Entrepreneurship: a competitive edge for economic development Presenter H. Randall Goldsmith, PhD

Entrepreneur Entrepreneur: someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. An entrepreneur is an agent of change.

Innovation Innovation: a new product, process, material, design, know-how, or business strategy.

“The interaction of technological innovation with the competitive marketplace is the fundamental driving force in capitalist industrial progress.” Joseph Schumpeter, 1942

Economic Research “Small firm establishment births have a larger impact than any other factor examined on gross state product, state per capita income, and total state employment. Donald Bruce, SBA It is crucial to raise innovative start-up activity, which is more important than an increase in general start-up activity. P. Mueller, Small Business Economics

Context Traditional Economic Development versus Innovation-led Economic Development

Traditional Economic Development *Attraction *Expansion*Retention*Creation Metric: Jobs

Innovation-led Economic Development *Research*Entrepreneurs*Capital*Workforce *Business Infrastructure *Community Environment Metric: Intellectual Capital

Economic Development Model Newco Growth Acquire or Acquired Talent Newco Infrastructure Ecosystem Talent

Balance: Not Us versus Them… Rather Us and Them Core economy strategies and Innovation economy strategies

Pathway to Progress Biology Chemistry Physics Engineering Energy Transportation Communications Materials Bioscience Innovations Companies & Jobs Economy Education Government Recreation QOL Discovery Transfer Development Transform New

Economic Progress Mercantile Factory Corporate Knowledge Productivity New Economy Old Economy Steam Steel Electronics CIT Real PPCI Education Life Span Health Gov Serv QOL Source: R.Atkins

Recipe for High Performance Regional Economy “Virtually unimaginable a half-century ago was the extent to which concepts and ideas would substitute for physical resources and human brawn in the production of goods and services.” Alan Greenspan High Performance Companies High Performance Jobs High Performance Communities

High Performance Community % of HPIIEs (3.5%*) Science & Engineering Jobs (4.1*) Patents/100K population (41*) Personal per capita income ($41.6K*) Community GDP/capita ($48.4K*) *U.S average

High-performance, Innovation Intensive Enterprises (HPPIEs) High performance: 2X jobs, 2X revenues Average age: 15 years Total # companies: 375,000 (2.3%) Size: All (<20 employees = 94%) Location: 77% urban, 23% rural Industry sector: All Source: SBA: Gazelles Revisited HPIIEs account for virtually ALL new growth in US economy

Barriers to Entrepreneurship 98% Willingness to take risks 93% Time and effort 91% Ability to raise capital 89% Business management skills 84% Know-how in starting a business 83% Industry and market knowledge 73% Family support Source: Wadhwa and Salkever, Kauffman

Critical Community Factors for Entrepreneurs Availability quality work force Availability quality management Access to expansion capital Overall regional economic health Overall standard of living Entrepreneur support organizations Access to alternative financing Quality K-12 schools Availability of qualified service providers Access to seed capital Council for Entrepreneurial Development Council for Entrepreneurial Development

Innovation Ecosystem Innovation Ecosystem Know What Know Who Know How Researchers Entrepreneurs Investors Workers Intermediaries Nexus of Innovation

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Thank You! Randy Goldsmith, PhD Presidentwww.T3DC.org

Startup HPIIEs Exponential growth potential A radical, disruptive, platform innovation Highly competent management Wealth generation strategy Significant early stage capital required

Average HPIIE Entrepreneur 40 years old 70% married 60% have 1+ children 72% middle class 95% bachelors degree

New Economy Features Knowledge jobs Knowledge jobs Globalization Globalization Economic dynamism Economic dynamism Transformation to a digital economy Transformation to a digital economy Technological innovation capacity Technological innovation capacity