Creating Entrepreneurial Ecosystems
by Casey Woods, Executive Director | May 20, 2016
For those of you that haven’t attended a summit style meeting, there are speakers and panels present, but there are also a series of break out sessions where attendees essentially become a panel to discuss specific issues for later compilation. This particular summit had people from all across the United State, and from throughout the entrepreneurial spectrum. The discussions were rooted in reality, often blunt and generally centered around change. The following were some of the things learned from participants of the summit:
– Traditional forms of Economic Development based on recruitment aren’t working. One speaker equated the difference between a community focused on entrepreneurial development vs. recruitment asthe equivalent of a mutual fund investor versus a day trader. Focusing on entrepreneurial growth and development often doesn’t look as flashy, but communities are generally much better off over time.
– Entrepreneurial talent is key to growing an economy. Entrepreneurs need places that readily expose them to other entrepreneurs, and need to take advantage of unique community assets to achieve success.
– Entrepreneurs can include both civic and social entrepreneurs. It’s important for entrepreneurs to have ready access to “neighborhood fun spaces” to encourage interaction and discussion. The varying types of entrepreneurs only grow in a community with a prevailing entrepreneurial attitude, and communities must be willing to adjust to the talents of local entrepreneurs.
– Organizations and civic systems that hope to deal with entrepreneurs must be entrepreneurial. The entrepreneur is part of a culture, and they understand/integrate with others that emulate that culture. If a system is too hierarchical, slow moving or resistant to change, entrepreneurs will rebel. So, communities that hope to become “entrepreneur friendly” must embrace change (even if it’s scary).
-Failure for most rural communities over the next few decades will come as a direct result of a lack of commitment to an entrepreneurial culture.
-Economic development of entrepreneurial ecosystems is the greatest social service an individual canprovide. This topic was hit pretty hard, and more nuanced than I can detail in a short bullet point, but the emcee made several points on this topic, including: Large corporations #1 goal is to accrue value to ownership- everything else (jobs created, community amenities) is a secondary consideration, but entrepreneurs tend to focus on sustainable community good within their mission. When entrepreneurial businesses are created, they tend to donate to and volunteer for a variety of social systems- by increasing community capacity through focusing on the development of entrepreneurial ecosystems, we improve resources for all- but if we choose not to build capacity and focus on direct giving, the resulting social systems base is unsustainable. The primary host of the conference from the Federal Reserve noted a company that had been recruited from Arizona to his home state of Nebraska that recently left for Illinois, stating that “At each stop they had a big media event talking about how they created jobs, but they didn’t create jobs- they simply moved them from one place to another. Entrepreneurs and their phase one and phase two businesses are the true net job creators in the nation.“
-Sustainability is a critical issue in economic development strategy. Are we overdeveloping? Are we creating a net improvement in the tax base? Are we intersecting with future trends? Or, are we attempting to capitalize on trends that have already passed?
– Endowments and community funds are critical to making entrepreneurial transformations happen. Without a dollar commitment directed to fostering the entrepreneurial culture of an area, the ecosystem can’t develop. Federal, state, county city and foundational resources should search for “heavy lifters on the ground that can get things done.“
– The word “entrepreneur” has become a buzzword among all organizations in community and economic development. Those worthy of an investment have shown that they can execute a game plan that benefit entrepreneurs and create results.
– Entrepreneurial communities must have scale-able funding and investment options that can continue tohelp entrepreneurs as they grow through different life cycle phases of their business.
– When working with entrepreneurs, organizations must move quickly to test, learn and refine processes that lead to best results.
– Successful communities place entrepreneurs at the center of their organizational focus; not as an ancillary part. Organizations cannot put themselves above the needs of their entrepreneurs, as long as the entrepreneurs understand that they are part of a larger ecosystem.
– Entrepreneurial ecosystems cannot be controlled by one organization. Control, in respect to economics, is an illusion. Enough flexibility must exist to allow entrepreneurs to collaborate where they feel comfortable.
– Prosperity within a community must be defined by creating growth within entrepreneurial businesses.
– Singular investment doesn’t guarantee a successful ecosystem. A culture of broad based entrepreneurial investment is required. We can’t “dabble” in entrepreneur-ism. A rural community can’t be entrepreneurial and commit extensive resources/focus to more homogeneous enterprises. The two focus sets are mutually exclusive.
– Job creation isn’t the only objective of entrepreneurship, and metrics must be developed to recognize cultural accommodations.
– Successful interaction with communities/organizations, from the entrepreneurs perspective, is based on tangible support.
– There are a lot of different recipes for successful entrepreneurial ecosystems, but they require variance from community to community to compensate for unique attributes and assets.
– You can’t be a small community that is slow to change. Failure must be an acceptable part of the ecosystem process. If you don’t have any failures, you aren’t taking enough risks. This ethos is hard for small communities. One presenter noted “Sometimes wolves don’t look like wolves… Sometimes they just want everything to stay where it is. Cut them loose or they will drag you down.” We can appreciate our heritage, while we are driving change.
-Activity creates activity. Busy communities that do “big things” have more “big things” that happen.
-Vacant properties kill ecosystems. A former economic adviser to a current Presidential candidate statedthat they turned their city and state around by focusing on local ownership in businesses that used local resources to help “seal the leaky bucket” of sales leakage. They did so through the use of public/private partnerships as prime conduits for change. By focusing on local for-profit initiatives, they built community capacity and a developed a culture that retained citizens and businesses. They found that by fixing “decrepit” buildings, they avoided “missing teeth” in a community and others naturally tried to “keep up with the Jones'”.
-Community Culture and Community Strategy “feed each other” in opportunistic communities. The culture of a community can emphasize unique facets of a town, and when the unique elements of a community are recognized they can be reinforced through strategic focus. Once strategy (and resources) help grow unique cultural elements, the surrounding culture grows to embrace strategic initiatives.
-Second stage entrepreneurs are often neglected, but they are the ones that “need to feel loved” the most. We often make a big “to do” about new businesses opening, or a big business landing, but successful community take second stage businesses and help them grow.
– Creating an entrepreneurial ecosystem is controversial in most rural communities. People want the quick fix of a big business or recognizable name, even if they don’t realize the long term negative impactit may have on the community. Speakers noted that a thick skin associated with “actually doing things” was a requirement for economic and community development, and they suggested that successful communities need to simply find ways to “outlast your critics.”
– My favorite quote of the conference: “Entrepreneur is a French word, meaning: has ideas and actually does them.” So often we get caught up in the “idea”, “vision”, or “mission” and then depend on others to “step up and do things”. Entrepreneurs can take the idea to fruition. There are people that have cool ideas, and people that can execute a task if you assign them, but entrepreneurs are the rare combination personality that can envision an opportunity and make it happen. Successful communities need to empower entrepreneurial personalities to create an entrepreneurial ecosystem.
This was definitely a different type of learning session than I’m used to. The tone, the interactive nature and the rapid pace were all things I truly enjoyed. But, a conference is just a conference if it doesn’t create momentum. What do you think of the bullet points listed above? Are there thoughts you agree or disagree with? How can we take different elements noted above and create tangible change within our community? My mind was buzzing with unique opportunities for our region after the session, but a true ecosystem involves all of you! What do you want for Emporia’s future?