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Boosting Economic Growth Through Entrepreneurship

Discover the impact of high entrepreneurship rates on firms' growth. Learn why small businesses create jobs and challenge entrepreneurial myths. Explore the Timmons Model for sustainable ventures and actionable steps for fostering entrepreneurship in communities. Find out how to stimulate high-growth businesses without incentives. Embrace diversity and overcome the fear of failure in entrepreneurial endeavors.

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Boosting Economic Growth Through Entrepreneurship

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  1. Entrepreneurship & Jobs The Case for Economic Gardening masont@rose-hulman.edu

  2. High Entrepreneurship Rates Mean • Better growth for existing firms! • 73% better employment growth • 14% higher wage growth • 45% higher productivity Source: Center for Rural Entrepreneurship www.ruraleship.org - Based on a study of the 90’s by Edwin Lowe Foundation &SBA

  3. Do small businesses matter? • Fortune 500 jobs declining, but large • Small and medium create jobs, but larger businesses employ a lot – including high tech. • See http://smallbiztrends.com/2010/08/do-small-businesses-matter-in-high-tech.html • This scholar criticizes helping small business? • Kauffman Foundation on jobs creation • http://www.kauffman.org/uploadedFiles/firm_formation_importance_of_startups.pdf

  4. Kauffman on Job Creation

  5. Small Business vs EntrepreneurshipSee Scott Shane. The Illusions of Entrepreneurship, YYP, 2008 • Most small businesses fail • Most are started in unpromising industries with which the founders are familiar • Most have little (i.e. insufficent) financial capital from family and friend sources • Most founders want “to be their own boss”, but reality is they get more “bosses” • BUT- most small businesses are not entrepreneurial!

  6. What is an entrepreneurial venture? • K. Allen (in Launching New Ventures) says they are • Innovative • Value-creating • Growth -oriented • AND they can occur as new organizations or within existing ones.

  7. Sustainable VenturesThe Timmons Model • Opportunity driven • By a lead entrepreneur and entrepreneurial team. • Resource parsimonious and creative • Depends upon fit and balance • Are integrated and holistic • See http://blacksgonegeek.org/Documents/Timmons%20Modelv3.pdf

  8. Requirements for Entrepreneurial Action • Evidence of current customer value • A sound business model • An effective team with the right skills • Resources – at least one of which can produce sustainable competitive advantage (SCA) • i.e. rare, valuable, hard to copy or find substitutes

  9. Lessons of Littleton, COChristian Gibbons-Director, Business/Industry Affairswww.littletongov.org/bia/economicgardening/ To stimulate development of high growth business (gazelles), communities should provide: • Information- Knowledge is the basis of 21st century wealth. • Infrastructure -Physical, Quality of Life & Intellectual • Connections -Academic institutions, trade groups, etc. • Littleton doubled jobs & spent no money on incentives or tax breaks. They grew their own new business.

  10. So what should we do? • START on the things you need! • Information like access to school, agricultural extension and library sources!!! • Infrastructure – EDUCATION, broad band & wireless, bike paths, nature areas, youth centers • Connections - universities, government, investors, SBDC, former residents and most importantly – other entrepreneurs!!!

  11. Some other thoughts • Technology is important, but it is about GROWTH, not technology • Manufacturing is different, not dying. • Assess resources and opportunities – i.e., ENGAGE IN ENTREPRENEURIAL ACTION!!! • Cultivate diversity! • FEAR the fear of failure! • CHANGE can be good!

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