Policy matchmaking

Locally Authentic Economic Development
Lincoln Bauer,WE Labs and Innovatory
Too often, municipalities view a competitive economic development landscape and believe
and act as if they need to replicate what their competitors are doing.We believe differently.
Cities certainly need to replicate their competitors’ successes, but not their competitors’
unique approaches. Cities should focus municipal economic development efforts on identifying
and then supporting existing, nascent economic ecosystems where they exist within their
own communities. Similarly, cities should look to their communities’ economic histories to
discover—and even imagine—economic opportunities for planning and support.
In Long Beach, Calif., we have looked to our experiences in education, sustainability, and
health care as areas where our city already has existing, nascent economic ecosystems and/
or the city has had significant history.The Port of Long Beach is continuing a significant
history of municipal commitment to sustainability through its Energy Island effort, while WE
Labs is leveraging this commitment through the opening of a green tech incubator.The Long
Beach College Promise is a national example of educational collaboration, and Innovatory
is helping the College Promise coalition to leverage this collaboration to pilot education
technology incubation throughout our city’s educational institutions.To support these efforts
and others, Innovatory is helping the city’s economic development efforts by spearheading the
establishment of a community development corporation and a local angel investment network.
If cities view their economic development efforts as if they are participating in a competitive
marketplace, then a city’s economic opportunity value proposition should include unique
qualities—the things that differentiate a city from other cities as a place for business. By
emphasizing unique economic experiences and the rich and deep workforce qualities these
experiences encompass, cities can more easily set themselves apart from other municipalities.
This focus makes it easier for cities to retain existing talent, as well as attract new talent and
business interests, as specialized labor forces and the mechanisms that support them already
are in place.Additional support is more easily identified and developed.Traditional incentive
and regulatory burden reduction approaches to municipal economic development are not
enough to truly differentiate one city from another, as almost all cities serious about attracting
business activity also offer similar incentives.This approach does not exclude incentive
development and regulatory burden reduction; it merely focuses it.
Traditional municipal economic development competition relies on a more laissez faire
approach combined with tax and regulatory burden reduction. Cities should not be in the
business of picking winners and losers; most economists would argue that a primary focus on
broad incentive development and regulatory burden reduction are safer bets for municipalities
looking to grow their economies.
THE MAYORS CONFERENCE
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Diversifying Entrepreneurial Opportunity
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The primary costs for this approach to municipal economic development vary depending on the
state in which a city finds its existing and nascent industries. Largely, the costs are associated
with time and effort within government dedicated to planning and building collaborations
outside of city hall, like those the City of Long Beach has established with its colleges,
corporations, and ecosystem players like Innovatory and WE Labs. Long Beach benefits from
a thriving, global port that is able to make investments in city-guided areas of focus, such
as sustainability, but its education experience and opportunity were much more hard fought
and are the result of a concerted and conscious effort to form collaborative partnerships.The
question of cost for this approach to economic development is also a question of available
existing and passive assets: what does the city government possess, in terms of talent,
assets, and resources that can be leveraged to spark and support locally authentic economic
development?
lincoln@innovatory.solutions
562-272-5202
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Digital Tools that Put User Experience First as Key to Support
Entrepreneurs
Efrem Bycer, Code for America
Far too many entrepreneurs experience the same pain points when interacting with
government: scattered resources across multiple websites, lack of clarity about the regulatory
requirements that apply to them, and so much uncertainty about the process that they do
not even know what questions to ask.Well-intentioned policy changes to aid entrepreneurs
will fall far short of their promise without improving the experience for entrepreneurs as they
interact with government. Perhaps more frustrating, the entrepreneurs who struggle with these
processes the most often live in the communities in which we’re trying to promote the most
economic activity.
This isn’t a call for policy change. Rather, it’s a call to bring more user-centered, iterative tools
to the points where citizens and government interact.Tools like newly-designed business
portals, such as the City of Long Beach’s BizPort, and web applications for permitting present
a much more positive user experience so that entrepreneurs can navigate the complex process
that is starting their business.These tools don’t changes fees or lower taxes; they just make
current programs and resources more accessible and present entrepreneurs with the order of
operations in which to successfully open their businesses.
As an example, BizPort puts all of the information regarding the government processes
associated with starting and growing a business in one place. It’s built to be accessible on both
desktop computers and mobile phones.While the processes of starting and growing a business
are complex, BizPort breaks them down into simple and accessible components based on the
highest priority pain points that came from user research with entrepreneurs and city staff.
Behind the simple front end are both tools that allow businesses and city staff to interact and
powerful analytics that can help drive further iterations of the tool.
The problems entrepreneurs often describe aren’t overly onerous operations, but unclear
expectations about how best to comply.These complex processes too often require the help of
costly expediters, consultants, attorneys, real estate brokers, and others who know their way
around city hall. In other words, only the businesses who know how to ask and whom to ask
get the help they need, while other entrepreneurs are told to wait in line. Digital tools can help
reduce information asymmetry and be useful for all entrepreneurs—particularly small business
owners from low- and medium-income communities—when they present information in a
more accessible fashion. Restated, we need to democratize the level of resources, services and
information that all businesses should receive.
Additionally, digital tools create feedback loops to better understand where businesses
struggle. For example, through various chat functions, government staff can better understand
the gaps in information on their websites and prioritize new content to address the most
frequently asked questions.This not only provides data for improving the digital front door to
entrepreneurs, but also provides a data-driven pathway to improving the business processes
themselves.
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In general, government staff and elected leadership support the concepts of leveraging digital
tools. Opposition to digital tools for businesses doesn’t materialize in outwardly vocal ways.
Rather, opposition comes in more indirect forms. For example, staff may have become used to
a current process that would be radically changed by the principles of user-centered design
and agile software development.They may be unwilling or uninterested in leveraging the
online tools (e.g., chat function) to engage with entrepreneurs over the web in real time. Staff
at all levels need to be brought into this approach.The switch to agile web applications can’t
just be a top-down mandate to staff. If they’re not bought in, the tools run a higher risk of
becoming part of a stale website that doesn’t serve entrepreneurs or city staff any better than
a completely out-of-date website does.
Building, supporting, and maintaining software costs time, personnel, and money.The cost of
any project will vary based on size and scope.An agile approach, however, supports a more
efficient and effective use of funds in that its iterative and incremental nature allow for quick,
inexpensive changes. Combining agile with user-centered design, the government can quickly
change and update tools to make them more responsive to user needs.Too often, agencies
procure technology from vendors that can’t deliver the technology on time or on budget.Those
tools are built without significant user input or feedback. Beyond being more expensive than
what many agile software developers would provide, these tools don’t address user needs.This
type of solution quickly becomes outdated, creating the need for additional expenditure, all
while not providing a consistent value add to entrepreneurs.
efrem@codeforamerica.org
802-578-7997
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Mercatus—Small Business Storytelling Platform
Tory Campbell, Portland Development Commission
Mercatus is an online platform founded in Portland, Ore. to highlight local entrepreneurs
of color through storytelling and a comprehensive inventory.This storytelling and business
directory platform can be replicated in your city.The website features videos and interviews
with entrepreneurs documenting their experience, resiliency, and stories, presenting a collective
narrative on business ownership at this moment in time in Portland.
Our vision is to Elevate the unique and universal narratives of Portland’s entrepreneurs of color,
and Connect the city and region with local talents, businesses, services and products that come
from the ethnically diverse entrepreneurs in the city.
Elevate—Our storytelling platform celebrates the determination, work, and resiliency that go
into running a business and, at the same time, improves access to and exploration of these
business stories. Mercatus elevates the narratives to a broader audience, raising awareness,
understanding, and corresponding business opportunities.
Connect—Community is the backbone of a good business environment. Knowing and
understanding each other is a key ingredient in a successful community. Hence, our aim is to
connect the city and a wider market with local enclaves of talent, businesses, and goods from
the ethnically diverse entrepreneurs in the city.
We all crave variety, but when we speak of a thriving, inclusive entrepreneurial ecosystem,
what do we see? Too often, discussions of entrepreneurism are considered and presented
in a cultural vacuum or reduced to tokenism and outliers. Most of the time, when we hear
about vibrant bootstrapping entrepreneurs in Portland, Ore., it is through members of the
dominant culture sharing their stories and aspirations in isolation of the “other.” Rarely do we
see the ethnically diverse entrepreneurs in the city sharing their anthems, struggles, and best
practices together.Yet today, more than ever, that is what our city (and our nation) require
to remain competitive and reflect the shifting demographics of a new, emerging tapestry of
entrepreneurs.
Primary opponents will be those who say there are already enough local vehicles aimed at
increasing marketing visibility for business owners of all stripes. Secondary opponents may
be those who consider an extra effort to highlight entrepreneurs of color as a form of reverse
racism. However, the vast disparity in investment, awareness, and success that still exists
between entrepreneurs of color and those of the dominant culture cannot be ignored.We are
not yet living in a world where true movement toward equality can be accomplished only by
highlighting sameness over difference.To simply say that our city is pro-small business and
make no mention of unique experiences of struggle, resilience, and success along lines of race
and ethnicity fails to acknowledge how much farther entrepreneurs of color must go to catch
up with their white counterparts.
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We can gladly walk you through the approaches and methods that created success for us with
this project.
Coordinated Outreach: $40,000–$50,000
The primary cost is the time needed for outreach to uncover the needs of small business
owners in focus groups, surveys, and follow-up, and then to capture their stories and build out
the business directory through face-to-face connection with business owners throughout your
city.
Technology: $400 annually
Website development can be cost effective through the use of a Squarespace template and
Member FindMe plugin that allows for personalized business profiles.
www.mercatuspdx.com
campbellt@pdc.us
503-823-3231
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Support for Minority Businesses
Gary L. Cunningham, Meda
Recommendations:
1. Create tax incentives to promote capital investments in minority businesses.
2. Create public/private/philanthropic partnerships to realign existing minority business support
systems to ensure a high standard of service and results and reduce duplication of services
along the business life cycle for minority businesses.The result will be creation of an ecosystem
for minority businesses to thrive.These partnerships will help create one front door support
system of intake, trusted advice/mentorship, peer learning education, and market access.
3. Ensure entrepreneurship pathways are a part of career and technical education for high
school students, and include entrepreneurial skill development in K-12 education.
This approach would significantly increase success for minority businesses, thereby increasing
employment and the tax base of cities. Evidence also shows that growing successful minority
businesses reduces crime.
The U.S. Business Census indicates that the number of minority businesses is growing at a
faster rate than are nonminority businesses across the United States.These data show that
minority women-owned businesses are increasing in number faster than any other group in
business. However, sales and revenue disparities between minority and nonminority businesses
are significant. In fact, many of these growing minority businesses are small and do not have
employees.
If these trends continue, it could have a devastating impact on the economic viability of cities
across the country.Without growing the sales and revenue of minority businesses, cities will
see an increase in areas of concentrated poverty and a deterioration of the business tax base.
In fact, minority businesses hire minority employees at a much higher rate than non-minority
firms do. Given the racial demographic shifts in the United States, growing minority businesses
(both new and existing) needs to be a current and long-term priority for cities that are going to
compete for talent, commerce, and viability.
Critics would argue that creating a tax incentive for capital for minority businesses and
redesigning the current structure of business support services would create an unfair
advantage for these firms in the marketplace.They also would suggest that giving women and
minorities “a leg up” would create barriers for majority businesses.A zero sum argument, if
you will.
Others in the existing minority business development system who are benefiting from
the current arrangement also will object to changes in the system that don’t benefit their
organizations. Issues of racialized politics may be a consequence of advocating for change in
the current arrangements.
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This approach would realign current financial cost within the system rather than add new cost.
There may be a need to invest in technology and other systems to create the one-stop shop.
Some of these costs could be shared by the public/private/philanthropic partnership. Increasing
capital and market access may also have some short-term cost, but will have significant upside
benefits by creating a pipeline of minority businesses of scale.
There is also the cost of time. Creating tax incentives, partnerships, and entrepreneurial
education in K–12 public schools is time-consuming, as is relational work to ensure
effective implementation and traction. It is recommended to focus on a few high-impact
partnership possibilities first, spending the time necessary to create a high-trust environment.
Implementing a pilot project with a local public school before scaling up a major solution also
may be helpful.
gcunningham@meda.net
612-978-8200
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Connecting City and Regional Entrepreneurial
Ecosystems Online
Austin Dean, Start Garden
Entrepreneurs have more resources available to them than ever before.As a result,
new companies are having difficulty navigating the maze of support organizations
and programs that were designed to improve access.What is lacking is an online tool
that showcases available resources and highlights for entrepreneurs the programs that
produce results.The tool needs to connect the entrepreneurial ecosystem online, derive
insights from the numerous interactions, and suggest to entrepreneurs the best resources
for their current needs. It should harness the collective brain power of the community and
be a fully autonomous mechanism for online engagement.With such a tool, we could
respond faster to issues at the grassroots level and deploy resources to entrepreneurs
more effectively.
An entrepreneurial ecosystem is vibrant, interconnected, and amazingly complex.Trying to
measure change, both positive and negative, requires a collective impact model involving
myriad organizations and institutions. Running in the background of this complex process
must be a technology platform that maintains transparency, accountability, and cohesion
between all stakeholders. Shared measurement and quantifiable outcomes are the
ultimate end goals, and must be tracked using a platform.
Implementation of such a platform is underway in Grand Rapids, Mich., and in Detroit
(called Collective Metrics).With the help of city economic development offices, local
foundations, venture funds, and other institutions, the site is actively tracking programs
and entrepreneurs across the state (more coming online every day).The Michigan
Economic Development Foundation ($40 million per year operating budget) seeks to
expand the platform into all regional hubs throughout Michigan in 2017.Additional trials
are underway in New York, N.Y., and Memphis,Tenn.
Opposition to such a platform stems from a shake-up of the status quo. Existing customer
relationship management tools focus on tracking internal operations for a single
entity, as opposed to holistically measuring the connections and interactions occurring
between companies/organizations. Conversely, popular social networks such as LinkedIn
are much too broad and do not focus on delivering performance data or place-based
recommendations.The recommended site, on the other hand, is inherently transparent
and accessible, and can be perceived as a threat to underperforming entities and
programs.
The predominant cost of implementation is time and social capital. Securing “buy-in”
from local institutions can be time intensive and requires a backbone entity to lead
discussions and coordinate implementation.Typically, directives from funding sources
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(e.g., foundations) improve participation. Roll-out and project implementation can
range from three to eighteen months.
The Collective Metrics platform (being implemented in Michigan) charges a fee per
organization; costs range between $75–$400/month.At times, state agencies have
sought to cover these fees by paying an annual membership.The Collective Metrics
team helps manage project implementation at each site.
Austin@startgarden.com
419-265-3189
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Welcome Immigrants
Emily Fetsch, Ewing Marion Kauffman Foundation
The Kauffman Foundation has long studied the impact of immigrant entrepreneurs. Immigrants
are more than twice as likely as native-born Americans to be entrepreneurs.
While the federal government dominates much of immigration policy, there are local and state-
level approaches to encourage immigrant entrepreneurship. For example,Welcoming America,
an organization comprising a network of 100 communities, encourages cities and regions to
recognize and enhance immigrant contributions.Welcoming America has a variety of resources
to bolster immigrant entrepreneurship. By lifting barriers facing immigrant entrepreneurs,
policymakers often are addressing barriers faced by other entrepreneurs.To learn more, check
out their website at www.welcomingamerica.org.
For policymakers, a politically charged topic like immigration can bring strong opinions from
both supporters and opponents of immigration reform. However, when discussing the impact of
immigrant entrepreneurship in particular, there is broader bipartisan support.
Other entrepreneurs are also proponents of addressing the barriers facing immigrant
entrepreneurs. Startups often consist of founding teams. If you have a gap in your ecosystem
where you aren’t helping immigrant entrepreneurs, you could be hurting native-born
entrepreneurs.When a startup team consists of an immigrant founder, the rest of the team,
even if they are native-born Americans, are affected by the barriers.
While there exists some contentious opposition, policymakers and think tanks from many
ideological viewpoints understand the economic dynamism immigrants can bring to local
communities, as well as to the entire nation. In addition, city-level approaches to support
immigrant entrepreneurs and more fully welcome all immigrants tend to be less politically
contentious than national-level activity.
The primary cost is the time and capacity to build relationships with the immigrant community
in the area. For some city officials, these relationships are already underway, with or without
a focus on entrepreneurship.As policymakers work to develop and strengthen relationships
with the immigrant community, they should be sure to learn about the specific needs of the
immigrant entrepreneur community.
efetsch@kauffman.org
816-932-1265
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The Entrepreneurial Ecosystem Playbook:
What Do Mayors Want?
Victor Hwang, Ewing Marion Kauffman Foundation
The purpose of the Entrepreneurial Ecosystem Playbook is to provide an actionable set of
principles, case studies, research, and data that can help all ecosystem builders support
and encourage entrepreneurial activity. Ecosystem builders include mayors, city managers,
entrepreneurs, entrepreneurial support organizations, investors, and community institutions;
thus, the playbook must reflect each ecosystem builder’s different needs and unique
contributions.
The question for you, Mayor, is what do you want from your entrepreneurial ecosystem and
what can you give your entrepreneurial ecosystem?
Below are a few examples of how, as a mayor, one might contribute to the entrepreneurial
ecosystem:
• Convene the ecosystem builders with entrepreneurs.
• Allow city departments to partner with entrepreneurs to innovate city services and
provide proof of concept to startups.
• Leverage city assets like land and public spaces to foster entrepreneurial activity.
Listed here are several examples of what a mayor could expect to get out of a healthy
entrepreneurial ecosystem:
• Job growth through an increase in young firms.
• Economic resiliency through entrepreneurial diversity.
• Equitable economic growth through a more representative entrepreneurial community.
The cost of your participation in providing content for the Kauffman’s Playbook on
entrepreneurial ecosystem is some—but not much—time. However, it does require that you
remain mindful of your interactions with entrepreneurs—their triumphs and frustrations—to
report back to the Kauffman Foundation.
vhwang@kauffman.org
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Resist Offering Tax Incentives for Big Businesses
Chris Jackson, Ewing Marion Kauffman Foundation
Policymakers spend hundreds of millions of dollars each year in attempts to lure existing
businesses to build new factories or headquarters in their cities, states, or regions.When these
deals are made, policymakers hold press conferences and proclaim the inevitable boon of
job creation and wealth that hosting these companies will bring. However, the vast majority
of these incentives are aimed at older and larger firms and don’t come close to fulfilling
the expectation of net new jobs.As well, these kinds of deals are overwhelmingly aimed at
larger companies, and not at the entrepreneurs that drive net new job growth, innovation,
and economic dynamism. Mayors, as recognized public figures in their communities, have the
power and clout to direct more targeted and local economic development strategies that can
fuel sustainable job growth. Mayors can act as champions and role models for others looking
to minimize or eliminate the use of these fiscal incentives.
These kinds of economic incentives, designed to lure existing companies to relocate within
new boundaries, are staggeringly common; one survey computed that 95 percent of U.S.
municipalities use fiscal incentives to attract firms.Across the United States, states and
municipalities spend $70 billion on this kind of economic development strategy.Yet, the
benefits fail to add up.Analysis of Kansas and Missouri efforts to attract firms to relocate
across state lines found a gain of only 414 jobs (to Kansas) at a cost of $340,000 per job.As
well, this strategy can snowball into a sort of arms race, where cities and states look at their
neighbors and feel the need to keep up with growing spending just to maintain the companies
and jobs that are located there.
One of the biggest pieces of opposition to refusing to use funds to incentivize firms to relocate
is the rejection of the status quo. States and cities throughout the country have used such
deals for decades. Choosing not to offer incentives to big companies to relocate removes a key
tool currently used in economic development, even if that tool struggles to justify its expense.
Another source of opposition comes from the arms race aspect of tax incentives. If one state or
city chooses to not offer incentives, but their neighbors continue to, cities and states fear (not
without merit) that firms located within their borders will take the other state’s or city’s money
and leave.The firms themselves also represent a group that will oppose an effort to reduce or
eliminate the tax incentives from which they directly benefit. Finally, tax incentives deals give
city and state leaders an opportunity to publicly present an accomplishment to constituents. It
may be difficult to remove that kind of spotlighted occasion.
Financially, choosing not to offer existing firms relocation tax incentives will initially save
money. But the major costs of reducing or eliminating tax incentives as an economic
development strategy fall on the reputation of city and state leaders. Choosing not to offer
these incentives, especially without an agreement with others also not to offer them, is a
brave effort, and puts significant pressure on leaders to succeed and communicate community
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growth and success in other areas.Another cost is figuring out how to devote their energy to
other issues that actually will move the needle.The Kauffman Foundation has studied where
cities and states can focus their energies to create the kinds of entrepreneurial ecosystems that
can sustain the growth that often is dreamed about with these incentive deals.
cjackson@kauffman.org
816-932-1153
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Incentivize Immigration in Cities
Joda Thongnopnua, Metro Ideas Project
The Metro Ideas Project recommends that cities adopt a robust series of services and
accommodations for immigrant communities and newly naturalized citizens.As the Kauffman
Foundation has noted , immigrants are almost twice as likely as are native-born Americans to
start businesses and accounted for over a quarter of new entrepreneurs in 2014.
Cities should create formal institutions and foster partnerships that provide key services
(e.g., offering informational assistance and grants/loans for the naturalization process and
translation assistance for other government agencies, and serving as intermediary between
nonprofit service providers) and incentives to attract immigrants (e.g., municipal ID programs,
refugee resettlement programs, immigrant ‘Welcome Weeks’ and diversity festivals, ordinances
to prevent immigration services fraud).
By embracing immigrant communities, cities are positioned to grow their economies and spur
job creation among a highly entrepreneurial community.
Several economists have found that immigrants are a positive force in the national economy,
boosting GDP growth and making up 28 percent of Main Street small business owners. In fact,
between 2000 and 2013, immigrants accounted for all net Main Street business growth and
48 percent of overall growth nationally.These businesses—small shops and service providers
that act as the foundation for many neighborhoods across the country—are often critical in
fostering a vibrant and economically prosperous city.
Cities like Nashville, which had the fastestgrowing immigrant population of any American
city in 2012 and is No. 4 in job growth nationwide, is a key example in demonstrating why
incentivizing immigration and promoting immigrant success is good for everyone.
Much of the opposition to programs like these are from antiimmigration activists who oppose
increased immigration nationally. Many argue that immigrants are a major source of crime
and violence in the United States, despite newcomers to the country being less likely than
the native population to commit violent crimes or end up in prison. Opponents occasionally
describe Offices of Immigrant Affairs/Offices of New Americans as ‘sanctuary policies,’
claiming they are inconsistent with federal law and contribute to violent crime.While it’s true
that certain ordinances that limit cooperation between local law enforcement and federal
immigration authorities are controversial (e.g., San Francisco, Miami, Denver, etc.), other
services that cities can provide are far less contentious.
Furthermore, the economic benefits of immigrant communities seem to far outweigh any
competition with nativeborn Americans. In fact, contrary to what’s heard frequently on talk
radio and cable news, there is little evidence that there is a statistically significant correlation
between immigration and unemployment.This is partly because immigrants and nativeborn
Americans rarely compete for the same jobs, according to the Urban Institute.
Because of the ideological polarization, there is likely to be significant opposition to any effort
to incentivize immigration. However, cities are likely to weather that opposition more effectively
than rural or suburban areas.
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The primary cost of establishing an Office of Immigrant Affairs or New Americans is in staffing
and time. However, the Metro Ideas Project recommends scaling the office over time, perhaps
within an existing agency, and increasing the size of the office year over year as needs grow
and budgets accommodate.
Nashville’s Office of New Americans is largely supported by unpaid panels of volunteers,
community leaders, and nonprofit service providers. Currently, it is staffed by the Director of
Community Inclusion within the Office of Neighborhoodsand Community Engagement.This is
a worthwhile model to consider if staffing a fully funded office is not feasible in the short term.
Using the Mayor’s Office’s ability to bring funding partners to the table, philanthropic funding
may be another viable alternative to public funding for the programs and services this office
may provide.
joda@metroideas.org
4232983676
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Integrating Light Industry Zones into Mixed-Use Urban Sectors;
Reducing Restrictions on Light Industry Zones
Dr. Carolyn Smith Keller, Keene State College
A boom in craft industries, including beer, distilling, wine-making, and coffee roasting, is
sweeping the country.These crafters need spaces where they can produce and sell their
products at the same time.Alternatively, they need spaces where similar artists, chefs, and local
entrepreneurs can highlight and cross-promote each other’s products. Direct or near-direct
distribution of products produce the highest margins for craft entrepreneurs. Furthermore,
cross-promotion helps build up neighborhoods and generates a geographically centered, built-
in networking and support opportunity for entrepreneurs in a rising-tide manner. One scholar
argues that mixed-use urban development, “can create high-wage, low-barrier-to-entry jobs,
diversify urban economies… and provide unique retail experiences and a local sense of place”
(Cotter 2012:5).
Scholars and professional organizations, such as the National Association of Industrial and
Office Properties:The Commercial Real Estate Development Association, support these policies,
especially in areas that have historically relocated manufacturing to the outskirts of cities.
Atlanta is an example of a city that has introduced this policy with significant success.
Introducing light industry into mixed-use spaces requires space. Some city blocks are physically
too small to meet the needs of crafters. Other towns have switched from so-called use-based
code systems to form-based code systems. Generally, opponents to these types of reform are
those who are already in the game and feel vulnerable. Residents may oppose new additional
industry coming in. Furthermore, already established businesses may have to make changes
that they view as costly and unnecessary.
The predominant cost of reform of these regulations is time. City officials and attorneys already
are stretched thin.Adding more in the form of a major zoning change takes organization and
coordination. Furthermore, determining which geographic areas would most benefit from this
type of development requires data collection and input from a variety of constituents.These
models are most successfully implemented when established and potential business owners
work together with the city.A less time-consuming and cost-efficient solution is to reduce
restrictions on light industry zones to allow craft establishments to produce and sell in the
same place. For example, the major growth in the Portland, Maine, craft beer industry is directly
correlated to a legislative change that allowed for taproom sales in 2011. Since that time, the
number of breweries and brew pubs has tripled.
ckeller@keene.edu
(603)358-2364
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Better Data for Decision Making
Julia Lane and Neil Kleiman,Center for Urban Science and Progress,NewYork University
Cities generate massive amounts of data that could be used to support entrepreneurs by
improving services, reducing costs, and minimizing duplication.The challenge is that the data
tsunami is outpacing the technical and workforce capacity of cities to make use of it. Building
the necessary data infrastructure by and for local government, while no more glamorous than
installing water pipes and building roads, is just as necessary. It involves building sophisticated
systems that lower the cost of data acquisition, protection, analysis, and dissemination. It also
involves building a workforce of agency officials that understands basic data management
tools, statistics, and data science.There is a potential to work with universities to develop
such an infrastructure, but any relationship must have a clear value proposition for both local
government and universities, be long term in nature, and be built on trust.
We recommend building a secure city data facility that would manage all local data collection
and analysis; provide a safe environment for city staff and researchers to collaborate; align
data from multiple levels of government (municipal, county, state and federal); and customize
data training courses and modules for local officials.
Universities increasingly are motivated to work with local officials to provide more grounded
research opportunities for scholars and students.And, institutions of higher learning can
greatly assist local government, as they are grant magnets, pulling in significant funds for
research projects that cities are not well-positioned to draw down. In addition, universities
have a teaching mission, which could be helpful in training city agency staff.
At the city level, mayors and city managers increasingly turn to new technology tools and
approaches to accelerate policy improvements. Cities have created a new job title, “chief data
officer,” built dashboards, and initiated predictive analytic and smart sensor projects in the
name of better efficiency, accountability, and even improved community engagement.
There are not opponents per se in establishing robust city/university partnerships, but certainly
many challenges.At the top of the list are “transaction costs.”The identification of an
appropriate university partner—whether a particular school, scholar, or research center—can
take an inordinate amount of time and energy. It is difficult to establish trusted partnerships
with high-quality researchers; most university partnerships are episodic—often project-
based efforts that end once the research is complete. Misalignment of incentives also is a
significant barrier. University scholars are motivated by research that takes years and is aimed
at peer-reviewed journals, while cities work on quick timelines focused on concrete service
improvements for citizens.There are many other challenges, as well. It is difficult to get funding
for infrastructure. Data quality is often mixed. Staff lack even basic skills.
The cost involved can be substantial, including time, resources, and training. It often makes
sense to begin a partnership through short-term pilots that demonstrate the value of a
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data facility—in terms of improving services, reducing costs, and minimizing waste. It also
is possible to use foundation grants and state and federal awards to offset the costs of
establishing a partnership that then can lead to a fully supported data facility.Additionally,
there are cost-sharing models with other, larger regional universities that can support the costs
of data infrastructure in smaller locales.
Julia.lane@nyu.edu
646-208-4990
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Creating Inclusive Entrepreneurship Support Organizations
Alex Krause, Ewing Marion Kauffman Foundation
According to a study by ICIC, participation by women and people of color in high-tech
incubators and accelerators is 20 percent and 23 percent, respectively. Some reasons for
why entrepreneurial support organization representation lacks women entrepreneurs and
entrepreneurs of color include implicit biases and the impact of organizational talent and
culture on their served-entrepreneur diversity.
Some factors that limit the participation of women and people of color in entrepreneurship
are the same things limiting their representation in entrepreneurship support programs. Many
challenges prevent women and people of color from entering entrepreneurship: mentorship,
access to finance, networks, cognitive biases, and family barriers. Because they are not starting
businesses at the same rate as their white, male counterparts are, they also are not joining
entrepreneurship support programs at the same rate.This is a serious issue for economic
development in cities.
Entrepreneurship support organizations have been proven to have an even larger gap for
women and people of color than entrepreneurship for women and people of color generally
does. Increasing the representation of women and people of color in these organizations is not
only an economic imperative; it is a moral imperative.
Not-for-profit and for-profit entrepreneurship support organizations treat diversity differently.
In for-profit support organizations, diversity is primarily a charitable cause.These organizations
often put profitability first and demographic background of entrepreneurs last. In not-for-profit
support organizations, diversity is part of the lifeblood on which their funding often depends.
The predominant costs of making entrepreneurship support organizations more inclusive are
the time and growing pains of changing ingrained and sometimes inherent biases impacting
culture. But, for cities to be successful, all citizens must be fully empowered to engage in
entrepreneurship if they wish.
akrause@kauffman.org
816-932-1123
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Real-Time, Local Entrepreneurship Web Data App
Arnobio Morelix, Ewing Marion Kauffman Foundation
In the future, economic development will focus on new and growth companies; and decision-
making will be done using real-time, hyper-local entrepreneurship data.
However, when we look at how things are done today, there is a big gap between our present
situation and this bright future.
I’m working to create web data tools that help make this future true—and allow policymakers
to make the best decisions they can for their entrepreneurs.
In this conversation, I would really like to learn from cities about the answers they would like
to have but don’t, and the tools they would like to have that are not currently available (so we
can build them).
Researchers,VC and angel investors, and entrepreneurs are proponents of this, I’d argue.
Moreover, it is very clear from the research literature that new and growth companies create
a disproportionate share of the jobs, wealth, and innovation in this country.Yet, most, or at
least a large share, of economic development is focused on giving companies incentives and
tax abatements for shops to move from one state (or city) to a neighboring one. Research has
shown that this approach largely is ineffective because it is mostly a zero to negative sum
game—you are changing where some of the economic pieces land on the board, but moving
them is really expensive (even for the host city/state), and you basically create no new value for
the nation.
I believe part of the reason we are still over-focused on the traditional economic development
model is because it is hard to prove the positive impact of new and growth companies at the
local level (while it is easy to show how many jobs a factory moving from a neighbor state
brought). Please correct me if I am mistaken.
So, I believe a major part of making this happen will have to do simply with the creation of
better tools that allow us to track/measure/prove the impact of entrepreneurship as a local
economic development driver.
“Traditional” proponents of economic development that exclusively focus on the economic
development model of giving massive incentives for factories/businesses to move to a different
border—and arguably could say we have no business focusing on/measuring/caring about new
and growth companies.
$0 to $50,000 per year, depending on level of involvement
amorelix@kauffman.org
816-932-1127
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Mayor’s Roundtable of Leading Entrepreneurs
Rhett Morris, Endeavor
A small number of fast-growing companies often are responsible for a very large percentage
of a city’s new job creation.The founders of these firms have unique needs and perspectives
on how to improve the local environment for fast-growing businesses.A Mayor’s Roundtable
that meets nine to twelve times a year can help to elevate the unique needs of these firms and
their peers and can help to provide the mayor’s office with feedback on its entrepreneurship
initiatives.
Similar programs in U.S. cities have helped to elevate and resolve the sorts of highly specific
municipal issues that prevent businesses from growing. For example, one can look to Seattle.
The city has more than fifty biotechnology companies employing 8,000 people in the city.
However, many of these life science companies are located in an area of Seattle where the
construction code used to forbid the development of labs above the fourth floor in any
building. Due to the enhanced communication with fast-growing entrepreneurs in the city, this
problem was brought to the attention of city government leaders, who quickly updated the
city’s code to allow local biotech labs to expand.
This program also can be implemented quite quickly.
Proponents include fast-growing business owners who are creating large numbers of new jobs
in the local community.These founders will appreciate having the opportunity to speak with
local leaders and to act as a channel to funnel issues from their fast-growing peers.
Slow-growing or no-growth businesses may oppose leading entrepreneurs’ meetings with city
leaders.These companies may complain that the mayor’s office is devoting time to helping
businesses who “don’t need it.”
The valuable time of the mayor and his or her staff.
Rhett.morris@endeavor.org
212-352-3200
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Including Women and Minority Entrepreneurs
Yas Motoyama, Ewing Marion Kauffman Foundation
It will unlock the potential of more entrepreneurs, i.e., more job creators.
Your city may be starting to have a vibrant community of entrepreneurs. However, such an
entrepreneurial community tends to evolve around a specific demography, namely Caucasian
males in the IT sector.You and local support organizations have raised a flat to increase the
diversity, but it may not be happening even after a year or two. My coauthors and I find that
there are unintentional, yet intrinsic, barriers for this inclusion, such as:
• An open-door policy will only disseminate information to people who are already in the
network (i.e., not reaching new people). More proactive communication is needed.
• Targeting ‘women entrepreneurs’ may be ineffective because women think they are
‘business owners,’ rather than entrepreneurs.We need to talk to the target population to
understand how they think and feel.
Actions include:
• Get a sense of representation by women and minority entrepreneurs in your area.
—Attend entrepreneurship events. Check past finalists and winners.
—Familiarize yourself not only with the heads of support organizations, but also with
key staff. Do the staff reflect diversity the organization targets?
—Ask your local organizations to share and track the kinds of entrepreneurs they serve.
• Ask your local support organizations whether their mentors and judges reflect the
diversity they target.
• Talk to women or minority entrepreneurs.
—Ask them what they want.
—Ask them whether they know and can bring in other entrepreneurs.
—If there are few of them, try to connect them to each other.
• If there are too many diversity initiatives, try to navigate them by convening the
organizers. Facilitate, rather than trying to influence the outcome.
Proponents include women, minorities, and people with interest in those populations.
As it comes to resource allocation, you may face opposition from the mainstream group
because they fear their current resource will be taken away.
As mentioned, if you try to reallocate budget/resources, it will start to cost you. Otherwise, the
cost will be mostly your precious time to meet, connect, and coordinate with people.
ymotoyama@kauffman.org
816-932-1010
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Machine-Readable Ordinances
Evan Absher, Ewing Marion Kauffman Foundation
Making city ordinances, administrative regulations, and policies machine readable will help
entrepreneurs in two predominant ways: first, it will allow entrepreneurs and cities to more
effectively innovate together, and, second, it will allow city operations to be more efficient,
especially when it comes to permitting, licensing, and land use.
Machine readable means that computers can work with code like a human reads text.
Basically, it turns municipal code into computer code. If then coupled with other measures,
such as a publicly accessible API, entrepreneurs can build apps for city services much like
they would be able to build apps for iOS,Apple’s iPhone operating system. Imagine an entire
city’s permitting scheme reduced to an app that can immediately determine which parts of
a prospective business plan are in violation of code and how to remedy the violation.This is
possible with tax code—think Turbo Tax.Why should it not be available for other forms of
government interaction?
Imagine the positive economic impact if entrepreneurs could make their businesses fully
permitted and licensed in an afternoon, all from the comfort of their homes.The first step
toward this outcome is making ordinances, policies, and regulations all machine readable.
Further, machine-readable code will be a fundamental step in making any city “smart.”The
massive advances in municipal data collection and analytics capacity are far less exciting if the
data are not connected to the city operations that serve the people and produce the data.The
city operations are represented in the code and regulations and, if the code exists only in text,
then the data will never truly impact city operations because a barrier exists between the digit
data and the analog ordinances.
The proponents of this measure are all those who want cities to operate more efficiently,
responsively, and transparently. Further, as cities begin to adopt new technology and
entrepreneurial mindsets, converting the city’s code will be imperative to achieving efficiency
and transparency.
The predominant opponent will be services that currently publish and produce codes online;
for example, Municode. First, they will say they do produce machine-readable code. But, even if
that is true, the standard is poor and they certainly are not making the code widely accessible.
Then the incumbent will tell you that an exclusivity clause in the contract between the city
and the incumbent stipulates that the city can only publish the code through the incumbent’s
product.This should be resolved with the city attorneys, but, generally, ordinances are public
information that no one entity should be able to control by way of contract.
Another opponent might be internal—specifically, the legal department.The lawyers may
feel apprehension about allowing entrepreneurs access to the code in a manner that can
manipulate the ordinances.As a lawyer and former city employee, I can tell you that city
attorneys are awesome, but there is little harm that can come from making the code machine
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readable. In fact, a third party could do it right now without the consent of the city.The
manipulation that occurs cannot change the source code. Basically, the entrepreneur is playing
with copies. However, it would be far more beneficial to the city and the ecosystem if the
conversion were supported by city hall and all stakeholders convened to leverage the real
opportunity.
The cost is nominal. It takes mostly time and a lot of labor.This is perfect for a computer
science department in a local learning institution or a partnership between Code For America
and a host city.This project is perfect for civic volunteerism and young talent to sharpen
their skills.The cost should be borne by the community, as it will astronomically increase city
innovation both for city hall and the entrepreneurial ecosystem.
Eabsher@kauffman.org
816-932-1274
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Women Entrepreneurs Initiative
Banu Ozkazanc-Pan, University of Massachusetts
Women entrepreneurs are the fastest-growing segment of entrepreneurs, but often do not
have full access to resources and networks within an ecosystem.Targeted support can help
integrate them into the ecosystem.As part of a city’s economic development efforts, a women
entrepreneurs initiative will improve business conditions to enable more women to participate
in business creation and established entrepreneurs to grow their ventures.Through this
initiative, the city can convene groups and educate women about the skills and knowledge
necessary to start their own businesses.The initiative also will connect women to resources
and relevant business networks to grow their businesses.These efforts will support inclusive
economic growth.
Economic researchers and political leaders across party lines have acknowledged economic
inequality as an issue that needs immediate attention. Research indicates that growing
economic inequality in cities can be mitigated through policies that even the playing field
for women entrepreneurs. Support for the city’s women entrepreneurs initiative will come
from various business groups across industries, women-focused networks, investors, and
entrepreneurial support organizations, such as incubators, accelerators, co-working spaces, and
other groups that stand to benefit.
Opposition to such an initiative may come from conservative business groups and leaders who
do not want to see public money spent on a specific group or who have traditional views on
gender.Their arguments will suggest that there should be limited government involvement in
business and any policy should improve the city’s business environment for all entrepreneurs.
While this is true, and a healthy business environment is best for all, most cities have
gender gaps in entrepreneurship that result in missed economic growth. Supporting women
entrepreneurs will close some of these gaps and bring further economic prosperity to cities.
The costs associated with implementing the initiative will be related to time and financing.
The time needed to start the initiative can be mitigated to a certain extent by learning from
cities that already have women entrepreneurs initiatives.To foster new business growth and
bring existing businesses to scale rapidly, the initiative will need a budget as part of economic
development efforts.To decrease this cost, the recommendation is to partner with institutions
of higher learning that have entrepreneurship centers and programs, banks and investor
groups, local entrepreneurial support organizations, and women’s business associations.
Connecting the city to various partners on this initiative also will build an inclusive and
integrated ecosystem and further lower barriers and costs to implementation.
banu.ozkazanc-pan@umb.edu
203-654-6872
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Chief Entrepreneurship Officer
Tony Tolentino, Blackstone Charitable Foundation
In designing and supporting programs to build and strengthen entrepreneurial ecosystems,
the Blackstone Charitable Foundation has worked extensively with elected officials at all levels
(federal, state, and local) to build these programs.As an external funder, the Foundation often
struggles navigating various government agencies to find a champion to help (1) navigate the
ecosystem, (2) surface opportunities/challenges for funders and entrepreneurs, and (3) identify
relevant thought leaders and possible partnerships. Creating a Chief Entrepreneurship Officer
role within a mayor’s office (beyond a traditional, typically inwardly focused Chief Innovation
Officer or Chief Technology Officer) to map the city’s ecosystem and help foster public/private
partnerships will help strengthen the overall entrepreneurial ecosystem of a city.
The greatest proponents would be your city’s entrepreneurs. Having a local government to
champion their businesses and success stories and help them navigate existing resources will
be a huge vote of confidence for your city’s entrepreneurs. In addition, foundations/corporate
philanthropies and VCs/angel investors will be supportive and will find it easier to navigate
your city’s ecosystems to support those entrepreneurs
One possible opponent could be the taxpayers and/or limited government activists in your
cities. Some may see this as an added layer of government, extraneous role/position within the
mayor’s office, or a general waste of resources.While these concerns are relevant and should
not be discounted, it is up to the mayor to champion and empower this role to ensure that the
Chief Entrepreneurship Officer can demonstrate success to the community.
The primary cost of this position is salary and benefits and general administrative or
programmatic support. City budgets are stretched thin, so justifying an additional role may be
difficult. It is our recommendation that an existing role be re-purposed into this role for a trial/
pilot period. If a Chief Innovation Officer or Chief Technology Officer role already exists within
city government, consider expanding the scope of the role for a trial period before actually
creating a new, separate role.
tony.tolentino@blackstone.com
212-583-5986
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Become a Statehouse Advocate
Jason Wiens, Ewing Marion Kauffman Foundation
Entrepreneurs need allies who will champion their cause and advocate for their interests.
As the highest-ranking elected officials in cities, mayors are in a position to be influential
advocates for entrepreneurs. Mayors already are doing this in their communities, but an
opportunity exists to join entrepreneurs at the statehouse in advocating for the removal of
state-level barriers to starting a business.Two state policies, in particular, stand in the way of
entrepreneurship: occupational licensing and non-compete agreements.
More than 25 percent of Americans need a license to do their jobs.That means they must pay
fees, pass exams, and complete education or training in order to work in certain occupations.
These fees and requirements limit who can start a business in the licensed profession and
are especially burdensome to those of less means. Research has found that entrepreneurship
rates fall more than 10 percent in states that license a greater percentage of low-income
occupations. In these cases, the license blocks a path to economic betterment and self-
sufficiency.
Non-compete agreements are contracts between employers and employees that limit an
exiting employee from working for competitors or launching their own business in that same
industry. Nationwide, one in every six workers is bound by a non-compete. States vary in
their enforcement of these contracts, with some states strictly enforcing them and others not.
Reform options—from shortening the length of non-competes to limiting the types of workers
that can be covered by one—exist and are being pursued in a handful of states.
Repealing unnecessary occupational licenses and reforming non-compete policy will remove
barriers to new business creation, allowing more residents of your city to freely pursue their
entrepreneurial ambitions.
Entrepreneurs, venture capitalists, labor advocates, those that care about economic liberty, and
even some business leaders have variously supported these efforts.
Members of licensed occupations, consumer advocates, and some business leaders may oppose
licensing and/or non-compete reform.
Legislative reform: $0 to minimal/Advocacy: time, political capital
jwiens@kauffman.org
816-932-1115
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