Economic Gardening has become quite a buzz phrase in recent years, but the concept is often not accurately understood. I recently attended the 10th Annual Economic Conference in Grand Rapids, MI to gain a more thorough understanding. For those that may not be very familiar with Economic Gardening (EG) here’s a quick blurb on economic gardening from the Kauffman Foundation’s website.
Economic gardening is an economic development model that embraces the fundamental idea that entrepreneurs drive economies. The model seeks to create jobs by supporting existing companies in a community….It initially was based on research by MIT’s David Birch, who suggested that most new jobs in any local economy were produced by the community’s small, local businesses. In Littleton, city leaders observed that only 3 to 5 percent of all companies were "high growth" but determined that those "gazelles" were creating the great majority of new jobs.
Economic gardening connects entrepreneurs to resources, encouraging the development of essential infrastructure and providing entrepreneurs with needed information.
So, in other words, instead of luring or keeping large companies in a community (“Retention and Attraction”) through use of incentives ($), economic gardening fosters growth of high-impact, high-potential companies in the community by providing them with the strategic and technical expertise they would otherwise not have access to.
Here’s what I learned about economic gardening at the conference:
The Economic Gardening client profile
- A coachable business owner that wants to grow.
- A Second Stage Company: Typically these are companies with between 10 and 100 employees. For the groups I met with at the conference, the employee count is used as a rule of thumb. Larger companies typically already have access to the type of knowledge gained through an economic gardening program, smaller companies are usually not yet ready for it.
What Economic Gardening does
- The Economic Gardening team consists of five experts who spend roughly 32 hours working hand-in-hand with the business owner/company leadership to identify strategic opportunities.
- The economic gardening team provides training and assistance in four key areas:
- Market research and competitive intelligence
- Internet and social media strategy/search engine optimization
- Geographical Information Systems
- Core Strategy Review
- The program often parlays with CEO peer mentoring groups: Leaders of second stage businesses often face new challenges accompanying their rapid growth. Struggles with personnel decisions and shaping company culture are two common examples. Peer mentoring allows the business owners the chance to share experiences and learn from other business owners faced with similar challenges.
What Economic Gardening isn’t
- Economic Gardening isn’t a consulting gig. The economic gardening team works hand-in-hand to not just identify issues facing the client company, but to also work through and implement a solution. In contrast to the “data dump” consultants might provide a client, the economic gardening team spends a great amount of time explaining the purpose and application of the information provided.
- Economic gardening isn’t a program that focuses on operational issues. Instead, the program targets core strategy, marketing and finance.
Other key take aways
It takes a village to reap a bountiful harvest:
- A champion in the community, with the desire, budget and staff to implement is vital.
- It works best when viewed as the third leg of an economic development approach. It isn’t likely to replace traditional business retention or attraction programs anytime soon, but pairs very well with them. This is especially true when one looks at the relatively minuscule per-client cost associated with an economic gardening program.
- A well developed, collaborative network of entrepreneurial support organizations (ESOs). The network is needed for two purposes:
- To help identify great prospective client companies. At the conference some economic gardening organizations discussed their challenges in identifying client companies for their programs. In contrast, Corey Mohn of NetWork Kansas attributed their success in identifying clients to leveraging the strong service provider network that exists throughout the state.
- To provide the needed auxiliary services identified in the program. In one example given at the conference, an economic gardening team and business owner discovered ripe business opportunities for the company in South American markets. Since neither the business owner nor the economic gardening team specialized in exporting, they connected with other organizations that did; the U.S. Export Assistance Centers and the World Trade Centers.
It really, really works.
It’s amazing what can happen when businesses can do when provided with the right resources at the right time:
GrowFL first implemented the program November of 2009. In less than two years the program:
- Helped create 3,285 jobs
- Increased state and local sales taxes by $18.7 million
- Increased state GDP by $267.4 million
- Saw participant client companies grow 11% faster than similar non-GrowFL companies
Numbers shmumbers, hearing from actual participants paints a great picture, hear what Grow FL company clients have to say.
Have you thought about economic gardening for your community?
Content contributed by Jeremy Hegle, U.S.SourceLink, America’s largest resource network for entrepreneurs