Like many professions, economic development has its factions and schools of thought. Folks interested in innovation policy tend to love technology but don’t put too much stock into the aesthetics of place making. If you’ve ever been to a 1980s-era research park, you’ll know what I’m talking about. They will be beautifully landscaped, but pretty devoid of any human activity or buzz. Meanwhile, placemakers sometimes neglect the importance of technology and innovation. I like a coffee shop and independent bookstore as much as the next person, but many cool places would be more vibrant and prosperous with a dose of innovation too.
That’s why I’m excited about a new partnership between the Brookings Institution and the Partnership for Public Spaces: the Bass Initiative on Innovation Districts and Placemaking. This new effort builds on Brookings’ well-known research on innovation districts, but looks to inject a new focus on placemaking, equity and vibrant public space into the conversation. I’m looking forward to the work of this new collaborative. For the time being, they’ve done some initial work and PPS has published “8 Placemaking Principles for Innovation Districts” which is a very good start on making innovation districts more vibrant and creative and perhaps making cool creative places more innovative too.
The news media—and this blog too—spend a lot of time talking about the ongoing economic transition challenges in the America’s coal regions. But, sadly, coal regions are not alone in facing such challenges. The northern border regions of New England are also facing major dislocation as the wood and paper industries continue their steady decline. Small towns across Maine and elsewhere have been rocked by the shutdown of paper mills that long served as town symbols and the primary providers of good jobs and local tax revenue. The impacts are profound—nearly every county in the northern regions of Maine, New Hampshire, New York, and Vermont can now be classified as “distressed,” with high rates of poverty, unemployment and outmigration. The ripple effects are profound, hurting related industries and professional opportunities as well. Some great efforts to rebound are underway, and I’d recommend the work of the Orton Foundation and the Northern Forest Center, among others. As we rightly pay more attention to economic dislocation in coal country, let’s not forget other regions as well.
A new study on business startup growth by the Economic Innovation Group is getting a lot of media hype this week. It’s an interesting assessment so the media attention is warranted. The study looks at US business startup rates between 2010 and 2014 and finds many worrying signs. Overall, business startup rates are down and the concentration of business activities are growing. In fact, they find that twenty US counties account for ½ of new business establishments and that 50% of total US job growth is concentrated in only 2% of US counties. These worrisome trends on business startups aren’t necessarily new news—we’ve discussed this topic many times in the past. And, we should remain worried. But, let me throw out a few provisos to this study. The analysis uses data from the Census County Business Patterns program which measures formally licensed business establishments. They thus miss the dynamic activity underway in the 1099 Economy of free lancers, self-employed and other gig economy workers. This is a complex situation and the data are somewhat murky, but we do know that many parts of the 1099 Economy are growing. For example, the latest Census data show that the number of self-employed in the US jumped 3.6 percent between 2013 and 2014. This group totals 23.8 million people, so they are a sizable chunk of our economy. Meanwhile, other data show some declines in the gig economy, especially in rural areas. In addition, we know that the rise of Walmart, Dollar General and other such large players are having a huge impact on small business activity in rural areas. The concentration of retail activity in these larger firms is also having a big impact on startup rates in rural America and elsewhere.
So where does this leave us? While I have a few wonky minor quibbles with the EIG data, we can’t avoid the sobering message found this report. We’ve got some challenges in terms of getting more regions and more people fully engaged in our ongoing economic recovery.
Yesterday, I attended an interesting Aspen Network for Development Entrepreneurs discussion on the topic of “What’s Working in Startup Acceleration.” The event unveiled a new ANDE report that assess the performance of business accelerators in both developed and developing economies. The report has lots of interesting findings. Perhaps the most important result is that accelerators appear to work in that client firms outperform those that don’t participate in acceleration programs. This may sound like a no-brainer, but it’s important. Despite the massive growth of business accelerators, we actually have very little rigorous studies of whether and how they work. This study helps on that front—–in addition to offering some other useful tips on smart practices for business accelerators.
This report is part of a larger and very exciting research project: the Global Accelerator Learning Initiative. GALI is seeking to develop a global assessment system of business accelerator performance—a way to assess the quality of accelerators and to benchmark their performance with their peers. The GALI effort is just getting started and this new ANDE report is one of its first publications. But, it has great potential if more accelerators opt to use the performance measure and evaluation systems being promoted by the GALI team. It also affords us a chance to better under the most effective ways to support acceleration in different countries, with different groups of entrepreneurs, and in different industry sectors. If you run a business accelerator or work with them, encourage their leadership to consider participating in the GALI research project. It’s a great opportunity to build a more professional and effective set of programs.
The latest edition of our quarterly e-newsletter, EntreWorks Insights, is now available. This issue shares some perspectives on the ongoing economic transition issues facing America’s coal-reliant communities. You can learn more and subscribe here.
The 2017 Farm Bureau Rural Entrepreneurship Challenge has just been announced and they’re looking for cool rural business ideas. The Challenge is the first and only business competition that focuses exclusively on rural businesses, and some cool companies won awards in 2015 and 2016. This year’s challenge is a little different as it is focused on companies working in the food and agriculture sectors. Also, firms can be located anywhere (not just in rural America), but must show how they have a positive impact on rural communities. And, the prize money is bigger—with $145,000 and other benefits available to this year’s winners. If you want to apply or encourage others to do so, you can apply and get more information here. The application deadline is June 30, 2016.
Big data gets a lot of deserved hype in the media, but, in the field of economic development, we haven’t yet really seen the benefits of big data. Federal agencies, like the Economic Development Administration and others, have been improving their offerings. But, we really haven’t yet seen a “killer app.” I’m not sure that it is the killer app, but I am really intrigued with the new Data USA site, and I highly recommend a visit. Developed by Deloitte, DataWheel and the researchers at the MIT Media Lab, Data USA bills itself as “the most comprehensive visualization of U.S. public data.” Based on my limited knowledge, they can rightly make this claim. If you want to understand your local economy, there are few better places to get started.
If you’re interested in digging deeper, I’d also encourage you to take a closer look at the work of MIT Media Lab’s Cesar Hidalgo, one of Data USA’s designers. This is the latest in a series of fascinating projects that he has done. Others include the Observatory of Economic Complexity, which maps international trade patterns, StreetScore, a tool to map the perceived safety of streets in major U.S. metro areas, and Data Viva, which maps employment and education patterns in Brazil.
If you’re interested in learning the basics of entrepreneurship-driven economic development, have I got a deal for you! Come join us in Baltimore on June 23-24, 2016, where I will be teaching the International Economic Development Council’s Entrepreneurship and Small Business Development course. (You can learn more and register here). This is a basic level introduction that is also part of the professional certification process for economic developers. If you can’t make it to Baltimore, you’ll have another chance in late July when I’ll be presenting similar material as part of the University of North Carolina’s Basic Economic Development Course. This training takes place in Chapel Hill, NC during the week of July 25, 2016. Hope to see you there!
There has been a lot of interesting work related to entrepreneurship in the past few months. Here’s a few that piqued my interest:
- Traction by Gabriel Weinberg and Justin Mares: There’s no shortage of how to guides for entrepreneurs these days, but many of them forget the real secret to success: getting people to pay you for something. Finding and keeping customers is one of the toughest challenges for any entrepreneur, and this book offers some great practice guidance on this front.
- “A New View of the Skew:” This MIT research offers some optimistic news about the state of American entrepreneurship. Numerous studies have shown a slowdown in US entrepreneurial activity, but this new research finds that the performance of high-growth start-ups has been improving since 2010.
- Time for Social Insurance? A new Kauffman Foundation brief examines how US social policies—namely a weak social safety net—impede entrepreneurship. Expanded social insurance programs, such as better, cheaper health care and more robust unemployment assistance, could actually help spur more people to consider entrepreneurship.
- Small Business Credit Survey 2015: The seven Federal Reserve Banks have released their annual survey of small business credit. Conditions are improving, but more than half of small firms still report that they have financing issues. Small banks remain the lender of choice. On-line lending is growing and was used by 20% of firms. But, most don’t seem to like it and customer satisfaction rates are very low.
- What About the Kids?: Finland regularly tops the global charts for best educational systems. They are now pioneering new approaches to youth entrepreneurship. Check out what’s happening with their “Me and My City” program focused on 12 year old budding entrepreneurs.
I’ve been doing a fair number of blog posts on EntreWorks Consulting’s ongoing work supporting economic diversification in coal-reliant communities. For the past 18 months, a lot of this work occurred under the auspices of the Coal Reliant Communities Innovation Challenge, a joint effort of the National Association of Counties, National Association of Development Organizations, and the US Economic Development Administration. This effort has been getting a lot of attention recently. The latest, which is worth a read, comes from the Smart Growth Network, which offers a great summary of the project and some early results from Harlan County (KY) and Rio Blanco County (CO). Watch this space for future updates!