Eight states will get 18 months of intensive training in developing new businesses under a program run by the Nationall Governors' Association (NGA) and the Kaufman Center on Entrepreneurial Leadership.
The eight `policy academies' are the crown jewels of a major NGA push to get states to concentrate more on entrepreneurism, which the organization views as a critical component of economic development.
"Most state economic development strategies have been based on trying to take (manufacturing) plants and employees from other states. This will be the first time that states will be focused on growing future employees in their own states in a way that's sustainable," says Patrick Von Bargen, executive director of the National Commission on Entrepreneurship, which is also involved in the project.
Even states that have done reasonably well at developing new businesses -- California, Virginia, Massachusetts, Colorado, Washington and Texas -- are viewed as having room for improvement, Von Bargen says.
An NGA report titled Nurturing Entrepreneurial Growth in State Economies says small, high-growth companies are responsible for 70 percent of the economic growth this country is presently experiencing. Since 1980, Fortune 500 companies have lost more than 5 million jobs, while 34 million new jobs have been funneled into the economy. Most of those new positions were spawned by entrepreneurs and small businesses, the NGA report claims.
In addition to examining the role entrepreneurs play in the new economy, Nurturing Entrepreneurial Growth in State Economies is meant to serve as a primer for governors looking to spur entrepreneurial growth in their states.
On May 15, the NGA notified states that they have until June 15 to submit a proposal to receive business-development training. Teams from the eight states chosen will meet in September at a location to be determined for three days of individualized training. Afterward, each participating state will receive technical assistance from the NGA, NCOE and Kauffman Center.
The eight states will be chosen based on their grasp of entrepreneurship's significance, their willingness to commit to the process and the breadth of their teams, Von Bargen says.
"States must rethink the way they provide services in the 21st century," says Republican Utah Gov. Michael Leavitt, the NGA's chairman. "Developing policies that assist entrepreneurs are crucial to the success of state economies."
Among the areas where the NGA wants to gives states help are:
The NGA and the Kauffman Center sent a business-creation survey to each of the 50 states and got 38 responses, says Thom Rubel, who heads the NGA's economic development and commerce division.
"We found some interesting venture capital programs and we found some interesting educational programs at the higher education level," Rubel says. Connecticut and Massachusetts were shown to excel at amassing seed capital for business start-ups. Additionally, other states possessed exemplary small-business assistance programs or securities laws and regulatory processes, but no state put all the pieces of the puzzle together, Rubel says.
Most people harbor an erroneous stereotype of new economy start-ups being predominantly dot-coms or high-tech enterprises, says Von Bargen, with the NCOE.
"Most entrepreneurial companies are not technology companies," he says. "Probably half of them are. Starbucks is a classic case of a non-technology entrepreneurial company." Von Bargen also cited Nike and Ben & Jerry's as examples.
Von Bargen cautions that fostering entrepreneurship doesn't happen overnight, or in a matter of weeks. "This is a slow process," he says. "One classic case to me is North Carolina, where I believe several governors had a vision about Research Triangle Park that they put together in the '60s and then executed over the next 20 years.
"It's doable, and a lot of it is about leadership and focus."