Growing Entrepreneurship in Rural Areas? (part 1)
I’m sitting in a place that is considered rural, in the northern part of the country, in an area making the painful transition from extractive/ag economy to a scary, Brave New World. It does have an intriguing nascent ICT cluster (despite a shortage of programmers). The area is good at creating small businesses but sadly weak at creating high-growth entrepreneurial firms. Anyway, here I am in
Lule?É?í?Ǭ• in the north of Sweden is part of a regional effort that Idahoans might find useful!
[Sure sounds like Boise, eh? (~100 km from Arctic Circle - 23 hrs daylight)]
Europe in general has bought into the “Triple Helix” model of entrepreneurial/technology development. All you have to do is get industry, government and academe at the plate and… voila! New products, businesses and jobs wealth magically appear!
Of course, the only problem with that is… it works rather badly (but it’s also more expensive too). You let the institutions drive the process in top-down fashion, then try to figure out what linkages between them are acceptable. Institutions (and their ideas) first, linkages second.
OR, why not try starting with the linkages??? Serve the linkages and the humans driving them. (Yeah, I know.. radical idea, LOL. The only thing going for it is.. It works. Period.)
Lule?É?í?Ǭ• and its neighbors have embraced the latter, bottom-up strategy. Some Swedes seem to think I’m a champion of this (nothing scarier than on my prior trip, seeing people quote something I wrote in 1995, LOL) but I must say that they are doing things that bode well for the future of Lule?É?í?Ǭ• and its region.
The bottom-up “Double Helix” model (see graphic below) argues that just as the key to the DNA helix is the links between the strands, the key to resilient, healthy development is the set of “bridging assets” that proactively build, repair and replace the links between ideas and people (and resources).
To see efforts that focus on independent, entepreneurial bridging assets rather than powerful institutions is amazing enough in Idaho, but in ?É?í?Ö‚Äúber-bureaucratic, ?É?í?Ö‚Äúber-PC Sweden? That political maneuvering is essentially punished? Holy culture change, Batman!
So what are they doing to change the culture, to get creative control to the right people involved? How do change the fundamental bureaucratic “truth” that power goes to the person in the right position or has the right political juice? How do you change the culture toward vesting creative control in those with the actual expertise and knowledge?
In part 2, I’ll translate the ideas into “Idahoan”, then label the policy ideas as WWLD? (”what would Lule?É?í?Ǭ• do?” lol).
Sounding suspiciously like our own EDA, the new mantras are “result-oriented” and “market-driven”. They even use the word “libertarian” to describe their strategy. That is, when in doubt, listen to the private sector and help them first. For example, they are no longer focusing on public sector counseling for entrepreneurs; they are explicitly “coaching the coaches”. As a preview, here’s one most intriguing idea - find ways to help private service providers do a better job, to “Coach the Coaches” and find ways for them to provide advice to entrepreneurs. (Imagine privatizing SCORE, etc.)
part 2 to follow…
Norris, I’m glad to see that you changed the metric from ‘jobs’ to ‘wealth’
Just for you!
It works for me too!
The unabashed Capitalist…
I’m not a capitalist, I’m an entrepreneurialist!
Is that the opposite of disestablishmentarianist?
Ya know, there are two types of entrepreneurs: Those who are capitalists and those who are hobbyists.
I love to break things down into “two types.” I think it’s because I think of the world as a binary proposition.
There are two types of people who work for themselves: Those who want to work for themselves, and those who can’t work with anyone else.
…OK…you can slug me next time you see me.
Great post.
What are some of the “bridging assets” you’re thinking of?
Stephen - YOU might be one! (TechConnect is the most visible model right now.)
Bridging assets are those who proactively bring together ideas, people and resources. In any ‘happening’ organization or community, there are those who catalyze action that way. (Yes, the same entity might directly support ‘innovation assets’ [sources of ideas] or ‘entrepreneurial assets’ [sources of people] as well, but as a bridging asset their key role is to identify links, to make connections to move things forward. The Euros use the term “liaison-animateur’ - both a broker and an agitator.
This part of the puzzle is less-supported partly because bridging assets (or liaison-animateurs) bubble up in any growing climate…and tend to have two legs (it’s politically tougher to support people over institutions) but it is very clear that it’s the links that offer the best ROI.
Steve, it’s not advisors, coaches and other service providers, though they can serve that role. Alas, what makes the best bridging assets is that they don’t play bureaucratic politics - and that makes them all too vulnerable.
When Idaho TechConnect was born, I showed this model to Ritter, et al. (in different guise)- the reaction? “Uh, that’s US!” LOL (Look at the ‘ecosystem’ graphic at this link for the original picture that I scribbled down: http://www.idahotechconnect.com/About_Us/FAQs/ )
See also TechConnect’s godparent the Oklahoma Tech Comm Corp, KTEC in Kansas, the Research Triangle, etc, etc. who emphasize this. You get the PR for providing seed capital or money for research, but the big, long-term payoff is nurturing this very human element. (Think economic development - there’s always a local sparkplug. But are they supported?)
We just need to find ways to make sure that we nurture bridging assets that are operating on a truly bottom-up basis, with genuine ‘win-win-win’ partnering. How do we help them? (And, Steve, maybe I need to ask - how do we help.. YOU??)
And though I talk too much, LOL… I gotta smack Leo (LOL) — “entrepreneurialism” assumes that ideas and entrepreneurial humans are at the heart of an economy and society, not capital. If you have money & no ideas, your economy stagnates (whether a community or an organization). If you have great, implementable ideas but no money… the money will find them. The scarce element is talent, not money.
Hey, something we can chew on! I agree that the “heart” of the entrepreneurial organism is the amalgamation of ideas and people.
But I’m much more inclined to argue that for the most part the ideas have to find the money. The VC players are aggressively sniffing around, but my experience is that they aren’t sniffing around as aggressively as the idea/people markets are.
My experience is, too, that the VC side is much more discriminating…which of course, they have to be because of the tangible nature of money vice the intangible nature of ideas.
Other-than-VC players, such as banks, SBA partners, and so on, seem to share the anxieties prevelant in VC.
Angels…well…met a few of them too. They seem to be either less risk-averse VC’ers or VH’ers (”Venture Hobbyists”), but they have their ideosyncracies, too. I know, because I’m a small-time Angel.
Anyhoo…a contrasting viewpoint. My experience with taking my company public was relatively anecdotal…and eventually aborted when we got to the point where we could horsepower our way through the capital needs.
There’s a two page article on our experiences in the December, 2004 Entrepreneur Magazine (”Coming Up, Short”-dealing with our use of short term financing). It was not the first or only national exposure we got, but none of it got us the friendlier terms we needed to engage equity capital.
OK, Leo - Word for the day to google: “Effectuation”
I’d rather bet on the jockey, than the horse -
Leo, it’s your damn money, so…
A) Grade A idea, Grade B entrepreneur/team
or…
B) Grade B idea, Grade A entrepreneur/team
Where do you put your money? (No politician -like weaseling, LOL - A or B?)**
Put another way -
Aren’t there more great ideas than great entrepreneurs/teams?
The great entrepreneur/team can turn a “b” idea into an “A” idea, n’est-ce pas?
And isn’t the “grade” of an idea a function of the entrepreneur/team?
Mon ami, that’s why we need those liaison-animateurs. Not just match ideas and persons, but helping adapt. As the world keeps changing, this is an unavoidably dynamic process - the original idea will change a LOT before it gets to market… you need a great jockey to manage that process & those jockeys need bridging assets…
a la prochaine fois.. NK
** Credit: General Doriot of ARD (first formal VC firm in 1950s) said this… still true.
Norris, we’re/I’m not recognizing the proposition as that of two different horse/rider teams-we’re given thousands of different horse/rider teams with a stunning diversity of “grades” and liabilities, both rider and horse, and an incredibly complex track…which, to call it dynamic would be an understatement. That’s my objection to the generalized binary question, without specific situational distillation.
I strongly believe that “marketing covers a multitide of production sins” (paraphrasing a Christian tenet here…), so would almost certainly go with the superior talent, but would most likely end up improving the idea and/or redirecting the talent. Too broad a topic, though, for a blog response. I agree about the development of the product, but I know that a scientist or tinkerer will rarely turn out to be an effective ship’s captain; Bill Gates, Wayne Huizinga, Fred Smith, Ross Perot, and other exceptions noted…and even then, Gates is known for hiring “scary smart” folks to take the wheel.
Je peux ?É?í?Ǭ† peine expr?É?í?Ǭ®s moi-m?É?í?Ǭ™me de mani?É?í?Ǭ®re satisfaisante dans l’anglais, parler seulement assez d’allemand pour me recevoir dans le probl?É?í?Ǭ®me et bien que j’aie une femme qui parle vraiment le fran?É?í?Ǭßais (?É?í?Ǭ©tait un ?É?í?Ǭ©tudiant de commerce des devises dans La Rochelle), j’ai tendance ?É?í?Ǭ† ?É?í?Ǭ©viter n’importe quoi le fran?É?í?Ǭßais ?É?í?Ǭ† part le Roquefort … yum. Leur balancement politique r?É?í?Ǭ©cent je trouve s?É?í?Ǭ©duisant, bien que!
I’m not certain that there are more of one element (ideas, entrepreneurs) than the other…I’m no longer part of the academic community other than an occasional lecturer for BSU/SBA. We (practitioners) rely unashamedly on the research and refinement of academia for issues like such a comparison…I gave away my copy of SPSS years ago!
Your last paragraph helps me to feel very secure in my position. I want to distinguish the natures of “scarce” and “talented,” although I know they do coincide, I don’t think they’ll occur in a predictable ratio (not trying to say you think one way or the other on this). However I am still convinced that the money is harder to marshal, regardless of all those other issues: The ratio of entrepreneurs to capital sources, the analogies, Pareto, the economic climate, et. al.
“scarcity” and “talent” aren’t immutable, of course- both can change. We certainly can cultivate talent (a topic for a future blog entry- we now know a remarkable amount about that!)
My last paragraph could be amended to say (a) of course, financial capital is the necessary oxygen to support the adaptation/evolutionary process as we move from raw idea to viable business concept [hmm.. maybe ideas are fuel & entrepreneurial passion is heat?] and (b) that brings us back to the notion of bridging assets.
Communities (and organizations) with a lot of entrepreneurial assets [talent/energy] and a lot of innovation assets [ideas] need not have a lot of actual entrepreneurial activity. If they don’t have the right ecosystem, they fall short - e.g., We don’t have enough launched entrepreneurs because we don’t have the ecosystem to grow “potential into opportunity” (to steal Tac’s phrase).
But, resources are more easily attracted to healthy ecosystems; capital is no different.
Where capital IS very much an issue is that we under-invest in brdiging assets; we aren’t investing as we should in the ecosystem. Tac has us investing more time & energy, but here you are right - we need $$$ to grow the ecosystem.
I might even have a relatively painless way for you to invest in exactly that, Leo!
(And the rest of you - chime in already! LOL)
Re: “I might even have a relatively painless way for you to invest in exactly that, Leo!”
Hey, I’ll do what you tell me…but maybe I like pain? Ahem. As long as it’s not in the fur-lined sink Nipper is developing…or Tac’s CD/DVD Toaster…or Krissa’s Braille Drive-Up Banking Machines. Hmmmmm.
Cool! I get to be the lump of coal in this conversation! As an urban historian and economist, I say let urban be urban, and rural be rural. Said another way:
Rural economic development is an oxymoron.
The rural “economy” is predicated on providing natural resources to the City. Yes, yes, you all are saying, “we KNOW that, and that is what needs to change.”
I say it doesn’t.
I say the coolest thing to happen in rural Idaho is the building of a new chicken processing plant in New Plymouth. Keep it rural baby, keep it old school!
I hope that Dell NEVER builds a call center out there. I hope Google NEVER puts a server farm in Rupert. I don’t care if Cambridge EVER gets broadband.
Rural by definition means “without economy.”
Let’s focus economic development efforts in urban areas - that is the raison d’etre of the city.
Let the country be the country. If you find yourself struggling to make ends meet in the 21st century ‘rural economy’ follow the sage advice of urban economist Axl Rose who sang, “move to the city!”
and if we apply enough pressure, we can turn you into a diamond!
Propinquity trumps proximity…
[sidebar: Aren’t you the guy who pointed out that Idaho is a lot less rural than it may seem? LOL and… what about those struggling to make ends meet IN the city? Where do they move?]
Anyway - I purposely did not say “rural entrepreneurship” - Boise is a city but it sits in a relatively rural part of the US. We are not LA, Bay Area or Noo Yawk. But frankly, Chris, I don’t give a hoot about ‘urban’ versus ‘rural’ per se - I care about people. How do we do cool things? How do help others to do cool things? Even when we’re not in the proximity of 20 million humans?
We live in a world where propinquity trumps proximity. How do we in Idaho take advantage of that?
That is the question!
One of the things we can do is look to history as a guide . . .
We have a tendency to do things that history has not rewarded. The “Hole” at Eighth and Main is a prime example.
What is Eighth and Main? Eighth and Main, since the 1860’s has been the territory’s premier public gathering spot. It is THE crossroads - the gateway to the Pacific Slope. The Boise Tower project failed because it encroached on all the public space - it did not fit in to the historic use of that space for the last 140 years.
We can also explain why the Saturday market draws 6,000 each Saturday to the same space - that use complements the historic use of the space.
So then, what is Boise (or Idaho - if we want to talk on a Macro scale)?? I alluded to that: Boise (Idaho) is the crossroads to the remainder of the territory - the gateway to the Pacific Slope. What does that mean for us? It means we should take advantage of history and do what history has rewarded.
One of the first things I would do is send that $250,000 up to northern Idaho for the intermodal transportation facility. This has always been a transportation/supply route. Hello: this is the Oregon Trail. So that is a start.
I also would get off the agricultural horse. WHAT??!??! But didn’t you say that we should do what history rewards? Idaho is a desert. Before there was irrigation, Idaho was as I mentioned: a transportation and supply route. When I say history, I don’t mean the last 80 years.
Also, let’s get a proper perspective of agriculture: agriculture does NOT make Idaho unique. It is what makes Idaho EXACTLY LIKE every other state in the world. ALL economies begin as agrarian, move to crude manufacturing, to skilled manufacturing, to the provision of services.
Now - the advanced stuff that Simplot does in its labs for example, is another great place to focus. That research falls into the innovation category.
I also don’t think that a focus on widgets, mousetraps, and DRAM is in our interest. It’s just not going to happen here long term.
BUT we can become a center of INNOVATION - that is another historic reality of Idaho, and Boise, because we are geographically isolated. And that is an advantage. It means that lots of interesting people come through this crossroads, and they leave ideas here. Without the influence of popular culture (mass culture) we are forced to innovate. Because Idaho is removed, we might not know that something we think would be a good idea, can’t be done. Think: television; french fry; Trus Joist trusses.
I think we need to turn the cart around - we need to plug the engineering school at BSU into the social science departments (and unplug it from the Fab). We need to plug the computer science department into everything. We don’t have the luxury of living in little silos - this is Idaho.
We need to look at history, and use it to our advantage. We’re an outpost, a crossroads, a gateway, an innovator. What can we do with that tool kit? Lots. Building on that is what will work.