Saturday, February 14, 2015

How is entrepreneurship doing in the U.S., and how does Charlotte fare?

Wendy Guillies
You're likely accustomed to the stories of business successes and triumphs -- the tales of entrepreneurs who carve a niche, solve a problem or make a huge business turnaround. 

All those things do happen. But, is that the full picture?

Apparently not.

Last Wednesday, the Kauffman Foundation, an entrepreneurship research institute based in Kansas City, attempted to give the lowdown on the state of entrepreneurship in the U.S.

The economy is on a rebound, but has yet to reach full health. The key to that complete economic renewal is a boom in entrepreneurship — which will bring new jobs and bundles of innovation, said Kauffman Foundation CEO Wendy Guillies.
Terry Cox, CEO of Charlotte's BIG

Easier said than done.

"The headline numbers may look good, but something isn't right when you dig a little deeper," Guillies said in a speech.

New business creation dropped by 31 percent in 2008 and is still trying to make headway post-recession, she said. Young companies still struggle getting capital and credit. And, the National Federation of Independent Business, this week released survey results showing that optimism among small-business owners dipped by 2.5 points — with most of the decline blamed on business owners' uncertainty about the economic recovery.

So what about the state of entrepreneurship in Charlotte? I asked a few local entrepreneurship advocates to weigh in:

Terry Cox, Business Innovation Growth Council: More government regulation and challenges associated with the Affordable Care Act have hindered U.S. entrepreneurial growth, Cox said. 

Charlotte does well economically, she said, is still in the early stages of building an "entrepreneurial ecosystem."

It "has not reached a critical mass or maturity to rapidly produce successful startups or attract the early stage capital we need for them to thrive," she said.

Steve ChapmanSmall Business Learning Center: "Main Street" entrepreneurship, Chapman said, is the "heart and soul" of microbusiness and the true mechanism that drives the economy. While he doubts the Kauffman Foundation's report is aimed at microbusinesses, he does agree that investment money for small businesses is scarce. 

Charlotte, he said, has the potential as a financial center to champion "microbusiness investment."

"But, I don't see that happening," he said. "Everyone talks about helping microbusiness owners access capital, but there is little effort behind the lip-service."

Jim Van Fleet
Jim Van Fleet, It's Bspoke: Van Fleet appreciates the Kauffman Foundation's efforts to spur entrepreneurship, but questions their gathering of "researchers and policy experts" -- two groups of people who, he said, are rarely considered entrepreneurs -- to help focus on "what is needed to renew entrepreneurial capitalism."

He looks to Charlotte's entrepreneurial alliance as an example of people working with city leaders to set policy and create "real foundations to benefit entrepreneurs here."

He said: "Our community isn't as vibrant as Durham and Raleigh...but if and when we're able to leverage our strength in community banking to feel more assured making bets on entrepreneurs...we in the Carolinas have the ingredients to change the face of the Southeast and the country."

Want to read the Kauffman Foundation speech yourself? Click here.


Steve Chapman said...

One of the points that really needs to be addresses when it comes to the national entrepreneurial activity is consumer spending. When people have discretionary money they buy more products and services from microbusinesses. People get their hair done, they have their cars detailed, they hire someone to cut the lawn or they take the family out for a meal.As a direct result of the lack of wage increases across the US only the rich have money to spend. Microbusiness growth and start-up are less dependent on outside capital than they are on customer growth. Without more customers and increased spending no business owner will see a positive future. If corporations don't see the long term, overall benefits of paying hire wages than it unfortunately falls on government to step in. Wage increases are the most effective economic stimulus we have because they have a greater impact on the entire economy.

Jim Van Fleet said...

I also find anything that increases wages after decades of stagnation is good policy, but successful entrepreneurship is not about finger-pointing. There's a tremendous economy all around us-- you have to find a way to convince people to spend some with you instead of whatever they're doing now.