曼哈顿政策研究所-企业家主导的经济发展：促进地方增长和生产力的新战略（英文）-2021.5-12正式版

REPORT|May2021

ENTREPRENEUR-LEDECONOMICDEVELOPMENT:

ANewStrategyforGeneratingLocalGrowthandProductivity

IanHathaway

RhettMorris

CenterforAmerican

CenterforAmerican

Entrepreneurship

Entrepreneurship

Entrepreneur-LedEconomicDevelopment:ANewStrategyforGeneratingLocalGrowthandProductivity

AbouttheAuthors

IanHathawayisaseniorfellowatboththeBrookingsInstitutionandCenterforAmerican

Entrepreneurship.He’scoauthorofTheStartupCommunityWay:EvolvinganEntrepreneurial

Ecosystem(Wiley,2020)

RhettMorrisisapartneratCommonGoodLabsandaseniorfellowattheCenterforAmericanEntrepreneurship.

2

Contents

ExecutiveSummary 4

FourKeyStepsandThreeKeyPlayers 5

Conclusion 9

Endnotes 11

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Entrepreneur-LedEconomicDevelopment:ANewStrategyforGeneratingLocalGrowthandProductivity

ExecutiveSummary

Thebestwayforlocalgovernmentstofostereconomicdevelopmentistosupportentrepreneurship.Policymak-ersshouldfocusonthesmallgroupofgrowth-orientedcompanies—often,butnotalways,inthetechnologysector—thatcansuccessfullyexpand.Thisreportoutlinesacomprehensiveapproach,whichwecall“entrepre-neur-ledeconomicdevelopment,”forworkingwiththeseimportantcompanies.Thegoalistocreatefeedbackloopsbetweenentrepreneurialleadersandotherlocaldecisionmakersandtocultivatenetworksthatconnectsuccessfulentrepreneurialleaderswithfuturegrowth-orientedfounderswhocanusetheirguidancetogrow.

Entrepreneur-ledeconomicdevelopmentisafour-stepprocess:

Identifythesuccessfulentrepreneurialbusinessesintheregion.

Buildnetworksaroundsuccessfullocalentrepreneurs.

Partnerwithentrepreneurialleaderstoaddressthemostimportantneedsofgrowinglocalbusinessesandtheirentrepreneurs.

Collectdataongrowingentrepreneurialbusinessestotrackresultsandsharefindingswiththecommunity.

Eachofthesestepsrequirestheinvolvementofdecisionmakersinthreedistinctareas:policymakers,funders,andserviceproviders.Collaborationamongstakeholdersismutuallyenhancing,becausenosingletypeofor-ganizationcanimplementthepolicyonitsown.Importantly,thisworkdoesnotendafterthesefourstepsarecompleted.Entrepreneur-ledeconomicdevelopmentisanongoingprocess.

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ENTREPRENEUR-LEDECONOMICDEVELOPMENT:

ANewStrategyforGeneratingLocalGrowthandProductivity

FourKeyStepsandThreeKeyPlayers

Economicdevelopmentisstuckinthepast.Stateandlocalgovernmentsspendmorethan$45billioneachyearonadatedsystemofsubsidiesdesignedfortheindustrialeraofthe1950sand1960s.1Thesesubsidyprogramsprovidepaymentstolargecorporationsthatarecurrentlylocatedelsewhere,inthehopethattheywillrelocateoropennewlocalfacilities.Thepaymentstheyoffernowrepresentnearlythree-quartersofthe$61billioninlocalandstateeconomicdevelopmentspendingeachyear.Unfortunately,thesepaymentsrarelygeneratesignificanteconomicgrowth.2

Abetterwaytofostereconomicdevelopmentistosupportentrepreneurship.Inparticular,policymakersshouldfocusonthesmallgroupofgrowth-orientedcompaniesthatcansuccess-fullyexpand.Thoughmanyofthesebusinessesaretechnology-driven,theycanbefoundineveryindustryandsector.3Astheygrow,theycreatelargenumbersofnewjobs,increaselocalproductivity,andgenerateadditionalbenefitsthroughwhateconomistsrefertoas“spillover”and“multiplier”effects.4

Supportingtheentrepreneurswhobuildtheselocalbusinessescanprovidetremendousvaluetocitiesandstatesacrossthecountry,anditisalsoextremelycost-effective.Theprogramsandinitiativesthatbenefittheseentrepreneursandtheircompaniesrequireonlyasmallfractionoflocaleconomicdevelopmentspending.

Thisreportoutlinesacomprehensiveapproach,whichwecall“entrepreneur-ledeconomicde-velopment,”forworkingwiththeseimportantcompanies.Thegoalistocreatefeedbackloopsbetweenentrepreneurialleadersandotherlocaldecisionmakersandtocultivatenetworksthatconnectsuccessfulentrepreneurialleaderswithfuturegrowth-orientedfounderswhocanusetheirguidancetogrow.5

Stateandlocalleadersshouldtakefourstepstoachievethesegoals.First,identifythesuccess-fulentrepreneurialbusinessesintheregion,thelocalstrengthstheyrepresent,andthekeyleadersbehindtheirgrowth.Second,buildnetworksaroundsuccessfullocalentrepreneurstoconnectthemwithfoundersoflocalbusinesseswithsignificantgrowthpotential.Third,partnerwithentrepreneurialleaderstoaddressthemostimportantneedsofgrowinglocalbusinessesandtheirentrepreneurs.Fourth,collectdataongrowingentrepreneurialbusiness-estotrackresultsandsharefindingswiththecommunity.

Foreachofthesesteps,wewilldiscusstheimplicationsthatthisstrategyhasforlocaldecisionmakersinthreekeyareas:

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Entrepreneur-LedEconomicDevelopment:ANewStrategyforGeneratingLocalGrowthandProductivity

Policymakers.Theseincludeelectedrepresentativesandeconomicdevelopmentstaff,aswellaspeoplewithsignificantinfluenceonpolicy,suchasexecutivesatchambersofcommerce,businessassociations,andothercivicgroups.

Funders.Thesecanincludelocalphilanthropists,communityfoundations,stateandlocalgovernments,economicdevelopmentagencies,corporations,andotherprivatesourcesofcapital,suchasangelandven-ture-capitalinvestors.6

ServiceProviders.Theseactorsprovidedirectsupporttohigh-growthentrepreneurs.Theyincludeoperatorsofaccelerators,incubators,venturestudios,andstartup-orientedofficespaces.

Step1:Identifythesuccessfulentrepreneurialbusinessesintheregion,thelocalstrengthstheyrepresent,andthekeyleadersbehindtheirgrowth.

Thefirstbenefitthatsuccessfulentrepreneursprovidetheircommunitiesissimplyofferinganexampleofwhattypesofentrepreneurshiphavealreadyworked.Butevenprosperousbusinessescanflyundertheradar,thusdeprivingleadersofthechancetolearnfromtheirexample.

ResearchinKnoxville,Tennessee,illustratesthispoint.7Thecityboastsseveraldozensuccessfultechnologycompanies,butwhenregionalstakeholderswereaskedtonameasmanyastheycould,thetypicalintervieweecouldnameonlytwoorthree.8AsimilarawarenessgaphasbeendocumentedinotherU.S.regions.9

Thefirststep,therefore,istomakeaconcertedefforttoidentifyalltheentrepreneurialbusinessesintheregionthathavedemonstratedsignificantgrowthorthataregainingthetypeofearlytractionthattypicallyprecedeshighgrowth.Toensurethattheidentificationprocessisrobust,itisimportanttoincorporatedatafromacrosstheentirecommunityandnotfocussolelyonthemostwell-knownfounderswhoarefrequentlyfeaturedinlocaleventsandinthemedia.

Policymakers

Governmentsalreadycollectdetailedinformationontherevenueandemploymentofcompaniesoperatingintheirjurisdictionfortaxpurposes.Whilethedataofindividualcompaniesareconfidential,analysisoftrendsacrossbusinessescangenerateanonymizedfindingsthatofferusefulinsightsonthetypesoflocalcompaniesthat

aregrowingthefastest.Missouri,forexample,usesdatafromtheQuarterlyCensusofEmploymentandWagestoanalyzeyoungandgrowingbusinessesbyindustryandtechnologysegment.10Membershiprollsfromthechambersofcommerceandotherorganizationsmayalsoincludekeyinformationoncompaniesandindividuals.

Funders

Localfoundationsandotherorganizationsthatfinanceentrepreneurshipprogrammingoftenhaveaccesstoprivatedatabaseswithvariousmeasuresofbusinessgrowth.Thoughnotalwaysasaccurateaspublicin-formation,thesedatacanofferspecificdetailsonin-dividualcompanies.Theycanalsobeaggregatedandcomparedwithotherregionstohelpcontextualizelocalfindingsinwaysthatdatarestrictedtosinglegeo-graphicareascannot.11

ServiceProviders

Thebusinessaccelerators,incubators,andotherorganizationsthatdirectlysupportlocalentrepreneurshaveaccesstoprogramandparticipantdataonthecompaniestheyserve.Thesedataareevenmorecurrentthangovernmentrecordsandmoreaccuratethannationalbusinessandventure-capitaldatabases,thoughtheycoverasmallersampleoflocalcompanies.Althoughmuchofthisinformationwillremainconfidential,publishingthecompanynames,operatingstatus,andprogramdatesisadditive,asispublishinglistsofrelevantprogramleaders,mentors,andothernetworkmembers.YCombinatorandTechstars,twoleadingacceleratorprograms,publishthisinformationontheirwebsites.12

Combiningthesesourcesofinformationwillhelpillu-minatethefactorsrelatedtoentrepreneurialstrengthsinacommunity.Thesestrengthscanincludespecificindustries,typesofcustomers,enablingtechnolo-gies,andevenparticipationinalocalorganization.Understandingthesetypesofstrengthscanempowerdecisionmakerstofocusonareaswherelocalentre-preneursarealreadyleadingandtodemonstratethatsuccessispossible.

Step2:Buildnetworksaroundsuccessfullocalentrepreneurstoconnectthemwithfoundersoflocalbusinesseswithsignificantgrowthpo-tential.

Oneofthemostimportantthingsthatsuccessfulentre-preneurscandofortheircommunityistohelpthose

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whowanttofollowintheirfootsteps.Theycandosoinseveralways:

Actingasmentorsandprovidingadvice;

Helpingconnectfounderswithpotentialcustomers,partners,employees,andinvestors;

Providingcapitalasearly-stageinvestors;

Leadinglocalsupportprogramsbyservingasboardmembers,executives,andvolunteers;and

Partneringwithotherentrepreneurstostartnewbusinessesandhelpingtotraintheircofoundersandemployeesintheprocess.

Entrepreneurialsuccessdependsonlocalnetworks.13Top-performingentrepreneurshipcommunities,suchasSiliconValleyandBoston,benefitfromthedensityoflocalrelationshipsaswellasthehighlevelsofpartic-ipationfromthemosttalentedpeople.14Researchin-dicatesthatentrepreneurialbusinesseswithstrongertiestothesenetworksperformbetter.15

Cultivatingnetworksbetweensuccessfulentrepre-neursandfuturefoundersisthuscritical.However,policymakerstoooftenfocusonlyongeneratinglargerquantitiesofresources—suchascapital,officespace,orprograms—withoutregardtoconnectionsbetweenthosewhowillusetheseresources.

Manyserviceproviders,suchasacceleratorprograms,arebuiltaroundmentorandinvestornetworks,whichconstituteasignificantportionoftheirvalueproposi-tion(beyondinvestmentcapital).16Theseprogramscanbeveryeffective,butthecommunitysufferswhentheirnetworksareclosedorcompetitivewithoneanother.

ConsiderBuffalo,NewYork,17whereabout20localprogramsworktosupportentrepreneurs.Thoughmanyoftheseinitiativestargetsimilarindustriesandevensharethesamefundingsources,thenetworksoftheseprogramsrarelyoverlap—afterafounderdevel-opsarelationshipwithone,heisunlikelytoformrela-tionshipswithanotherlocalprogramororganization.Thelackofcross-pollinationacrossthesenetworksmeansthatlocalfoundershavefeweropportunitiestoaccessresources,shareinformation,andsupportoneanother.18

Thesuccessfulcreationofastrongentrepreneurialnetworkisnotataskforanyoneinstitution;itrequiresthecontributionsofleadersfromallareas.

Policymakers

Publicofficialscanusetheirofficestorecognizeleadersatgrowingcompanieswhoareactiveinsupportingotherbusinessfoundersinthecommunity.Theycaninvitebusinessleaderstoparticipateinlocalsupportprogramsdesignedtohelpgrowingcompanies.GregFischer,mayorofLouisville,Kentucky—andasuccess-fulentrepreneurbeforeenteringpolitics—hashelpedstrengthenthenetworksinthecitybyconnectingen-trepreneurstolocalsupportorganizations.19

Funders

Mostfundingorganizationsdolittletoconnectgrowingcompanieswithsuccessfulfounders,whocanprovidevaluablementorshipandotherformsofsupport.OnenotablecounterexampleistheKnightFoundation,whichsupportshigh-growthentrepreneursinMiamibyfundinginitiativesthatexpandtheavailabilityoflater-stagecapital,increaseinclusion,andoffermentorshipexclusivelytargetedtofast-growinglocalbusinesses.20

ServiceProviders

Organizationsthatdirectlysupportentrepreneursshouldbuildnetworksaroundleadersatgrowingcompaniesbyconnectingthemtopotentialmentors,customers,employees,andinvestors.HighAlphainIndianapolis,forexample—afirmlaunchedbyScottDorsey,whopreviouslyfoundedthesuccessfullocaltechcompanyExactTarget—operatesaventurestudioandinvestmentfund.HighAlphanotonlyprovidesservicesbutalsoexplicitlyworkstofosternetworksinsupportoffounders.21

Inhelpingtobuildastrongnetwork,leadersshouldthinkonabroadscale.Thereareoftenopportunities,especiallyinareasthathaveexperiencedtalentflight,toengagewithsuccessfulentrepreneurialleaderswhogrewuporattendedschoolinthecommunitybutnowliveelsewhere.22Itisimportanttofocusnotonlyonhigh-techfirmsbutacrossallsectorsoftheeconomy.23

Decisionmakersshouldstrivetoensurethatthesenetworksarediverseandaccessibletoall.Adiversi-tyoftalentandideasfavorsinnovation,whileclosednetworkscreatefrictionsthatharmentrepreneurs.24Ensuringdiversityrequiresactivelyengagingwithvariousunderrepresentedgroups,definedintermsofsocioeconomicstatus,race,ethnicity,gender,orgeo-graphicorigin.

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Entrepreneur-LedEconomicDevelopment:ANewStrategyforGeneratingLocalGrowthandProductivity

Step3:Partnerwithentrepreneurialleaderstoaddressthemostimportantneedsofgrowinglocalbusinessesandtheirentrepreneurs.

Successfulentrepreneursknowthatoneofthefirstthingstheymustdoislearnwhotheircustomersareandunderstandtheirpainpoints.Decisionmakerstryingtopromoteentrepreneurshipshouldtrytodothesamething,byworkingcloselywithbusinessfoundersinordertounderstandwhattheirbiggestburdensareandhowtheymightbefixed.Recentevidencevalidatestheneedfordecisionmakerstobetterengagewithentrepreneurs.25

Entrepreneurstalktooneanotherandoftenworktogethertosolvecollectivechallenges.Theyhavedeepknowledgeoftheproblemstheyfacethemselves,aswellasthosefacedbyotherfoundersinthesameregion.Successfulentrepreneursarealsoexpertsatsolvingproblems;fundamentally,thatiswhatentrepreneursdo.Ifentrepreneurshaveideasforcreatingnewsolutions,decisionmakersinallareasshouldlookforwaystopartnerwiththem.

Policymakers

Stateandlocalgovernmentsshouldcreateadvisoryboardscomposedoflocalentrepreneurstohelpiden-tifyopportunitiestoimprovepoliciesandregulations.Advisoryboardmembersshouldmeetregularlywithofficialsasindividualsandasagroup.Itisimportanttohavepersonnelwhocanactasambassadorsbetweengovernmentandentrepreneurs—forexample,Seattle’sStartupAdvocate,amemberofthecity’sOfficeofEco-nomicDevelopmentwhohelpsconnectentrepreneurstotheresourcestheyneed.

Funders

Organizationsthatfundentrepreneurshipprogramsshouldestablishtheirowncommitteesofentrepre-neurialleaderstoadviseontheseinvestments.Allfundingshouldbelinkedtomeetingperformanceob-jectivesand,overtime,shouldbematchedwith,orfullyreplacedby,additionalfundingstreams.TheEwingMarionKauffmanFoundation,whichhasworkedformanyyearsinKansasCitytosupportinnovativeen-trepreneurshipprogramsforgrowinglocalcompanies,hasillustratedtheimportanceofensuringthatitsfi-nancialsupportisacatalystfororganizations,ratherthanapermanentmechanismforfinancingoperations.

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ServiceProviders Policymakers

Organizationsthatprovideservicestoentrepreneursshouldrecruitsuccessfulentrepreneursintoleadershiproles,especiallyasboardmembersoradvisors.Wherepossible,organizationsshouldrecruitentrepreneurialleadersastheday-to-daydirectorsorCEOsoftheirorganizations,whichpromotestheleadershipoflocalfoundersandprovidestheorganizationwithcriticalsocialcapital.InnovationWorks,apubliclyfundedor-ganizationthatisbyfarthelargestseed-stageinvestorinPittsburgh,demonstratesthevalueofthisapproach.TheorganizationisledbyRichLunak,asuccessfulen-trepreneurwhoworkedinrobotics,oneofthecity’stechnologicalstrengths.UnderLunak’sleadership,In-novationWorkshasmadeinvestmentsinanumberoftheregion’smostsuccessfultechnologyfirms,includ-ingseverallarge“liquidityevents”(i.e.,asaleorlistingofsharesonapublicexchange).26

Step4:Collectdataongrowingentrepreneur-ialbusinessestotrackresultsandsharefind-ingswiththecommunity.

Decisionmakersneedactionableinformationtoassessandimprovetheperformanceofentrepreneurshipprograms.Thiscanincludedataonentrepreneurialstrengths,thestatusofthelocalentrepreneurshipnetwork,andtheemergingneedsoflocalbusinessfounders.Thisinformationshouldbedrawnfromamixofsources,includinggovernmentdata,surveysofentrepreneurs,andinterviewswithkeyinfluencersinthecommunity,aswellasparticulardatabasesonindividualcompanies,suchasPitchBookorDun&Bradstreet.

Capturing,analyzing,anddisseminatingdataonaregularschedulehelpstoensurethatdecisionsareinformedandtoestablishacultureofdata-drivendecision-making.Dependingontheparticularmetric,datashouldbeupdatedandsharedonaquarterly,semiannual,orannualbasis.Eventsanddiscussionscanbebuiltarounddatareleasestoserveasproductiveformsofcommunityengagement.

Finally,transparencyindatacollectionandmethodologyofanalysisisessentialtoestablishingcredibility,drivingengagement,andchangingbehavior.Toofrequently,thelimitationsofdatasourcingareobscuredandanalyticalapproachesareputintoa“blackbox.”Transparencybuildstrustandproducesmorehonestdiscussionsaroundwhatistobelearned.

Stakeholderswhoimplementnewpoliciesbasedonthefeedbackofgrowingentrepreneursshouldconductfollow-upsurveystoensurethatthenewinitiativesarehavingthedesiredeffect.Thesesurveysshouldincludebothformaldatacollectionandinformalconversations(preferablyfromanongoingdialogue).

Funders

Organizationsthatfinanceentrepreneurshipprogramsshouldensurethattheirprogrambudgetsincludesig-nificantfundingforevaluation.Ataminimum,fundersshouldmeasurethegrowthofthebusinessesthatpar-ticipateineachprogram.Thosethatwishtogofurthercanundertakenetworkmappingtoevaluatehowen-trepreneurialleadersatgrowingfirmsarementoring,investing,andstartingnewcompaniesinthecommu-nity.Forexample,thePartnershipforNewYorkCitysupportedacomprehensivenetworkstudytoidenti-fyhowfoundersinNewYork’stechsectorwerecon-structingnetworksaroundthemostsuccessfulentre-preneursthroughlocalprograms.27

ServiceProviders

Programsthatsupportentrepreneursshouldmeasurethegrowthofthecompaniestheysupportintermsoflocaljobcreation,increasesinrevenues,capitalraised,andotherrelevantmetrics.Thebestserviceprovid-ersgoevenfurther,bymeasuringhowwelltheyhaveengagedthebestlocalentrepreneursasleadersintheirprogramsandbyevaluatinghowthefounderswhomtheysupportaregivingbacktoothersbyactingasmentors,peeradvisors,andeveninvestors.

Conclusion

Themostimportantparticipantsinentrepreneur-ledeconomicdevelopmentaresuccessfullocalentrepre-neursandthefoundersatgrowingcompanieswhobenefitfromtheirsupport.However,policymakers,funders,andserviceprovidersalsoplayessentialrolesinsupportingtheseactivities.

Collaborationamongdecisionmakersismutuallyen-hancing.Forexample,nosingletypeoforganizationhasallthedatanecessaryforidentifyingeverygrowingentrepreneurialbusinessinacity;butwhenstakehold-ersworktogethertocombinetheircollectiveresourc-es,amorecompletepicturecanemerge.

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Entrepreneur-LedEconomicDevelopment:ANewStrategyforGeneratingLocalGrowthandProductivity

Unfortunately,itoftentakesjustonestakeholderto

stifleprogress.Iffunderschoosetofinanceprograms

incompletelydifferentareasfromwheresuccessful

foundersareoperating,thelocalentrepreneurship

communitycanfracture.Or,ifgovernmentofficials

leaveoutdatedregulationsunchanged,itcanbediffi-

cultforcompaniestogroweveniftheyhavesupportive

networks.

Entrepreneursatgrowingcompaniesareessentialto

localprosperity.Entrepreneur-ledeconomicdevel-

opmentoffersaprocessthatdecisionmakerscanuse

tocomplementtheirexistingeconomicdevelopment

programsandenhancesomeofthemostvaluableeco-

nomicassetsalreadygrowingintheircommunities.

Importantly,thisworkdoesnotendafterthesefour

stepsarecompleted.Entrepreneur-ledeconomicde-

velopmentisanongoingprocess.Themeasurement

andevaluationofexistingprogramsandinitiatives

shouldflowdirectlybackintotheidentificationofnew

entrepreneurialbusinessesthathavebeengrowingin

theregion,thelocalstrengthstheyrepresent,andthe

keyleadersbehindtheirsuccess.Localdecisionmakers

shouldincorporatethedynamicnatureofthisprocess

intotheirannualplanningactivitiesorcreatefaster

iterationcycleswheresupportandfeedbackactivities

occurseveraltimeseachyear.

10

Endnotes

TimothyJ.Bartik,

“UsingPlace-BasedJobsPoliciestoHelpDistressedCommunities,”

JournalofEconomicPerspectives34,no.3(Summer2020):99–127.

CailinSlatteryandOwenZidar,

“EvaluatingStateandLocalBusinessIncentives,”

JournalofEconomicPerspectives34,no.2(Spring2020):90–118.

DavidBirchandJamesMedoff,“Gazelles,”inLaborMarkets,EmploymentPolicy,andJobCreation,ed.LewisC.SolmonandAlecR.Levenson(NewYork:Routledge,2018);ZoltanJ.Acs,WilliamParsons,andSpencerTracy,

“High-ImpactFirms:GazellesRevisited,”

CorporateResearchBoard,LLC,June2008;DavidB.Audretsch,

“DeterminantsofHigh-GrowthEntrepreneurship,”

OrganisationforEconomicCo-operationandDevelopment(OECD),Mar.28,2012;RichardL.Claytonetal.,

“High-Employment-GrowthFirms:DefiningandCountingThem,”

BureauofLaborStatistics,MonthlyLaborReview(June2013);JohnHaltiwangeretal.,

“High-GrowthYoungFirms:ContributiontoJob,OutputandProductivityGrowth,”

CenterforAdministrativeRecordsResearchandApplications,U.S.CensusBureau,February2017;IanHathaway,

“High-GrowthFirmsandCitiesintheU.S.:AnAnalysisof

theInc.5000,”

BrookingsInstitution,Feb.5,2018;LeahD.BartoandRhettMorris,

“HowCitiesCanIdentifytheBestBusinessesforLocalEconomic

Growth:ANewApproachtoIncreasingLocalProductivityandPreventingDecline,”

EndeavorInsight,September2020.

EnricoMoretti,TheNewGeographyofJobs(NewYork:HoughtonMifflinHarcourt,2012);AaronChatterji,EdwardGlaeser,andWilliamKerr,“Clustersof

EntrepreneurshipandInnovation,”InnovationPolicyandtheEconomy14,no.1(2014):130–66.

Theideassharedinthispaperbuildonpreviousworkthatwehavepublishedwithcoauthors,includingLeahBarto,BradFeld,andLiliTörök.

Whilegovernments,inparticular,havebeenslowtoadapttotheneedsofsupportingentrepreneurship,morethan100communityfoundationsmakegrantsthatsupportentrepreneurship,atrendthathasgrowninrecentyears.See,e.g.,CarolinePringleandLiliTörök,

“FoundationsLeadingThrough

Entrepreneurship:ANewPhilanthropicTrendtoCreateJobs,ImproveQualityofLife,andStrengthenLocalGiving,”

EndeavorInsight,Aug.19,2015.

Techstars,

“AssessmentoftheEntrepreneurshipEcosystemoftheGreaterKnoxvilleMetropolitanArea,”

January2021.

Asignificantlysuccessfultechcompanywasdefinedasmeetingatleastoneofthreecriteria:(1)raisingover$1millioninexternalfundingviagrantsorequityinvestment;(2)employing50ormorepeople;or(3)experiencinganacquisitionthatyieldedpositivereturnsfortheentrepreneursandtheirinvestors.

Techstars,“AssessmentoftheEntrepreneurshipEcosystemintheHamptonRoadsRegion,”April2021.

MariaE.Meyers,KatePopeHodel,andJonKrajack,

“ShowMeJobs:TheImpactofFirst-TimeEmployersonJobCreationinMissouri,”

MOSourceLink,July2020.

Forstrongexamples,seeIanHathaway,

“Start-UpCapitalIsSpreadingAcrosstheU.S.,”

HarvardBusinessReview,Feb.23,2015;idem,“High-GrowthFirmsandCitiesintheU.S.”;RichardFloridaandIanHathaway,

“RiseoftheGlobalStartupCity:TheNewMapofEntrepreneurshipandVentureCapital,”

CenterforAmericanEntrepreneurship,Oct.5,2018.

SeeYCombinator,

“StartupDirectory”;

Techstars,

“PortfolioCompanies.”

TomKemenyetal.,

“TheEconomicValueofLocalSocialNetworks,”

JournalofEconomicGeography16,no.5(September2016):1101–22;Rhett

MorrisandLiliTörök,

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