Building Entrepreneurial Communities


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  • Building Entrepreneurial Communities

    1. 1. Building Entrepreneurial Communities Oklahoma Regional Economic Development Conference June 15, 2007 Craig Schroeder, Sr. Associate
    2. 2. Session Outline: <ul><li>Entrepreneurs and Entrepreneurship </li></ul><ul><li>Making the Case </li></ul><ul><li>Understanding and Targeting E Talent </li></ul><ul><li>Entrepreneurship Development Systems </li></ul><ul><li>Getting Started and Q & A </li></ul>
    3. 3. Entrepreneurs & Entrepreneurship Working Definitions
    4. 4. <ul><li>“ A person who creates and grows a venture .” Jay Kayne, Miami University </li></ul>Entrepreneur
    5. 5. Entrepreneurial Attributes Perceive Opportunities Risk Tolerant Flexible & Resourceful Creative & Innovative Smart & Dynamic Growth Oriented Independent ? ?
    6. 6. <ul><li>“ The process through which ventures are created .” Deb Markley, RUPRI Center for Rural </li></ul><ul><li>Entrepreneurship </li></ul>Entrepreneurship
    7. 7. Entrepreneurship Development <ul><li>Environment that fosters and supports entrepreneurs and entrepreneurship </li></ul><ul><li>through public and private partnerships and practices. </li></ul>
    8. 8. The Many Faces of Entrepreneurs Aspiring Lifestyle Serial Growth Startups
    9. 9. Vanceboro Apparel Owner: Shirley Williams Vanceboro, NC Two-time “victim” of industrial flight Decided owning her own shop was the best bet
    10. 10. Who’s a Business Entrepreneur in Your Region?
    11. 11. Civic Entrepreneur – Haley Kilpatrick
    12. 12. Who’s a Civic Entrepreneur in Your Region?
    13. 13. Rural Context <ul><li>More aspiring entrepreneurs </li></ul><ul><li>Fewer entrepreneurs </li></ul><ul><li>Far fewer growth entrepreneurs </li></ul><ul><li>Far fewer serial entrepreneurs </li></ul>
    14. 14. Challenges for Rural Entrepreneurs <ul><li>Physical & psychological isolation / distance </li></ul><ul><li>Limited access to technology </li></ul><ul><li>Limited sources of funding/resources </li></ul><ul><li>Poor connections to markets </li></ul><ul><li>Limited opportunities for networking </li></ul>
    15. 15. Entrepreneurial Communities <ul><li>It is about an environment that fosters entrepreneurs . </li></ul>
    16. 16. Fairfield, Iowa – pop. 9,600 <ul><li>Recognizes and celebrates entrepreneurs </li></ul><ul><li>Over 20 years: created 3,000 jobs; tripled per capita income; increased charitable giving; HQ for 75 companies </li></ul>
    17. 17. Are There Entrepreneurial Communities in Your Region?
    18. 18. Making the Case The Value of Taking an Entrepreneurial Approach
    19. 19. Growing Body of Research
    20. 20. Entrepreneurship and Economic Development <ul><li>Promote entrepreneurship as the bedrock for economic development </li></ul><ul><li>Creating an entrepreneur-friendly community makes it easier to attract and retain industry and other businesses </li></ul><ul><li>Entrepreneur-friendly refers to both the business and community environment </li></ul>Recruitment Retention Entrepreneurship
    21. 21. Evidence - Data <ul><ul><li>Positive net job growth from small businesses vs. large – 2002-2003, US businesses with <500 employees gained 1.990 M jobs while businesses with >500 employees lost 995K </li></ul></ul><ul><ul><li>Jobs come from expanding businesses (55%), new businesses (44%), and business re-locations (1%) (SBA, 2003) </li></ul></ul><ul><ul><ul><ul><ul><li>Increase in self-employment – 5.7 % in US 2002-2003 biggest increase ever (US Dept. of Commerce) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Importance of microenterprise (<5 employees) – 22.5 million establishments in US (AEO, 2006) </li></ul></ul></ul></ul></ul>
    22. 22. Evidence - Historical Trends <ul><li>Small entrepreneurial growth companies account for: </li></ul><ul><ul><li>5-15% of all US businesses </li></ul></ul><ul><ul><li>2/3 of net new jobs in the 1990s (60-80% in 2003 – SBA) </li></ul></ul><ul><ul><li>2/3 of inventions since WWII </li></ul></ul><ul><ul><li>95% of radical innovations since WWII </li></ul></ul><ul><li>Of the Inc 500 “best” entrepreneurs: </li></ul><ul><ul><li>69% started with <$50,000 </li></ul></ul><ul><ul><li>50% are non-tech related </li></ul></ul><ul><ul><li>56% started at home </li></ul></ul><ul><ul><li>Only 18% used venture capital </li></ul></ul><ul><li>National Commission on Entrepreneurship , A Candidate’s Guide, 2002, . </li></ul>
    23. 23. Defining Your “Vision” <ul><li>What do I hope to accomplish through entrepreneurial development and how will my approach help me get there? </li></ul>
    24. 24. Two Examples of Vision <ul><li>Entrepreneurial Development </li></ul><ul><li>Nurture local firms </li></ul><ul><li>Stimulate others to “take the leap” </li></ul><ul><li>Create jobs </li></ul><ul><li>Generate and reinvest wealth </li></ul><ul><li>Healthy community </li></ul><ul><li>Industrial Recruitment </li></ul><ul><li>Attract new plant </li></ul><ul><li>from outside </li></ul><ul><li>Create jobs </li></ul><ul><li>New residents </li></ul><ul><li>New taxes </li></ul><ul><li>Healthy </li></ul><ul><li>community </li></ul>
    25. 25. Recruit Validators <ul><li>You can’t do it alone! </li></ul><ul><ul><li>It takes a sustained community effort </li></ul></ul><ul><ul><li>Must “recruit” others who support your vision </li></ul></ul><ul><ul><li>Target 1: Successful Entrepreneurs </li></ul></ul><ul><ul><li>Target 2: Other Local Champions </li></ul></ul><ul><ul><li>Target 3: Entrepreneurial Youth </li></ul></ul>
    26. 26. Hot Buttons -- Vision <ul><li>Why Should People Care About E-ship in Your Region? </li></ul><ul><ul><li>Wealth Creation (and Reinvestment) </li></ul></ul><ul><ul><li>Job Creation </li></ul></ul><ul><ul><li>Citizen Empowerment </li></ul></ul><ul><ul><li>Youth Attraction </li></ul></ul><ul><ul><li>Civic Capacity-Building </li></ul></ul>
    27. 27. Be Creative! <ul><li>Create your own “ribbon-cutting” opportunities </li></ul><ul><li>Give politicians what they want </li></ul><ul><ul><li>Access to Publicity, Information, </li></ul></ul><ul><ul><li>Time, Voters </li></ul></ul><ul><li>Provide </li></ul><ul><ul><li>Information on Local Economy </li></ul></ul><ul><ul><li>Access to Entrepreneurs </li></ul></ul><ul><ul><li>Success Stories and Field Trips </li></ul></ul>
    28. 28. Understanding & Targeting E Talent Every community has it--- e -talent
    29. 29. Understanding Entrepreneurial Talent Understanding the e-talent in your region can lead to more strategic shaping of your economic development program .
    30. 30. Entrepreneurial Talent Growth Entrepreneurs Entrepreneurs EGCs – Serial Es Potential Entrepreneurs Aspiring Dreamers Startups Youth Survival Restarts Lifestyle Transitional
    31. 31. Entrepreneurial Talent & Development Opportunity Large Immediate High-Growth Potentially Large Short-Term Growth-Oriented Modest Medium-Term Start-Ups Wide Range Long-Term Aspiring Scale of Impact Time to Impact E Talent
    32. 32. Common Needs <ul><li>A supportive environment </li></ul><ul><li>Freedom and encouragement to innovate </li></ul><ul><li>Technical assistance that meets their needs </li></ul><ul><li>Entrepreneurial networks </li></ul><ul><li>Various forms of capital for different types of entrepreneurs </li></ul>
    33. 33. Youth Engagement and Entrepreneurship Be sure to include your young entrepreneurs!
    34. 34. Critical Issues & Youth Impact <ul><li>Historical Youth Out-Migration Trends </li></ul><ul><li>Loss of Farms and Small Businesses </li></ul><ul><li>Erosion of Leadership Capacity </li></ul><ul><li>Generational Wealth Transfer </li></ul>
    35. 36. Why Target Youth “E” Talent? <ul><li>Youth currently in your region may well represent your greatest resource for economic growth and community sustainability. </li></ul><ul><li>The challenge is to: engage these youth, </li></ul><ul><li>equip them with the skills and knowledge to be successful, </li></ul><ul><li>and then support them and their enterprising ventures. </li></ul>
    36. 37. Teen Survey Results 49% 49% 48% 47% Picture yourself living in the area in the future? 19% 7% 9% 17% Have a business right now? 51% 43% 41% 47% Interested in owning your own business in the future? 6.2 5.1 5.3 6.6 Rate your community (1-10) Garden County Pop. 2,292 Columbus Pop. 20,971 McCook Pop. 7,994 Cambridge Pop. 1,041 Survey Questions
    37. 38. Youth Engagement System © Community Support of Youth and Their Ideas Entrepreneurial Education & Career Development Youth Involvement & Leadership in Community Engage Equip Support
    38. 39. <ul><li>4-H </li></ul><ul><li>Jr. Achievement </li></ul><ul><li>FFA, FCCLA, DECA, FBLA </li></ul><ul><li>Youth Led Projects </li></ul><ul><li>Community Scholarships </li></ul>Vehicles to Consider
    39. 40. Targeting Entrepreneurs Entrepreneur Expertise
    40. 41. Why Target? <ul><li>Different E talent = different needs </li></ul><ul><li>Limited resources = making strategic decisions about what types of talent to target in your community </li></ul>
    41. 42. What Aspiring E’s Need and Want <ul><li>Clarification: </li></ul><ul><ul><li>Idea </li></ul></ul><ul><ul><li>Feasibility </li></ul></ul><ul><ul><li>How </li></ul></ul><ul><li>Decision: </li></ul><ul><ul><li>Go or No Go </li></ul></ul>
    42. 43. Appropriate Approaches Training Networking Moral Support Business Counseling Micro
    43. 44. What Startups Need and Want <ul><li>Game Plan </li></ul><ul><li>Team </li></ul><ul><li>Some Capital </li></ul><ul><li>Markets </li></ul><ul><li>Management </li></ul>
    44. 45. Appropriate Approaches Facilitation Micro Networking Training Mentors
    45. 46. Key Insight <ul><li>The success rate of startups rises dramatically with strong supportive environments! </li></ul>
    46. 47. What Growth Entrepreneurs Need and Want <ul><li>Customized Assistance </li></ul><ul><li>Higher Order Assistance </li></ul><ul><li>Real Time Assistance </li></ul><ul><li>Perspective </li></ul><ul><li>Peer Support </li></ul>
    47. 48. Appropriate Approaches Networks Capital Incubators Facilitation Peer Groups
    48. 49. What High-Growth Entrepreneurs Need & Want <ul><li>Room to Grow </li></ul><ul><li>Capital </li></ul><ul><li>Workforce </li></ul><ul><li>Infrastructure </li></ul><ul><li>Listening & Responsiveness </li></ul>
    49. 50. Appropriate Approaches ESO Capital Environment Networks
    50. 51. Key Insight <ul><li>Keeping high-growth companies in rural areas is as challenging as helping to create them. </li></ul>
    51. 52. Finding the “Sweet Spot” Entrepreneurial Talent Development Goals Development Capacity The Sweet Spot or Strategic Focus
    52. 53. Infrastructure Elements <ul><li>Move beyond traditional economic development notion of infrastructure </li></ul><ul><ul><li>Sites and buildings </li></ul></ul><ul><ul><li>Roads, utilities, etc </li></ul></ul><ul><li>Think outside the box </li></ul><ul><ul><li>Leadership </li></ul></ul><ul><ul><li>Service providers (public, private, non-profit) </li></ul></ul><ul><ul><li>Educational institutions </li></ul></ul>Demand-Driven Approach
    53. 54. Support Elements <ul><li>Basic </li></ul><ul><li>Advanced </li></ul><ul><li>High Performing </li></ul>
    54. 55. Basic <ul><li>Positive Climate </li></ul><ul><li>Necessary Infrastructure </li></ul><ul><li>Focus on Entrepreneurs </li></ul><ul><li>Business Services </li></ul><ul><li>Networks & Mentors </li></ul>
    55. 56. Advanced <ul><li>Financing </li></ul><ul><li>Market Opportunities </li></ul><ul><li>Entrepreneurial Training </li></ul><ul><li>Youth Entrepreneurship </li></ul><ul><li>Support Organizations </li></ul>
    56. 57. High Performing <ul><li>Enterprise Facilitator or Coach </li></ul><ul><li>Equity Capital </li></ul><ul><li>Entrepreneurship in the Schools </li></ul><ul><li>Entrepreneurial Support Organizations </li></ul>
    57. 58. Rural Culture <ul><li>Entrepreneurship is a creative process. Local culture can enable or limit this process . </li></ul>
    58. 59. Cultural Check: How Do We Treat Our Entrepreneurs? Do we value, encourage and support them? Or do we gossip about and criticize them?
    59. 60. Creating an Entrepreneurial Culture <ul><li>Create climate and culture in which entrepreneurs and entrepreneurship can flourish </li></ul><ul><li>4 organizing principles: </li></ul><ul><ul><li>Community-driven </li></ul></ul><ul><ul><li>Regionally-oriented </li></ul></ul><ul><ul><li>Entrepreneur-focused </li></ul></ul><ul><ul><li>Continuously learning </li></ul></ul>
    60. 61. Tools to Help Your Region Move Ahead… <ul><li>Community Readiness Factors </li></ul><ul><li>How do you know if your region is “ready” for entrepreneurship? </li></ul><ul><li> </li></ul>
    61. 62. Entrepreneurship Development Systems (EDS) It takes a system….
    62. 63. Successful Entrepreneurship Development Systems (EDS) <ul><li>Focus on entrepreneurs </li></ul><ul><li>Build on assets </li></ul><ul><li>Encourage collaboration & take regional approach </li></ul><ul><li>Engage youth, minorities, aging and others who are not usually invited to the table </li></ul><ul><li>Strategically target & respond to entrepreneurs </li></ul><ul><li>Celebrate community and entrepreneurial success!! </li></ul>
    63. 64. Getting Started <ul><li>Is your region ready to focus on entrepreneurship development? </li></ul><ul><li>What kind of culture of support for entrepreneurs exists in your region right now? </li></ul><ul><li>What elements of a support infrastructure do you already have in place that you can build upon? </li></ul>
    64. 65. Q & A Craig Schroeder [email_address]