Posts Tagged ‘small busimess job creation’


August 8, 2016

Smart PlacesTHE SMARTEST PLACES ON EARTH   Why Rustbelts are the Emerging Hot Spots of Global Innovation 

Antoine van Agtmael and Fred Bakker

2016 Public Affairs Perseus Books Club, New York

It’s every Mayor’s goal…an innovative community that surpasses social and economic threats producing social and economic prosperity.

There are 100’s of books telling how to do this…describing public, and yes, private programs to achieve this.

One of the newer contemporary suggestions – innovation – put forth by Antoine van Agtmael and Fred Baker in their book “The Smartest Places on Earth” add to the wealth of ideas and techniques for socio-economic sustainability.

They proffer that “brainsharring” for the new economy, the “reinventing of local economies by developing new products, technologies that will eventually transform daily life, is the solution to economic repurposing of our rust belt impacted communities and surrounding regions”.

Through visitation and personal interview among a select group of economically reinvented former “rust belt” global communities, they identified “keys” to successful economic reinvention.

Here are a few “takeaways” from reading:

Successful “brainsharing reinvention” begins when communities acknowledge the historic economic malaise and generate a strong sense of action to prevent reoccurrence – the “communitywide recognition that economic improvement action is necessary”.

Coupled with the attitude ‘it won’t happen again” is the notion of a new direction – “a pathway to economic revitalization that repurposes the local economy producing a sustainable future”; one that is also easily understandable to a wide spectrum of constituents”.

Brainsharing across public and private entities is a must and typically arranged, facilitated and mentored by a “connector”, one, or more, individuals who bring together, normally separate interest groups to collaborate and then serve as their “shepherd” leading them to a specific goal.

While there are many pathways, concerted effort on 1 or 2 reinvention strategies leads to greater chance of success compared to expending a “little bit of effort on a wide variety of strategies”.

For those interested in economic reinvention of local economies, this book will stimulate some interesting thoughts about the “new economy philosophy” of economic development and job creation.

Economic reinvention comes with destruction and replacement of current socially accepted community thinking.

Maybe more important for action is the “continued fear that a significant economic down turn event can happen again and we can’t let that happen”.

It also shows that reinvention must happen regardless of its hard work and realistically, is bigger than our community alone…calling on us to cooperate on a larger regional scale.

An innovative community is one which welcomes technological destruction, shows a willingness to sponsor “brainsharing” for the purposes of producing new businesses creating new economy jobs and investment.



March 9, 2012

Every community wants new businesses.  Not only do new businesses create jobs but they give a public demonstration of a growing prosperous community. 

Academic research provides strong evidence that small young businesses lead job creation when exiting a recession.  Local economic developers have taken note and many incorporate specific work tasks called “economic gardening” designed to assist new business formation as an element in the overall community economic development strategy.

However, community economic development work tasks that make a significant contribution to the formation of new businesses are a little more difficult to identify.

Here are ten thoughts to consider when forming your community based new business economic development “gardening” strategy:

1.  Recognize Individualism

The decision to start a business is a personal decision.  Whether the decision is made by an employee that says “I can do this better” and wants to create the next “Apple Computer”, the laid-off manager that begins offering consulting services,  or the housewife that begins to sell cosmetics, the final decision to go into business is an individual decision.

It’s easy to understand that a decision of this type will be stressful, effecting personal income and the family lifestyle.

Work program suggestion –

Provide access to personality assessment services that determine ability to accept risk and manage risk.

2. Help Surmount the Hurdles

Forming a business is much more than making a product or offering a service and collecting money. It gets involved with complex things as 1) what form of legal entity do I need, 2) what are my federal, state and county business identification obligations, 3) how to I complete my accounting to comply with tax obligations, 4) what licenses and permits are required, 5) what insurances coverage is needed, 6) how to get start-up funds, among other things.

Each poses a hurdle challenging the entrepreneur.

Work program suggestion –

Sponsor how to go into business for yourself programs, offered by local SBA sponsored Small Business Development Centers. Often local colleges and universities are available to assist with these challenges.

3. Make Entrepreneurialism Part of Junior and High School Education

Is entrepreneurialism a learned desire?  Some academics believe so.  Under this assumption, the role of entrepreneurialism as taught in the classroom is important to the early introduction that “going into business for yourself” can be a career providing great personal and financial reward.

Work program suggestion –

Make Junior Achievement and similar programs available in all schools.

4. Host Entrepreneurial Cafes

There is strong evidence that certain entrepreneurial camaraderie exists, especially among today’s “younger generation” computer based entrepreneurs. In fact a recent study found that over 50% of the Gen-Z’ers, Gen-X’ers and millennials plan to start their own business some time.

The older form of dedicated office space to many younger entrepreneurs is a “thing of the past” and the new office can be any location having internet connectivity. An entrepreneurial café, being a location where resources can be found and where entrepreneurs congregate can provide the necessary networking and social support structure sought after by those considering entrepreneurship.

Work program suggestion –

Create a café and virtual office providing a physical location for business and social needs of emerging entrepreneurs.

5. “Carve-Out” opportunities within the economic landscape.

There are numerous magazines touting the next great business opportunity.  However little research is completed on a communitywide scale to identify what businesses opportunities are likely destined for success based on the current and future projected local economy.

Most times identification of the business opportunity is left to the entrepreneur and made by “gut instinct” without a formal examination or market study.

There are resources, such as Nielsen-Claritas data that can help identify “opportunity gaps” in consumer purchasing patterns for retail and household goods which when used by  entrepreneurs can help identify certain small business opportunities.  Today, almost every university has some type of research assistance mechanism that can aid an entrepreneur in identifying market opportunities for more complex business ventures.

Work program suggestion –

Create, typically a university sponsored, entrepreneurial investigation research team to identify local community needs and opportunities that can be served by new businesses, including providing private sourced socio-economic data for use by entrepreneurs when needed.

6. Raise Capital Create a “Shark Tank”

One reason given for new businesses failure is the lack of capital.  This is especially true today where commercial lenders and the US Small Business Administration have reduced lending to small businesses.  Today, it’s a rare exception to find a commercial lender interested in financing a new business “start-up”.

The need for entrepreneurial financing has been popularized on television by “Shark Tank” a program where entrepreneurs “pitch” there new business idea to potential investors, in an effort to seek needed capital for business start-up and expansion.

Work program suggestion –

Community economic development strategies may require assembling social venture capitalists a new bread of investor typically organized in the form of an LC(3) – Low-profit Limited Liability Company to provide new business start-up financing.

7. Play the Numbers

Academic research documents nationally that 32 of 100,000 people will start-up a business, each month. Indiana and Michigan while being slightly lower than this ratio, still demonstrates a strong propensity for new business formation.

But a strong propensity does not automatically result in new businesses contributing jobs to the local economy; that being the goal of a community based economic development program. An economic development program that “mines the data” focusing on the population groups that have propensities to form new businesses is called for to help create these new businesses.

The key entrepreneurial characteristics include:

  • ·         One, or more, parents being entrepreneurs,
  • ·         Childhood small business experiences,
  • ·         Personality traits that accept risk,
  • ·         Personal predisposition to succeed in face of adversity.

Work program suggestion

Programs that create interest aimed at certain population groups, such as Gen-Z’ers,  Gen-X’ers and millennial’s  which have higher propensity to form new businesses should be part of the community economic development program.

8. Support Population Diversity

Entrepreneurial population studies document that certain demographic sectors have a greater propensity to from new businesses, especially Hispanics and recent immigrants. 

Work program suggestion –

Support program that celebrate population diversity embracing population groups that have a higher propensity to form new businesses.

9.  Create a “Match-Up” Market Place

Forming a business is a “team effort” needing different “skill sets” and talents, all which must be assembled by the entrepreneur.   

Work program suggestion –

Create a “wants and needs” bulletin board to match entrepreneur business needs with available support capacities.

10. Celebrate Success – Achieving Entrepreneurial Notoriety

Nothing breeds success more than success.  Being noted in state and national media as a community hosting new business formation not only demonstrates success but encourages others to consider “going into business themselves” or to take permanent residency in a location where new business formation is thriving.

Work program suggestion –

Create a media program announcing new business formations on a regular basis to create a statewide and national recognition as a geographic location for “new business start-up”.


Today, everyone talks about “economic gardening”, the notion that government sponsored local community economic development programs can cause people to start new businesses that eliminate unemployment and create community economic prosperity. 

Philosophically, the creation of an environment that embraces entrepreneurism should be a goal of every community economic development strategy.

However, it is still an individual decision whether someone actually starts a business.

Adding some or all these suggestions to your economic development strategy will “enrich the soil for planting the seeds of new businesses”.


Author note:  This was first prepared presentation at the Purdue University North Central “Topics in Regional Economic Development” class, Spring 2010.


January 30, 2012

Innovation – like the” iPad”, you know it when you can hold in your hand but like “beauty”, don’t ask what it is or how to make it happen.

For economic developer practitioners and those who fancy themselves as entrepreneurship facilitators, innovation is important.  It’s economic gardening – the current government mantra for job creation as a means to reduce unemployment by creating high-wage jobs to improve household wealth.

Go to any bookstore business section and you will find more than a dozen titles, all telling their story on how you and your company or organization needs innovation to compete in the global economy and, by the way create jobs.

But more importantly, to the economic developer practitioner, is can we identify how to innovate and how do I get innovation to happen in my community.

This is where “THE INNOVATOR’S DNA – MASTERING THE FIVE SKILLS OF DISRUPTIVE INNOVATORS” will help.  Authors Jeff Dyer, Hal Gregersen and Claton M. Christensen explain skills that can cause innovation to happen.

With the notion that we can identify personal behavior skills that cause innovation, we can then apply them in a directed pathway increasing the opportunity to identify new products and services resulting in business investment and new jobs.

Let’s examine each of the skills and how economic developers may wish to apply them.

But first, we have to agree on a basic principal – innovators think differently and act differently….creating a curiosity that results in changed behaviors.

The good news, according to the authors, is if we change our behaviors we can improve our “creative curiosity” and creative impact.


Now that’s a powerful statement one that can be used to develop a community program to stimulate business innovation resulting in new business investment and jobs.

This is great news to economic developers seeking to create innovative communities.

If “two-thirds of our innovation skills come through learning – from first understanding the skill, then practicing it and ultimately gaining confidence in our ability to create”, than innovation can be taught on a communitywide basis leading to greater innovation and increased business investment resulting more and better paying jobs.

The behavioral traits –

 1. Questioning

Innovators are consummate questioners who show a passion for inquire frequently challenging the status quo.  They show a high Q/A ratio where questions (Q) out number answers (A) in a typical conversation.

 2. Observing

Innovators are intense observers – the world around them, customer behavior, new technologies, and new products and services.  These observations provide them insights into new ideas on how to do things.

 3. Networking

Innovators spend time testing ideas through a diverse network of individuals of varied backgrounds and perspectives.  They tend to seek out comments and reactions from a wide group of people that, at times, may have radically different viewpoints.

 4. Experimenting

Innovators are not just “thinkers” but actually try-out new ideas.  They test hypotheses and seek new information and continue to experiment to learn new things.  They hold that questioning, observing, networking and experimenting are discovery skills that together identify new ideas.

 5. Associational thinking

Innovators routinely see the essential features of an idea and make surprising connections across areas of knowledge – connecting the unconnected knowledge producing innovative business ideas.  Successful innovators are always “on the hunt” for new associations that will create combinations of diverse knowledge, experience and personal perspectives

 6. Challenge the status quo

Innovators believe in economist Joseph Schumpeter’s theory of “creative destruction” and thus actively challenge the status quo. Schumpeter popularized in the 1950, the theory of challenging the status quo reformulating conventional thinking by associating existing and new knowledge and technology thus creating economic innovation.  Innovators are unafraid or inhibited in rebuffing “the notion – because we did it that way in the past, we’ll do it that way in the future”.  They see “many things broken and want to fix them”.

 7. Taking risks

Innovators are “risk takers” unafraid of failure and actually promote failure a part of the process of experimenting to achieve success.  They feel personally responsible for “coming-up” with ideas and innovation solutions.

A Last Thought on Innovation and the Practice of Economic Development

Innovation begins with you.  You can change your behavior to become more innovative.

For the economic practitioner this is good news.

By asking yourself some simple questions such as, am I good at generating ideas, can I find  and “friend” innovative people, can I get myself and colleagues to “think outside the box” you too, can begin the process of being a better innovator.

If you find yourself struggling with “frank and honest “answers cheer-up, the authors state you can change your behavior and become more creative. 

This also holds true for economic development organizations which many economic development practitioners staff on a daily basis. 

As stated earlier, if two-thirds of innovation skills come through better understanding of behavioral traits that inspire innovation, this knowledge coupled with a program to incorporate change should result in new innovative ideas fostering economic development success.

The challenge before the economic development practitioner is not more business subsidies, tax forgiveness or other business aid but changing the communitywide behavior of individuals to become more innovative thus producing innovative business ideas resulting in new business investment and jobs.

A Governor’s Story – Jennifer Granholm

November 14, 2011

  A Governor’s Story

The Fight for Jobs and America’s Economic Future

 Recommended reading for everyone with interest in economic development and America’s quest for jobs in a global competitive economy. 

    Enlarged Book Jacket 

I guess it should be come as no surprise that former Michigan Governor Granholm calls for “active [economic] strategic planning led by government”.

She’s an FDR Progressive at heart that truly blames “big business” for taking advantage of tax breaks offered by local and state government and then “using the savings not to invest in American business infrastructure but to create off-shore investments which create employment in other countries”.

Granholm citing Michigan’s accomplishments in reducing business taxes relative to other states in the search of economic growth dispels the belief “that lower taxes will inevitability increase investment, growth & jobs and generate more tax revenue”.

She credits the lack of government involvement for the Michigan economic malaise – specifically the lack of federal action to “defend American business from unfair trade, lack of partnering with global economies to create good jobs here, and [the absence] of strategic investment in education and training to prepare for the knowledge economy”.

Her position, like FDR, Is that “hands-off laissez-fair free market economics will only ensure that other governments step into the void”…her solution being more and bigger government investment in planning and managing the economy.

With this said, she provides an interesting historical account of her term in office, to seek amidst a somewhat immobile government, unionized employment preference and automaker management bias against change and reinvention, to prevent  past history from being the future economic structure of the State of Michigan. 

Her efforts to retool Michigan’s economy on a green energy platform cobbled together all available funding sources, especially those of the Obama administration, to lessen the personal and financial impact upon individual Michigan residents, should be acknowledged.

CHAPTRER 10 – CRACKING THE CODE: KEYS TO CREATING AMERICAN JOBS IN A GLOBAL ECONOMY is a must read and offers eight strategies tried in Michigan during her term that portends to be solutions to reinvent the American economy.

Her recommendations for economic revival include:

1.  Government Must Get in the Game – allowing government to design and implement competitive global economic policies picking winners and losers to foster job growth.

2. Cut Government Where We Can to Invest Where We Must – to redirect financial resources to education and training for “targeted” chosen new growth businesses that will create jobs.

3.  Develop National Strategies for Economic Growth – to level the global “job creation playing field “by picking “targeted industries” and incentivizing them to attract investment and create jobs.

4.  Educate or Die – make public policy changes that prepare individuals for the knowledge based economy of the 21st Century recognizing that education is the top priority to stimulate job creation resulting in personal income growth.

5.  Create Fairer, More Flexible Labor – Management Partnerships – changing current practices whereby labor and business have greater flexibility to harness cost saving competitive on a global scale.

6.  Make Smart Government Investments in Industries Crucial to Growth – incentivize and invest government funding to economic sectors that align with important national or regional economic development goals via national economic development planning.

7.  Face Down Threats – Become the Change – by discontinuing avoidance – the inability to take action – favoring change opposed to reliance on past economic practices and policies.

8.  Practice Do-It-Yourself Leadership – accepting the responsibility to take individual action to form new for profit and nonprofit business enterprises that create jobs and investment in local communities.

Only time will tell whether the Granholm strategies will successfully reinvent Michigan’s economy and return Michigan to its “historical powerful position” in the US economy.

Highly recommend reading for anyone interested in economic development and reinvention of older manufacturing based economies.



August 13, 2010

Does community wide social connectivity serve as a predictor of economic sustainability? History discloses that loss of homegrown and resident owned businesses portend future economic instability.

Social connectivity is the latest community economic development theory.  Well connected communities, those having multiple formal and informal vehicles for social interaction, have been identified through academic research as having superior competitive advantages for the formation of new businesses and therefore hold greater promise for a healthy future economy.

Measured in terms of the number of scout troops, church organizations, book clubs, face book & twitter accounts and even coffee clutches at morning breakfast restaurants, the theory states the more opportunity to stimulate human interaction the greater opportunity for the sharing of ideas that ultimately produce new business ideas.Product Details

The power of social networks is explained by Sean Strafford author of “Why the Garden Club Couldn’t Save Youngstown“.   He chronicles the history of two cities – Allentown, Pennsylvania and Youngtown, Ohio, through the “Transformation of the Rust Belt” (the book subtitle) and efforts of both cities to reinvent themselves as 21st Century global business leaders.

It is a well known fact that leaders of industrial companies accepted prestigious roles in their communities during the manufacturing growth period of the late 1880’s and 1990’s and exerted powerful influence upon the social culture and government sponsored community development.  Name any Midwest manufacturing based community and the legacy of this influence remains today, even where the business no longer exists.

Stafford’s research documents how business leaders influenced and controlled information and resources that shaped the direction and velocity of economic growth in both cities.  Much of this home grown business influence has disappeared, especially in the Midwest with the closing, consolidation and relocation of numerous manufacturing firms along with owners and “key” business leaders rooted in the fabric of the local communities.

He emphasizes today’s modern communications and social networking, provide a platform for the instant free exchange of information among a wide and diverse population, a new infrastructure which can replace the forces that provided historic direction and velocity of economic growth; especially formation of new businesses.  He continues profiling todays new role of key business leaders in shaping the social and government milieu. Social connectiveness  today augments and in some places replaces the historic role exercised by business owners and other “key” business leadership upon social and civic activities.

He advocates a historically different present-day policy for community economic development focusing on social structures which promote social interaction with involvement of key business leadership – being vital to regional economic success.  Civic leadership, most often originating from top business leaders with “stakeholder roots” in the community, is needed advocating new rules for community engagement and cooperative regional community economic development, to address local impacts of economic uncertainty brought about by globalization and the current recession.

Safford explains the success and reinvention of Allentown in terms of rebuilding its social infrastructure, identifying that “business organizational structure and community change are ultimately linked” together.    He states that “Allentown got it its grove back” through establishing “network structures making it possible to reconfigure itself and arrive at a new, stable social arrangement … vital for economic success”.   This new civic network provides the groups  where actors engage in collective action creating organizational change in which “entrepreneurship can flourish in Allentown”.

Instead of quarrels between labor and management, ethnic and racial communities, cities and suburbs, and local political governments the new network structures promote an effective independent means providing communications necessary for economic growth and the exercise of local business and governmental leadership formalizing coherent responses to both economic crises and opportunities.

There are a number of lessons to be learned:

     Conflict or Crisis Creates Opportunities for Change.

Regardless of whether a community becomes involve in a social or political conflict or faces an economic crisis, these events pose an opportunity to alter existing social networks and the way people interact with each other.

     Configuration of Social Networks is of prime Importance.

Regardless of the number of social networks the “key” to shaping the process of social interaction is what makes civic social vitality.

     Particular Organizations must Bind Together.

Particular organizations (more…)


March 12, 2010

Wall Street Journal profiles Los Angeles, Minnesota, and Michigan efforts to lower business taxes in an effort to retain and grow jobs – Implementing the famous Laffer curve.

Arthur Laffer is most famous for originating the Laffer curve, an economic theory that states that higher taxes remove funds and motivation for the use of these precious resources in creating jobs and ultimately personal wealth.  The infamous (1972) “Back of the Napkin Laffer Curve” seeks to identify the point on a scale of tax rate vs. business revenue where it is no longer desirable for business to spend time and money in pursuit of additional revenue growth.

The economic literature is filled with commentary on this theory. Laffer a prolific author, has several books discussing his theory and its implications upon the national economy.  More importantly, he authors an annual comparative study of state economic competitiveness published for the National Legislative Exchange Council titled Rich States – Poor States.


In Rich States – Poor States ‘09 Laffer and co-author Stephen Moore give a convincing argument that taxes do influence the location and growth of business.

It’s not surprising that high tax states are concerned about the impact of business taxes.

While there is strong evidence that Laffer’s theory is correct and business taxes do play an important role in economic development, the political economic development policy debate about balancing the need for tax revenue with the source of this revenue, many times clouds ability to implement a clear and sustainable business tax policy. 

This ambiguity leads to state-to-state and community-to-community tax inequities. 

It seems logical and prudent business strategy to take advantage of these inequities when they contribute to business revenue and profits.

Further, its logical that states having inequities would seek changes to produce parity with states that have a business tax competitive advantage.

For economic development practitioners whose success, in part, is directly attributable to economic competitiveness, understanding the impact of business tax inequities and means to remedy these inequities clearly is necessary to increase competitive advantage and success in creating jobs and economic wealth for the communities they serve.

 Author note:  This was prepared by Charles Eckenstahler for presentation at the Purdue North Central “Topics in Regional Economic Development”   class, Spring 2010.


November 25, 2009