Policy matchmaking

Locally Authentic Economic Development

Lincoln Bauer, WE Labs and Innovatory

Too often, municipalities view a competitive economic development landscape and believe and act as if they need to replicate what their competitors are doing. We believe differently. Cities certainly need to replicate their competitors’ successes, but not their competitors’ unique approaches. Cities should focus municipal economic development efforts on identifying and then supporting existing, nascent economic ecosystems where they exist within their own communities. Similarly, cities should look to their communities’ economic histories to discover—and even imagine—economic opportunities for planning and support. In Long Beach, Calif., we have looked to our experiences in education, sustainability, and health care as areas where our city already has existing, nascent economic ecosystems and/or the city has had significant history. The Port of Long Beach is continuing a significant history of municipal commitment to sustainability through its Energy Island effort, while WE Labs is leveraging this commitment through the opening of a green tech incubator. The Long Beach College Promise is a national example of educational collaboration, and Innovatory is helping the College Promise coalition to leverage this collaboration to pilot education technology incubation throughout our city’s educational institutions. To support these efforts and others, Innovatory is helping the city’s economic development efforts by spearheading the establishment of a community development corporation and a local angel investment network.

If cities view their economic development efforts as if they are participating in a competitive marketplace, then a city’s economic opportunity value proposition should include unique qualities—the things that differentiate a city from other cities as a place for business. By emphasizing unique economic experiences and the rich and deep workforce qualities these experiences encompass, cities can more easily set themselves apart from other municipalities. This focus makes it easier for cities to retain existing talent, as well as attract new talent and business interests, as specialized labor forces and the mechanisms that support them already are in place. Additional support is more easily identified and developed. Traditional incentive and regulatory burden reduction approaches to municipal economic development are not enough to truly differentiate one city from another, as almost all cities serious about attracting business activity also offer similar incentives. This approach does not exclude incentive development and regulatory burden reduction; it merely focuses it.

Traditional municipal economic development competition relies on a more laissez faire approach combined with tax and regulatory burden reduction. Cities should not be in the business of picking winners and losers; most economists would argue that a primary focus on broad incentive development and regulatory burden reduction are safer bets for municipalities looking to grow their economies.

THE MAYORS CONFERENCEON ENTREPRENEURSHIP Diversifying Entrepreneurial Opportunity20

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The primary costs for this approach to municipal economic development vary depending on the state in which a city finds its existing and nascent industries. Largely, the costs are associated with time and effort within government dedicated to planning and building collaborations outside of city hall, like those the City of Long Beach has established with its colleges, corporations, and ecosystem players like Innovatory and WE Labs. Long Beach benefits from a thriving, global port that is able to make investments in city-guided areas of focus, such as sustainability, but its education experience and opportunity were much more hard fought and are the result of a concerted and conscious effort to form collaborative partnerships. The question of cost for this approach to economic development is also a question of available existing and passive assets: what does the city government possess, in terms of talent, assets, and resources that can be leveraged to spark and support locally authentic economic development?

[email protected] 562-272-5202

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Digital Tools that Put User Experience First as Key to Support

Entrepreneurs

Efrem Bycer, Code for America

Far too many entrepreneurs experience the same pain points when interacting with

government: scattered resources across multiple websites, lack of clarity about the regulatory

requirements that apply to them, and so much uncertainty about the process that they do

not even know what questions to ask. Well-intentioned policy changes to aid entrepreneurs

will fall far short of their promise without improving the experience for entrepreneurs as they

interact with government. Perhaps more frustrating, the entrepreneurs who struggle with these

processes the most often live in the communities in which we’re trying to promote the most

economic activity.

This isn’t a call for policy change. Rather, it’s a call to bring more user-centered, iterative tools

to the points where citizens and government interact. Tools like newly-designed business

portals, such as the City of Long Beach’s BizPort, and web applications for permitting present

a much more positive user experience so that entrepreneurs can navigate the complex process

that is starting their business. These tools don’t changes fees or lower taxes; they just make

current programs and resources more accessible and present entrepreneurs with the order of

operations in which to successfully open their businesses.

As an example, BizPort puts all of the information regarding the government processes

associated with starting and growing a business in one place. It’s built to be accessible on both

desktop computers and mobile phones. While the processes of starting and growing a business

are complex, BizPort breaks them down into simple and accessible components based on the

highest priority pain points that came from user research with entrepreneurs and city staff.

Behind the simple front end are both tools that allow businesses and city staff to interact and

powerful analytics that can help drive further iterations of the tool.

The problems entrepreneurs often describe aren’t overly onerous operations, but unclear

expectations about how best to comply. These complex processes too often require the help of

costly expediters, consultants, attorneys, real estate brokers, and others who know their way

around city hall. In other words, only the businesses who know how to ask and whom to ask

get the help they need, while other entrepreneurs are told to wait in line. Digital tools can help

reduce information asymmetry and be useful for all entrepreneurs—particularly small business

owners from low- and medium-income communities—when they present information in a

more accessible fashion. Restated, we need to democratize the level of resources, services and

information that all businesses should receive.

Additionally, digital tools create feedback loops to better understand where businesses

struggle. For example, through various chat functions, government staff can better understand

the gaps in information on their websites and prioritize new content to address the most

frequently asked questions. This not only provides data for improving the digital front door to

entrepreneurs, but also provides a data-driven pathway to improving the business processes

themselves.


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In general, government staff and elected leadership support the concepts of leveraging digital

tools. Opposition to digital tools for businesses doesn’t materialize in outwardly vocal ways.

Rather, opposition comes in more indirect forms. For example, staff may have become used to

a current process that would be radically changed by the principles of user-centered design

and agile software development. They may be unwilling or uninterested in leveraging the

online tools (e.g., chat function) to engage with entrepreneurs over the web in real time. Staff

at all levels need to be brought into this approach. The switch to agile web applications can’t

just be a top-down mandate to staff. If they’re not bought in, the tools run a higher risk of

becoming part of a stale website that doesn’t serve entrepreneurs or city staff any better than

a completely out-of-date website does.

Building, supporting, and maintaining software costs time, personnel, and money. The cost of

any project will vary based on size and scope. An agile approach, however, supports a more

efficient and effective use of funds in that its iterative and incremental nature allow for quick, inexpensive changes. Combining agile with user-centered design, the government can quickly

change and update tools to make them more responsive to user needs. Too often, agencies

procure technology from vendors that can’t deliver the technology on time or on budget. Those

tools are built without significant user input or feedback. Beyond being more expensive than what many agile software developers would provide, these tools don’t address user needs. This

type of solution quickly becomes outdated, creating the need for additional expenditure, all

while not providing a consistent value add to entrepreneurs.

[email protected]

802-578-7997

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Mercatus—Small Business Storytelling Platform

Tory Campbell, Portland Development Commission

Mercatus is an online platform founded in Portland, Ore. to highlight local entrepreneurs of color through storytelling and a comprehensive inventory. This storytelling and business directory platform can be replicated in your city. The website features videos and interviews with entrepreneurs documenting their experience, resiliency, and stories, presenting a collective narrative on business ownership at this moment in time in Portland.Our vision is to Elevate the unique and universal narratives of Portland’s entrepreneurs of color, and Connect the city and region with local talents, businesses, services and products that come from the ethnically diverse entrepreneurs in the city.Elevate—Our storytelling platform celebrates the determination, work, and resiliency that go into running a business and, at the same time, improves access to and exploration of these business stories. Mercatus elevates the narratives to a broader audience, raising awareness, understanding, and corresponding business opportunities.Connect—Community is the backbone of a good business environment. Knowing and understanding each other is a key ingredient in a successful community. Hence, our aim is to connect the city and a wider market with local enclaves of talent, businesses, and goods from the ethnically diverse entrepreneurs in the city.

We all crave variety, but when we speak of a thriving, inclusive entrepreneurial ecosystem, what do we see? Too often, discussions of entrepreneurism are considered and presented in a cultural vacuum or reduced to tokenism and outliers. Most of the time, when we hear about vibrant bootstrapping entrepreneurs in Portland, Ore., it is through members of the dominant culture sharing their stories and aspirations in isolation of the “other.” Rarely do we see the ethnically diverse entrepreneurs in the city sharing their anthems, struggles, and best practices together. Yet today, more than ever, that is what our city (and our nation) require to remain competitive and reflect the shifting demographics of a new, emerging tapestry of entrepreneurs.

Primary opponents will be those who say there are already enough local vehicles aimed at increasing marketing visibility for business owners of all stripes. Secondary opponents may be those who consider an extra effort to highlight entrepreneurs of color as a form of reverse racism. However, the vast disparity in investment, awareness, and success that still exists between entrepreneurs of color and those of the dominant culture cannot be ignored. We are not yet living in a world where true movement toward equality can be accomplished only by highlighting sameness over difference. To simply say that our city is pro-small business and make no mention of unique experiences of struggle, resilience, and success along lines of race and ethnicity fails to acknowledge how much farther entrepreneurs of color must go to catch up with their white counterparts.


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We can gladly walk you through the approaches and methods that created success for us with this project.Coordinated Outreach: $40,000–$50,000The primary cost is the time needed for outreach to uncover the needs of small business owners in focus groups, surveys, and follow-up, and then to capture their stories and build out the business directory through face-to-face connection with business owners throughout your city.Technology: $400 annuallyWebsite development can be cost effective through the use of a Squarespace template and Member FindMe plugin that allows for personalized business profiles.

www.mercatuspdx.com [email protected] 503-823-3231

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Support for Minority Businesses

Gary L. Cunningham, Meda

Recommendations:

1. Create tax incentives to promote capital investments in minority businesses.

2. Create public/private/philanthropic partnerships to realign existing minority business support

systems to ensure a high standard of service and results and reduce duplication of services

along the business life cycle for minority businesses. The result will be creation of an ecosystem

for minority businesses to thrive. These partnerships will help create one front door support

system of intake, trusted advice/mentorship, peer learning education, and market access.

3. Ensure entrepreneurship pathways are a part of career and technical education for high

school students, and include entrepreneurial skill development in K-12 education.

This approach would significantly increase success for minority businesses, thereby increasing employment and the tax base of cities. Evidence also shows that growing successful minority

businesses reduces crime.

The U.S. Business Census indicates that the number of minority businesses is growing at a

faster rate than are nonminority businesses across the United States. These data show that

minority women-owned businesses are increasing in number faster than any other group in

business. However, sales and revenue disparities between minority and nonminority businesses

are significant. In fact, many of these growing minority businesses are small and do not have employees.

If these trends continue, it could have a devastating impact on the economic viability of cities across the country. Without growing the sales and revenue of minority businesses, cities will

see an increase in areas of concentrated poverty and a deterioration of the business tax base.

In fact, minority businesses hire minority employees at a much higher rate than non-minority firms do. Given the racial demographic shifts in the United States, growing minority businesses (both new and existing) needs to be a current and long-term priority for cities that are going to

compete for talent, commerce, and viability.

Critics would argue that creating a tax incentive for capital for minority businesses and

redesigning the current structure of business support services would create an unfair

advantage for these firms in the marketplace. They also would suggest that giving women and minorities “a leg up” would create barriers for majority businesses. A zero sum argument, if

you will.

Others in the existing minority business development system who are benefiting from the current arrangement also will object to changes in the system that don’t benefit their organizations. Issues of racialized politics may be a consequence of advocating for change in the current arrangements.


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This approach would realign current financial cost within the system rather than add new cost. There may be a need to invest in technology and other systems to create the one-stop shop.

Some of these costs could be shared by the public/private/philanthropic partnership. Increasing capital and market access may also have some short-term cost, but will have significant upside benefits by creating a pipeline of minority businesses of scale. There is also the cost of time. Creating tax incentives, partnerships, and entrepreneurial

education in K–12 public schools is time-consuming, as is relational work to ensure

effective implementation and traction. It is recommended to focus on a few high-impact partnership possibilities first, spending the time necessary to create a high-trust environment. Implementing a pilot project with a local public school before scaling up a major solution also may be helpful.

[email protected]

612-978-8200

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Connecting City and Regional Entrepreneurial

Ecosystems Online

Austin Dean, Start Garden

Entrepreneurs have more resources available to them than ever before. As a result,

new companies are having difficulty navigating the maze of support organizations and programs that were designed to improve access. What is lacking is an online tool

that showcases available resources and highlights for entrepreneurs the programs that

produce results. The tool needs to connect the entrepreneurial ecosystem online, derive

insights from the numerous interactions, and suggest to entrepreneurs the best resources

for their current needs. It should harness the collective brain power of the community and

be a fully autonomous mechanism for online engagement. With such a tool, we could

respond faster to issues at the grassroots level and deploy resources to entrepreneurs

more effectively.

An entrepreneurial ecosystem is vibrant, interconnected, and amazingly complex. Trying to measure change, both positive and negative, requires a collective impact model involving

myriad organizations and institutions. Running in the background of this complex process must be a technology platform that maintains transparency, accountability, and cohesion

between all stakeholders. Shared measurement and quantifiable outcomes are the ultimate end goals, and must be tracked using a platform.

Implementation of such a platform is underway in Grand Rapids, Mich., and in Detroit

(called Collective Metrics). With the help of city economic development offices, local foundations, venture funds, and other institutions, the site is actively tracking programs

and entrepreneurs across the state (more coming online every day). The Michigan

Economic Development Foundation ($40 million per year operating budget) seeks to

expand the platform into all regional hubs throughout Michigan in 2017. Additional trials are underway in New York, N.Y., and Memphis, Tenn.

Opposition to such a platform stems from a shake-up of the status quo. Existing customer relationship management tools focus on tracking internal operations for a single

entity, as opposed to holistically measuring the connections and interactions occurring

between companies/organizations. Conversely, popular social networks such as LinkedIn are much too broad and do not focus on delivering performance data or place-based

recommendations. The recommended site, on the other hand, is inherently transparent

and accessible, and can be perceived as a threat to underperforming entities and

programs.

The predominant cost of implementation is time and social capital. Securing “buy-in”

from local institutions can be time intensive and requires a backbone entity to lead

discussions and coordinate implementation. Typically, directives from funding sources


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(e.g., foundations) improve participation. Roll-out and project implementation can

range from three to eighteen months.

The Collective Metrics platform (being implemented in Michigan) charges a fee per

organization; costs range between $75–$400/month. At times, state agencies have sought to cover these fees by paying an annual membership. The Collective Metrics

team helps manage project implementation at each site.

[email protected]

419-265-3189Contact Information

Welcome Immigrants

Emily Fetsch, Ewing Marion Kauffman Foundation

The Kauffman Foundation has long studied the impact of immigrant entrepreneurs. Immigrants are more than twice as likely as native-born Americans to be entrepreneurs. While the federal government dominates much of immigration policy, there are local and state-level approaches to encourage immigrant entrepreneurship. For example, Welcoming America, an organization comprising a network of 100 communities, encourages cities and regions to recognize and enhance immigrant contributions. Welcoming America has a variety of resources to bolster immigrant entrepreneurship. By lifting barriers facing immigrant entrepreneurs, policymakers often are addressing barriers faced by other entrepreneurs. To learn more, check out their website at www.welcomingamerica.org.

For policymakers, a politically charged topic like immigration can bring strong opinions from both supporters and opponents of immigration reform. However, when discussing the impact of immigrant entrepreneurship in particular, there is broader bipartisan support. Other entrepreneurs are also proponents of addressing the barriers facing immigrant entrepreneurs. Startups often consist of founding teams. If you have a gap in your ecosystem where you aren’t helping immigrant entrepreneurs, you could be hurting native-born entrepreneurs. When a startup team consists of an immigrant founder, the rest of the team, even if they are native-born Americans, are affected by the barriers.

While there exists some contentious opposition, policymakers and think tanks from many ideological viewpoints understand the economic dynamism immigrants can bring to local communities, as well as to the entire nation. In addition, city-level approaches to support immigrant entrepreneurs and more fully welcome all immigrants tend to be less politically contentious than national-level activity.

The primary cost is the time and capacity to build relationships with the immigrant community in the area. For some city officials, these relationships are already underway, with or without a focus on entrepreneurship. As policymakers work to develop and strengthen relationships with the immigrant community, they should be sure to learn about the specific needs of the immigrant entrepreneur community.



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The Entrepreneurial Ecosystem Playbook:

What Do Mayors Want?

Victor Hwang, Ewing Marion Kauffman Foundation

The purpose of the Entrepreneurial Ecosystem Playbook is to provide an actionable set of

principles, case studies, research, and data that can help all ecosystem builders support

and encourage entrepreneurial activity. Ecosystem builders include mayors, city managers,

entrepreneurs, entrepreneurial support organizations, investors, and community institutions;

thus, the playbook must reflect each ecosystem builder’s different needs and unique contributions.

The question for you, Mayor, is what do you want from your entrepreneurial ecosystem and what can you give your entrepreneurial ecosystem?

Below are a few examples of how, as a mayor, one might contribute to the entrepreneurial

ecosystem:

• Convene the ecosystem builders with entrepreneurs.

• Allow city departments to partner with entrepreneurs to innovate city services and

provide proof of concept to startups.

• Leverage city assets like land and public spaces to foster entrepreneurial activity.

Listed here are several examples of what a mayor could expect to get out of a healthy

entrepreneurial ecosystem:

• Job growth through an increase in young firms. • Economic resiliency through entrepreneurial diversity.

• Equitable economic growth through a more representative entrepreneurial community.

The cost of your participation in providing content for the Kauffman’s Playbook on entrepreneurial ecosystem is some—but not much—time. However, it does require that you remain mindful of your interactions with entrepreneurs—their triumphs and frustrations—to

report back to the Kauffman Foundation.

[email protected]


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Resist Offering Tax Incentives for Big Businesses

Chris Jackson, Ewing Marion Kauffman Foundation

Policymakers spend hundreds of millions of dollars each year in attempts to lure existing businesses to build new factories or headquarters in their cities, states, or regions. When these deals are made, policymakers hold press conferences and proclaim the inevitable boon of job creation and wealth that hosting these companies will bring. However, the vast majority of these incentives are aimed at older and larger firms and don’t come close to fulfilling the expectation of net new jobs. As well, these kinds of deals are overwhelmingly aimed at larger companies, and not at the entrepreneurs that drive net new job growth, innovation, and economic dynamism. Mayors, as recognized public figures in their communities, have the power and clout to direct more targeted and local economic development strategies that can fuel sustainable job growth. Mayors can act as champions and role models for others looking to minimize or eliminate the use of these fiscal incentives.

These kinds of economic incentives, designed to lure existing companies to relocate within new boundaries, are staggeringly common; one survey computed that 95 percent of U.S. municipalities use fiscal incentives to attract firms. Across the United States, states and municipalities spend $70 billion on this kind of economic development strategy. Yet, the benefits fail to add up. Analysis of Kansas and Missouri efforts to attract firms to relocate across state lines found a gain of only 414 jobs (to Kansas) at a cost of $340,000 per job. As well, this strategy can snowball into a sort of arms race, where cities and states look at their neighbors and feel the need to keep up with growing spending just to maintain the companies and jobs that are located there.

One of the biggest pieces of opposition to refusing to use funds to incentivize firms to relocate is the rejection of the status quo. States and cities throughout the country have used such deals for decades. Choosing not to offer incentives to big companies to relocate removes a key tool currently used in economic development, even if that tool struggles to justify its expense. Another source of opposition comes from the arms race aspect of tax incentives. If one state or city chooses to not offer incentives, but their neighbors continue to, cities and states fear (not without merit) that firms located within their borders will take the other state’s or city’s money and leave. The firms themselves also represent a group that will oppose an effort to reduce or eliminate the tax incentives from which they directly benefit. Finally, tax incentives deals give city and state leaders an opportunity to publicly present an accomplishment to constituents. It may be difficult to remove that kind of spotlighted occasion.

Financially, choosing not to offer existing firms relocation tax incentives will initially save money. But the major costs of reducing or eliminating tax incentives as an economic development strategy fall on the reputation of city and state leaders. Choosing not to offer these incentives, especially without an agreement with others also not to offer them, is a brave effort, and puts significant pressure on leaders to succeed and communicate community


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growth and success in other areas. Another cost is figuring out how to devote their energy to other issues that actually will move the needle. The Kauffman Foundation has studied where cities and states can focus their energies to create the kinds of entrepreneurial ecosystems that can sustain the growth that often is dreamed about with these incentive deals.


Contact Information

Incentivize Immigration in Cities

Joda Thongnopnua, Metro Ideas Project

The Metro Ideas Project recommends that cities adopt a robust series of services and accommodations for immigrant communities and newly naturalized citizens. As the Kauffman Foundation has noted , immigrants are almost twice as likely as are native-born Americans to start businesses and accounted for over a quarter of new entrepreneurs in 2014.Cities should create formal institutions and foster partnerships that provide key services (e.g., offering informational assistance and grants/loans for the naturalization process and translation assistance for other government agencies, and serving as intermediary between nonprofit service providers) and incentives to attract immigrants (e.g., municipal ID programs, refugee resettlement programs, immigrant ‘Welcome Weeks’ and diversity festivals, ordinances to prevent immigration services fraud).By embracing immigrant communities, cities are positioned to grow their economies and spur job creation among a highly entrepreneurial community.

Several economists have found that immigrants are a positive force in the national economy, boosting GDP growth and making up 28 percent of Main Street small business owners. In fact, between 2000 and 2013, immigrants accounted for all net Main Street business growth and 48 percent of overall growth nationally. These businesses—small shops and service providers that act as the foundation for many neighborhoods across the country—are often critical in fostering a vibrant and economically prosperous city.Cities like Nashville, which had the fastestgrowing immigrant population of any American city in 2012 and is No. 4 in job growth nationwide, is a key example in demonstrating why incentivizing immigration and promoting immigrant success is good for everyone.

Much of the opposition to programs like these are from antiimmigration activists who oppose increased immigration nationally. Many argue that immigrants are a major source of crime and violence in the United States, despite newcomers to the country being less likely than the native population to commit violent crimes or end up in prison. Opponents occasionally describe Offices of Immigrant Affairs/Offices of New Americans as ‘sanctuary policies,’ claiming they are inconsistent with federal law and contribute to violent crime. While it’s true that certain ordinances that limit cooperation between local law enforcement and federal immigration authorities are controversial (e.g., San Francisco, Miami, Denver, etc.), other services that cities can provide are far less contentious. Furthermore, the economic benefits of immigrant communities seem to far outweigh any competition with nativeborn Americans. In fact, contrary to what’s heard frequently on talk radio and cable news, there is little evidence that there is a statistically significant correlation between immigration and unemployment. This is partly because immigrants and nativeborn Americans rarely compete for the same jobs, according to the Urban Institute. Because of the ideological polarization, there is likely to be significant opposition to any effort to incentivize immigration. However, cities are likely to weather that opposition more effectively than rural or suburban areas.


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The primary cost of establishing an Office of Immigrant Affairs or New Americans is in staffing and time. However, the Metro Ideas Project recommends scaling the office over time, perhaps within an existing agency, and increasing the size of the office year over year as needs grow and budgets accommodate.Nashville’s Office of New Americans is largely supported by unpaid panels of volunteers, community leaders, and nonprofit service providers. Currently, it is staffed by the Director of Community Inclusion within the Office of Neighborhoodsand Community Engagement. This is a worthwhile model to consider if staffing a fully funded office is not feasible in the short term.Using the Mayor’s Office’s ability to bring funding partners to the table, philanthropic funding may be another viable alternative to public funding for the programs and services this office may provide.

[email protected] 4232983676

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Integrating Light Industry Zones into Mixed-Use Urban Sectors;

Reducing Restrictions on Light Industry Zones

Dr. Carolyn Smith Keller, Keene State College

A boom in craft industries, including beer, distilling, wine-making, and coffee roasting, is

sweeping the country. These crafters need spaces where they can produce and sell their

products at the same time. Alternatively, they need spaces where similar artists, chefs, and local

entrepreneurs can highlight and cross-promote each other’s products. Direct or near-direct

distribution of products produce the highest margins for craft entrepreneurs. Furthermore,

cross-promotion helps build up neighborhoods and generates a geographically centered, built-

in networking and support opportunity for entrepreneurs in a rising-tide manner. One scholar

argues that mixed-use urban development, “can create high-wage, low-barrier-to-entry jobs,

diversify urban economies… and provide unique retail experiences and a local sense of place”

(Cotter 2012:5).

Scholars and professional organizations, such as the National Association of Industrial and

Office Properties: The Commercial Real Estate Development Association, support these policies, especially in areas that have historically relocated manufacturing to the outskirts of cities.

Atlanta is an example of a city that has introduced this policy with significant success.

Introducing light industry into mixed-use spaces requires space. Some city blocks are physically

too small to meet the needs of crafters. Other towns have switched from so-called use-based

code systems to form-based code systems. Generally, opponents to these types of reform are

those who are already in the game and feel vulnerable. Residents may oppose new additional

industry coming in. Furthermore, already established businesses may have to make changes

that they view as costly and unnecessary.

The predominant cost of reform of these regulations is time. City officials and attorneys already are stretched thin. Adding more in the form of a major zoning change takes organization and

coordination. Furthermore, determining which geographic areas would most benefit from this type of development requires data collection and input from a variety of constituents. These

models are most successfully implemented when established and potential business owners

work together with the city. A less time-consuming and cost-efficient solution is to reduce restrictions on light industry zones to allow craft establishments to produce and sell in the

same place. For example, the major growth in the Portland, Maine, craft beer industry is directly correlated to a legislative change that allowed for taproom sales in 2011. Since that time, the

number of breweries and brew pubs has tripled.

[email protected]

(603)358-2364


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Better Data for Decision Making

Julia Lane and Neil Kleiman, Center for Urban Science and Progress, New York University

Cities generate massive amounts of data that could be used to support entrepreneurs by improving services, reducing costs, and minimizing duplication. The challenge is that the data tsunami is outpacing the technical and workforce capacity of cities to make use of it. Building the necessary data infrastructure by and for local government, while no more glamorous than installing water pipes and building roads, is just as necessary. It involves building sophisticated systems that lower the cost of data acquisition, protection, analysis, and dissemination. It also involves building a workforce of agency officials that understands basic data management tools, statistics, and data science. There is a potential to work with universities to develop such an infrastructure, but any relationship must have a clear value proposition for both local government and universities, be long term in nature, and be built on trust.We recommend building a secure city data facility that would manage all local data collection and analysis; provide a safe environment for city staff and researchers to collaborate; align data from multiple levels of government (municipal, county, state and federal); and customize data training courses and modules for local officials.

Universities increasingly are motivated to work with local officials to provide more grounded research opportunities for scholars and students. And, institutions of higher learning can greatly assist local government, as they are grant magnets, pulling in significant funds for research projects that cities are not well-positioned to draw down. In addition, universities have a teaching mission, which could be helpful in training city agency staff. At the city level, mayors and city managers increasingly turn to new technology tools and approaches to accelerate policy improvements. Cities have created a new job title, “chief data officer,” built dashboards, and initiated predictive analytic and smart sensor projects in the name of better efficiency, accountability, and even improved community engagement.

There are not opponents per se in establishing robust city/university partnerships, but certainly many challenges. At the top of the list are “transaction costs.” The identification of an appropriate university partner—whether a particular school, scholar, or research center—can take an inordinate amount of time and energy. It is difficult to establish trusted partnerships with high-quality researchers; most university partnerships are episodic—often project-based efforts that end once the research is complete. Misalignment of incentives also is a significant barrier. University scholars are motivated by research that takes years and is aimed at peer-reviewed journals, while cities work on quick timelines focused on concrete service improvements for citizens. There are many other challenges, as well. It is difficult to get funding for infrastructure. Data quality is often mixed. Staff lack even basic skills.

The cost involved can be substantial, including time, resources, and training. It often makes sense to begin a partnership through short-term pilots that demonstrate the value of a


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data facility—in terms of improving services, reducing costs, and minimizing waste. It also is possible to use foundation grants and state and federal awards to offset the costs of establishing a partnership that then can lead to a fully supported data facility. Additionally, there are cost-sharing models with other, larger regional universities that can support the costs of data infrastructure in smaller locales.


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Creating Inclusive Entrepreneurship Support Organizations

Alex Krause, Ewing Marion Kauffman Foundation

According to a study by ICIC, participation by women and people of color in high-tech

incubators and accelerators is 20 percent and 23 percent, respectively. Some reasons for

why entrepreneurial support organization representation lacks women entrepreneurs and

entrepreneurs of color include implicit biases and the impact of organizational talent and

culture on their served-entrepreneur diversity.

Some factors that limit the participation of women and people of color in entrepreneurship

are the same things limiting their representation in entrepreneurship support programs. Many

challenges prevent women and people of color from entering entrepreneurship: mentorship,

access to finance, networks, cognitive biases, and family barriers. Because they are not starting businesses at the same rate as their white, male counterparts are, they also are not joining

entrepreneurship support programs at the same rate. This is a serious issue for economic

development in cities.

Entrepreneurship support organizations have been proven to have an even larger gap for

women and people of color than entrepreneurship for women and people of color generally

does. Increasing the representation of women and people of color in these organizations is not

only an economic imperative; it is a moral imperative.

Not-for-profit and for-profit entrepreneurship support organizations treat diversity differently. In for-profit support organizations, diversity is primarily a charitable cause. These organizations often put profitability first and demographic background of entrepreneurs last. In not-for-profit support organizations, diversity is part of the lifeblood on which their funding often depends.

The predominant costs of making entrepreneurship support organizations more inclusive are

the time and growing pains of changing ingrained and sometimes inherent biases impacting

culture. But, for cities to be successful, all citizens must be fully empowered to engage in entrepreneurship if they wish.

[email protected]

816-932-1123


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Real-Time, Local Entrepreneurship Web Data App

Arnobio Morelix, Ewing Marion Kauffman Foundation

In the future, economic development will focus on new and growth companies; and decision-

making will be done using real-time, hyper-local entrepreneurship data.

However, when we look at how things are done today, there is a big gap between our present

situation and this bright future.

I’m working to create web data tools that help make this future true—and allow policymakers

to make the best decisions they can for their entrepreneurs.

In this conversation, I would really like to learn from cities about the answers they would like

to have but don’t, and the tools they would like to have that are not currently available (so we

can build them).

Researchers, VC and angel investors, and entrepreneurs are proponents of this, I’d argue.

Moreover, it is very clear from the research literature that new and growth companies create

a disproportionate share of the jobs, wealth, and innovation in this country. Yet, most, or at

least a large share, of economic development is focused on giving companies incentives and

tax abatements for shops to move from one state (or city) to a neighboring one. Research has

shown that this approach largely is ineffective because it is mostly a zero to negative sum

game—you are changing where some of the economic pieces land on the board, but moving

them is really expensive (even for the host city/state), and you basically create no new value for

the nation.

I believe part of the reason we are still over-focused on the traditional economic development

model is because it is hard to prove the positive impact of new and growth companies at the

local level (while it is easy to show how many jobs a factory moving from a neighbor state

brought). Please correct me if I am mistaken.

So, I believe a major part of making this happen will have to do simply with the creation of

better tools that allow us to track/measure/prove the impact of entrepreneurship as a local

economic development driver.

“Traditional” proponents of economic development that exclusively focus on the economic

development model of giving massive incentives for factories/businesses to move to a different

border—and arguably could say we have no business focusing on/measuring/caring about new

and growth companies.

$0 to $50,000 per year, depending on level of involvement

[email protected]

816-932-1127


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Mayor’s Roundtable of Leading Entrepreneurs

Rhett Morris, Endeavor

A small number of fast-growing companies often are responsible for a very large percentage

of a city’s new job creation. The founders of these firms have unique needs and perspectives on how to improve the local environment for fast-growing businesses. A Mayor’s Roundtable

that meets nine to twelve times a year can help to elevate the unique needs of these firms and their peers and can help to provide the mayor’s office with feedback on its entrepreneurship initiatives.

Similar programs in U.S. cities have helped to elevate and resolve the sorts of highly specific municipal issues that prevent businesses from growing. For example, one can look to Seattle. The city has more than fifty biotechnology companies employing 8,000 people in the city. However, many of these life science companies are located in an area of Seattle where the

construction code used to forbid the development of labs above the fourth floor in any building. Due to the enhanced communication with fast-growing entrepreneurs in the city, this

problem was brought to the attention of city government leaders, who quickly updated the city’s code to allow local biotech labs to expand.

This program also can be implemented quite quickly.

Proponents include fast-growing business owners who are creating large numbers of new jobs

in the local community. These founders will appreciate having the opportunity to speak with local leaders and to act as a channel to funnel issues from their fast-growing peers.

Slow-growing or no-growth businesses may oppose leading entrepreneurs’ meetings with city

leaders. These companies may complain that the mayor’s office is devoting time to helping businesses who “don’t need it.”

The valuable time of the mayor and his or her staff.

[email protected]

212-352-3200


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Including Women and Minority Entrepreneurs

Yas Motoyama, Ewing Marion Kauffman Foundation

It will unlock the potential of more entrepreneurs, i.e., more job creators.Your city may be starting to have a vibrant community of entrepreneurs. However, such an entrepreneurial community tends to evolve around a specific demography, namely Caucasian males in the IT sector. You and local support organizations have raised a flat to increase the diversity, but it may not be happening even after a year or two. My coauthors and I find that there are unintentional, yet intrinsic, barriers for this inclusion, such as:

• An open-door policy will only disseminate information to people who are already in the network (i.e., not reaching new people). More proactive communication is needed.• Targeting ‘women entrepreneurs’ may be ineffective because women think they are

‘business owners,’ rather than entrepreneurs. We need to talk to the target population to understand how they think and feel.

Actions include:• Get a sense of representation by women and minority entrepreneurs in your area.

—Attend entrepreneurship events. Check past finalists and winners.— Familiarize yourself not only with the heads of support organizations, but also with

key staff. Do the staff reflect diversity the organization targets?—Ask your local organizations to share and track the kinds of entrepreneurs they serve.

• Ask your local support organizations whether their mentors and judges reflect the diversity they target.

• Talk to women or minority entrepreneurs.—Ask them what they want.—Ask them whether they know and can bring in other entrepreneurs.—If there are few of them, try to connect them to each other.

• If there are too many diversity initiatives, try to navigate them by convening the organizers. Facilitate, rather than trying to influence the outcome.

Proponents include women, minorities, and people with interest in those populations.

As it comes to resource allocation, you may face opposition from the mainstream group because they fear their current resource will be taken away.

As mentioned, if you try to reallocate budget/resources, it will start to cost you. Otherwise, the cost will be mostly your precious time to meet, connect, and coordinate with people.



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Machine-Readable Ordinances

Evan Absher, Ewing Marion Kauffman Foundation

Making city ordinances, administrative regulations, and policies machine readable will help

entrepreneurs in two predominant ways: first, it will allow entrepreneurs and cities to more effectively innovate together, and, second, it will allow city operations to be more efficient, especially when it comes to permitting, licensing, and land use.

Machine readable means that computers can work with code like a human reads text.

Basically, it turns municipal code into computer code. If then coupled with other measures,

such as a publicly accessible API, entrepreneurs can build apps for city services much like

they would be able to build apps for iOS, Apple’s iPhone operating system. Imagine an entire

city’s permitting scheme reduced to an app that can immediately determine which parts of

a prospective business plan are in violation of code and how to remedy the violation. This is

possible with tax code—think Turbo Tax. Why should it not be available for other forms of

government interaction?

Imagine the positive economic impact if entrepreneurs could make their businesses fully

permitted and licensed in an afternoon, all from the comfort of their homes. The first step toward this outcome is making ordinances, policies, and regulations all machine readable.

Further, machine-readable code will be a fundamental step in making any city “smart.” The

massive advances in municipal data collection and analytics capacity are far less exciting if the

data are not connected to the city operations that serve the people and produce the data. The

city operations are represented in the code and regulations and, if the code exists only in text,

then the data will never truly impact city operations because a barrier exists between the digit

data and the analog ordinances.

The proponents of this measure are all those who want cities to operate more efficiently, responsively, and transparently. Further, as cities begin to adopt new technology and

entrepreneurial mindsets, converting the city’s code will be imperative to achieving efficiency and transparency.

The predominant opponent will be services that currently publish and produce codes online;

for example, Municode. First, they will say they do produce machine-readable code. But, even if

that is true, the standard is poor and they certainly are not making the code widely accessible.

Then the incumbent will tell you that an exclusivity clause in the contract between the city

and the incumbent stipulates that the city can only publish the code through the incumbent’s

product. This should be resolved with the city attorneys, but, generally, ordinances are public

information that no one entity should be able to control by way of contract.

Another opponent might be internal—specifically, the legal department. The lawyers may feel apprehension about allowing entrepreneurs access to the code in a manner that can

manipulate the ordinances. As a lawyer and former city employee, I can tell you that city

attorneys are awesome, but there is little harm that can come from making the code machine


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readable. In fact, a third party could do it right now without the consent of the city. The

manipulation that occurs cannot change the source code. Basically, the entrepreneur is playing

with copies. However, it would be far more beneficial to the city and the ecosystem if the conversion were supported by city hall and all stakeholders convened to leverage the real

opportunity.

The cost is nominal. It takes mostly time and a lot of labor. This is perfect for a computer

science department in a local learning institution or a partnership between Code For America

and a host city. This project is perfect for civic volunteerism and young talent to sharpen

their skills. The cost should be borne by the community, as it will astronomically increase city

innovation both for city hall and the entrepreneurial ecosystem.

[email protected]

816-932-1274

Cost

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Women Entrepreneurs Initiative

Banu Ozkazanc-Pan, University of Massachusetts

Women entrepreneurs are the fastest-growing segment of entrepreneurs, but often do not

have full access to resources and networks within an ecosystem. Targeted support can help

integrate them into the ecosystem. As part of a city’s economic development efforts, a women

entrepreneurs initiative will improve business conditions to enable more women to participate

in business creation and established entrepreneurs to grow their ventures. Through this

initiative, the city can convene groups and educate women about the skills and knowledge

necessary to start their own businesses. The initiative also will connect women to resources

and relevant business networks to grow their businesses. These efforts will support inclusive

economic growth.

Economic researchers and political leaders across party lines have acknowledged economic

inequality as an issue that needs immediate attention. Research indicates that growing

economic inequality in cities can be mitigated through policies that even the playing field for women entrepreneurs. Support for the city’s women entrepreneurs initiative will come

from various business groups across industries, women-focused networks, investors, and

entrepreneurial support organizations, such as incubators, accelerators, co-working spaces, and

other groups that stand to benefit.

Opposition to such an initiative may come from conservative business groups and leaders who

do not want to see public money spent on a specific group or who have traditional views on gender. Their arguments will suggest that there should be limited government involvement in

business and any policy should improve the city’s business environment for all entrepreneurs.

While this is true, and a healthy business environment is best for all, most cities have

gender gaps in entrepreneurship that result in missed economic growth. Supporting women

entrepreneurs will close some of these gaps and bring further economic prosperity to cities.

The costs associated with implementing the initiative will be related to time and financing. The time needed to start the initiative can be mitigated to a certain extent by learning from

cities that already have women entrepreneurs initiatives. To foster new business growth and

bring existing businesses to scale rapidly, the initiative will need a budget as part of economic

development efforts. To decrease this cost, the recommendation is to partner with institutions

of higher learning that have entrepreneurship centers and programs, banks and investor

groups, local entrepreneurial support organizations, and women’s business associations.

Connecting the city to various partners on this initiative also will build an inclusive and

integrated ecosystem and further lower barriers and costs to implementation.

[email protected]

203-654-6872


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Chief Entrepreneurship Officer

Tony Tolentino, Blackstone Charitable Foundation

In designing and supporting programs to build and strengthen entrepreneurial ecosystems, the Blackstone Charitable Foundation has worked extensively with elected officials at all levels (federal, state, and local) to build these programs. As an external funder, the Foundation often struggles navigating various government agencies to find a champion to help (1) navigate the ecosystem, (2) surface opportunities/challenges for funders and entrepreneurs, and (3) identify relevant thought leaders and possible partnerships. Creating a Chief Entrepreneurship Officer role within a mayor’s office (beyond a traditional, typically inwardly focused Chief Innovation Officer or Chief Technology Officer) to map the city’s ecosystem and help foster public/private partnerships will help strengthen the overall entrepreneurial ecosystem of a city.

The greatest proponents would be your city’s entrepreneurs. Having a local government to champion their businesses and success stories and help them navigate existing resources will be a huge vote of confidence for your city’s entrepreneurs. In addition, foundations/corporate philanthropies and VCs/angel investors will be supportive and will find it easier to navigate your city’s ecosystems to support those entrepreneurs

One possible opponent could be the taxpayers and/or limited government activists in your cities. Some may see this as an added layer of government, extraneous role/position within the mayor’s office, or a general waste of resources. While these concerns are relevant and should not be discounted, it is up to the mayor to champion and empower this role to ensure that the Chief Entrepreneurship Officer can demonstrate success to the community.

The primary cost of this position is salary and benefits and general administrative or programmatic support. City budgets are stretched thin, so justifying an additional role may be difficult. It is our recommendation that an existing role be re-purposed into this role for a trial/pilot period. If a Chief Innovation Officer or Chief Technology Officer role already exists within city government, consider expanding the scope of the role for a trial period before actually creating a new, separate role.



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Become a Statehouse Advocate

Jason Wiens, Ewing Marion Kauffman Foundation

Entrepreneurs need allies who will champion their cause and advocate for their interests. As the highest-ranking elected officials in cities, mayors are in a position to be influential advocates for entrepreneurs. Mayors already are doing this in their communities, but an opportunity exists to join entrepreneurs at the statehouse in advocating for the removal of state-level barriers to starting a business. Two state policies, in particular, stand in the way of entrepreneurship: occupational licensing and non-compete agreements.More than 25 percent of Americans need a license to do their jobs. That means they must pay fees, pass exams, and complete education or training in order to work in certain occupations. These fees and requirements limit who can start a business in the licensed profession and are especially burdensome to those of less means. Research has found that entrepreneurship rates fall more than 10 percent in states that license a greater percentage of low-income occupations. In these cases, the license blocks a path to economic betterment and self-sufficiency. Non-compete agreements are contracts between employers and employees that limit an exiting employee from working for competitors or launching their own business in that same industry. Nationwide, one in every six workers is bound by a non-compete. States vary in their enforcement of these contracts, with some states strictly enforcing them and others not. Reform options—from shortening the length of non-competes to limiting the types of workers that can be covered by one—exist and are being pursued in a handful of states.Repealing unnecessary occupational licenses and reforming non-compete policy will remove barriers to new business creation, allowing more residents of your city to freely pursue their entrepreneurial ambitions.

Entrepreneurs, venture capitalists, labor advocates, those that care about economic liberty, and even some business leaders have variously supported these efforts.

Members of licensed occupations, consumer advocates, and some business leaders may oppose licensing and/or non-compete reform.

Legislative reform: $0 to minimal/Advocacy: time, political capital



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Leadership & Management

Policy matchmaking