Not surprisingly, economic growth is driven by the expansion of small businesses. 1 Entrepreneurs invest in new ventures on a hunch that they are tapping into some unmet demand. 2 Guided by expectations of profits, entrepreneurs experiment with and test new ideas. If they hit the mark, their fledgling businesses grow and prosper. This lesson is important for cities.
Prosperous cities are havens for trade and investment.
The earliest cities were markets for agricultural goods. Cities facilitated economic expansion by providing a mechanism for developing new markets beyond the closed, narrow market of the village or the nearby farmers. 3 Historically, the rise of great civilizations has been predicated on trade. Some cultures, such as the ancient Phoenicians, depended on trade for their livelihood. The rise of Amsterdam and the great cities of Italy was credited in large part to their position as centers for trade and commerce.