How can cities meaningfully impact entrepreneurship? Help from mayors and Kauffman

I’ve written plenty before — in the book and at the main blog — about how one-shot solutions, like throwing up a small business incubator, often don’t help, and may hurt.

This article summarizing the recent Kauffman Foundation’s Mayors Conference on Entrepreneurship shed some additional light on this topic, including this:

One common error by local lawmakers is erecting a downtown incubator and relying on the piecemeal measure. “If you build it, they will come’ does not work for entrepreneurship,” according to their research. “Studies show there is no evidence that incubator firms perform better than non-incubator firms.”

I’ll buy that.  The recommendations from the report also indicate that cities can support entrepreneurship via:

eliminate common burdens that entrepreneurs face at the local level, such as complex tax codes and strict occupational licensing requirements, and then develop incentive programs for small business.

and

support entrepreneurs across various entrepreneurial stages. And because data has found immigrants are twice more likely to start a business than a native-born citizen, Mayor Svante Myrick, of Ithaca, N.Y., says it’s important to intentionally build an entrepreneurial environment that is both resourceful and “welcoming.”

The article goes on to summarize current events and projects in several cities, including Raleigh, Cincinnati and Los Angeles.

Caveat: I’m writing this before a trip and I haven’t had time to read the report in any more than a cursory fashion yet.  But I will, and I think that you should, too.  As you read, however, you might want to ask yourself some questions, similar to the one that I will be asking:

  • I’ve heard the koan about eliminating onerous governmental burdens to help entrepreneurship for a long time. I believe it, and I’ve had those words come out of my own mouth more times than I can count.  But I’m wondering if anyone has actually calculated that impact, monetarily?  I think it would be helpful to see a documentation of growth in small business after a streamlining of regulations and permits.  I think that would help make the case for taking on that unbelievably hard and thankless work at the local level.  Until you have waded into that morass yourself, I think it’s hard for people to realize just how hard fixing “complex tax codes and strict occupational licensing requirements” can be, especially given the fact that codes and licensing requirements at the like were, at their core, put in place for some public protection purpose.  What’s an unnecessary complication?  Sometimes, certainly, it depends on whether you are the business owner or the person who could get hurt by shoddy work.

 

  • Entrepreneurs struggle with capital.  Even though I agree that public venture capital is a mega-risky business and that conventional incubators don’t universally fix things, is there an appropriate way for the public and nonprofit sectors to play an intelligent role in seed funding?

 

  • It’s a definite that entrepreneurs need to connect with each other — connect businesswise and personally, for as Kauffman so well says, “Entrepreneurship often is a lonely, emotional, and challenging process that evolves over time.”  But is a startup weekend, or a mentorship program, the most effective thing we can do to facilitate that?  Building relationships and networks is a long-term process with many moving parts.  How do we help grow networks of entrepreneurs?

 

  • There are tech entrepreneurs, there are non-tech entrepreneurs, and there is a whole lot of grey area in between.  How are their needs similar, and different?  What’s the benefit of more focused entrepreneurship networks (for example, all the software designers or all the downtown shops), versus broader networks? How can some of the tools that have been developed for building tech ecosystems be transferred to non-tech business environments?

And at this moment, I think this is my biggest one:

  • Is it enough to simply throw a bunch of entrepreneurs in a room and let them “collide,” on the assumption that colliding will lead to business growth?  That’s the assumption that a lot of entrepreneurship and start-up events work on, as as a person who has been in some of those collision pits, I can tell you that you make some amazing connections and growth out of that seeming randomness.  But is it necessary or desirable to leave those collisions entirely to chance, or are there ways that we can increase the odds — perhaps using group structures to facilitate better collisions?

Think, think, think…. let me know what’s going on in your head.

 

Wise Economy Workshop Birthday Promotion! 30%-50% off Wise Fool Books!

It’s kind of shocking (at least to me) but it’s been four (four!) years since I launched the Wise Economy Revolution!  In that time I’ve gained thousands of readers, yammered at thousands of not-entirely-helpless audience members, gained the friendship of some amazing people and had the privilege of working on some kick-ass projects.  Also, I finally managed to write a book and edit another one, and I’m proud as hell of them both.

To celebrate surviving another year of this craziness, you can pick up both The Local Economy Revolution: What’s Changed and How You Can Help and Why This Work Matters: Wisdom from the People Who are Making Communities Better for 30% to 50% (yes, 50%) off their usual price!

book coverbook cover

Whether you prefer print or digital, we got’cha covered.  Just click

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Thank you for four great years!  We got a lot more to do…let’s go get ’em!

Tax Breaks for Tech Hiring: well….

As most readers know, I am an avid tech startup junkie with a strong interest in how tech companies are both reacting to and themselves remaking economies, both through their works and products and through the fundamentally different approach that people trained in the tech world bring to decision-making, innovation and problem-solving — issues that our communities definitely need some help with.  But,  becaus they operate on a fundamentally different model, they don’t always have the ability to live up to our usual expectations.

This article, which I originally read in San Francisco’s Central City Extra during a trip

computer keyboard

From NewAmericanMedia.org

there this fall, does a very good job of highlighting something that tech businesses don’t easily or universally do: create large numbers of jobs, especially the kinds of market-driven living-wage jobs that we so need for our disadvantaged communities.  As the article outlines, a tax incentive designed to prod this neighborhood’s burgeoning tech companies to hire local residents — not just into service jobs, but into tech jobs, where they could learn and build valuable skills.

However, the tax break has generated very little impact — according to the article, one full time job and five summer internships. 

The article doesn’t attempt to deeply analyze what happened, and as an outsider I hardly feel qualified to make a definitive diagnosis.  However, it looks like a few issues might be at play.

One that non-tech people often find it hard to grasp is that the tech business growth cycle is often hyper-accellerated as compared to more traditional businesses.  Tech people and tech business funders engage in regular mad races to get the product out, get updates out, etc.  The Red-Bull slugging, sleeping-in-the-office stereotype is a stereotype, but like any, there’s a germ of truth to it.  My slightly educated guess would be that this makes it hard to bring on a person who does not already have appropriate tech chops — it’s not an environment that’s well set up for training people.  Second, the fact that these businesses tend to be funded by angel and later venture capital, which wants a massive return in a relatively short time, both reinforces that pressure and, I would guess, makes it hard to do anything that, while having long-term benefits, might not pay out right away.

In a sense, this is an even more intense version of the lean pressure that economic developers see in lots of types of growth businesses, from advanced manufacturing to health industries.  If the ongoing pressure, the accepted way of doing business, is speed, speed, pivot, pivot, then the bandwidth for in-house training almost by necessity becomes razor-thin.

Perhaps more than a lesson about incentives, perhaps this story ends up being more of an slit window into the future of business growth.  If so, that may indicate that the frustration that some in economic development are feeling in terms of businesses not making the effort to train for themselves the people that they claim that they need so badly is, in fact, a leftover of an era of business self-sufficiency that, for better or for worse, seems to be fading away quickly. From a purely pragmatic standpoint, it may be impractical to expect businesses to train their own tech specialists, because the pressure on them to remain light and agile works in direct conflict with that goal.

That doesn’t mean that there is no hope, however.  As part of the ongoing trend toward lean, agile operations, businesses increasingly outsource the tasks that they need but aren’t in their core competencies.  Procter & Gamble doesn’t make most of its own bottles.  Car manufacturers source electric harnesses from businesses that specialize in making them.  Outsourcing can cause problems, but it also creates a certain resilience in the whole system.  From the outsourcing business’s point of view, the risks of lack of control are largely offset, or at least managed, by the ability to specialize.

Perhaps this is the model that we should be looking at more aggressively as workforce development becomes a more and more integral part of economic development.  Perhaps part of the profession’s new role is to be the outsourced manager or provider of talent pipeline — the ones who make sure it’s done right and fits, like the electrical harness provider.  And put that way, it’s a necessary service that even lean businesses may be more easily persuaded to help fund.  After all, outsourcing is a model that they’re used to.  As the story from the Tenderloin indicates, training within, increasingly, is not.

 

 

So…what _Is_ urban planning’s Knowledge Domain (and what is missing? Hint: important stuff)

This piece of research from Tom Sanchez and Nader Afzalan is insightful for both what it includes and what is does not include.  Tom and Nader examined the reported areas of expertise among hundreds of academic urban planners and graphed the resulting prevalence various areas of expertise, as well as the commonalities in areas of expertise.  This is what they found:

chart

from tomsanchez.wordpress.com

 

Take a close look at the chart.

We have a huge number of people focused on urban design, infrastructure, natural resources, etc.  All well and good.

We have very, very few academic planners who profess any knowledge of or academic interest in economics.  Regional economics is one of the smallest circles on this map, indicating that relatively few academics listed any interest in that topic.

And what few things does that paltry circle eclipse?

Among others, Real Estate (the economics behind all that design stuff), and

Citizen participation (the work of actually working with the communities where all that design stuff happens).

 

No wonder planners get accused of being design dictators, fantasy-makers, people who design places that are supposed to have all these social and economic benefits … That.Never.Happen.

Apparently it’s because we’re teaching them that way.

If you are involved in training urban and community planners at the academic level, I think this indicates a serious challenge.  This would appear to indicate that you are not teaching your students to interact with the actual, real world.   Which may be why urban planning has not lived up to its potential to make the broad swath of community existence more successful, more intelligent, more healthy.

We claim to be broad and inclusive and wider-ranging and thoughtful, but this chart would seem to indicate otherwise.  And our inability, especially to understand and effectively interact with the core factors that underlie how communities work — people and economics — bodes ill for the future relevance and impact of the profession.  People and economics are not, cannot be someone elses’s job while you do cool maps and pretty designs.

 

 

From the Good Learnings File: the Power of Small Wins

This week, the nonprofit organization CEOs for Cities will be facilitating a national meeting of business and community leaders from across the country to explore cross-sector innovations and learning about how to significantly “move the needle” on urban issues.  And it’s not a small gathering — 400 people from 75 cities is nothing to shake a stick at, and CEOs for Cities has a long history of research and sharing around issues that range from the role of anchor institutions and clusters to urban art and wayfinding.  In its own words, CEOs for Cities views its role  as “the cross-sector, cross-generation city success learning network.”

Given the size of the cities that make up most of its membership and the fact that what we read about these cities in general media is either “holy crap what a mess they’ve made” or “look at this big huge giant thing City X just did,” I though it was particularly intriguing that CEOs for Cities’ own CEO, Lee Fisher, described the purpose of this gathering to Livability.com as follows:

 

Livability: What will we be talking about at the conference?

Nashvile

From CEOs for Cities.com

Fisher: The theme is “city dividends.” We have developed a concept, which is basically the return on investment for achieving a measurable goal for your cities economic growth and success. We have found that there is great power in small wins. The best way to motivate and sustain action in your city is to have goals that are achievable and measurable, and mobilize cross-sector leaders in achieving those goals. We call them city dividends. We’ll be looking at this in four different ways. One of our signature pieces of research is called “City Vitals,” and we say there are four dimensions of city success, and they are easy to remember because they spell out “City:” The Connected city, the Innovative city, the Talented city and Your distinctive city.  [emphasis mine]

 

Those of us who work with communities often feel this enormous pressure to do Big Things — big projects, big programs, big building projects, Big Stuff.  And as you read in the Local Economy Revolution, we should know by now that a Big Stuff approach can cause as many problems as it solves.  Whether we’re generating unintended consequences, failing to get a decent return on our investment, or simple shutting out the people who are impacted the most by the Big, it’s becoming increasingly clear that meaningfully addressing the tangled and many-layered creature that is a city requires a fundamentally different approach — one that focus on small wins that reach across boundaries to create demonstrable impact on goals.  If you’re asking yourself how to make a difference on the tough issues facing your community, you might want to think about how small wins toward a big goal could increase your capacity by yoking more horses to the plow.

I’ll be interested to see what comes out of CEOs for Cities this week.

Are You an Institutional Radical? (no, don’t duck…)

I spend a lot of time in blogs and publications that aren’t exactly household names, and the brilliance of what you find there is often stunning.  Cormac Russell is revered among a certain subset of the community development world for his work on articulating Asset-Based Community Development principles.  As benign as that sounds, it’s often a hard sell for the kinds of reasons the book identifies as so crucial to the emerging economy — interconnecting resources.  incremental progress, small scale, Little Bets, attention to future impacts and potential unintended consequences, etc. etc.  Doesn’t sound like rocket science to me.

In many specific organizations, however, both Cormac and I have noticed that you have to be a bit of a radical, in the generic sense, to move an organization toward those kinds of ways of working.  And so I loved this list of Institutional Radical characteristics from Cormac’s blog.  The full post is much longer and tells an interesting story about a social services and  prison re-offender issue, which colors the social services tone of this excerpt.   But I thought that the principles in this section were pretty universally applicable to conventional government and nonprofit work.  We have a tendency to see ourselves as professionals who do things _to_ communities, populations, people, instead of seeing ourselves as the manager or caretaker or capacity-builder for the community.  As I’ve talked about elsewhere with regard to the challenges of Business Recruitment and Retention in economic development, and the rush to develop civic apps without learning deeply about what communities actually need, and methods of public engagement in urban planning and all types of local government that give residents no options other than applauding or throwing tomatoes, we need to shift our fundamental approach away from doing to, and toward doing with.  

So without further ado, here are the

Seven Habits of Institutional Radicals

Habit #1: Get Out of the Way

There are certain things that only communities can do; beyond a certain point institutions become useless, and a community response is the only viable one….

 Institutional radicals understand that institutions forget that they have been hatched from the nest of associational life, and, through arrogance and an over eagerness to help or regulate, often get in the way of community alternatives.

Radicals heckle and disrupt their systems, like protective lionesses they patrol the boundaries between institutional life and community, and snap at the heels of those who would seek to grow the influence and hegemony of the system.  To achieve this they lead by stepping out of civic space, and not doing for individuals and communities what they can do for themselves. In simple terms they get out of the way.

Habit #2: Reduce Dependency

Their mantra is clarion: if we are to reduce dependency on our institutions, we much increase interdependency in community life. They are driven by the belief that extended time in their institution, whatever it might be, is time lost making a life. ‘Get a life, not a service’ is their motto:  they see services as only there in reserve, while they believe community and free association is the preferred front line of social change and well being. They do not therefore, measure their success by the number of clients they have in their programmes, but the extent to which they have built community, and, accordingly, reduced dependency on their services. This may seem counter intuitive, and so it should, it’s radical!

There are many ways of increasing dependencies on services. From the outset needs analysis is about the best, since it confuses service categories with human needs and simultaneously convinces those that are being analysed that their capacities are irrelevant, only their needs matter. And so the most disruptively innovative step a radical takes is to move from needs analysis to a participatory asset inventory that is led by communities themselves. Radicals know that we can’t know what people need, until we and they first know what they have.

Habit #3: Increase interdependency

Deinstitutionalisation is not a new concept. Today I spoke at the Swedish National Social Care Convention. I addressed an audience of some 700 social workers, many of whom led the drive to close institutions across Sweden over twenty years ago. But they tell me that for many, community care is tantamount to lonely living.

Radicals don’t just shut down institutions, they are intentional about promoting a great level of interdependency between the people they serve and the community at large.

Habit #4: Be Authentic about the limits

Systems and institutions are not designed to care; people care, systems produce services to a standardized format and are structured to enable the few to control the many. Radicals get this, accept it, and move on; they do not try to reform the system to do what it can’t. A radical is also a pragmatist who accepts that institutions have functions, and so to do communities. They are clear, that institutions cannot and should not replace the functions of individuals, families and communities.

What is the service for loneliness? There isn’t one! If you think that befriending schemes are the answer, then I hate to break it to you, but you’re not a radical.

Habit #5: Clear and vocal about what Community can do

Radicals understand that communities have irreplaceable functions that if not done by them, can not be done by any other. They are clear, therefore, around what it is they believe communities must do to be the change they seek. Their voice is a revelatory one, they often see what is invisible to most, and invite it into expression.

Habit #6: Do no Harm

Radicals understand the harm they can do; they know that helping hurts as well as heals, and they see clearly the iatrogenic effects that their systems regularly bring about. Their prime directive is, therefore, to do no harm to the individual agency of the people they serve, and the community capacities that can serve to grow interdependence beyond institutional boundaries.

Habit #7: Don’t reform; re-function.

Radicals are not invested in reforming their institutions and its systems. They understand that form follows function and that most institutions have never figured out their function, and therefore are formless. Many public sector institutions and some civil society organisations have lost sight of their function to serve the public good. Local governments throughout the world, for example, have become so focused on the provision of statutory services that they have failed to attend to their functions as stewards of local democracy. Consequently they have come to treat people as clients of their services, and not as citizens with authority; at the centre of local democratic life.

Hence we do not need reform, we need re-function. Institutions, which were once hatched from associational life, have become bloated and arrogant. Their function is simply to do what we cannot do in associational life, no more, no less. Yet they regularly colonise our lives and our neighbours, attempting to manage, regulate, curricularise and otherwise control free space. Restoring the function of our systems is the work of radicals, and in essence is an effort towards halting the expansion of the systems world into the associational world. Another motto of the radical is: Institutions know your place.