building entrepreneurial communities

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Building Entrepreneurial

Communities

Oklahoma Regional Economic Development

ConferenceJune 15, 2007

Craig Schroeder, Sr. Associate

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Session Outline: Entrepreneurs and Entrepreneurship Making the Case Understanding and Targeting E Talent Entrepreneurship Development Systems Getting Started and Q & A

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Entrepreneurs & Entrepreneurship

Working Definitions

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“A person who creates and grows a venture.” Jay Kayne, Miami University

Entrepreneur

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PerceiveOpportunities

RiskTolerant

Flexible &Resourceful Creative &

Innovative

Smart &Dynamic

GrowthOriented

Independent

Entrepreneurial Attributes

?

?

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“The process through which ventures are created.” Deb Markley, RUPRI Center for Rural

Entrepreneurship

Entrepreneurship

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Entrepreneurship Development

Environment that fosters and supports entrepreneurs and

entrepreneurship through public and private partnerships and practices.

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The Many Faces of Entrepreneurs

Aspiring

Lifestyle

SerialGrowth

Startups

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Owner: Shirley WilliamsVanceboro, NC

Two-time “victim” of industrial flight Decided owning her own shop was the best bet

Vanceboro Apparel

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Who’s a Business Entrepreneur in Your Region?

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Civic Entrepreneur – Haley Kilpatrick

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Who’s a Civic Entrepreneur in Your Region?

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Rural ContextMore aspiring entrepreneurs

Fewer entrepreneursFar fewer growth

entrepreneursFar fewer serial entrepreneurs

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Challenges for Rural EntrepreneursPhysical & psychological

isolation/distanceLimited access to technologyLimited sources of funding/resourcesPoor connections to marketsLimited opportunities for networking

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Entrepreneurial Communities

It is about an environment that fosters

entrepreneurs.

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Fairfield, Iowa – pop. 9,600

• Recognizes and celebrates entrepreneurs • Over 20 years: created 3,000 jobs; tripled per capita income; increased charitable giving; HQ for 75 companies

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Are There Entrepreneurial Communities in Your Region?

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Making the Case

The Value of Taking an Entrepreneurial

Approach

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Growing Body of Research

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Entrepreneurship and Economic Development

Promote entrepreneurship as the bedrock for economic development

Creating an entrepreneur-friendly community makes it easier to attract and retain industry and other businesses

Entrepreneur-friendly refers to both the business and community environment

Recruitment

Retention

Entrepreneurship

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Evidence - Data• 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 995KJobs come from expanding businesses (55%), new businesses (44%), and business re-locations (1%) (SBA, 2003)

•Increase in self-employment – 5.7 % in US 2002-2003 biggest increase ever (US Dept. of Commerce)

•Importance of microenterprise (<5 employees) – 22.5 million establishments in US (AEO, 2006)

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Evidence - Historical Trends

Small entrepreneurial growth companies account for:•5-15% of all US businesses•2/3 of net new jobs in the 1990s (60-80% in 2003 – SBA)•2/3 of inventions since WWII•95% of radical innovations since WWII

Of the Inc 500 “best” entrepreneurs:•69% started with <$50,000•50% are non-tech related•56% started at home•Only 18% used venture capital

National Commission on Entrepreneurship, A Candidate’s Guide, 2002, http://www.entreworks.net/library/reports/4249_NCOE_GUIDE.pdf.

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Defining Your “Vision” What do I hope to

accomplish through entrepreneurial development and how will my approach help me get there?

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Two Examples of VisionEntrepreneurial

Development Nurture local firms Stimulate others to

“take the leap” Create jobs Generate and

reinvest wealth Healthy

community

Industrial Recruitment• Attract new plant from outside• Create jobs• New residents• New taxes• Healthy community

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Recruit Validators You can’t do it alone!

•It takes a sustained community effort

Must “recruit” others who support your vision

•Target 1: Successful Entrepreneurs•Target 2: Other Local Champions•Target 3: Entrepreneurial Youth

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Hot Buttons -- Vision Why Should People Care

About E-ship in Your Region?

•Wealth Creation (and Reinvestment)

•Job Creation•Citizen Empowerment•Youth Attraction•Civic Capacity-Building

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Be Creative! Create your own “ribbon-cutting”

opportunities Give politicians what they want

•Access to Publicity, Information, Time, Voters

Provide•Information on Local Economy•Access to Entrepreneurs•Success Stories and Field Trips

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Understanding & Targeting E Talent

Every community has it---e-talent

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Understanding Entrepreneurial Talent

Understanding the e-talent in your region can lead to more strategic shaping of your economic development program.

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EntrepreneurialEntrepreneurialTalentTalent

Growth Entreprene

urs

Entrepreneurs

EGCs – Serial Es

PotentialEntreprene

ursAspiring

Dreamers Startups

Youth

SurvivalRestartsLifestyle

Transitional

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Entrepreneurial Talent & Development Opportunity

E Talent Time to Impact

Scale of Impact

Aspiring Long-Term Wide Range

Start-Ups Medium-Term Modest

Growth-Oriented

Short-Term Potentially Large

High-Growth Immediate Large

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Common Needs A supportive environment Freedom and encouragement to

innovate Technical assistance that meets their

needs Entrepreneurial networks Various forms of capital for different

types of entrepreneurs

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Youth Engagement Youth Engagement and Entrepreneurship and Entrepreneurship

Be sure to include Be sure to include your young your young

entrepreneurs!entrepreneurs!

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Critical Issues & Youth Impact

Historical Youth Out-Migration Trends

Loss of Farms and Small Businesses

Erosion of Leadership Capacity

Generational Wealth Transfer

America's Wealth Transfer:A Likely Scenario

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5

6

7

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1999 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

% o

f Wea

lth R

elea

sed

United States Nebraska Rural Nebraska

Rural NebraskaEstimated WealthTransfer = $94 billion

Nebraska Estimated Wealth Transfer = $258 billion

United States Estimated WealthTransfer = $41 trillion

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Why Target Youth “E” Talent?Youth currently in your region may well

represent your greatest resource for economic growth and community

sustainability.

The challenge is to: engage these youth, equip them with the skills and knowledge to

be successful, and then support them and their

enterprising ventures.

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Survey QuestionsCambridgePop. 1,041

McCookPop. 7,994

ColumbusPop. 20,971

Garden County

Pop. 2,292

Rate your community (1-10) 6.6 5.3 5.1 6.2

Interested in owning your own business in the future? 47% 41% 43% 51%Have a business right now? 17% 9% 7% 19%Picture yourself living in the area in the future? 47% 48% 49% 49%

Teen Survey Results

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Youth Engagement System©

Community Support of Youth and Their Ideas

Entrepreneurial Education &

Career Development

Youth Involvement & Leadership in Community

Engage

Equip

Support

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4-H Jr. Achievement FFA, FCCLA, DECA, FBLA Youth Led Projects Community Scholarships

Vehicles to Consider

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Targeting Entrepreneurs

Entrepreneur Expertise

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Why Target?

Different E talent = different needs Limited resources = making

strategic decisions about what types of talent to target in your community

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What Aspiring E’s Need and Want

Clarification:•Idea•Feasibility•How

Decision:•Go or No Go

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Training

Appropriate Approaches

Networking

MoralSupport

BusinessCounseling

Micro

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What Startups Need and Want

Game PlanTeamSome CapitalMarketsManagement

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Appropriate Approaches

Facilitation

Micro

Networking

Training

Mentors

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Key Insight

The success rate of startups rises dramatically with strong

supportive environments!

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What Growth Entrepreneurs Need and Want

Customized Assistance

Higher Order Assistance

Real Time Assistance Perspective Peer Support

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Appropriate Approaches

NetworksCapital

IncubatorsFacilitation

PeerGroups

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What High-Growth Entrepreneurs Need & Want

Room to Grow Capital Workforce Infrastructure Listening &

Responsiveness

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Appropriate Approaches

ESO

Capital Environment

Networks

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Key InsightKeeping high-growth companies

in rural areas is as challenging as helping to create them.

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Finding the “Sweet Spot”

Entrepreneurial Talent

Development Goals

Development Capacity

The Sweet Spotor Strategic Focus

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Infrastructure Elements Move beyond traditional economic

development notion of infrastructure•Sites and buildings•Roads, utilities, etc

Think outside the box•Leadership•Service providers (public, private, non-profit)•Educational institutions

Demand-Driven

Approach

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Support Elements

BasicAdvancedHigh Performing

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BasicPositive ClimateNecessary InfrastructureFocus on EntrepreneursBusiness ServicesNetworks & Mentors

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Advanced

FinancingMarket OpportunitiesEntrepreneurial

TrainingYouth EntrepreneurshipSupport Organizations

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High Performing

Enterprise Facilitator or CoachEquity CapitalEntrepreneurship in the

SchoolsEntrepreneurial Support

Organizations

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Rural Culture

Entrepreneurship is a creative process. Local culture can

enable or limit this process.

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Cultural Check:How Do We Treat Our Entrepreneurs?

Do we value,

encourage and

support them?

Or do we

gossip about and

criticize them?

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Creating an Entrepreneurial Culture Create climate and culture in which

entrepreneurs and entrepreneurship can flourish

4 organizing principles:oCommunity-drivenoRegionally-orientedoEntrepreneur-focusedoContinuously learning

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Tools to Help Your Region Move Ahead…Community Readiness Factors

How do you know if your region is “ready” for entrepreneurship?

www.energizingentrepreneurs.org

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Entrepreneurship Entrepreneurship Development Systems (EDS)Development Systems (EDS)

It takes a system….It takes a system….

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Successful Entrepreneurship Development Systems (EDS) Focus on entrepreneurs Build on assets Encourage collaboration & take regional

approach Engage youth, minorities, aging and others who

are not usually invited to the table Strategically target & respond to entrepreneurs Celebrate community and entrepreneurial

success!!

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Getting Started Is your region ready to focus on

entrepreneurship development? What kind of culture of support for

entrepreneurs exists in your region right now?

What elements of a support infrastructure do you already have in place that you can build upon?

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Q & ACraig Schroeder craigs@neb.rr.com

www.energizingentrepreneurs.org