In an article called "The frappuccino effect: How Starbucks branches caffeinate local economies," a recent edition* of widely-read magazine The Economist discusses a new working paper by Quetelet Professor of Social Science and Chair of the Department of Sociology, Mario Small. The paper, which is co-authored by Jinkyong Choi and Jorge Guzman of Columbia Business School, finds that a new Starbucks in an American neighborhood without another coffee shop leads to the creation of between 1.1 and 3.5 new companies a year over the following seven years. What seems to underly the effect is Starbucks' role as a "third space"--somewhere people can gather without a purpose, helping entrepreneurs to form and mobilize social networks. Mario and his co-authors find no effect following the establishment of a new Dunkin Donuts, which typically does not provide much seating.
Next time to head to a cafe, consider taking a seat instead of running off with a to-go order!
Congratulations, Mario!
*The article appears in the July 6th-12th print edition of the The Economist. It appears online under the title “How Starbucks caffeinates local economies.”