by: Conaway Haskins
This is a hot time for entrepreneurial development in Virginia. All across the Commonwealth, conferences, hackathons, startup weekends, coffee chats, summits, and festivals are popping up. Workshops are increasingly being offered to help Virginians pursue what is fast becoming the new American dream – owning a small business. This trend is reinforced by national data and analysis:
- Small Business Ownership is the second greatest source of household wealth after home equity, and over 15% of the U.S. Labor-force owns a microbusiness (CFED).
- In most counties in the U.S., the percent of workers employed by locally- or resident-owned businesses outweigh the percent of workers employed by nonresident-owned businesses Smaller local businesses have a more positive effect on local economic performance - per-capita income growth, employment growth, and change in poverty - than larger local businesses. (Atlanta Federal Reserve Bank).
- From 2001 through 2009 (including the 9/11 crisis and the Great Recession), non-local employers (businesses located in one region but headquartered in another state) cut 7.1 million jobs and America’s largest employers eliminated another 9 million jobs. Meanwhile, America’s smallest firms generated 8 million net new jobs and self-employment grew by 3.2 million, a 91% increase (Center for Rural Entrepreneurship)
- Between 1998 and 2008, Stage 2 companies (10-99 workers) were responsible for the creation of an estimated 2 million jobs, while large companies lost 3.7 million jobs (Kansas City Federal Reserve Bank)
Engagement with a wide array of community and economic developers, business assistance groups, entrepreneurs, civic and government leaders across Virginia has provided us with a bird’s eye view for the happenings in and around Virginia’s economic & entrepreneurial development scene over the past year. Now that Global Entrepreneurship Week is upon us, there may be no better time to offer up some snapshot reflections on what we’ve seen as VCEN & SourceLink Virginia have journeyed to the heart of Virginia’s entrepreneurship ecosystem.
Here’s some of what we’ve learned so far:
Entrepreneurship ecosystems are inherently and fundamentally local and regional. In Virginia, this is taken one step further as we have regional economies that cross state borders. Thus, devising broad-brush statewide “one-size-fits-all” policies and programs have proven less effective than empowering the growth of local and regional strategies that reflect and fit the dynamics on the ground in cities, counties, and towns. Several Virginia regions - of varying sizes - are emerging as leading-edge entrepreneurship, innovation, and creative economy destinations.
Quality, not quantity, of available services is the key issue. There is not necessarily a statewide shortage in the number of available economic & entrepreneurial development programs, but the relevance and excellence of that programming varies widely within and across regions and the state regardless of population, industrial base, and geography. Some of Virginia’s larger regions have notable gaps in the availability of quality programs while some smaller localities and regions have relatively robust available services and supportive cultures for aspiring & established business-owners.
The line between “community economic development” and “traditional economic development” is increasingly blurred. The reality of the Virginia’s new economy means that many local and regional economic developers – especially those serving distressed urban and rural areas – are choosing “all-inclusive” approaches to help drive growth in their communities and regions. Now, they are balancing portfolios that include industrial recruitment, regional place-marketing, business retention & expansion, downtown & neighborhood revitalization, entrepreneurial innovation, and startup support. Essentially, it’s all economic development now.
Lingering challenges exist that are ripe for creative solutions. Disconnects still persist in aligning the public policy goals of economic developers with the businesses goals of entrepreneurs with respect to job creation, increasing tax revenue, managing lending & investment risk, targeting specific industry sectors, poverty reduction, etc. Though there is broad consensus that supporting aspiring, emerging and established small businesses is critical to local and state economic growth, there is a need to raise awareness of the critical role that small business and entrepreneurial developers – who are often in the public and nonprofit sectors - play in the growth of dynamic ecosystems. Both K-12 and Higher Education institutions are critical to fostering and facilitating entrepreneurship development, but the diversity and distinctions among them should be leveraged as resource versus viewed as impediments to action. None of these problems is insurmountable, and in fact, the sooner they are addressed - via communication and collaboration - the further the ball can be advanced down the field in Virginia.
Virginia was essentially founded as an entrepreneurial venture as the explorers and settlers from England first set foot on our shores facing the great unknown back in 1607. On the horizon, we have a particularly rich opportunity for entrepreneurship to serve as a tool for economic transformation by ensuring that aspiring and existing small business-owners from all walks of life are empowered by support systems that meet their real-time business needs and creatively assist them in overcoming challenges. If we can get it right, the entrepreneurial journey will continue to be a powerful mechanism to help people live out their American dream...right here in Virginia.
Content contributed by Conaway Haskins, SourceLink Virginia. SourceLink Virginia is a proud affiliate of U.S.SourceLink, America’s largest resource network for entrepreneurs.