Entrepreneurship

1. Entrepreneurship Michigan Municipal League May 19, 2010 Dr. Barb Fails

2. Michigan Prosperity Initiative Partners

3. 1987 City of Littleton, CO Alternative to the traditional practice of recruiting firms EG launched with simple concept that small, local firms were the source of jobs and wealth The job of economic developers should be to create nurturing environments for these firms. Economic Gardening

4. Entrepreneur • French word; “to undertake” • Organizes, manages, and assumes the risks of a business or enterprise (Webster) • Creates or grows an enterprise (commercial or noncommercial) • Innovation; new idea, method, or product that creates and delivers customer value Who are they? Can you identify the entrepreneurs in your community?

5. An Entrepreneurial Spirit “The entrepreneur is our visionary, the creator in each of us. We're born with that quality and it defines our lives as we respond to what we see, hear, feel, and experience. It is developed, nurtured, and given space to flourish – or it is squelched, thwarted, and without air or stimulation it dies.

6. Communities Ask • How do we create more jobs? Entrepreneurs are the primary engine of job creation – and wealth creation – within a community • Which entrepreneurs will succeed? Gazelles grow enterprises at 15%+/yr. for at least 5 yr. (3-5% of all) Serial entrepreneurs excel at starting, growing, and selling enterprises (<1% of all) Those who (at least initially) create most jobs are: Start up enterprises (Kauffman Foundation) Established firms, on average 25 years old, with sales over $1,000,000 (ZoltanAcs of George Mason University) • How can we predict winners from losers? We can’t! All start at the same place, stage one.

7. In its first 5 years of existence, eBay hired 640 people – an average of 128 new people per year. • eBay – a New Economy sector • Kauffman Foundation 2010 State of Entrepreneurship Address: • Companies like this are vital to our economic recovery • Entrepreneurs are not easily discouraged; even in down economies, and perhaps because of them, they often take the E leap • As America ages, the pool of potential entrepreneurs only increases. The average age of company founders is 40.

8. Entrepreneurial Pipeline Nurture the entrepreneur next door There are many entrepreneurial types, and all start at stage one None of us can predict the next gazelle, or the “winners and losers” The more people engaged in entrepreneurship, the greater the chance that successful enterprises will result

9. Economic and Community Development • Does a healthy, vibrant community attract innovators and entrepreneurs? • Emphasis on place (place making) • Or, do innovative and entrepreneurial people create those healthy, vibrant communities? • Emphasis on people

10. How Entrepreneurial Are We? • Kauffman Foundation Index of Entrepreneurial Activity 2008 data (based on Current Population Survey data, collected by U.S. Bureau of the Census) Percent of population aged 20-64 who start a new business per month (at least 15 hr./week of business ownership as their main job) • Michigan rate 0.28% vs. National rate 0.32% In 2008, 28 new Michigan businesses started per 10,000 population of adults/month. Past 12 yr. average rate; Michigan 0.25% vs. National 0.29% • Regional indices: Midwest 0.23% Northeast 0.29% West 0.42% South 0.33%

11. Kauffman Foundation Entrepreneurial Index (2008) Who Is More Likely to Start a Business? Photo: Pure Michigan

12. Kauffman Foundation Entrepreneurial Index (2008) Entrepreneurial Index Trends Necessity Entrepreneurs – motivated by economics Opportunity Entrepreneurs – opportunity motivated College grads less entrepreneurial than high school drop outs (0.31% vs. 0.48%) Immigrants increasingly more entrepreneurial, though primarily in low income potential businesses Boomers (aged 55-64) increasingly more entrepreneurial than younger populations Photo: Issues Media Group

13. Monitoring Entrepreneurial Activity Establishments in counties or MSAs By sector (per NAICS codes) By business stage (per number of employees) By commercial vs. noncommercial By resident vs. nonresident (i.e. headquarters out of state) Jobs created by each Economic trends (by sector, stage, commercial, residential, jobs) Openings and closings Expansions and contractions In-movement and out-movement www.YourEconomy.orgis a business census resource

14. Michigan Small Businesses Establishments (2007) Jobs (2007) REF: www.YourEconomy.org(Edward Lowe Foundation) See by Michigan county.

15. Entrepreneurial Communities What do they look like? How do they get there? How long does community change take? …the work of entrepreneurs Detroit: Pure Michigan

16. How Entrepreneurs Are Supported by Community • Entrepreneurial Development Systems (EDS) – or Ecosystems • Integrated • Collaborative • Systems approach • Many community models of Entrepreneurial Development Systems

17. Community-Driven Actions • Collaboration, optimism, tolerance, and inclusion • Long term view • Regional base • Global, innovative thinking • Asset based, heritage, culture • Investment in people and systems • Monitor entrepreneurial activity Photo: Issue Media Group Teamwork

18. Build Systematic Support for Entrepreneurs (systems) Two Part Strategy for Communities Develop a Pipeline of Entrepreneurs (people) Entrepreneurship social networks Culture of entrepreneurship Entrepreneurial activity creates enterprises. Education (K-12) critically important • Resources for business • Policy Develop the local/ regional infrastructure to support the system

19. Entrepreneurship Clubs Incubators SCORE chapters Mentors Business networking organizations Idea pitch events “Third place” coffee shops Social media connections Young professionals Faith based groups Social Networks Photo: Issue Media Group

20. Network: ICE (Innovation Club for Entrepreneurs) Monthly meetup Speaker draw Referrals and resources Affirming, motivating Social and fun Recruits and builds the E pipeline

21. Awards, celebrations, events Media recognition, stories Community attitudes, values – risk, failure Supportive environment Role models Dynamic communities Culture of Entrepreneurship Photo: Michigan Tech

22. Entrepreneurial Culture: Role Models Find the possibility thinkers Realize that you can have a significant and positive influence on just one person

23. Capital – start up and expansion, bridge loans, working capital Equity investment capital Educated workforce Affordable real estate Community heritage and cultural assets Resources

24. Resources: Green and Sustainable

25. High speed internet Transportation Business services SBTDC programs Education, training Business resource centers Information, market data Public libraries Public marketplaces Community websites Infrastructure Support

26. Infrastructure Support: Farmers Market Andrew and family travel a considerable distance from the Quincy area every Saturday to join us on our prime market day. They offer an incredible array of fresh produce, direct in most cases from their farm, but also items from the larger Amish community …….

27. Small business friendly Minimize financial risk Leverage and allocate community assets to support and encourage enterprise development Buy local, independent businesses Limit regulation for small business owners Choose investments in “economic gardening” Policy Photo: Pure Michigan, Kalamazoo

28. Policy:Support for Libraries, School Programs

29. CEC Entrepreneurial Development Systems Faith and community based groups E support professionals Business groups “No wrong doors” “Third places” Social media E Clubs Coaches and mentors Professional services Information Education Workforce Capital Space Zoning Reporting Incentives Regulation Public policy Public institutional support Risk tolerant Diversity valued Messages/ media Welcoming to all Youth engagement Awards and recognition

30. Entrepreneurial Community Strategies Entrepreneurial target focus Emphasis on heritage, clusters, and economic development of community assets Regionalism New Economy positioning (talent retention, attraction) Rural, urban, suburban, small town “placemaking” Community inventory assessment > identification of gaps Strategic planning and community engagement Champion and resource identification Infrastructure for team support

31. MML 21c3 Assets; Entrepreneurship • Growing knowledge-based jobs in ones and twos creates sustainable economies in the 21st century. • Strategies that solely focus on seeking out large manufacturers and big box retailers overlook the positive impact that entrepreneurs and small businesses have on local communities. • It is critical to identify the characteristics entrepreneurs seek out in places where they want to start up and grow their businesses in order to harness the potential for economic growth that this vital sector brings to local communities.

32. Pilot Community: Ypsilanti/eastern Washtenaw County Phase I - Asset Mapping and Gap Analysis Phase II - Facilitated community dialogue and strategic planning for programs and services Phase III - Consulting support to advise on the execution of the strategic plan, development of assessment criteria

33. Entrepreneurship is Pure Michigan Barbara Fails, Ph.D., Associate Director Michigan State University 307 Manly Miles Building East Lansing, MI 48823 fails@msu.edu 517-432-3287

34. CEC Program Benefits • Community coaching services for 3 years • Training in Energizing Entrepreneurship (E2) curriculum • Access to resources among program partners and other communities • Community assessments for a solid foundation to develop your entrepreneurial initiatives • Structured process with measurable benchmarks

36. Application Steps • Form a team of 6 -10 community leaders who are committed to starting a new entrepreneurship program in your community • Submit a proposal describing your team composition, community culture, statement of purpose and community endorsement • Send completed application to MSU Land Policy Institute by June 30, 2010 • Selections will be made by July 30, 2010