The Start-Up State
Maine scores an unimpressive “average” when it comes to entrepreneurial activity. What would it take to become “the start-up state”—and who has the political will to turn the key?
It’s not easy being an entrepreneur, nor is it easy to be around one.
Entrepreneurs, as a general rule, are good at taking risks but poor at taking directions. They may have brilliant ideas, but frequently have no idea how to run a business. They may be able to split the atom on the back of a napkin but often can’t present their way out of a wet paper bag. They fail more often than they succeed, and yet they are the engines of innovation and growth. Where would we be without them?
The Ewing Marion Kauffman Foundation recently issued its Kauffman Index of Entrepreneurial Activity for the years 2007–2009 and the report contained several noteworthy data points.
First, the 2007–2009 period witnessed a marked increase in entrepreneurial activity as measured by the number of new businesses started during the period. Overall, among the states, Oklahoma and Montana had the highest entrepreneurial activity rates, with 470 per 100,000 adults starting new businesses each month. Maine scored at the national average with 340 per 100,000.
The foundation noted that the weak economy may have been the reason for the rise in new business starts, as laid-off employees abandoned the search for work and resorted to starting their own businesses. Regardless, the foundation concluded that increased entrepreneurial activity can only be good for the country. After all, entrepreneurs, for all of their warts, are risk-takers, innovators, and job-creators.
This isn’t exactly breaking news, yet it’s clearer than ever that we in Maine are going to have to ramp up our entrepreneurial efforts and retool our approach to innovation. We tend not to soar too high during the fat times, nor do we crash as dramatically during the lean times, but plodding along in the middle of the pack isn’t exactly inspiring in an era of heightened global competition.
In economic development circles the focus is often on “landing the big one,” i.e., attracting an employer of such size that the impact on the economy is felt almost immediately. But large employers come and go with the market and, it must be said, with the business-attraction budgets of other states and provinces. The big ones come and go (as do the small ones), but when the big ones go they leave behind large office complexes, idle, single-purpose production facilities, and, occasionally, unpaid obligations and incentive “clawbacks” owed to state or local governments.
The virtues of small businesses, however, are legion. Ross Perot (who knows a thing or two about business) noted that “most new jobs won’t come from our biggest employers. They will come from our smallest. We’ve got to do everything we can to make entrepreneurial dreams a reality.”
We in Maine support entrepreneurism—right? For example, Maine has a business incubator system and offers technology entrepreneurs two facilities, the Target Technologies Center in Orono and the Maine Center for Enterprise Development in Portland, providing tenants with access to mentors, business networks, sources of capital, office infrastructure, and the like.
This is a good thing, but it’s not the kind of effort that is going to take Maine past “average.” Israel, by contrast, has established 24 major incubators organized around key technology sectors ranging from agriculture to medical devices to software to electronics to materials science. Even accounting for Israel’s population of 7.3 million, their per capita investment dwarfs ours in Maine.
Israel’s incubator system is designed for success: A specialized industry review board determines who gets in and, as part of the package, receives a grant or soft loan of anywhere from $350,000 to $600,000. In 2002, the government, along with visionary Arab businessmen, established a joint Arab and Jewish incubator in Nazareth, with an Arab CEO, and 18 Arab, Jewish, and jointly-owned companies operating there.
Israel, according to a recent bestseller, is called Start-Up Nation for its remarkable ability to harness talent, foster innovation, and generate new businesses. The country leads the world in per capita patents and scientific papers published, has more companies traded on the NASDAQ than any country outside North America, and has attracted more venture capital than the entire European Union.
What would it take for Maine to make that kind of headway? A bold vision and the political will to carry it out.
So, as we careen into election season, mired in a sluggish economy with little wind at our backs, how will we proceed? Will we put our shoulders to the wheel and make the kind of commitment to innovative excellence it will take to become the Start-Up State? I can’t think of a better question to ask Libby Mitchell, Paul LePage, Eliot Cutler, Shawn Moody, and Kevin Scott.
Perry B. Newman, founder and president of Atlantica Group of Portland, wrote this column during a two-week trip to Israel to study Arab-Jewish technology partnerships.
You must log in to post a comment.