Despite what the presidential candidates might want you to believe, there is ample evidence that most entrepreneurial activity underway in communities is largely due to what happens locally and, to that end, don't forget the mayors.
Why? Recent work by Babson College and the Business Innovation Factory on the entrepreneurial process underscores how much entrepreneurs value physical connections and contact. Entrepreneurs want to be able to access a face-to-face network of peers for varied kinds of support, ideas, and feedback.
Just last week, writing in the Wall Street Journal about "The Joys of Urban Tech," Richard Florida also pointed out "the distinct lifestyle advantages of starting new ventures in cities as well as how high tech products and industries are now more multi-disciplinary and benefit from proximity to each other."
The reality is that mayors have substantially more ability to nurture local ecosystems and the local alliances and relationships that differentiate one area from another as a good place to start and grow businesses. The challenge for even the most farsighted mayors is to capitalize on this trend in ways that revive parts of their cities that have been left behind -- and to accomplish this when public resources are scarce.
Consider the way Mayor Menino launched the Innovation District, attracting entrepreneurial activity to 1,000 acres in the Seaport area adjacent to Boston's downtown financial district. He announced the District's creation in his State of the City message in January 2010. He did this without new money, without more staff, and without an ambitious and detailed plan. The area he singled out had a vibrant artist community but fell far short of its development potential. Menino's vision was to spawn a new ecosystem that could attract a critical mass of entrepreneurs.
Fast forward two and a half years and today the Innovation District is one of the most exciting parts of the city, bustling day and night with all sorts of activity. How did this happen? A Babson teaching case on the Innovation District slated for publication in October tells how the Mayor and his team avoided determining or prioritizing the kinds of businesses they would prefer "as long as they were innovative... you can't legislate an ecosystem." Contrast this with the popular approach to local economic development that has city officials targeting specific industries and using public funds to attract them.
The Mayor and his team reached out to a host of players -- developers, entrepreneurs, professionals, venture capitalists, architects, academics and others. He got the results he wanted because Mayor Menino is very persuasive and convincing (as those who've worked with him know). A milestone along the way occurred when a developer donated great space, rent free, to MassChallenge, the world's largest start-up competition and business accelerator. The presence of MassChallenge, in itself, attracted hundreds of new ventures and changed the epicenter of the conversation about where the most lively development opportunities in the city could be found.
The Mayor's Office contacted several of the university entrepreneurship clubs and Babson was the first to respond. A member of the Mayor's team came to our campus to reach out to our MBA students, urging them to start their new businesses in the Innovation District. Early on, Babson committed to a presence in the District -- first subleasing space for graduate student businesses at MassChallenge and then creating its own classroom and conference room space -- in effect, establishing a satellite campus in the District.
Throughout, Mayor Menino and his team were engaged in full court press to draw other partners to the District. CSE, Vertex Pharmaceuticals, and a number of high profile later stage ventures came onboard. Still, the Innovation District is very much a work in progress. As the Mayor has said, "standing still is going backwards," so he will keep working with his team and other potential partners on the next steps.
The bottom line is that the Innovation District didn't come out of a national mandate; it didn't come out of a President or Governor's playbook. It began when a Mayor created it by simply announcing it.
There are equally exciting stories for Rahm Emmanuel in Chicago, Michael Bloomberg in New York City and Mitch Landrieu in New Orleans, where each mayor in his own way is playing a critical role in reshaping the local environment to be substantially more supportive of entrepreneurial activity. Mayors with the right strategy, unrelenting enthusiasm and a determined team with focused energy can build a local entrepreneurial ecosystem and set into motion a win-win for their cities and entrepreneurs.
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