Los Alamos
The micropolitan area of Los Alamos has the highest knowledge intensity score of any entrepreneurial ecosystem across the United States — a legacy of its history as the development site for atomic weapons.

Heartland Forward, a new think tank focused on 20 states in the middle of the United States, released an important report on the connection between entrepreneurship and job growth in early May. Communities with strong entrepreneurial ecosystems saw job growth that was 15-34% faster in the period 2010-2017.

The report’s authors, Jonas Crews, Ross DeVol, Richard Florida and Dave Shideler, offered recommendations for people who want to use startups to spark growth in their communities, especially in the Heartland or other underdeveloped regions that need job growth and dynamism:

• Make The Case: Explain to politicians that there is a direct connection between young firms and jobs.

• Improve Attitudes Toward Entrepreneurs: Creating positive attitudes towards entrepreneurial activities is an area that needs emphasis, especially in the Heartland. In communities in the Heartland, entrepreneurs are not held in as high esteem as corporate managers. In emerging markets, a government job is often seen as the highest economic prize.

• Establish and Fund Entrepreneurial Support Organizations: These can be accelerators and incubators, programs at colleges and universities, networking organizations, or they might go by other names. “(They) are a necessary part of the process for creating the social capital that is required for success,” the authors wrote.

• Enable Dealmakers. They’re not always obvious and they’re not always financial connectors. “A particular form of social capital and connectors in entrepreneurial ecosystems has been isolated for its growing importance—“dealmakers.” Dealmakers are individuals with valuable social capital who can facilitate relationships that support new firm formation; while this could include financial connections, it could also be connecting entrepreneurs with similar ideas or an entrepreneur with a manufacturing firm to commercialize this product,” the authors wrote. Times of Entrepreneurship wrote about dealmakers in this story about Oklahoma City.

• Create Hard Infrastructure. Physical spaces such as incubators and accelerators help; they can use alternative revenue models, such as trading in equity, rather than charging rent or rent alone.

• Demand University Entrepreneurial Engagement. Communities must insist that universities see entrepreneurial ecosystem involvement as a critical component of their missions.

• Promote Early Stage Risk Capital Networks. Encourage business angel investors to provide startup capital and smart money management. The public sector can underwrite operating costs for business angel networks.

• Turn Government Agencies Into Helpers. government agencies can act as a central hub and facilitate access to resources available to entrepreneurs via processes like sales tax permits and corporate licensing and registration. 

• Link In Corporations. Companies can fund and support local entrepreneurship efforts, incubate startups and may eventually acquire companies. This company, Cloosiv, was incubated by the founder’s employer before moving on to Y Combinator, a famous Silicon Valley accelerator. The founder returned to Charlotte, N.C. to grow the business.

• Enhance Your Quality of Place. Boulder, Colo., is great evidence for this: Smart people want to grow businesses where they like to live. “A growing body of research provides an empirical basis for the role quality of place, including arts and culture, plays in promoting the prosperity of place,” said the report’s authors.

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This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.