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.


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