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!
It’s no big news to note that the local foods movement is booming across the US. That’s a very good thing as local foods improve our health, reduce carbon footprints, and generally improve the quality of life for both producers and consumers. They also help the bottom line according to new research from the US Department of Agriculture’s Economic Research Service. The study look at the growth in direct to consumer (DTC) agriculture sectors between 2007 and 2012, and found that farms with DTC sales had much higher business survival rates than their traditional counterparts. In fact, DTC sales improved a farm’s survival rate by anywhere from 6-10 percent. This may not sound like a whopping difference, but its impacts are significant as farms face regular and substantial fluctuations in annual income. As a result, failure rates can be quite high. In general, the researchers find that farms with DTC sales are more stable. They see less pronounced fluctuations in income, but they also show slightly lower growth rates over time. This probably results from the fact that DTC sales can be very labor intensive, perhaps limiting the farm’s capacity to sustain rapid growth rates.
As an article in today’s Wall Street Journal notes, China’s economy is beginning to look like America’s economy in a number of ways. One of the less desired similarities is the rise of a two-tiered (or two-speed) regional breakdown, where some regions, like Shenzen, boom and prosper, and other regions, like Fushun in China’s industrial northeast, face stagnation and decline. These regional disparities are likely to get worse as many Chinese regions face daunting transition challenges moving away from reliance on coal or heavy industries like steel. A number of recent studies have examined similar regional disparities here in the US. For example, the National Association of Counties has found many parts of the US have grown and are now “fully recovered” from the impacts of the Great Recession. However, roughly 16% of US counties have shown little or no recovery since then. Similarly, the 2016 Distressed Communities Index finds huge performance differences between America’s most prosperous and distressed zip codes. In prosperous communities, employment jumped by 22% between 2009 and 2013, and the number of establishments climbed 11 percent. Among the distressed areas, job losses averaged 13% and one in ten businesses shut down. It’s certainly no consolation to see these big regional disparities at home and abroad, but it should again remind us that we have all work to do.
My firm works across the US so I have a decent amount of hard-earned experience with the good and bad (hello New York!) of state procurement rules and regulations. So, I was very pleased to see a new series from the Governing Institute that assesses and ranks states for the quality and user-friendliness of their procurement practices. The study, the first in an ongoing series, ranks states on a number of factors including the use of technology, contract administration, information technology procurement, and workforce training and quality. The researchers kindly refrain from noting the worst performers, but they do rank the best. They find that Georgia tops the list, followed by Virginia, Minnesota, Utah, Massachusetts, and Ohio. What do these states do better? For one, they got an early start and have been aggressively modernizing their systems for at least a decade. In addition, they have strong leaders who view procurement as a means to achieve the state’s policy goals, not just as an enforcement weapon or as a means to manage contracts.
I applaud the Governing team for this good work and look forward to the rest of the series. As they look forward, I encourage them to also look more deeply at the idea of demand driven innovation where states can use the power of procurement to promote innovation, purchase more cutting edge products and services, and engage new types of partners and suppliers. The Governing survey does ask whether states do special outreach and training for small and disadvantaged business—it finds that 78% of state agencies do so. But, it would also be instructive to see what other steps are being done to use the power of the state purse to develop more innovative state economies.