Entrepreneurship 1 Michigan Municipal League May 19, 2010 Dr. Barb Fails.
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Transcript of Entrepreneurship 1 Michigan Municipal League May 19, 2010 Dr. Barb Fails.
Entrepreneurship
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Michigan Municipal LeagueMay 19, 2010
Dr. Barb Fails
Michigan Prosperity Initiative Partners
Economic Gardening
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.
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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?
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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.
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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 (Zoltan Acs of George Mason University)
How can we predict winners from losers?We can’t! All start at the same place, stage one.
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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:
1. Companies like this are vital to our economic recovery
2. Entrepreneurs are not easily discouraged; even in down economies, and perhaps because of them, they often take the E leap
3. As America ages, the pool of potential entrepreneurs only increases. The average age of company founders is 40.
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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
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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
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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%
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Who Is More Likely to Start a Business?
2008 data
% of adults starting a business each month
Gender Men 0.42
Women 0.24
Ethnicity White 0.31
Black 0.22
Latino 0.48
Asian 0.35
Nativity Native born 0.28
Immigrant 0.53
Age 20-34 0.26
35-44 0.35
45-54 0.35
55-64 0.36
Kauffman Foundation Entrepreneurial Index (2008)Kauffman Foundation Entrepreneurial Index (2008)
Pho
to:
Pur
e M
ichi
gan
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Entrepreneurial Index Trends
Kauffman Foundation Entrepreneurial Index (2008)Kauffman Foundation Entrepreneurial Index (2008)
Pho
to:
Issu
es M
edia
Gro
up
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 businessesBoomers (aged 55-64) increasingly more entrepreneurial than younger populations
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Monitoring Entrepreneurial Activity
Establishments in counties or MSAsBy sector (per NAICS codes)By business stage (per number of employees)By commercial vs. noncommercialBy resident vs. nonresident (i.e. headquarters out of state)Jobs created by each
Economic trends (by sector, stage, commercial, residential, jobs)
Openings and closingsExpansions and contractionsIn-movement and out-movement
www.YourEconomy.org is a business census resource
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Establishments (2007)Establishments (2007) Jobs (2007)Jobs (2007)
Total 607,131
100%
Noncommercial 41,892 6.9%
Commercial 565,239
93.1%
Self employed 216,746
35.7%
Stage 1 (2-9 employees)
321,780
53.0%
Stage 2 (10-99 employees)
63,749 10.5%
Stages 3 & 4(over 100 employees)
4,857 0.8%
Total 5,277,000
100%
Noncommercial
722,949 13.7%
Commercial 4,554,051
86.3%
Self employed 274,404 5.2%
Stage 1 (2-9 employees)
1,303,419
24.7%
Stage 2 (10-99 employees)
1,889,282
35.8%
Stages 3 & 4(over 100 employees)
1,809,895
34.3%
Michigan Small Businesses
REF: www.YourEconomy.org (Edward Lowe Foundation) See by Michigan county.
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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
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How Entrepreneurs Are Supported by Community
Entrepreneurial Development Systems (EDS) – or Ecosystems Integrated Collaborative Systems approach
Many community models of Entrepreneurial Development Systems
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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 Teamwork
Photo: Issue Media Group
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Two Part Strategy for Communities
Develop a Pipeline of Entrepreneurs (people) Develop a Pipeline of Entrepreneurs (people)
Entrepreneurship social networks
Culture of entrepreneurship
Entrepreneurial activity creates enterprises.
Education (K-12) critically important
Build Systematic Support for Entrepreneurs (systems)Build Systematic Support for Entrepreneurs (systems)
Resources for business
PolicyDevelop the local/ regional infrastructure to support the system
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Social Networks
Entrepreneurship Clubs
Incubators
SCORE chapters
Mentors
Business networking organizations
Idea pitch events
“Third place” coffee shops
Social media connections
Young professionals
Faith based groups Photo: Issue Media Group
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Network: ICE (Innovation Club for Entrepreneurs)
Monthly meetup
Speaker draw
Referrals and resources
Affirming, motivating
Social and fun
Recruits and builds the E pipeline
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Culture of Entrepreneurship
Awards, celebrations, events
Media recognition, stories
Community attitudes, values – risk, failure
Supportive environment
Role models
Dynamic communities
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Photo: Michigan Tech
Entrepreneurial Culture: Role Models
Find the
possibility thinkers
Realize that you can have a significant and positive influence on just one person
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Resources Capital – start up and expansion, bridge loans, working capital
Equity investment capital
Educated workforce
Affordable real estate
Community heritage and cultural assets
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Resources: Green and Sustainable24
Infrastructure Support
High speed internet
Transportation
Business services
SBTDC programs
Education, training
Business resource centers
Information, market data
Public libraries
Public marketplaces
Community websites
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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 …….
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PolicySmall 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” Photo: Pure Michigan, Kalamazoo
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Policy: Support for Libraries, School Programs
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Coaches and mentorsProfessional servicesInformationEducationWorkforceCapitalSpace
CEC Entrepreneurial Development Systems
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Faith and community based groupsE support professionals
Business groups“No wrong doors”
“Third places”Social media
E Clubs
Risk tolerantDiversity valuedMessages/ mediaWelcoming to allYouth engagementAwards and recognition
ZoningReportingIncentivesRegulation
Public policyPublic institutional support
Entrepreneurial Community Strategies
Entrepreneurial target focusEmphasis on heritage, clusters, and economic
development of community assetsRegionalismNew Economy positioning (talent retention, attraction)
Rural, urban, suburban, small town “placemaking” Community inventory assessment > identification of gapsStrategic planning and community engagementChampion and resource identification Infrastructure for team support
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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.
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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
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Entrepreneurship is Pure Michigan
Barbara Fails, Ph.D., Associate DirectorMichigan State University307 Manly Miles BuildingEast Lansing, MI [email protected] 517-432-3287
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CEC Program Benefits
Community coaching services for 3 yearsTraining 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
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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
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