Foley’s short-sighted cuts rock South Australia

SA’s lead economic agency, the Department of Trade and Economic Development, has just copped budget cuts of $100m over 4 years – and staff numbers are to fall from 200 to 120.

SA Cockatoo members are aghast – funding disappears for the nine Business Enterprise Centres, the Small Business Helpline and the SA Youth Entrepreneur Scheme, Innovate SA and the Technology Industry Association. The export and investment attraction functions have also been severely cut.

Treasurer Kevin Foley – facing criticism on numerous other fronts, even his mobile phone bill – said the cuts were to deliver election promises and marked a refocusing of DTED’s priorities around four sectors – cleantech, advanced manufacturing, knowledge-intensive services and resources.

Foley has a very short memory – the SA economy would be up the proverbiall creek had it not won the big federal Defence contracts 3-4 years ago, and the feds have been pumping in adjustment assistance to shore things up. How much longer is the federal government going to do the heavy lifting?

Malaysia’s entrepreurial efforts

Malaysia’s relatively high entrepreneurialism is reflected in ranking on the Legatum Prosperity Index: 28^th out of 104 economies. And the World Bank ranks it 23^rd out of 183 economies in the ease of doing business.

A report by the Mansfield Foundation refers to the support mechanisms for entrepreneurs in Malaysia, including physical infrastructure, business advisory services and access to capital. Also, the ‘New Economic Model’ for Malaysia has made entrepreneurship the key driver for the next 10 years.  But Malaysia’s entrepreneurial impact hasn’t been maximized. The CEO of Warisan Global explains that “there is a strong intent by the government to create entrepreneurs – but some of these initiatives are also our weaknesses – they create a dependent mentality and tend to smother the hunger in entrepreneurs.”

Entrepreneurs also point to the need to produce highly competent graduates, the risk adversity of the small venture capital sector, and government protection of certain industries via regulatory requirements e.g. Astro has the sole satellite TV license and severely curtails entrepreneurship and access to the best services.

Contributed by Jonathan Ortmans, Public Forum Institute (Policy Dialogue on Entrepreneurship, USA)

Entrepreneurs and geography

 

The Harvard Rappaport Institute for Greater Boston is sponsoring a series of talks on geography and entrepreneurship. Now, it has released a Policy Brief that explores the question of “Why are some metropolitan areas so much more entrepreneurial than others?” For example, startups can be found on every block in Silicon Valley, while in declining Rust Belt cities startups are far and few between.

Authors Edward Glaeser and William Kerr report that high levels of entrepreneurship are closely correlated with regional economic growth. This means that “state and local policymakers may well want to do more to encourage entrepreneurship in their communities.” They offer a few tentative policy insights:

• Investing too much in attracting large, mature firms may not be good policy. 
• Little reason to have much faith in the ability of local governments to play venture capitalist.
• Policymakers should focus on quality of life policies that can attract smart, entrepreneurial people.
• Universities should get involved in local start-ups and train students to be entrepreneurial. 

Glaeser & Kerr argue that entrepreneurs are influenced by features of their local economies, and they in turn influence the fates of those economies. Yet, urban economists only infrequently looked directly at the local causes and consequences of entrepreneurship, including policies/programs of local and state governments in those regions. Can the economic history of Detroit be told without Henry Ford and Alfred Sloan? Would Ford have achieved the same success if he had worked in Houston? Would Silicon Valley have experienced its remarkable growth without Terman and Shockley? Powerpoint presentation by Edward Glaeser

Angles for Cockatoo members

• Who in your region understands the issues raised by Glaeser & Kerr?
• Is there scope to establish a parallel study? Contact us if you’d like to pursue.

 Thanks to Mark Marich (Policy Dialogue on Entrepreneurship) for alerting us to this research work.

 

USA business incubator dialogue

 

A House Committee on Small Business hearing in March 2010 covered the topic of “Business Incubators and Their Role in Job Creation.” Testifying before the committee, Dr. Robert Strom, Director of Research & Policy at the Ewing Marion Kauffman Foundation encouraged the committee to consider public policies “conducive to the birth and growth of new companies, regardless of where they begin,” including:

• Immigration policies that welcome talented potential entrepreneurs and even favor immigrants who plan to start innovative, new businesses in the US.
• Regulatory frameworks that do not impose onerous compliance requirements on small business.
• IP laws that strike the right balance between giving sufficient incentives to inventors and imposing legal roadblocks to new entrants.
• Bankruptcy protection that mitigates the risks of business failure.
• Antitrust laws that allow for healthy competition.
• Marginal income tax rates that do not discourage entrepreneurial endeavours.
• Financial systems that offer access to both debt and equity capital for new firms.

See the Committee’s YouTube channel (The Ewing Marion Kauffman Foundation is best practice in terms of nurturing public understanding of development issues. We suggest you liaise directly with them – Editor).

Canadian Youth Business Foundation (BEST PRACTICE)

 

The Harper Government is investing $10 million in the Canadian Youth Business Foundation.

 

This is a national charity getting a lot of attention of late – it provides start-up mentoring, financing, resources to help young Canadians, aged 18-34, create their own businesses. Founded in 1996, it supports youth who would not otherwise realize their full potential and launch a business. 

 

Modeled after the UK’s Prince’s Trust, CYBF has been recognized as one of the most efficient organizations of its kind globally. As such, CYBF is often called upon to mentor youth entrepreneurship programs in other countries.

 

CYBF provides business start-ups with loans of up to $15k and on-line business resources. Loans below $7,500 are repayable over 3 years – above that level, the repayments are over 5 years. Year 1 payments are interest-only. Initial start-up fee of $50 plus $10 monthly administration fee.

 

The difference is the mandatory world-class mentoring program. CYBF individually qualifies, interviews and trains every volunteer mentor, hand-matching each with a CYBF entrepreneur for 2 years during the critical start-up period.

 

Delivery partners are located across Canada and most sectors are eligible. Last year CYBF funded 400 new start-ups – total to date of 2,800 companies. They have created $300 million in sales, $69 million in tax revenue, $33 million in exports and 15,000+ jobs.  On average, each new company creates 5 jobs.  CYBF has an impressive repayment rate of 95% – received money is reinvested in the next wave of entrepreneurs.

 

Contributed by Mark Marich (USA)

Are YOU a social entrepreneur?

 

Former WA Industry Minister Mal Bryce has introduced us (via Peter Kenyon) to an amazing book on social entrepreneurs entitled “The Power of Unreasonable People” by John Elkington and Pamela Hartigan. (Harvard Business Press 2008) Sub titled “How social entrepreneurs create markets that change the world.”

 

The book describes Social Entrepreneurs as people who:

 

1.     Shrug off ideology and regulation

2.     Focus on practical solutions

3.     Innovate

4.     Do social value creation and SHARE

5.     Jump in without waiting for back-up

6.     Have unwavering beliefs in innate capacity of others

7.     Have dogged determination

8.     Demonstrate real passion for change

9.     Have a great deal to teach change makers in other sectors

10.  Have a healthy impatience (don’t do well in bureaucracies)

W2W channels Kiwi tech innovation (BEST PRACTICE)

Paul Spence (Cockatoo member) is a Wellington based technology blogger (http://www.genius.net.nz), management consultant and CEO of ideegeo Group Limited a web software developer.

 

Unlimited Potential is a Wellington-based volunteer managed networking community for ICT professionals and entrepreneurs.

 

UP puts on monthly events supported by local sponsors and invites anyone interested in IT to turn up for after work beer and pizza plus a themed presentation. The group is co-sponsored by Grow Wellington, the regional economic development agency.

 

In November 2008 I managed an event called “Wellington to the World” (W2W) – a half day program of talks on emerging technology plus presentations from technology entrepreneurs with recently launched ventures.

 

In the evening we hosted a networking session for all attendees. Members of a local angel investors group participated and mingled with guests and presenters. The idea for the event sprung from a realisation that, despite a wealth of ideas and talent, New Zealand’s isolation from the major consumer and financial markets makes it difficult for small or start-up tech businesses to compete offshore. 

Smart companies from NZ (and Australia) need to find networks and bridge-builders to help pave the way for access overseas. Consequently W2W partnered with the KEA Global Mentors program to match the young tech firms with people offshore who could help. KEA is a global network of over 25,000 New Zealanders living abroad.

 

Presenters at W2W were selected through an intense interview process to ensure quality pitches and a variety of products. After the live event we deployed the entrepreneur presentations on Youtube.

 

NZ Trade and Enterprise then shared the video content around its global trade missions. It was a natural progression to use a video site given that many businesses are enthusiastically adopting social media to share their sales message. Because of time zone differences and local bandwidth constraints we decided on an asynchronous rebroadcast and avoided the cost of live video content streaming.

 

Around 80 guests attended the event and hundreds visited the video channel and viewed content.

 

We later heard that one tech entrepreneur received an approach from a U.S. venture capital firm within 24 hours of posting the video content online. Angel investors were excited by the emerging technologies and approached the local university for further talks.  Subject to securing sponsorship, the event will be repeated in 2009. We hope to extend the scope by inviting participation from across NZ.

 

Weblinks: http://up.org.nz – http://www.youtube.com/UPW2W – http://www.keanewzealand.com/

 

Entrepreneurship in the Northern Forest of USA (BEST PRACTICE)

 

The decline of forestry and other economic anchors has created a challenging economic climate in Maine, New Hampshire, New York, and Vermont.

 

A new regional coalition – the Northern Forest Sustainable Economy Initiative, is examining new solutions for revitalizing the area’s economy.

 

A new report contends that entrepreneurship should be a critical part of the mix. It  calls for a new system of innovation networks and entrepreneurial clusters that better link regional businesses to one another and to support programs at local universities, non-profits and government agencies.

 

The report recommends a focus on the opportunities created by the region’s beauty and natural assets. This could occur through efforts to promote eco-tourism, adventure recreation and the development of sustainable wood industries and products.

 

Go to A Strategy for Regional Economic Resurgence. Source: NDOE

 

Entrepreneurship Policy in the Nordic Countries

Most Nordic countries have been pursuing aggressive policies to promote entrepreneurship – a new report from Norway’s Nordisk Innovations Center assesses how they’ve performed.

 

The report recognizes that Nordic nations are making major investments, especially in areas related to R&D spending. It also notes an increasing convergence between entrepreneurship and innovation policies.

 

Yet the report criticizes the absence of effective program evaluations. There are poor linkages between researcher and policy makers, and most policies are developed in a top-down manner. Policymakers must do a better job of reaching out to entrepreneurs, and designing programs that meet their real needs and demands.

 

Go to Entrepreneurship Policy in the Nordic Countries; Perspectives of the Development Since 2003.

 

Britain’s Most Enterprising Community = Scarborough (BEST PRACTICE)

 

Each year, the British government, through its Make Your Mark campaign to promote entrepreneurship, honors the UK’s most enterprising community.

 

It recognizes a community for its work in improving the local business climate, stimulating enterprise, and creating stronger community connections. Scarborough, located in North Yorkshire, was honored for its Scarborough Renaissance Partnership and its ‘Waking Sleeping Beauty’ initiative.

 

The Partnership sought to diversify the local economy from their historical concentration in the fishing and tourism industries – it invested in a number of programs, including a major push to support the creative and digital sectors, via investments in regional Wi-Fi networks and support for the Creative Coast enterprise network. These industries now account for 19% of the local economy. (Interesting precedent for other nations? – Editor) 

Go to Enterprising Britain awards