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Building an Entrepreneurial Indiana Challenges and Opportunities

Building an Entrepreneurial Indiana Challenges and Opportunities. Deborah M. Markley, PhD Managing Director and Director of Research Presentation to the Indiana Rural Summit November 14-15, 2007. RUPRI Center for Rural Entrepreneurship.

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Building an Entrepreneurial Indiana Challenges and Opportunities

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  1. Building an Entrepreneurial Indiana Challenges and Opportunities Deborah M. Markley, PhD Managing Director and Director of Research Presentation to the Indiana Rural Summit November 14-15, 2007

  2. RUPRI Center for Rural Entrepreneurship • Mission to foster greater understanding of the promise and practice of entrepreneurship as a core economic development strategy for rural regions • Achieve this mission through • Practice-driven research and evaluation • Outreach to practitioners through training and customized support • Engagement with policy makers

  3. Center’s Core Beliefs • Entrepreneurship development is a necessary and significant component of a rural economic development. • May be the most promising strategy for many rural places • Creating an entrepreneurial environment requires cultural change. • Replacing “waiting to be saved” with “growing our own” mentality • Entrepreneurship development requires a systems approach. • Connecting the dots, building the pipeline, and serving all types of entrepreneurial talent

  4. Why focus on entrepreneurship development? • Macroeconomic shifts • Competition is global and pace of change rewards the agile, entrepreneurial innovators in the market place. • Demographic changes • Young people embrace career change, and entrepreneurship. • Economic development reality • 99% of new jobs are coming from start ups and expansions, not relocations (SBA).

  5. Evidence for Making the Case: Global Entrepreneurship Monitor • “Entrepreneurial behaviour remains a crucial engine of innovation and growth for the economy…” GEM 2006www.gemconsortium.org • All entrepreneurial activity is not equal. • High levels of necessity entrepreneurship in lower per capita GDP countries; high levels of opportunity entrepreneurship in higher per capita GDP countries. • The institutional (policy) environment does influence entrepreneurial activity. • And, as a result, economic development • Entrepreneurship comes in many forms. • No “one size fits all” for entrepreneurial policy

  6. Evidence for Making the Case:Historical Trends • Small entrepreneurial growth companies account for: • 5-15% of all US businesses • 2/3 of net new jobs in the 1990s • 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 • We can’t predict where the next great entrepreneur will come from! National Commission on Entrepreneurship, A Candidate’s Guide, 2002, www.entreworks.net/library

  7. State Policy Maker Interest in Entrepreneurship • Traditional economic development community interested, but wants to know if it works • We need to do a better job of measuring impacts. • Hungry for models and tools that are “proven effective” • It is still too early to have a definitive answer. • Policy change requires external pressure to act • We need entrepreneurial leaders who will be proactive rather than waiting for a challenge that necessitates action.

  8. What are States/Regions Doing to Become Entrepreneurial? • Undertaking Regulatory Reform • Making Entrepreneurship a State Economic Development Priority • Investing in High-Quality Support Services • Changing the Culture for Future Entrepreneurs • Improving Access to Capital

  9. Regulatory Reform • Small business impact reviews • External Reviews of Existing and New Regulations • Improving Access • Creation of Small Business Advocate or Ombudsman • Cutting Red Tape • Expediting Licensing and Registrations; Creating clear path to business start up

  10. Regulatory Reform – Examples • SBA State Model Legislationhttp://www.sba.gov/advo/laws/law_modeleg.html • New York Office of Regulatory Reformhttp://www.gorr.state.ny.us/index.html • NY Small Business Advisory Boardhttp://www.nylovessmallbiz.com/AdvisoryBoard.asp • Minnesota Entrepreneurial Gateway http://www.minnesotagateway.net/

  11. Make Entrepreneurship a State Economic Development Priority • Increase Funding for Entrepreneurial Initiatives • Restructuring/Rebranding of Existing Economic Development Organizations • Awards and Other Media Strategies

  12. Making Entrepreneurship a Priority – Examples • Reynolds Cup (AR, OK, NV) http://crc.arcapital.com/governors_award/business_plan_competition/ • Georgia Small Business and Entrepreneurship Network http://www.georgia.org/Business/SmallBusiness/ • Georgia Mentor-Protégé Program http://www.georgia.org/Business/SmallBusiness/mentor_protege.htm • NC Business ServiCenter http://www.nccommerce.com/servicenter/

  13. Invest in Support Services • Restructure and Invest in Strengthened Support Provider Networks • Invest in Pilot Projects • Link Entrepreneurship to Ongoing Cluster/Sectoral Strategies

  14. Invest in Support Services – Examples • North Carolina Demonstration Projectshttp://www.ncruralcenter.org/pubs/comm_demo_report.pdf • Montana Creative Economy Projecthttp://www.art.state.mt.us/ • North Iowa Area Community College Pappajohn Entrepreneurship Centerhttp://www.niacc.edu/pappajohn/ • Wisconsin Entrepreneurs Networkwww.wenportal.org

  15. Changing the Culture for Future Entrepreneurs • Heavy Focus on Entrepreneurship Education • Need to Hit all Levels of Education Systems • Easier Said than Done • Special Target Populations • Immigrants • University Faculty • Seniors?

  16. Changing the Culture – Examples • Illinois Hispanic Entrepreneurship Centerwww.ihccbusiness.net • Nebraska Department of Educationhttp://www.nde.state.ne.us/entreped/ • North Carolina Small Business Center program http://www.ncccs.cc.nc.us/Business_and_Industry/sbcnmainpage.htm

  17. Access to Capital • Few programs at early start-up state • Most target seed stage funds • Beyond Microenterprise • Focus on Equity • Angel Investors as Key Target • Money is not Enough! • Must be tied to support services

  18. Access to Capital – Examples • Pennsylvania Angel Networkwww.paangelnetwork.com • Capital Access Policy • Tax Credits for Angels or Other Investors; typically 20-25% of total invested (e.g., Wisconsin Angel Credit) • Pre-Seed Investing-Oklahoma www.i2e.org

  19. Moving Toward a Systems Approach – State Kansas Experience • 2001: Enterprise Facilitation Pilots Kick Off • 2004: Kansas Economic Growth Act Passed • $500 million over 10-15 years in two areas • Biotechnology/Technology • Entrepreneurship • 2005: Kansas Center for Entrepreneurship • 2006: NetWork Kansas Unveiled www.networkkansas.com

  20. Moving Toward a Systems Approach – Multi-County Region North Iowa Area Community College • 1997: John Pappajohn E Center Started • 1999: Summer Youth Entrepreneurial Academy Offered • 2005: State Business Accelerator Created; Iowa Workforce Development Partnership Co-Located • 2006: E for a Day Program for Middle School Students Developed; E Exchange Network Facilitated; Revolving Loan Fund Established • 2007: Business Incubator Started; NanoLoan Program Offered; Regional Health Care Initiative for New Businesses Launched

  21. Moving Indiana Forward – Building on … • Leadership • Including IN Office of Community and Rural Affairs, IN Rural Development Council, Purdue’s Center for Regional Development, IN Grant Maker’s Alliance, IN Small Business Development Centers, among others • Vision • RISE 2020 Report • Commitment to investment • OCRA grants; HomeTown Competitiveness commitment

  22. Moving Indiana Forward – Next Steps • Community engagement • Developing a broadly shared vision of an Entrepreneurial Indiana; creating local entrepreneurial capacity • Systems approach • Addressing technical assistance, capital access, entrepreneurship education, leadership capacity, policy and cultural changes • Focus on entrepreneurs • Building the skills of all types of entrepreneurs; creating the pipeline that will drive this system

  23. Issuing a Challenge • Learn from the experience in other states • Build on existing assets • Create a focus on entrepreneurs • Move forward with a systems approach to entrepreneurship development  The next decade is the Decade of Entrepreneurial Indiana

  24. Contact Information Deborah Markley RUPRI Center for Rural Entrepreneurship 199 Valley Meadow Drive Chapel Hill, NC 27516 Phone/Fax: 919-932-7762 Email: dmarkley@nc.rr.com Website: www.energizingentrepreneurs.org

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