by Future of Hampton Roads
During the course of a region's advancement and maturation, it often finds its strength in specific business that helps to sustain economic strength. Forbes identified several regions in the U.S. in its May 2012 edition. The article is titled The U.S. Economy: Regions To Watch In 2012 at Forbes Report.
Certainly Hampton Roads has had its strength with the military, but in addition;
- The Port is major economic driver as we are part of a small number in the country that can accept the larger ships of today.
- Tourism is a major economic driver as people come here to visit our beaches, museums, culture, history and more.
- Ship building and repair is a major economic driver with linkages to both maritime and military.
However, Hampton Roads is vulnerable to negative economic impacts with the potential of significant military cuts. See the report from the Hampton Roads Planning District Commission (HRPDC) Sequestration and the Hampton Roads Economy By James Clary at HRPDC Sequestration Report.
The challenge at hand for Hampton Roads is one of diversification, to create other economic drivers for the region like independent businesses.
There are several clusters that have been identified for several years now. See the attached 2004 report; The Hampton Roads Economy - Analysis and Strategies, Part 2: Hampton Roads Cluster Study as well as the Innovate Hampton Roads Cluster Section at Innovate Hampton Roads Clusters
Regardless of the sector, the challenge is to help make businesses succeed in a challenging economy. Economic Gardening may be a very effective tool in that process.
Economic gardening is an economic development model that embraces the fundamental idea that entrepreneurs drive economies. The model seeks to create jobs by supporting existing companies in a community. The concept, pioneered in 1987 in Littleton, Colorado, when the state was in a recession, is an alternative to traditional economic development practices. It initially was based on research by MIT's David Birch, who suggested that most new jobs in any local economy were produced by the community's small, local businesses. In Littleton, city leaders observed that only 3 to 5 percent of all companies were "high growth" but determined that those "gazelles" were creating the great majority of new jobs.
Economic gardening connects entrepreneurs to resources, encouraging the development of essential infrastructure and providing entrepreneurs with needed information. The Littleton economic gardening initiative provides local entrepreneurs with access to competitive intelligence on markets, customers, and competitors that is comparable to the resources customarily only available to large firms. Included in the market information category are database and data mining resources, and geographic information systems.
"Economic Gardening is not a quick fix – it is not a silver bullet. It is a long term strategy. It is not a fad diet; it is a lifestyle change. It takes a while to put the infrastructure in place and to get to a scale large enough to make a difference. It also takes a while for a company to start to grow and add jobs. However, with patience and commitment it has proven to be a viable alternative to the traditional practices of economic development."
Since 1989, Littleton (population 41,000), has added 15,000 jobs, with no incentives. Although no formal studies of economic gardening's impact exist, it is widely believed in Littleton that the concept has made an important contribution to this result.
By the late 1990s, a number of communities (including Lake Elsinore, San Bernardino, Chico, and San Luis Obispo in California; Santa Fe, New Mexico; Lancaster County, Pennsylvania; Steamboat Springs, Colorado; the state of Wyoming; and the North Down Borrough of Northern Ireland) were beginning to investigate and experiment with economic gardening. Major states like California regularly include economic gardening discussions in their state economic development conferences, and cities including Oakland and Berkeley have small pilot economic gardening projects under way.
The Edward Lowe Foundation is especially interested in the concept and is supporting such programs that assist second-stage companies. Ewing Marion Kauffman Foundation Report
Also read the attached article from the IEDC Economic Development Journal.
It is important to differentiate start-ups to the target for economic gardening. In the article, the term 'gazelle' is used. Definition of 'Gazelle Company' - A high-growth company that is increasing its revenues by at least 20% annually for four years or more, starting from a revenue base of at least $1 million. This growth pace means that the company has effectively doubled its revenues over a four-year period. As gazelle companies are characterized by their rapid growth pace, rather than their absolute size, they can range in size from small companies to very large enterprises.
Another key point is that a "Gazelle Company" is not necessarily a technology firm. It can be any company who is poised to advance to the next level.
Economic Gardening is the process of providing resources to proven businesses that have the ability to accelerate to the next level.
There are organizations like Entrepreneur's Organization who might want to engage at a higher level and we have a chapter here in our region.
The Entrepreneurs' Organization (EO) is a global business network of 8,000+ business owners in 122 chapters and 35 countries. Founded in 1987 by a group of young entrepreneurs, EO enables small and large business owners to learn from each other, leading to greater business success and an enriched personal life. Our vision is to build the world's most influential entrepreneur community, which aligns with our mission of supporting entrepreneurial education and engaging entrepreneurs to learn and grow.
This year, EO is celebrating its 25th Anniversary with events around the world, which will highlight the growth of our entrepreneur network and its role in the lives of members everywhere. As a global business owner network and association, we help transform the lives of the entrepreneurs who transform the world. We educate, we transform, we inspire and we offer invaluable resources in the form of events, leadership-development programs, an online entrepreneur forum, and business owner education opportunities, among other resources designed for business growth.
The Entrepreneurs' Organization also operates the Global Student Entrepreneur Awards (GSEA), thepremier award program for undergraduate students that own and run businesses while attending a college or university; and Accelerator, a series of quarterly, high-impact learning events designed to provide top business owners with the tools, knowledge and skills they need to grow their businesses to more than US$1 million in annual revenue.
For more information about the EO global business network, go to the EO directory at Entrepreneurs' Organization.
Locally, Hampton Roads has done some very good things such as Innovate Hampton Roads with their Economic Gardening Network. Also Hatch in Norfolk is a local version of a national effort fostering startups through an intense accelerator program. and .
With all this said, the question on the table is whether Hampton Roads is doing enough to foster and develop small to medium sized, and fast growth business?
Are we providing mentorship, advice, counseling, experience, involvement and interest?
The business case is simple: Let those that have run successful businesses, help small businesses learn from their experience to optimize their growth potential.
However, we get there; the culture of Hampton Roads must change from being reliant on the military and government contracting to evolving in other areas of business.
Future of Hampton Roads believes that the private sector needs to engage at higher levels to assist the region in the ways mentioned.