Mayor Warren leads the way for entrepreneurial ecosystem building: Entrepreneurial ecosystem development in Rochester, NY

Rochester_Mayor Warren Photo

Several cities across the U.S. are seeing success with entrepreneurial ecosystem development efforts thanks to trailblazing mayors like Mayor Lovely A. Warren of Rochester, NY.

Supporting entrepreneurs and early-stage businesses is key to economic mobility, opportunity and growth. But it’s one thing for city leaders to “talk the talk” and quite another to implement a strategy that will spark and sustain entrepreneurship. A report called “Dynamism in Retreat” (Economic Innovation Group, February 2017) stated that, “From 2010 to 2014, just five metro areas—New York, Miami, Los Angeles, Houston and Dallas—produced as big of an increase in businesses as the rest of the nation combined.” In fact, across the rest of the United States the report said many cities were seeing major declines in new business starts. Since then, however, more and more city officials, especially mayors, are embracing the role of “entrepreneurial ecosystem builder,” and are actively working to create—through policies and programs—an environment within their communities that supports entrepreneurship.

Alejandro Manzanares is a program manager with City Innovation Ecosystems (CIE), a program the National League of Cities (NLC) launched in 2018 to aid cities’ entrepreneurial ecosystem-building efforts. More than 100 cities have participated in the first two cohorts. Manzanares said that there is no one-size-fits all approach cities should take when it comes to entrepreneurial development efforts. He encouraged mayors and city officials to get creative about their ecosystem initiatives and to embrace programs and policies that consider the current assets, challenges and opportunities, as well as the dynamics of their specific communities. One thing is clear, though, he said, “Entrepreneurs should be at the center of any entrepreneurial development efforts.” Here’s how the City of Rochester, New York and Baltimore City, Maryland developed an infrastructure to support entrepreneurship—with the mayors of both cities taking the lead.

Rochester, New York: A Lovely Idea

According to census data compiled by ACT Rochester, Rochester ranks third within the 10 poorest cities among the top 75 metropolitan areas in the United States. More specifically, it ranks first among 17 benchmark cities for overall, child and extreme poverty rates. Mayor Lovely A. Warren recognized the need to reverse these trends. In January 2018, at the beginning of her second term in office, Warren launched the Office of Community Wealth Building (OCWB), the second of its kind in the nation. Community wealth building is a “bottom-up” economic development strategy theoretically advanced by the Democracy Collaborative at the University of Maryland in partnership with the Aspen Institute. The OCWB’s original mandate was to develop policies and initiatives that combined existing government programs, the business community, the nonprofit sector and educational institutions to help citizens build personal and community wealth. One of the sectors the plan targeted was small business and entrepreneurship. A goal was to build an ecosystem that supports prospective entrepreneurs and existing small business owners.

Dr. Lomax Campbell, director of the OCWB, said entrepreneurship was targeted because eradicating poverty requires being able to build wealth, especially in a capitalistic society. According to Dr. Campbell, true wealth-building occurs when people can own property, invest in the stock market, or start a business. “There’s not really a lot of other ways to build wealth,” he said. “As a city, it all begins with asking ourselves, do we want more people trying to go take jobs when there aren’t a ton of jobs in the city? Or,do we have to create the businesses in the city that would allow those jobs to exist for people to take. So,the reason entrepreneurship is so important is because as our economy experienced the vacancy through the decline of Kodak, Xerox and Bausch and Lomb,Rochester has had to transition from being a ‘company town’to a ‘town of companies,’as the mayor sometimes says. We want to be mini employers. And we know that the biggest employer of America’s citizens are small businesses.”Dr. Campbell said it made sense for Mayor Warren to lead the initiative because she is “a child of Rochester” who has deep relationships andsocial and cultural capitalwith Rochester’s residents. “When the mayor says this is what’s important to us and this is what we are doing, there’s a significant proportion of our population that believeher,” Dr. Campbell said. “So that credibility and those relationships are important.That network is important.”Previously, he said, Rochester’s entrepreneurial and business support services were fragmented and had operated in silos.Dr. Campbellpointed out that the mayor could reach across all the organizations where there traditionally had been little sharing of goals or data and say:“You all are jockeying to be a part of it. So,sincewe all have a relationship anyway, why don’t we do this together?That’s where the voice of the mayor is so important and why we’re the center of this,”he said.He stressed adopting a collaborative approach is critical when cities consider entrepreneurial ecosystem building.Campbell began a yearlongundertaking of engagingwith Rochester residents, business leaders, and regional stakeholdersabout entrepreneurship and asset building.In April 2019, OCWB obtained approval to reallocate $40,500 in City Acceleratorgrant funds toconduct three “undoing racism” workshops for city staff, community members, andlocal trainers.This decision was essential to addressing the systemic barriersthat had to be addressed if ecosystem efforts were to be viable, Dr. Campbell said. The accelerator initiative helped city officials and other stakeholders gain the insights of minority and women business owners through both surveys and focus groups. “Since the needs of our primary markets are varied, our principal strategy for ensuring their satisfaction is meeting them where they are. This compels us to get to know them in authentic ways,” he said.

Agrant from the JPMorgan ChaseFoundation allowed the OCWBto enter an agreement with SourceLinkin August 2019to connect resources, collect and track data, and provide referrals for entrepreneurs within the Rochester community.In summer 2020, the OCWB—in conjunction with the Rochester Institute of Technology’s Center for Urban Entrepreneurship, theRochester Economic Development Corporation (REDCO), and the Business Insight Center at the Central Library of Rochester and Monroe County—officially launched the first phase of Nexusi90,an online entrepreneurial ecosystem solution. It consists of SourceLink’s Resource Navigator; an events calendar; a blog; content for starting, growing and funding small businesses; and a data system for tracking and measuring network success.Dr. Campbell said, “We’ve never been able to say,‘What are the top two or three barriers or challenges for any given entrepreneur? What are the top goals and aspirations of an entrepreneur? What are the shortcomings in terms of the skill set knowledge? How many meetings are held before they achieve their goals? What percentage isn’t achieving their goals?How much capital are these businesses getting when they’re awarded grants and loans?’Now we can answer those questions by just looking at the data and producing an annual report.”He noted that moving forward, the OCWB will continue to play the role of convener, engagingand collaborating with key stakeholder groups in even more robust waysso the program remains sustainable. For example, he said, they will establish regular meetings of issue-and affinity-based advisory councils to inform ongoing initiativesand ensure mission alignment. “When I came on as director,one of the first things I asked was, ‘How do we make this sustainable?So,as we’ve rolled out projects, we’ve tried to find partners from the nonprofit sectorand other areasto partner with us on conceptualizing, administering,androlling out these programs,”Dr. Campbell said.He said he’s also discussed the possibility of the OCWB being absorbed into the Department of Labor to ensure its continuity beyond Mayor Warren’stenure as mayor. Another option Dr. Campbell says has come from strategic planning activities is to consider all business-serving activities to eventually be absorbed by REDCOsince it’s a separate organization from the city.Such a plan, Dr. Campbell said, “gives the OCWB a continuity buffer.”Baltimore City, Maryland: Creating Connections and ContinuityA few hundred miles directly south of Rochester, officials in the City of Baltimore, Maryland, also began to consider the importance of entrepreneurship to economic developmentand job creation.“The small business community is the greatest drivers for jobs,” said Paul Taylor, the director of the Mayor’s Office of Small, Minority and Women Business, which takes the lead role in the city’s provider network. “Even though it’s always nice when a large corporation moves into city, it’s really at the most basic level, the small business owner, the store owner, the professional service providers who are driving the job creation and our economy. It’s critical for us to focus on that.”But city officials grappled with how to connect theirvarious entrepreneurialresource organizations with each other and with entrepreneurs.
Taylor said although the city recognized that chambers and other community-based organizations were serving as business resources, it’s more effective to have a coordinated network where organizations are talking with each other and understand the “singular purpose for why we exist and what are we doing.”Taylor said the mayor’s office was the perfect place for convening those resources.“It’s the place where we can convene the conversation. We can make sure that we illuminate the resources that are available, can measure performance, and understandwhere we need to tweak resources or response to small businesses,” he said.Taylor noted that once the decision was made to develop a formal network from the “loosely operating organizations” they engaged with SourceLink. Beginning in 2016,“working with SourceLink,” he said,“we met with our 137 organizations—whether they were city,state,or nonprofits that were providing technicalassistance—to identify the services they provide. That also organically started those organizations talking to each other and connecting with each other.”Taylor, also recognized that when an elected official leads the charge for an initiative, there’s always a danger of the initiative fizzling if the successor isn’t on board with it. To keep the continuity intact during mayoral transitions, Taylor said he and others sat down with the mayor who initiated the program as well as the incoming mayor to explain what SourceLink does and why its integral to sustaining the infrastructure for a vibrant entrepreneurial ecosystem.“It’s important that you bring the new administration into it so they understand the value and the importance of such a resource. Every year we pay a licensing fee, but that is pennies compared to the benefitit [SourceLink] brings for ensuring resourcesreach the small business community,” Taylor said.Further, Taylor said, the data tracking the SourceLink model provides measures performance:“We were able to show the mayors and their staff, not just anecdotal information, but actual measurements of progress.”For example, Taylor said,“Using our network database, we were able to see how many referrals occurred. Last year, there were over 600 referral transactions.That means a client went to one organization for assistanceandthe organization recognized it wasn’t the best resource for that client. So,they were able to refer them to another resource within the network.We’re also able to see which classes are being promoted by different organizations within the network, how many people attended, and measure the outreach and response we’re getting from the community.”Taylor cautions that once a network is up and running, additional effort is necessary to keep it relevant and growing. Some of the ways the City of Baltimore has maintained the network’s visibility in the community is through social media, coordinatingwith the Baltimore Development Corporation and the mayor’s officeas well as the city council.He advised that to keep both aspiring and established entrepreneurs engaged with the resource organizations, cities must commit to keeping the information in their network updated.
“Making sure we’re consistent in updating information is one reason people returnto our network. The other thing we’re able to see, by looking at analytics, is what they’re coming to find. We learned, for example, they spent time looking for permits. So,we were able to say, ‘either our permitting system in Baltimore is not as good as it should be,or people get lost because it’s not a very logical system. So,wewere able to help them by focusing more on that. We’re able in real time to match the relevancy of the information we’re providing and optimize it so small businessescan reach the things they’re looking for.”In conclusion, cities that are not focusing on an economic development plan that includes entrepreneurs are missing a key component for driving economic growth in their communities. Having elected officials, especially mayors, on board to carry the banner for such initiatives is also important for ensuring buy-in among various stakeholders. Most important,is including entrepreneurs themselves in the ecosystem-building efforts.