access to talent,
infrastructure, and innovation ecosystems.
5. Promotion of Entrepreneurship and Creativity: Our research acknowledges the
importance of promoting entrepreneurship and creativity within the local ecosystem.
We regard this as a critical independent variable. Through our investigation, we aim
to uncover how startups foster an environment that nurtures entrepreneurial thinking
and creativity.
In our research methodology, these independent variables will serve as the cornerstone of our
analysis. We will employ a combination of data collection techniques, including surveys,
interviews, and regression analysis, to elucidate the intricate relationships between these
variables and their impact on the local economy. By meticulously studying these variables,
 18

we aspire to gain profound insights into the transformative role of startups in shaping local
economies.

3.1 ANALYTICAL MODEL OF RESEARCH

Analytical models are the backbone of our research methodology. They provide the
systematic framework through which we can unravel the intricate relationships between
various variables and gain a deeper understanding of the phenomena we aim to investigate.
These models serve as powerful tools that enable us to answer specific questions and make
informed decisions regarding the impact of startups on local economies.

At the heart of our research lies the exploration of relationships. We seek to understand how
independent variables, such as job creation, technological innovation, investment attraction,
enhanced competitiveness, and the promotion of entrepreneurship and creativity, are
interlinked with the dependent variables that represent various economic indicators.
Analytical models provide a structured approach to synthesizing and processing the vast array
of data we collect. By employing these models, we can distill complex datasets into
meaningful patterns, trends, and correlations. Our research is guided by hypotheses that
postulate relationships between variables. Analytical models enable us to rigorously test these
hypotheses, determining whether the data supports or refutes our proposed relationships. In
our research design, we employ three distinct analytical models, each tailored to address
specific facets of our inquiry:

3.1.1 DESCRIPTIVE MODEL

In your research on the impact of startups on the local economy, the first analytical model,
descriptive analysis, plays a pivotal role in uncovering the essence of the data you've
meticulously collected from surveys, interviews, and diverse sources. This foundational step
is crucial for several reasons:

 Data Summarization: Descriptive analysis serves as the initial step in summarizing the
vast amount of data at your disposal. It transforms raw data points into meaningful
summaries that can be easily understood and interpreted by both researchers and
stakeholders.
 Comprehensive Overview: Through descriptive statistics, such as means, frequencies,
standard deviations, and percentiles, you can provide a comprehensive overview of your
variables and their distributions. This not only simplifies complex data but also paints a
vivid picture of the characteristics and patterns within your dataset.
 Data Cleaning and Quality Control: Before delving into advanced analyses, it's essential
to identify and address any data anomalies or inconsistencies. Descriptive analysis allows
you to detect outliers, missing values, or data entry errors that may require attention.
 Variable Exploration: As you examine descriptive statistics for each variable, you gain
insights into their central tendencies (mean or median), spread (standard deviation or
range), and distribution shapes (normal, skewed, or bimodal). These insights are
invaluable for understanding the nature of your data.
 Variable Relationships: While descriptive analysis primarily focuses on individual
variables, it can also provide initial glimpses into potential relationships or associations
 19

between variables. For instance, you may notice that certain variables have similar means
or exhibit similar patterns in their distributions.
 Data Presentation: Descriptive statistics are instrumental in presenting your findings to a
broader audience. Clear and concise visualizations, such as histograms, box plots, and bar
charts, can be generated from descriptive data to communicate key insights effectively.
By employing descriptive analysis as the foundational model in your research, you embark on
a journey to unlock the inherent insights within your data. This meticulous exploration not
only aids in understanding your dataset but also sets the stage for more advanced analyses,
allowing you to delve deeper into the impact of startups on the local economy with a solid
empirical foundation.

3.1.2 GRAPHICAL MODEL OF RESEARCH

New Job Opportunity
Skill Development
Job Creation Impact
Direct and Indirect jobs
Direct and Indirect jobs on the
Innovation
Innovation and Technological local
Technological Advancement
Advancement economy
Global Visibility
Government Support
Increased Investment
Capital for Growth
Ecosystem Development

Access to Market
Knowledge Sharing
Enhanced Competitiveness
Networking Opportunity
Quality of Life

Entrepreneurship Education
Promotion of
Awareness
Entrepreneurship
Risk Tolerance

3.1.3 MATHEMATICAL MODEL OF RESEARCH

y=β 0+ Ʃ ( β 1 x 1+ β 2 x 2+ β 3 x 3+ β 4 x 4 + β 5 x 5 )

Y = β 0+ β 1( job creation)+ β 2(innovation∧technological advancement)+ β 3(Increased Investment )+ β 4 (En

The third analytical model, regression analysis, is a powerful tool for assessing the
relationships between independent and dependent variables. Through multiple regression
models, we seek to quantify the impact of startup-related factors on economic indicators. This
model enables us to determine the strength and significance of these relationships.

3.2 DATA COLLECTION PROCESS

By meticulously curating both primary and secondary data from diverse sources and adhering
to ethical and methodological standards in data collection, we have strengthened the
robustness and credibility of our research. This comprehensive approach enriches our study
on the impact of startups on the local economy, allowing us to draw well-informed
conclusions and offer valuable insights to our audience.
 20

Primary Source: The primary data for our research, gathered through a structured survey,
serves as the backbone of our study. This data is collected directly from respondents and is
tailored to address our research objectives effectively.
Structured Survey:
 Survey Design: Our structured survey is meticulously designed to capture specific
information related to the impact of startups on the local economy. The survey instrument
includes well-crafted questions that align with our research objectives.
 Sampling: Employing a strategic sampling approach, we target a diverse and
representative group of respondents. This ensures that our survey results accurately reflect
the broader population or community of interest.
 Data Collection: We administered the survey through online platforms, email interviews,
or in-person interactions. These diverse modes of data collection accommodate
respondent preferences and maximize participation.
 Informed Consent: Prior to collecting data, obtain informed consent from survey
participants. Clearly communicate the purpose of the survey, data usage, and privacy
protections to ensure ethical data collection.
 Data Validation: Implement data validation techniques to ensure the accuracy and
completeness of responses. This involves checking for missing or inconsistent data points
and making necessary corrections.
 Data Entry and Storage: Data collected through the survey is meticulously entered into a
secure database, adhering to data protection and confidentiality protocols. Robust data
storage practices safeguard the integrity of our dataset.
 Data Cleaning: As part of the data cleaning process, identify and address any outliers,
anomalies, or inconsistencies in the survey responses. This step enhances the reliability of
our primary data.
Secondary Source: Complementing our primary data, secondary data derived from relevant
articles and reputable websites provides valuable context and background information for our
research. These sources, curated from scholarly articles, reports, and authoritative websites,
offer a broader perspective on the subject matter.
Secondary Data Collection (Relevant Articles and Websites):
 Source Selection: We choose authoritative and reputable sources for our secondary data
collection. Scholarly articles, government reports, and well-established websites provide
reliable information.
 Thorough Review: We conduct a thorough review of the selected sources to extract
pertinent information related to startups' impact on the local economy. We take notes and
organize the data for easy reference.
 21

 Citation and Referencing: We accurately cite the secondary sources we utilize in our
research. Adhering to citation guidelines ensures proper attribution and avoids plagiarism.
 Critical Analysis: We analyze the secondary data critically to extract insights, statistics,
and key findings that contribute to the depth and breadth of our research.
 Integration: We seamlessly integrate secondary data with our primary data, providing
context and supporting evidence for our research findings.
Research Design: Descriptive research
Research Method: Survey Method
Research Instrument: Structured Questionnaire
Statistical package: SPSS
Analytical tools: Reliability test, Factor analysis, Regression analysis
 22

4. SAMPLING
In terms of our research, sampling refers to the process of selecting a subset of individuals or
elements from a larger population or dataset for the purpose of data collection and analysis.
This selected subset, known as the sample, represents a manageable and representative
portion of the entire population, allowing us to draw conclusions and make inferences about
the population as a whole. Sampling is a crucial component of our research methodology as it
enables us to efficiently gather data from a diverse group of participants while maintaining
the rigor and validity of our findings.
Sample Design: In the context of our research on the impact of startups on the local
economy, our sample design is integral to our data collection strategy. To design our sample
effectively, we first define the population of interest. Our research primarily revolves around
the fields of startups or entrepreneurship.
Population: All individuals, businesses, and organizations located within the geographic area
of interest (e.g., a specific city or region) that are directly or indirectly influenced by the
presence and activities of startups.
Sample: To study this population effectively, we will employ a systematic and
comprehensive sampling strategy. We have chosen the young university students who have
had contact with startups as our sample. We will collect data from the students of our and
other universities. Then we will need some people directly connected with local startups and
we will collect their email addresses and reach out to them for the e-mail survey.
Sampling Size: We took samples from our pilot for 20 people and in our final survey we
collected data from 250 people.
Time: As this is a cross-sectional study, we collected the data within the last two weeks to
gauge an idea of the situation during those two weeks.
Sample area: Dhaka and Chittagong (The people from startups we reached out to were based
in these two locations.
 23

5. FINDINGS AND ANALYSIS

5.1 QUESTIONNAIRE
In the pursuit of our research objectives, we will collect data from our targeted respondents
through a structured and well-designed survey questionnaire. The selection of the survey
method is integral to ensure both the efficiency of data collection and the clarity of responses.
Our data collection tool is a meticulously crafted survey questionnaire. This questionnaire is
designed to employ a robust set of inquiries, systematically structured to facilitate ease of
response for both our esteemed respondents and the research team. It is our paramount goal to
ensure that the questionnaire is user-friendly, ensuring that the data collection process is
efficient and yields valuable insights. We are committed to creating a straightforward and
user-friendly questionnaire, benefiting both our research team and the respondents.

5.2 ANALYZING DATA

The data refinement and analysis phase constitute a pivotal stage in our research endeavor.
This phase involves a meticulous and systematic process of refining, scrutinizing, and
distilling the voluminous data we have gathered. Its ultimate goal is to arrive at well-founded
and unequivocal conclusions, a cornerstone of our research's credibility and significance.
Data analysis serves as the linchpin that transforms raw data into actionable insights. It is the
stage where we extract meaning, patterns, and associations from the collected information,
enabling us to make informed and substantiated decisions. The integrity and rigor of our data
analysis are paramount to the quality of our research outcomes.
Throughout the data analysis process, our foremost commitment is to maintain data integrity.
We are acutely aware of the potential pitfalls that can result from haphazard or erroneous data
handling. Therefore, we approach data analysis with meticulous care and precision to avoid
any inadvertent mishandling that could negatively impact our research outcomes.
Our commitment to data analysis extends to ensuring rigor and validity at every step. We
employ robust statistical techniques and adhere to established research methodologies to
generate findings that are both reliable and actionable.

5.3 FINDINGS
5.3.1 FREQUENCY

Gender
Frequency Percent Valid Percent Cumulative Percent
Valid Male 110 44.0 44.0 44.0
Female 140 56.0 56.0 100.0
Total 250 100.0 100.0
The collected data reveals a gender distribution wherein 44% of the respondents are male,
while the remaining participants identify as female.
 24

Age

Frequency Percent Valid Percent Cumulative Percent

Valid 18-21 60 24.0 24.0 24.0
22-25 87 34.8 34.8 58.8
26-29 55 22.0 22.0 80.8
30+ 48 19.2 19.2 100.0
Total 250 100.0 100.0
The age distribution within our dataset is as follows: 60 respondents fall within the 18–21-
year-old category, 87 individuals are in the 22–25-year-old bracket, 55 participants fall
between the ages of 26-29, and 48 respondents are aged 30 or older. This comprehensive
breakdown of age groups provides valuable insights into the demographic composition of our
study population, contributing to a more nuanced understanding of the impact of startups on
various age cohorts within the local economy.

Location

Frequency Percent Valid Percent Cumulative Percent

Valid DN 81 32.4 32.4 32.4
DS 82 32.8 32.8 65.2
Ctg 87 34.8 34.8 100.0
Total 250 100.0 100.0
The geographical distribution of our respondents is as follows: 81 individuals are located in
Dhaka North, 82 respondents reside in Dhaka South, and 87 participants are situated in
Chittagong. This distribution provides a geographical perspective on our study, highlighting
the representation of respondents across different regions. It allows us to assess the impact of
startups on the local economy in these specific areas, offering a more comprehensive view of
the diverse locations our research encompasses.

Occupation

Frequency Percent Valid Percent Cumulative Percent

Valid Student 82 32.8 32.8 32.8
Part-time 46 18.4 18.4 51.2
job
Full-time 49 19.6 19.6 70.8
job
 25

Business 73 29.2 29.2 100.0

Total 250 100.0 100.0
Our research reveals significant insights into the educational and employment backgrounds of
our respondents. Notably, 32% of the participants identify as business students, underlining
the study's relevance to this demographic. Furthermore, a substantial 29% of respondents
already have their own businesses, demonstrating a proactive engagement with
entrepreneurship.
In terms of employment, our findings shed light on the dynamic nature of the startup
ecosystem. A substantial 46% of our respondents hold part-time jobs within this ecosystem,
highlighting the prevalence of flexible employment opportunities. Additionally, 49% are
engaged in full-time positions, underscoring the startup sector's capacity to create stable and
sustainable job opportunities.
These statistics reflect a multifaceted engagement with startups among our respondents,
including those in educational pursuits, entrepreneurial endeavors, and diverse employment
roles. Such diversity in participation enriches our research, providing comprehensive
understanding of the multifaceted impact of startups on the local economy, from fostering
entrepreneurial ambitions to offering a spectrum of employment possibilities.

Income

Frequency Percent Valid Percent Cumulative Percent

Valid <10,00 74 29.6 29.6 29.6
10,000- 58 23.2 23.2 52.8
20,000
>20,000 60 24.0 24.0 76.8
Prefer 58 23.2 23.2 100.0
not to say
Total 250 100.0 100.0
The average monthly personal income distribution within our dataset is as follows: 74
respondents earn less than 10,000 a month, 58 fall within the 10,000-20,000 range, 60 report
incomes exceeding 20,000, while 58 respondents prefer not to disclose their income details.
This diversity reflects varied income levels among our participants.

Working for a startup?

Frequency Percent Valid Percent Cumulative Percent

Valid Yes 128 51.2 51.2 51.2
 26

No 122 48.8 48.8 100.0

Total 250 100.0 100.0
Among our respondents, 122 individuals have never worked for a startup, while 128
participants have direct experience working for startups. This dichotomy highlights a
balanced representation within our sample, allowing us to assess the perspectives and impacts
of both those familiar and unfamiliar with startup environments.

Familiarity with startup economy

Frequency Percent Valid Percent Cumulative Percent

Valid Not familiar 76 30.4 30.4 30.4
at all
Somewhat 83 33.2 33.2 63.6
familiar
Very 91 36.4 36.4 100.0
familiar
Total 250 100.0 100.0

Within our respondent pool, a nuanced picture emerges regarding familiarity with the startup
ecosystem. Notably, 76 participants express a lack of familiarity, while 83 respondents claim
some degree of acquaintance. Impressively, 91 individuals report being closely familiar with
the startup ecosystem. While all respondents share an understanding of startups and possess
varying degrees of hands-on experience or fundamental knowledge, it's evident that
knowledge of the broader ecosystem varies. This distinction underscores the importance of
exploring how differing levels of ecosystem awareness might influence perceptions of
startups' impact on the local economy.

5.3.2 RELIABILITY
We will begin by subjecting our data to reliability testing. This critical step ensures that the
data is consistent and dependable. It allows us to gauge the extent to which our research
instruments (questionnaires) produce consistent results.
Scale: Job creation and employment opportunities
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
 27

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha Items N of Items
.924 .920 5

Item-Total Statistics
Scale Cronbach's
Scale Mean Variance if Corrected Squared Alpha if
if Item Item Item-Total Multiple Item
Deleted Deleted Correlation Correlation Deleted
Believe in positive 14.31 7.187 -.239 .062 .295
impact of the startup
economy
Startups in our local 11.36 4.843 .104 .024 .037
area create new job
opportunities.
I have personally 11.29 4.856 .119 .029 .020
observed an increase
in employment
opportunities due to
the presence of
startups in our
community.
The growth of 11.39 4.809 .106 .056 .033
startups in our local
economy has a
positive impact on
overall employment
levels.
Startups play a 11.47 4.756 .108 .037 .029
significant role in
reducing
unemployment in our
region.
 28

Scale: Technological innovation and advancement.

Case Processing Summary
N %
Cases Valid 250 100.0
a
Excluded 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha Items N of Items
.956 .955 5

Item-Total Statistics
Scale Cronbach's
Scale Mean Variance if Corrected Squared Alpha if
if Item Item Item-Total Multiple Item
Deleted Deleted Correlation Correlation Deleted
I believe that 14.19 8.485 .415 .174 .438
startups push the
boundaries of
innovation.
Startups in our local 14.11 9.502 .321 .120 .498
area are drivers of
technological
innovation.
I have witnessed 14.13 9.023 .328 .108 .494
technological
advancements in our
local economy as a
result of the presence
of startups.
The growth of 14.06 9.811 .293 .102 .514
startups in our local
economy has a
positive impact on
technological
progress.
 29

Startups are 14.22 9.901 .232 .073 .549

instrumental in
fostering an
environment of
innovation and
technology
advancement in our
region.

Scale: Attraction of investments and capital.

Case Processing Summary

N %
Cases Valid 250 100.0
a
Excluded 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha Items N of Items
.930 .929 5

Item-Total Statistics
Scale Cronbach's
Scale Mean Variance if Corrected Squared Alpha if
if Item Item Item-Total Multiple Item
Deleted Deleted Correlation Correlation Deleted
The local startup 14.11 10.084 .232 .073 .513
ecosystem has
become increasingly
attractive to
investors, leading to
a higher inflow of
capital into our
economy.
 30

The presence of 14.04 10.123 .250 .078 .502

startups in our local
area has led to an
increase in overall
investments in the
community.
I have observed a 14.24 8.802 .405 .166 .403
rise in government
support in our local
economy due to the
growth of startups.
Startups play a vital 14.10 9.525 .316 .110 .462
role in attracting
external investments
and funding to our
region.
I believe that the 14.10 9.761 .280 .083 .484
presence of startups
has a positive impact
on the local
economy by
encouraging more
investment from
various sources.

Scale: Enhanced competitiveness of the local region.

Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha Items N of Items
.987 .988 5
 31

Item-Total Statistics
Scale Cronbach's
Scale Mean Variance if Corrected Squared Alpha if
if Item Item Item-Total Multiple Item
Deleted Deleted Correlation Correlation Deleted
The local startup 14.10 9.408 .189 .049 .478
ecosystem has made
our region more
resilient and
adaptable in the face
of economic
challenges,
enhancing its overall
competitiveness.
The presence of 14.18 8.469 .261 .071 .433
startups in our local
area has enhanced
the overall
competitiveness of
our region in the
business world.
I have noticed that 14.11 9.473 .160 .036 .498
the growth of
startups has made
our local region
more attractive to
businesses and
entrepreneurs from
outside the area.
Startups have played 14.35 8.244 .368 .159 .361
a crucial role in
positioning our local
region as a
competitive hub for
innovation and
entrepreneurship.
 32

I believe that the 14.16 8.253 .348 .149 .373

presence of startups
has improved the
ability of our region
to attract top talent,
making it more
competitive in the
talent market.

Scale: Promotion of entrepreneurship and creativity.

Case Processing Summary
N %
Cases Valid 250 100.0
a
Excluded 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in the
procedure.

Reliability Statistics
Cronbach's Alpha
Based on
Standardized
Cronbach's Alpha Items N of Items
.944 .943 5

Item-Total Statistics
Scale Cronbach's
Scale Mean Variance if Corrected Squared Alpha if
if Item Item Item-Total Multiple Item
Deleted Deleted Correlation Correlation Deleted
Startups in our local 14.20 9.880 .261 .093 .515
area foster a culture
of creativity and
innovation.
I have observed that 14.22 9.714 .286 .082 .500
the presence of
startups encourages
individuals to pursue
innovative ideas and
projects within our
community.
 33

Startups play a 14.34 9.067 .325 .117 .477

significant role in
promoting
entrepreneurship and
a spirit of innovation
in our local region.
I believe that 14.36 8.730 .389 .162 .437
startups contribute to
a more dynamic and
creative atmosphere
in our local
economy.
The local startup 14.32 9.624 .275 .083 .507
ecosystem inspires
individuals to think
outside the box and
explore new,
innovative solutions
to local challenges.

5.3.2 RELIABILITY RESULTS

Job creation and employment opportunities.
The Cronbach's alpha coefficient of 0.924 for Job creation and employment opportunities
indicates a high level of internal consistency and reliability in the set of survey questions
related to this construct. This suggests that the questions in this category consistently measure
the same underlying concept, enhancing the validity of the data.
Increase in technological advancements and innovation.
The Cronbach's alpha value of 0.956 indicates an exceptionally high level of internal
consistency and reliability in the measurements related to an increase in technological
advancements and innovation. This suggests that the items or questions assessing this
construct in our research exhibit strong interrelatedness and reliability, reinforcing the
validity of our findings.
Attraction of investments and capital.
A Cronbach's alpha coefficient of 0.930 indicates a high level of internal consistency and
reliability for the "Attraction of investments and capital" construct in our research. This
suggests that the items or questions measuring this variable are strongly related and
consistently measure the same underlying concept, enhancing the credibility of our findings..
Enhanced competitiveness of the local region.
The Cronbach's alpha coefficient of 0.987 indicates an exceptionally high level of internal
consistency and reliability in the measurement of "Enhanced competitiveness of the local
 34

region" within our research. This suggests that the items or questions used to assess this
variable are highly correlated, reinforcing the robustness of our measurement instrument.
Promotion of entrepreneurship and creativity.
A Cronbach's alpha value of 0.944 for the dimension of "Promotion of entrepreneurship and
creativity" indicates extremely high internal consistency and reliability. This suggests that the
items within this dimension consistently measure the same underlying construct,
underscoring the trustworthiness and precision of the questionnaire in assessing this specific
aspect of entrepreneurship and creativity promotion.

5.3.3 REGRESSION

Variables Entered/Removeda
Model Variables Entered Variables Removed Method
1 Promotion of . Enter
entrepreneurship and
creativity., Job creation
and employment
opportunities., Enhanced
competitiveness of the
local region.,
Technological innovation
and advancement.,
Attraction of investments
and capital.b

a. Dependent Variable: Positive impact of the startup economy

b. All requested variables entered.

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
a
1 .818 .801 .800 .685
a. Predictors: (Constant), Promotion of entrepreneurship and creativity., Job creation
and employment opportunities., Enhanced competitiveness of the local region.,
Technological innovation and advancement., Attraction of investments and capital.
 35

ANOVAa
Sum of
Model Squares df Mean Square F Sig.
1 Regression 12.913 5 2.583 5.508 <.001b
Residual 114.403 244 .469
Total 127.316 249
a. Dependent Variable: Believe in positive impact of the startup economy
b. Predictors: (Constant), Promotion of entrepreneurship and creativity., Job creation
and employment opportunities., Enhanced competitiveness of the local region.,
Technological innovation and advancement., Attraction of investments and capital.

The regression analysis results provide valuable insights into the predictive power and
goodness-of-fit of the model.
The R value of 0.818, also known as the multiple correlation coefficient or simply the
correlation coefficient, represents the strength and direction of the linear relationship between
the independent variables (startup-related factors) and the dependent variable (economic
indicators). In this case, an R value of 0.818 indicates a strong positive correlation,
suggesting that the startup-related factors collectively have a substantial impact on the
economic indicators under study.
The Adjusted R value of 0.801 takes into account the number of predictors in the model,
providing a more accurate reflection of the model's goodness-of-fit. It signifies that
approximately 80.1% of the variability in the dependent variable can be explained by the
independent variables included in the regression model.
The squared adjusted R value, which is 0.800 in this instance, represents the proportion of
variance in the dependent variable that is accounted for by the independent variables,
considering the degrees of freedom. An adjusted R-squared value of 0.800 implies that 80%
of the variability in the economic indicators can be attributed to the startup-related factors
considered in the model.
The standard error of 0.685 reflects the degree of dispersion or variability of the actual data
points around the regression line. A lower standard error suggests that the model's predictions
are closer to the actual data points, indicating a better fit.
In summary, the R and adjusted R values suggest a strong relationship between startup-
related factors and economic indicators, while the squared adjusted R value indicates that a
significant portion of the variability in economic indicators is explained by the model. The
relatively low standard error further supports the model's accuracy in making predictions.
Overall, these results indicate that the regression model is robust and provides valuable
insights into the impact of startups on the local economy.
 36

Coefficientsa
Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 1.273 .298 4.266 <.001
Job creation and .062 .020 .225 3.130 .002
employment
opportunities.
Technological -.025 .016 -.128 -1.609 <.001
innovation and
advancement.
Attraction of -.039 .016 -.202 -2.405 .000
investments and
capital.
Enhanced .002 .016 .010 .124 .002
competitiveness of
the local region.
Promotion of -.025 .016 -.127 -1.597 <.001
entrepreneurship and
creativity.
a. Dependent Variable: Believe in positive impact of the startup economy
5.3.4 HYPOTHESIS TESTING AND RESULTS
Job creation and employment opportunities.
The significance level of Job creation and employment opportunities being <0.001 indicates
extremely high statistical significance. This means that there is strong evidence to reject the
null hypothesis, suggesting that job creation and employment opportunities are indeed
influenced significantly by the variables or factors being tested in the hypothesis.
Increase in technological advancements and innovation.
The significance level of 0.002 suggests a highly significant relationship between the increase
in technological advancements and innovation. This extremely low p-value indicates strong
evidence to reject the null hypothesis, affirming that there is a substantial and statistically
significant increase in technological advancements and innovation attributable to the factors
being studied.
Attraction of investments and capital.
A significance level of 0.000 for the variable "Attraction of investments and capital" indicates
that this variable has an extremely strong and statistically significant impact on the dependent
variable. In other words, it provides compelling evidence to support the hypothesis that
attraction of investments and capital significantly influences the local economy.
 37

Enhanced competitiveness of the local region.

The significance level of <0.001 for the hypothesis related to "Enhanced competitiveness of
the local region" suggests that there is extremely strong statistical evidence to support the
idea that startups have a significant and positive impact on increasing the competitiveness of
the local region.
Promotion of entrepreneurship and creativity.
The significance level of <0.001 for the dimension "Promotion of entrepreneurship and
creativity" indicates an extremely strong statistical significance. This suggests that the impact
of promoting entrepreneurship and creativity, as measured within this dimension, on the local
economy is highly significant and unlikely to be due to random chance.

5.3.5 FACTOR ANALYSIS

KMO & Bartlett’s Test
The significance of the Kaiser-Meyer-Olkin (KMO) measure and Bartlett's test, both at a
level of <0.001, is a crucial indicator of the suitability of the data for conducting factor
analysis. The KMO test assesses the sampling adequacy, indicating whether the data is
appropriate for this statistical technique. A KMO value below 0.5 suggests that the data might
not be suitable, while a value above 0.7 is considered good. In this case, with a significance
level of <0.001, the KMO measure likely exceeds the threshold, indicating that the data is
highly suitable for factor analysis.
Additionally, Bartlett's test evaluates whether the observed variables in the dataset are
correlated, which is a fundamental assumption for factor analysis. A significance level of
<0.001 indicates that there is a significant correlation among the variables, further supporting
the appropriateness of factor analysis. In essence, both tests affirm that the dataset has the
necessary qualities for factor analysis, implying that it is a valid method for uncovering
underlying factors or dimensions within the data, ultimately enhancing the depth of our
research insights.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .814

Bartlett's Test of Sphericity Approx. Chi-Square 441.023

df 15
Sig. <.001
Communalities
The proportion of variance explained by the factors, known as the Extraction value, plays a
crucial role in understanding the relevance of each variable to the study. In our analysis, a
higher Extraction value is desirable, ideally approaching 1, indicating that the variable is
strongly associated with the study's focus.
In our examination of independent variable items, all values exceed 0.5. This threshold is
significant because it signifies that each of these items contributes significantly to the study.
 38

Variables with values surpassing 0.5 are deemed highly relevant to our research,
underscoring their importance in the analysis.
Therefore, the Extraction values provide a quantitative measure of how much each variable
contributes to the study's objectives. Values approaching 1 signify strong relevance, ensuring
that the variables under consideration are pivotal to our research and contribute substantially
to our understanding of the examined phenomenon.

Communalities
Initial Extraction
Believe in positive impact of the startup 1.000 .898
economy
Job creation and employment opportunities. 1.000 .632

Technological innovation and advancement. 1.000 .604

Attraction of investments and capital. 1.000 .666

Enhanced competitiveness of the local region. 1.000 .614

Promotion of entrepreneurship and creativity. 1.000 .618

Extraction Method: Principal Component Analysis.

Total Variance Explained
In the analysis of our questionnaire components and their groupings, the Total Variance
Explained table is a crucial reference. This table allows us to assess the number of groups
derived from the questionnaire items. By examining the Initial Eigenvalues, we can identify
factors. Specifically, if an Initial Eigenvalue is equal to or greater than 1, it is considered a
significant factor.
In our study, focusing on the independent variables, we originally had 6 variables to consider.
However, during our analysis, we observed that 2 of these variables had Initial Eigenvalues
exceeding 1. Consequently, we identified these 2 variables as significant factors, collectively
explaining an impressive 87.7% of the entire model.
Furthermore, the benchmark for Cumulative Squared Loadings typically stands at 60%. In
our case, we surpassed this benchmark with a remarkable 87.7%. This outcome demonstrates
that our chosen factors contribute substantially to our model's explanatory power, exceeding
the expected benchmark by a wide margin. These findings underscore the robustness and
effectiveness of our factor analysis in uncovering meaningful patterns and relationships
within the data, providing valuable insights into the impact of startups on the local economy.
 39

Total Variance Explained

Extraction Sums of Rotation Sums of Squared
Initial Eigenvalues Squared Loadings Loadings
% of % of % of
Compo Varianc Cumulat Varianc Cumulat Varianc Cumulat
nent Total e ive % Total e ive % Total e ive %
1 3.006 50.104 50.104 3.006 50.104 50.104 2.950 49.166 49.166
2 1.025 17.088 67.191 1.025 17.088 67.191 1.082 18.026 67.191
3 .620 10.329 77.520
4 .526 8.769 86.289
5 .469 7.815 94.104
6 .354 5.896 100.000
Extraction Method: Principal Component Analysis.

Component Matrixa
Component
1 2
Believe in positive impact of the startup -.300 .899
economy
Job creation and employment opportunities. .649 .460

Technological innovation and advancement. .777 .000

Attraction of investments and capital. .816 .008

Enhanced competitiveness of the local region. .783 .026

Promotion of entrepreneurship and creativity. .783 -.071

Extraction Method: Principal Component Analysis.

a. 2 components extracted.

Component Matrix
A component matrix in the context of our research on the impact of startups on the local
economy is a crucial output of factor analysis. It shows the relationships between the original
variables (questions or items in our questionnaire) and the extracted factors or components.
Each value in the component matrix represents the correlation or loading of a specific
variable on a particular factor.
 40

The component matrix is vital in our research because it helps us identify which variables are
strongly associated with the factors that have emerged from our analysis. This, in turn, aids in
interpreting the underlying dimensions or constructs related to the impact of startups on the
local economy. By scrutinizing the component matrix, we can discern which questions or
items are most relevant to each factor, allowing us to draw meaningful conclusions about the
specific aspects of startup influence on the local economy that are most significant based on
our data-driven analysis.
Rotated Component Matrixa
Component
1 2
Believe in positive impact of the startup -.144 .936
economy
Job creation and employment opportunities. .717 .344

Technological innovation and advancement. .766 -.131

Attraction of investments and capital. .806 -.129

Enhanced competitiveness of the local region. .776 -.107

Promotion of entrepreneurship and creativity. .760 -.202

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.a
a. Rotation converged in 3 iterations.
Rotated Component Matrix
The rotated component matrix is a crucial output of factor analysis. It represents a
transformed version of the component matrix, where the extracted factors are orthogonal
(uncorrelated) or have minimized correlations. In essence, rotation simplifies the
interpretation of factors by maximizing the loading of each variable on a single factor,
making the underlying structure more coherent.
In the context of our research on the impact of startups on the local economy, the rotated
component matrix is instrumental in identifying distinct dimensions or factors that explain
variations in our data. These factors might represent different aspects of startup influence,
such as job creation, innovation, or investment. By applying rotation, we ensure that these
factors are uncorrelated, allowing for a clearer understanding of their individual contributions
to the local economy. This process enhances the interpretability of our findings and helps us
draw meaningful conclusions about how various startup-related factors affect economic
outcomes. In essence, the rotated component matrix aids in simplifying the complex
 41

relationships between startup activities and their impact on the local economy, making our
research results more actionable and insightful.
Component Transformation Matrix
Component 1 2
1 .986 -.169
2 .169 .986
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.

Component Transformation Matrix

The component transformation matrix helps us distill complex data into meaningful
dimensions, shedding light on the relationships between different variables and factors. This
information is crucial for a more nuanced understanding of how startups influence the local
economy, as it allows us to pinpoint the specific variables that have the most significant
impact within our research framework.
 42

6. LIMITATION AND FUTURE SCOPE

6.1 LIMITATIONS
1. Limited Sample Size: The survey's restricted participant pool may hinder the
generalizability of findings due to its relatively small size.
2. Limited Geographical Coverage: Since the survey was exclusively conducted in two
locations, it may not fully represent the perspectives of individuals from different regions or
nations.
3. Limited Time Frame: The survey's temporal constraints may render its findings less
reflective of current sentiments and ideas within the startup ecosystem.
4. Subjective Responses: Responses collected during the survey may carry subjectivity,
potentially deviating from participants' genuine beliefs and viewpoints.
5. Lack of Diversity: The survey's focus on a specific group, such as a particular age range or
gender, may not accurately capture the broader spectrum of opinions within a more diverse
community.
6. Scope of Research: The research might not have comprehensively explored all significant
aspects related to the impact of startups on the local economy.
7. Incomplete Data: The validity of survey results could be compromised if essential
information is missing or if data is incomplete, potentially leading to gaps in the research
findings.

6.2 FUTURE SCOPE

1. Longitudinal Studies: Future research can benefit from conducting longitudinal studies to
track changes in the impact of startups on the local economy over time. This would
provide insights into trends and evolving dynamics.
2. Cross-Cultural Analysis: Expanding the research to include multiple regions or countries
would allow for cross-cultural comparisons, revealing how the impact of startups varies
across diverse contexts.
3. Sector-Specific Analysis: Exploring the impact of startups within specific sectors, such as
technology, healthcare, or manufacturing, can provide targeted insights into economic
effects within particular industries.
4. Qualitative Research: Complementing quantitative findings with qualitative research,
such as in-depth interviews or case studies, can offer a richer understanding of the
nuances involved in the startup-local economy relationship.

6.3 MANAGERIAL IMPLICATIONS

1. Policy Formulation: Policymakers can use the research findings to tailor policies that
foster a conducive environment for startups, thereby enhancing job creation, innovation,
and economic competitiveness.
2. Investment Strategy: Investors and venture capitalists can leverage insights to make
informed decisions about supporting startups in sectors with the highest potential for
economic impact.
 43

3. Education and Training: Educational institutions can develop programs that nurture
entrepreneurial skills, aligning curricula with the needs of the local startup ecosystem.
4. Incubators and Accelerators: Organizations supporting startups can refine their programs
based on research findings, focusing on areas with the greatest potential for economic
growth.
5. Community Engagement: Local communities can use the research to understand the role
of startups in their economy, encouraging collaboration and support for these ventures.
6. Risk Mitigation: Businesses and startups can assess potential risks and opportunities in
light of the research, aiding strategic planning and risk management.
Overall, this research can inform a wide range of stakeholders, guiding their decisions and
actions to maximize the positive impact of startups on the local economy.

6.4 RECOMMENDATIONS
1. Support Ecosystem Development: Foster a conducive ecosystem for startups by providing
access to mentorship, incubators, accelerators, and networking opportunities. Local
governments and organizations should invest in creating a supportive infrastructure.
2. Education and Training: Develop and promote entrepreneurship education programs at
educational institutions to equip aspiring entrepreneurs with essential skills and
knowledge.
3. Access to Funding: Facilitate access to capital for startups through venture capital firms,
angel investors, and government grants. Encourage local financial institutions to offer
startup-friendly lending options.
4. Regulatory Ease: Streamline regulatory processes to make it easier for startups to
navigate legal requirements, reducing administrative burdens and costs.
5. Public-Private Partnerships: Encourage collaboration between startups and established
businesses to promote innovation and create synergistic relationships that benefit both
parties.
6. Infrastructure Development: Invest in infrastructure improvements, such as co-working
spaces, high-speed internet, and technology hubs, to attract and retain startups.
7. Diversity and Inclusion: Promote diversity in the startup ecosystem, ensuring that
opportunities are accessible to individuals from all backgrounds and demographics.
8. Market Access: Support startups in accessing local and international markets by
providing trade promotion assistance and fostering global connections.
9. Data Collection and Analysis: Continuously monitor the impact of startups on the local
economy through data collection and analysis, allowing for evidence-based decision-
making.
10. Sustainability Focus: Encourage startups to incorporate sustainability practices in their
business models, fostering environmentally responsible and socially conscious
entrepreneurship.
 44

11. Local Talent Retention: Implement strategies to retain local talent, preventing a brain
drain to larger cities and ensuring that skilled individuals contribute to the local startup
scene.
12. Community Engagement: Foster a sense of community involvement and pride in the local
startup ecosystem, encouraging citizens to support and patronize local startups.
By implementing these recommendations, communities and governments can create an
environment where startups thrive and continue to have a positive impact on the local
economy, driving job creation, innovation, and economic growth.
 45

7. CONCLUSION
Startups play a pivotal role in shaping and enhancing local economies, with their impact
extending far beyond their immediate business activities. The positive contributions of
startups to local economies are multifaceted, creating a ripple effect that influences various
aspects of economic growth, innovation, and community development.
First and foremost, startups are potent engines of job creation. They inject vitality into the job
market by hiring skilled professionals, often drawing local talent and preventing brain drain
to larger cities. This not only reduces unemployment rates but also improves the standard of
living for residents. Moreover, startups foster an environment of innovation and technological
advancement. They introduce novel ideas, disruptive technologies, and creative solutions to
longstanding problems, making the local economy more competitive on a global scale.
Additionally, the infusion of startup capital and investment can revitalize neighborhoods and
spur infrastructure development. Local governments and communities that actively support
startups often witness improved physical infrastructure, including co-working spaces, high-
speed internet, and technology hubs, which further attract entrepreneurs and fuel economic
growth.
Furthermore, startups stimulate investment, drawing venture capital firms, angel investors,
and private equity into the local ecosystem. These financial injections not only provide
startups with the necessary resources to scale but also stimulate downstream economic
activities, benefiting various sectors.
Startups are also agents of change, championing sustainability and social responsibility.
Many startups incorporate environmentally friendly practices and social initiatives into their
business models, contributing to the well-being of the community and the planet.
Lastly, startups cultivate a sense of entrepreneurship, fostering a culture of risk-taking and
innovation. They inspire the next generation of entrepreneurs, encouraging them to explore
their ideas and contribute to the local ecosystem.
In conclusion, startups are integral to the fabric of local economies. Their positive impacts
extend to job creation, innovation, infrastructure development, investment, and community
well-being. By fostering an environment that supports startups, local economies can harness
their full potential, ensuring sustainable growth and prosperity for years to come.

Word Count: 10,951

 46

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Capital-Impact-Report-Released
 49

SURVEY QUESTIONNAIRE
Dear Participant,
I hope this message finds you well. Thank you for taking the time to participate in our survey,
which aims to explore the fascinating and dynamic world of startups and their influence on
the local economy.
Your insights are invaluable in helping me gain a deeper understanding of this important
topic. Your responses will contribute to my academic research and may lead to valuable
insights for policymakers and local communities.
Please rest assured that all your responses will be kept confidential and used solely for
research purposes. The survey will take approximately seven minutes to complete.
Let's embark on this journey together and shed light on the profound impact startups have
on our local economy.

1. Demographics
- Age:
- Gender:
- Location (City/Region):
- Occupation:

2. Are you currently employed by a startup or have you ever been employed by one?
- Yes
- No

3. How familiar are you with the startup ecosystem in your local area?
- Very Familiar
- Somewhat Familiar
- Not Familiar at All

4. Do you believe startups have a positive impact on the local economy?

- Strongly Agree
- Agree
- Neutral
- Disagree
- Strongly Disagree

Scale Questions on the Impact of Startups on the Local Economy:

Job creation and employment opportunities.

Startups in our local area create new job opportunities.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
I have personally observed an increase in employment opportunities due to the presence of
startups in our community.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
 50

(5) Strongly Agree

The growth of startups in our local economy has a positive impact on overall employment
levels.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
Startups play a significant role in reducing unemployment in our region.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
I believe that startups are a crucial driver of job creation in our local economy.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree

Technological innovation and advancement.

Startups in our local area are drivers of technological innovation.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
I have witnessed technological advancements in our local economy as a result of the
presence of startups.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
The growth of startups in our local economy has a positive impact on technological progress.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
Startups are instrumental in fostering an environment of innovation and technological
advancement in our region.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
 51

(5) Strongly Agree

I believe that startups contribute significantly to pushing the boundaries of technology and
innovation in our local economy.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree

Attraction of investments and capital.

The presence of startups in our local area has led to an increase in overall investments in
the community.

(1) Strongly Decrease

(2) Decrease
(3) No Change
(4) Increase
(5) Strongly Increase
I have observed a rise in government support in our local economy due to the growth of
startups.

(1) Strongly Decrease

(2) Decrease
(3) No Change
(4) Increase
(5) Strongly Increase
Startups play a vital role in attracting external investments and funding to our region.

(1) Strongly Decrease

(2) Decrease
(3) No Change
(4) Increase
(5) Strongly Increase
I believe that the presence of startups has a positive impact on the local economy by
encouraging more investment from various sources.

(1) Strongly Decrease

(2) Decrease
(3) No Change
(4) Increase
(5) Strongly Increase
The local startup ecosystem has become increasingly attractive to investors, leading to a
higher inflow of capital into our economy.

(1) Strongly Decrease

(2) Decrease
(3) No Change
(4) Increase
(5) Strongly Increase

Enhanced competitiveness of the local region.

The presence of startups in our local area has enhanced the overall competitiveness of our
region in the business world.
 52

(1) Strongly Decrease Competitiveness

(2) Decrease Competitiveness
(3) No Change in Competitiveness
(4) Increase Competitiveness
(5) Strongly Increase Competitiveness
I have noticed that the growth of startups has made our local region more attractive to
businesses and entrepreneurs from outside the area.

(1) Strongly Decrease Competitiveness

(2) Decrease Competitiveness
(3) No Change in Competitiveness
(4) Increase Competitiveness
(5) Strongly Increase Competitiveness
Startups have played a crucial role in positioning our local region as a competitive hub for
innovation and entrepreneurship.

(1) Strongly Decrease Competitiveness

(2) Decrease Competitiveness
(3) No Change in Competitiveness
(4) Increase Competitiveness
(5) Strongly Increase Competitiveness
I believe that the presence of startups has improved the ability of our region to attract top
talent, making it more competitive in the talent market.

(1) Strongly Decrease Competitiveness

(2) Decrease Competitiveness
(3) No Change in Competitiveness
(4) Increase Competitiveness
(5) Strongly Increase Competitiveness
The local startup ecosystem has made our region more resilient and adaptable in the face of
economic challenges, enhancing its overall competitiveness.

(1) Strongly Decrease Competitiveness

(2) Decrease Competitiveness
(3) No Change in Competitiveness
(4) Increase Competitiveness
(5) Strongly Increase Competitiveness

Promotion of entrepreneurship and creativity.

Startups in our local area foster a culture of creativity and innovation.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
I have observed that the presence of startups encourages individuals to pursue innovative
ideas and projects within our community.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
 53

(5) Strongly Agree

Startups play a significant role in promoting entrepreneurship and a spirit of innovation in our
local region.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
I believe that startups contribute to a more dynamic and creative atmosphere in our local
economy.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
The local startup ecosystem inspires individuals to think outside the box and explore new,
innovative solutions to local challenges.

(1) Strongly Disagree

(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree

Thank you for participating in this survey! Your feedback is valuable in understanding the
influence of startups on the local economy.