Entrepreneurship & Jobs

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!