How Would You Spend $4 Million?
Posted by Mark Marich on May 16th, 2011 09:02 1 Comments
If you wanted to transform your city into a thriving hub of economic activity — and you had access to $4 million to spend however you wanted — where would you start?
Norris Krueger, a researcher and tireless advocate for entrepreneurship who serves as GEW/USA’s Regional Coordinator for Idaho, is helping pose that question to Boise (and the rest of the state, as well).
The challenge is meant to look for a more entrepreneurial approach to economic growth than the city is currently getting from its local economic development group. Krueger argues that the Boise Valley Economic Partnership recently spent $5 million that according to him attracted “basically 3 firms” and that the group is now seeking an additional $4 million.
Is that the right approach? Do you need to spend $4 million or can you get away with less?
A local Boise venture capitalist has suggested a new program in materials science (with a price tag of roughly $2 million). Krueger seems to wonder if entrepreneurship training programs would be a great investment, considering that Boiseans are “pretty good at ideation but lousy at execution.”
[I might argue in favor of a stipend for GEW Regional Coordinators to facilitate greater community involvement and collaboration through Global Entrepreneurship Week… of course, my opinion is somewhat biased…. although I’m sure Krueger wouldn’t mind.]If you want to contribute to the Boise discussion, they would love to have you at the TechBoise Open Coffee Club on LinkedIn. If you would rather jumpstart a conversation about your city or state, leave your ideas in the comments field here.
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[‘Boise at night’ photo courtesy of brianjacobsen]
So what would YOU spend $$ on?
Norris here: Thanks, Mark! To my GEW friends out there, I’d love to see what you think of my rant on the TechBoise site. Do I make sense? (Fortunately, I start with the great evidence from 10+ years of the Global Entrepreneurship Monitor; Paul Reynolds identified the three significant predictors of entrepreneurial activity. [Go read the TechBoise post or email me if you can’t access it]
I’m sure that Boise isn’t the only place where they spend a great deal of money of low/neg ROI activities. Locally, everyone seems to be falling over themselves trying to not insult the economic developers.. and I agree that diplomacy has its place. But………… check out the great www.YourEconomy.org website that has 15+ years of firm and job data… by state & MSA.. by industry.. AND by size. Amazing data.
2000-2008 for Idaho: gross job creation = ~500K jobs, net job creation = ~70K
Gross Job Creation:
Startups 58%
Growing firms 40%
In-migrating firms 2% (2%!)
Guess what? That’s NOT unusual… California reports the same, overall USA is similar
If we go net job creation:
Startups – exits ~8%; Growing firms – shrinking firms = ~92% [it’s more 10%/90%]
(Idaho actually lost more jobs from out-migrating firms than gained from in-migrants)
Go to that website, www.youreconomy.org, and run the numbers for your state…
Bottom Line: We should spend money on:
1) Entrepreneurial growth in existing firms [not just gazelles]
2) Startups, especially those with growth potential.
As for specifics on spending, start with what Paul R (& Dave Audretsch & Zoltan Acs & …) show us!