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.
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.
One thought on “How can cities meaningfully impact entrepreneurship? Help from mayors and Kauffman”
Flora and Flora introduced the concept of social entrepreneurial infrastructure. Still holds true today, despite few citing it (Applause to Norris Krueger).
Lichtenstein and Lyons have contributed significant knowledge, which is virtually ignored (at your own peril, communities) Their assessment is incredibly spot on related to inefficient/ineffective development efforts: http://www.pipelineofentrepreneurs.com/page23.php
Inclusive innovation is a mandate- abject disconnect between opportunity and economic growth, and the marginalized citizens are typically recipients of the least effective strategies.
Funding toolkits should be ubiquitous- so that entrepreneurs have access to the funding they need at each stage of business.
Sector-specific and broad networks are both required. Not an either/or situation. Loads of knowledge-sharing and innovation occurs at the intersections of sectors.
Regions need both export-oriented, growth companies and local-serving companies. Local-serving are typically ignored, as “not scalable” by providers. Nonsense, scaling deeply is a term needed to describe the potential growth dynamics.