Center for Entrepreneurial Excellence

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Entrepreneurial Economic Development

The effectiveness of the traditional approach to economic development has begun to decline over the last few decades. For a variety of reasons, the large-scale relocation of major industrial complexes is now slowing down. Concurrently, there is a proliferation of economic and industrial development bodies spending more money than ever before to "recruit" this declining market.

While the pursuit of traditional economic development must continue, most communities are overlooking opportunities which could effectively be utilized to help meet their goal of job creation. Economic development agencies should expand their focus to include the development of programs that can foster growth from within their communities—programs that stimulate entrepreneurial economic development (EED). These type programs should be viewed as an integral and complementary part of the economic development process.

Viewed at its core, EED is simply a process through which entrepreneurs make their way to the marketplace. The United States is the global leader in entrepreneurial success and our culture has allowed millions of new enterprises to evolve into growth companies.

Research shows that three vital ingredients must exist in order to build a foundation for start-up enterprise success. Those ingredients are:

1. Market driven ideas - most business fail because there is not sufficient demand for or market interest in the idea.

2. Management skills - many businesses fail because their owners lack sufficient skills to execute a basic business plan. Many more are deficient in the ability to create such a plan.

3. Access to capital - many firms fail because they do not know how to use capital or they lack small amounts of capital at a critical time when their needs are greatest.

 

The goal of EED is to create programs that address the needs of entrepreneurs in these three key areas. Every community should create programs that help entrepreneurs: clarify and articulate sound marketable ideas; gain access to basic management training; establish ways to link entrepreneurs to local capital in a timely fashion.

Many communities have found that EED programs work best when they are brought together and implemented in a small business incubator environment.