We have often framed business climate using the acronym DURT
MACE Enterprising States 2013 - Delore Zimmerman
Enterprising States 2013Getting Down to Small BusinessMid-America Association of Chamber ExecutivesMay 8, 2013
Economic research, strategy & development companythat works with leaders, innovators & entrepreneursto create more competitive communities & companiesDelore Zimmerman
ENTERPRISING STATES PROJECT1. Which state policies have the biggestimpact on creating jobs?2. Are there best practices that states areputting into action to create neweconomic opportunities andprosperity?www.freeenterprise.com/enterprisingstates
Small Business Startups Stalled0%5%10%15%20%25%19821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010U.S. Employment in Firms Five Years Old and YoungerSource: U.S. Small Business Administration, Office of Advocacy, from data provided by theU.S. Census Bureau, Business Dynamics Statistics
Small Business Outlook Low-40-2002040608010012014020032004200420052005200620062007200720082008200920092010201020112011201220122013113-2812-323-119Wells Fargo/Gallup Small Business IndexOwners Ratings of Current Situation and Future ExpectationsWells Fargo/Gallup Quarterly Small Business Index
U.S. Chamber BusinessOutlook Survey 16% of small businesses addedemployees in the past year 82% feel the U.S. economy is headed inthe wrong direction January 2013: 54% expect outlook to getworse over then next year, up from 24%the previous October
Employment by Business Size, U.S. EconomySelf-Employed (1)Stage 1 (2-9)Stage 2 (10-99employees)Stage 3 (100-499)Stage 4 (500+)051015202530354045501995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010NumberofJobsMillionsSource: National Establishment Time Series
Small Business Growth & Vigor Minority-owned businesses Immigrant-owned businesses Women-owned businesses Baby boomers Self-employed & solo entrepreneurs
Energy & All Other Sectors10.1%2.3%Energy Jobs All other Sectors2010-2012
States and Small BusinessAll states have policies and programs toencourage entrepreneurs and support smallbusiness 30% increase in program funding 2012-13 Most states have loosely integratedprograms but some havecomprehensive, policies and programsintended to create “ecosystems” Many states are focusing on high-growthpotential firms with job generating capacity
PoliciesThatProduceEntrepreneurship& InnovationTalent PipelineExports &InternationalTradeBusinessClimateInfrastructureStates Impact Economic Growth & JobCreation in 5 Key Policy Areas
Moratoria on new rules andregulations Fast-track permitting Eliminate rules, regulations andstatutes that are job-killing Impact statements for newlyproposed rules and regulations “One-stop” offices for stategovernmentBusiness Climate: DURT BustingMany states are bringing businessleaders to the table to help withregulatory and policy reforms
Tax credits for:o Investors in startup and expandingbusinesseso Hiring employeeso Businesses in targeted industries, e.g.data centers Regulations tailored for targetedindustries, e.g. financial, energy, andvehiclesBusiness ClimateHighlights
Focus on emerging growth companies, a.k.a.high-growth firms Economic gardening initiatives for expansionstage companies Technology-based economic developmentprograms; “ecosystem” initiatives Investment funding for startups and expansions University-business-government partnerships Business plan competitionsEntrepreneurship & InnovationBig shift towards entrepreneurship and growingexisting businesses.
Top Entrepreneurship & InnovationStates1527443842
Expand access to broadband Target and incentivize specializedinfrastructure and equipment Upgrade ports & airports Establish state infrastructure banks andfunds Encourage Public Private Partnerships(PPP)InfrastructureSoutheastern states upgrading ports to trade withCentral and South America
Programs at colleges and universitiestailored to industry sectors and/or specificcompanies STEM initiatives – secondary andpostsecondary Middle-skill jobs that require less than a four-year degree InternshipsTalent PipelineEconomic development and workforce developmentsystems are becoming more integrated.
Training and support for companies todevelop their export skills and connect toforeign markets. Governors as international businessdiplomats –> door openers and deal closersto attract foreign companiesExports & International TradeSmall businesses are a major target for stateexport programs
Energy industries Reasonable regulations and taxes A pro-growth culture and attitude Strong talent pool and training systems Sound fiscal policy that invests in the basics- Governors providing high-level leadership tobuild local networks and internationalconnectionsTop Performing States
Conclusions After 4 YearsEach state has its own unique economicDNAA state can neither cut nor tax itself intocompetitiveness & prosperityTo simply proclaim an enterprise-friendlyenvironment is no longer adequate. A storymust be backedup by actions.
Using Enterprising StatesGovernor’s roundtable with businessleadersCustomized state reportPresentation at statewide chamber eventsor other business conferences