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It Takes a Region For Entrepreneurship to be Successful

Author: Robert Ady
08/18/2009

During my various business travels the past year or so, I have noticed that many communities are focusing much of their attention on developing local "entrepreneurs"; that is, growing their economy through identifying and assisting local individuals or even small companies that offer potential for job growth and economic viability. This is especially true among rural and smaller communities.

This seems very logical considering that business attraction and local business expansion have recently been in the doldrums and, to some extent, entrepreneurship seems a natural extension of the local BRE program. Unfortunately, based on the local input I have received from both successful communities and unsuccessful communities in pursuing this activity, it is much more complicated and time-consuming than realized.

It is true that no geographic area or community size or economic base has exclusive rights to the elusive individuals with job creating and money-making ideas. They can originate anywhere, be of any age, and have completely different backgrounds. So these entrepreneurs, technically, could be somewhere in any local community. The only problem is how to find them and how to help them transition from an idea or a fledging company into the next Google, Microsoft, McDonalds, or WalMart.

It seems to me in talking with communities that have developed successful entrepreneurs, the key ingredient has been involvement and support from many organizations and individuals within the community and probably more often the region or even the state. Local economic development organizations might take the lead but having a successful BRE program is not the precursor of a successful entrepreneurship program.

Let's start with the basics. MONEY
Once an individual or company has tapped out family and friends, it is estimated that up to 80% fail because of the lack of second level financing. With few exceptions, banks cannot lend at this stage of development, so where to go? Not the Silicon Valley! In many cases, it is the economic development group that lends second level financing. These are not gigantic mega-dollar deals but the additional $5,000 or $10,000 that gets the entrepreneur "over-the-hump." Angel investors and venture capital funds are another source of capital available to entrepreneurs.

Incubator Space
With a plethora of available space throughout the country, this should not be a challenge for most communities. Why do entrepreneurs and small companies need this space? They need it because they need interaction with other organizations and groups and the discipline that comes with a working environment. Working "at home" is not conducive to achieving these goals.

Peer-To-Peer Mentor Support
This support can take all forms but it is usually in individual who has been successful as an entrepreneur, someone from the local community college or university, or a business leader. These peers help identify opportunities, influence perceptions, and serve as good substitutes for direct experience.

Leadership
Here the EDO can play a critical role. Its key function should be to provide the bridge between entrepreneurs and local and state organizations. This network is usually exceedingly broad, represented by schools and colleges, local and state government, and community and business leaders.

Regionalism
From metropolitan areas to small, remote rural areas, regionalism is a must for any successful entrepreneurship program. They cannot survive without an extensive network that extends beyond any jurisdiction. No community has all the talent and infrastructure to nurture and grow a concept into a viable job generator and investment engine. IT TAKES A REGION!