Friday, August 20, 2010

New data & best practice - More from Montreal

Newest data re job creation is courtesy of the US Census (slides available).
The short answer is:

* Growing firms are the only real engine - regardless of age, size, industry, region, urban/rural, gender, etc. There is so much turnover in jobs per year that you MUST create jobs like crazy (the US has averaged 3 million historically and now we have, um, er, a lot fewer.

* Startups are a key part of that but far, far from the only component. Existing firms can -and do- grow. Entrepreneurial cultures/ecosystems foster both.

At the recent Academy of Management, I got to hear a lot of data from countries all over:
* Almost everywhere, small-scale entrepreneurship is up (people starting businesses to pursue a lifestyle or out of necessity).
* Almost everywhere, opportunity-driven entrepreneurship has been trending lower since 2005. (2005? Yikes!)
* However, there are always pockets of great entrepreneurial activity - sometimes it is cities/states/neighborhoods, more often it's in industry niches. (Bring those together and you get.. clusters.)

* If you want to encourage innovation, you need to encourage entrepreneurship - but focus in two paradoxical directions:
? Where are you competitively strong already? (Not core competences but where you do have a sustainable competitive advantage? No wishful thinking: what are you already great at? You want a viable cluster? Go with real strengths. Me, I'd start with Idaho Tech Council's 3 focus areas.)
? Where are you under-represented by entrepreneurs? (In most places globally, women & rural are the 'ripest' low hanging fruit.)

* Ask entrepreneurs, existing & prospective: "What do you want?" (There is actually a sound methodology available to identify this - let me know if you want to know more. I'd love to deploy this - it's basically free to do)

Interesting how this matches with what we already know.

Latest data was particularly sobering - usually firms with 50 employees or less create more jobs than they shed... that is NOT the case today . This obviously reflects the slide in growth entrepreneurship. But if we are coming out of the recession, these numbers should be reversed.

OK, Norris, any good news?

Yes! It's clear that globally the interest in pro-entrepreneur, pro-innovation policies is growing past the usual pat-on-the-head "small biz is groovy" platitudes. Even if national governments seem clueless (most are), entrepreneurship has always been a bottom-up process. So....

If you haven't scanned the 'entrepreneurial job creation' slides, let me know & I'll shoot them over to you. I was just asked to write up a 'primer' on all this... no pressure, LOL but you're getting the cutting edge stuff.

Call me. Email me.

Tuesday, August 10, 2010

Bonjour A Montreal!

Here at the international meetings of the Academy of Management (nothing like 11,000+ eggheads) -one of the largest divisions is the Entrepreneurship Division. Cool stuff already - Friday was a panel on best practice in teaching social & sustainable entrepreneurship, then lots of discussions of policy issues (more powerful intel on how entrepreneurs create jobs but ALSO how to advance entrepreneurial job creation that has continued into Saturday. Lots to bring back for the Innovation Council, et al.!)

This is a delightful crew -- big brains, even bigger hearts (just like many of you!)

Some of the people here are deeply involved with the programs that FUND entrepreneurial development. The latest salvo from the Kauffman Foundation [ link] noted their increasing role in driving the agenda for programs like NSF's Partnerships for Innovation. Kauffman has a key member of the President's new innovation council; he's here along with tech commercialization/entrepreneurship guru, my friend Dave Audretsch. I will be picking their brains to see how we can maximize Idaho's chances for getting some serious "Other People's Money"!

MUCH money is on the table - foundations fed, even private sector. Shouldn't we be working hard to go after this??EDA , SBA & the US Depts of Commerce & Energy are also here - interestingly, their preferences re what they fund is increasingly similiar & simllar to Kauffman, NSF, etc.. Again, it's surprisingly clear what they'd like to fund & that should be a good reason for us to be optimistic!

Interesting new data tidbit: Gross job creation is driven by startups but long-term net job creation depends overwhelmingly on firms that grow (*regardless* of age/size). That means newer firms are much more volatile -more exit & more grow. Thus, while we need to encourate startups.. we also need to grow existing firms. But both require... entrepreneurial thinking and an entrepreneur-friendly ecosystem. We know how to help both - the costs are minimal - but we have to DO it.


p.s. WHO should be leading the charge? Heard a great analogy using the "will run through brick walls" metaphor...

Running Through Brick Walls - Find people who'll do it for free (so many of my friends here in the entrepreneurship world are like me -- essentially we'll PAY to run through the brick walls, LOL)