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Entrepreneurship: a Entrepreneurship: a competitive edge for competitive edge for
economic developmenteconomic developmentPresenterPresenter
H. Randall Goldsmith, PhDH. Randall Goldsmith, PhD
EntrepreneurEntrepreneur
Entrepreneur:Entrepreneur: someone who organizes, someone who organizes, manages, and assumes the risks of a manages, and assumes the risks of a business or enterprise. business or enterprise.
An entrepreneur is an An entrepreneur is an agent of changeagent of change..
InnovationInnovation
InnovationInnovation: a new product, process, : a new product, process, material, design, know-how, or material, design, know-how, or business strategy.business strategy.
“The interaction of technological innovation with the competitive marketplace is
the fundamental driving force in capitalist industrial progress.”
Joseph Schumpeter, 1942
Economic ResearchEconomic Research
““Small firm establishment births have Small firm establishment births have a larger impact a larger impact than any other factor examinedthan any other factor examined on gross state on gross state product, state per capita income, and total state product, state per capita income, and total state employment. employment. Donald Bruce, SBADonald Bruce, SBA
It is crucial to raise It is crucial to raise innovative start-up activityinnovative start-up activity, which , which is more important than an increase in general start-up is more important than an increase in general start-up
activity.activity. P. Mueller, Small Business EconomicsP. Mueller, Small Business Economics
ContextContext
TraditionalTraditional Economic Economic DevelopmentDevelopment
versusversus
Innovation-ledInnovation-led Economic Economic DevelopmentDevelopment
Traditional Economic Traditional Economic DevelopmentDevelopment
**AttractionAttraction*Expansion*Expansion
*Retention*Retention*Creation*Creation
Metric: Jobs
Innovation-led Economic Innovation-led Economic DevelopmentDevelopment
*Research*Research*Entrepreneurs*Entrepreneurs
*Capital*Capital*Workforce*Workforce
*Business Infrastructure*Business Infrastructure*Community Environment*Community Environment
Metric: Intellectual Capital
Economic Development ModelEconomic Development Model
Newco GrowthAcquire orAcquired
Talent
NewcoNewcoNewcoNewcoInfrastructure
Ecosystem
Talent
Balance:Balance: NotNot UsUs versusversus Them…Them… Rather Rather UsUs andand ThemThem
Core economy strategies andCore economy strategies and
Innovation economy strategiesInnovation economy strategies
Pathway to ProgressPathway to Progress
BiologyChemistryPhysics
Engineering
EnergyTransportation
CommunicationsMaterials
Bioscience
Innovations
Companies& Jobs
EconomyEducation
Government Recreation
QOL
Discovery
Transfer
Development
Transform
New
Economic ProgressEconomic Progress
1840 1890 1940 1995 2045
Mercantile Factory Corporate Knowledge
Productivity
New Economy
New Economy
New Economy
New Economy
Old Economy
Old Economy
Old Economy
Steam
Steel
ElectronicsCIT
•Real PPCI•Education•Life Span•Health•Gov Serv•QOL
Source: R.Atkins
Recipe for High Performance Recipe for High Performance Regional EconomyRegional Economy
“Virtually unimaginable a half-century ago was the extent to which conceptsand ideas would substitute for physical resources and human brawn in the production of goods and services.” Alan Greenspan
HighPerformanceCompanies
High Performance
Jobs
HighPerformanceCommunities
High Performance CommunityHigh Performance Community
% of HPIIEs % of HPIIEs (3.5%*)(3.5%*)
Science & Engineering Jobs Science & Engineering Jobs (4.1*)(4.1*)
Patents/100K population Patents/100K population (41*)(41*)
Personal per capita income Personal per capita income ($41.6K*)($41.6K*)
Community GDP/capita Community GDP/capita ($48.4K*)($48.4K*)
*U.S average
High-performance, Innovation Intensive High-performance, Innovation Intensive Enterprises Enterprises (HPPIEs)(HPPIEs)
High performance: 2X jobs, 2X revenuesHigh performance: 2X jobs, 2X revenuesAverage age: 15 yearsAverage age: 15 yearsTotal # companies: 375,000 (2.3%)Total # companies: 375,000 (2.3%)Size: All (<20 employees = 94%)Size: All (<20 employees = 94%)Location: 77% urban, 23% ruralLocation: 77% urban, 23% ruralIndustry sector: AllIndustry sector: All
Source: SBA: Gazelles Revisited
HPIIEs account for virtually ALL new growth in US economy
Barriers to EntrepreneurshipBarriers 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 Critical Community Factors for EntrepreneursEntrepreneurs
Availability quality work Availability quality work forceforce
Availability quality Availability quality managementmanagement
Access to expansion capitalAccess to expansion capital
Overall regional economic Overall regional economic healthhealth
Overall standard of livingOverall standard of living
Entrepreneur support Entrepreneur support organizationsorganizations
Access to alternative Access to alternative financingfinancing
Quality K-12 schoolsQuality K-12 schools
Availability of qualified Availability of qualified service providersservice providers
Access to seed capitalAccess to seed capital
Council for Entrepreneurial DevelopmentCouncil for Entrepreneurial Development
Innovation EcosystemInnovation Ecosystem
Know What Know Who
Know How
Researchers
Entrepreneurs
Investors
Workers
Intermediaries
Nexus of Innovation
To Be an ILED PlayerTo Be an ILED Player
CommunicateCommunicate
CollaborateCollaborate
ParticipateParticipate
Thank You!Thank You!
Randy Goldsmith, PhDRandy Goldsmith, PhDPresidentPresident
www.T3DC.orgwww.T3DC.org
Startup HPIIEsStartup HPIIEs
Exponential growth potentialExponential growth potential
A radical, disruptive, platform innovationA radical, disruptive, platform innovation
Highly competent managementHighly competent management
Wealth generation strategyWealth generation strategy
Significant early stage capital requiredSignificant early stage capital required
Average HPIIE EntrepreneurAverage HPIIE Entrepreneur
40 years old40 years old
70% married70% married
60% have 1+ children60% have 1+ children
72% middle class72% middle class
95% bachelors degree95% bachelors degree
New Economy FeaturesNew Economy Features
Knowledge jobsKnowledge jobs
GlobalizationGlobalization
Economic dynamismEconomic dynamism
Transformation to a digital economyTransformation to a digital economy
Technological innovation capacityTechnological innovation capacity