This is important because large companies operate on a huge scale. Most Americans work for companies with 250 or more employees. However, small businesses are important because they contribute to local culture and tradition.
But if you want to provide new jobs for the residents of your city, every action comes with new business. Entrepreneurship brings new ideas, new wealth, and new jobs to everyone. According to his influential 2013 MIT analysis, all net new jobs were created by businesses founded within the past 10 years.
This is a big reason why local policymakers and economic development strategists encourage the creation of new businesses.
Directed tech policy recommendations to Philadelphia's new mayor, Sherrell Parker, that were mostly translatable to chief executives in other big cities, but entrepreneurship appeared to be an important follow-up. . Here is some simple guidance I offer to local elected officials and entrepreneurial support organizations, based on information gleaned from his 15 years of reporting and work on the subject.
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Remote work and distributed teams are especially popular among technology founders, who helped popularize American entrepreneurship in the 2010s. Local leaders may have a bleak view of entrepreneurship. That's wrong. Entrepreneurship comes in many forms, and some of the hottest new technologies include location-based sectors such as robotics, life sciences, and software teams that occasionally use offices.
There are three reasons to pursue entrepreneurship. It's about encouraging solutions to real problems, helping residents live richer, happier lives, and expanding the tax base to improve city services.
And we can do so in four ways: fostering innovation, making it easier to start a business, maintaining a balanced regulatory environment, and developing our workforce. Some of the steps to get there will require cooperation between the legislative and executive branches, and that's a good thing. Other measures can only be taken by the Mayor.
Encourage innovation rather than leading it
The powers of the mayor are much more limited than we generally think. But they set the vision, the tone, and give permission.
Their priorities emerge gradually in their attitudes and perceptions. Today's entrepreneurial spirit should translate well into metropolitan politics. Black women are driving the entrepreneurial boom, immigrants are disproportionately likely to start businesses, and universities, city infrastructure, and wealthy professionals all contribute to the ecosystem.
Mayors then need to understand the full entrepreneurial journey, from research and development to business launch and growth, as a talking point. Drop the name of the entrepreneur. We help homegrown founders grow away from home. Encourage procurement practices that allow experimentation with new business (supplier diversity is constantly reinventing itself, right?).
Don't develop an in-house program for entrepreneurs. In 2015, the Kauffman Foundation, which focuses on entrepreneurship, released a report recommending that state and local governments avoid developing investment funds, accelerators, and incubator programs. It is better to contribute a small amount of funds to coordinate the entire private sector partners. In the rapidly changing world of new business creation, governments and other institutions are better conveners and supporters than leaders.
Make it easier to get started
Government does not exist to serve business. Government exists to serve a population that often benefits from a dynamic business environment.
Among wealthy countries, the United States is relatively easy to start a company. At the local level, the added complexity varies widely. Arizona State University last released his 2022 Ease of Doing Business rankings. Although incomplete, it serves as an accessible benchmark across approximately 100 cities. Philadelphia's top 15 ranking may surprise self-critical locals, but it also ranks among Pittsburgh (43rd), Baltimore (60th), Washington DC (70th), New York (74th) and San Jose ( #77) and Los Angeles (#82).
Ease of doing business is clearly not a silver bullet, but it is still a priority. Experiences still vary widely. For example, a group of Philadelphia real estate developers grudgingly acknowledged last week that while many processes in the city have improved in recent years, the city's health department was hurting the restaurateurs they host.
Across the city, there are generations of projects tied to trusted open data, cross-sector collaboration, and online business services that have benefited entrepreneurs and will continue to be important.
Reduce regulatory burden (and improve quality of life)
Few, if any, places in the United States have burdensome processes that prevent aspiring entrepreneurs from starting their own businesses. As noted above, advice on regulatory, policy development and government relations is typically provided by larger, more established firms, although it can sometimes be done more easily.
Thus, local business associations are primarily tied to large corporations (such as the Philadelphia Chamber of Commerce and the Greater Baltimore Committee) or to specific industries (such as the Pittsburgh Technology Council, the Delaware State Technology Council, and the Pennsylvania State Life Sciences). No wonder. None of these are intended to represent only new businesses. By contrast, groups like his 15-year-old Philly Startup Leaders and his DC Startup Week are better known as clubs for tech founders and friends than as united lobbying efforts.
As a result, regulatory priorities for entrepreneurs are less clearly defined. However, examples do exist. First, before entrepreneurs choose where to start their business, they choose where to live. Make your city a great place to live to attract and retain people with options. Crime, trash, and schools are important. Local priorities, like changes to Philadelphia's wage tax and adjustments to Baltimore's property taxes, are also pro-growth.
Kaufman's report identifies other common priorities.
- Reduce the burden of excessive professional and occupational licensing
- Simplify tax and compliance processes
- Streamline zoning to accelerate development while maintaining safety
- Rethink non-compete agreements to encourage former employees to strike out on their own
- Encourage immigration to attract the most economically vibrant residents
All affect different stages. One startup advocate told me that he advises local governments to divide their entrepreneurship programs into what he calls four stages: “Start-up,” “Survival,” “Scaling up,” and “Break-up.” Ta.
Maintaining competitiveness in talent development
Entrepreneurship is workforce development. Sole traders and small businesses are extensions of other organizations.
In addition, entrepreneurs benefit from being close to other smart and capable people – people who are employees and who may later become entrepreneurs.
Therefore, our technology policy recommendations related to workforce development are also relevant here. Early childhood education, upskilling, and career development help both these populations and attract businesses that need to employ them. There's a reason business membership group Philadelphia Alliance of Capital and Technology (also known as PACT) invested in her MentorConnect program and partnered with the Pittsburgh Technology Council to expand its apprenticeship apprenticeship program.
Also consider how to encourage evolving employee ownership models that share wealth creation and foster career development.
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Entrepreneurship has a lot to offer people across the political spectrum. Americans start businesses across demographic groups, so encouraging more Americans to grow can reduce racial wealth inequality. Entrepreneurship is central to the American spirit.
With such popularity, the term naturally becomes bloated. Not all technology businesses are innovative. Not all large companies engage in civic activities. Not every new business is a startup ready for growth.
State and local governments need to become more informed and more intentional about how they support entrepreneurship. Understanding their importance and the differences between them is a start.
Knowledge is power!
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