Creating high-growth, high-impact entrepreneurial enterprises has
become a common goal of cities. Metros and states have cut taxes,
implemented entrepreneur-friendly business policies, launched their own
venture capital efforts, and underwritten incubators and
accelerators—all in the hope of creating the next Apples, Facebooks,
Googles, and Twitters.
But what really attracts innovative entrepreneurs who create these economy-boosting companies?
The
answers: talented workers, and the quality of life that the educated
and ambitious have come to expect—not the low-tax, favorable-regulation
approach that many state and local governments tout.
These are the findings in a
new report from Endeavor Insight, the research department of the nonprofit
Endeavor,
which focuses on fostering and mentoring "high-impact" entrepreneurs.
Based on surveys and interviews with 150 founders of some of the
country's fastest-growing companies, the report answers the basic
question, "What do the best entrepreneurs want in a city?" It offers
basic evidence that cities should focus on factors and conditions that
attract the talented, educated workers who fast-growing entrepreneurial
enterprises need.
Entrepreneurs look for talented workers and the amenities that these workers like.
Looking at this sample of America's most successful new businesses, Endeavor identified two fundamental patterns.
For
one, size matters. These top business-creators gravitated towards
cities with at least a million residents in the metro area. This size
offered the scale and diverse array of offerings needed to attract
talent.
A
city also needs to appeal to the young and the restless. The
entrepreneurs surveyed were a highly mobile bunch when they first
started out. They moved often and easily in the early phases of their
careers, following personal ties or lifestyle amenities while also
seeking the right environment to launch their enterprises. But 80
percent of respondents had lived in their current city for at least two
years before launching their companies, meaning that cities had to catch
them early. And once they started their first company, these business
leaders rarely moved. So attracting this mobile group at an early age is
key.
The report then dug deeper into exactly what these entrepreneurs cited as the most important part of their location choices.
The
top-rated factor by far was access to talent. Nearly a third of those
surveyed mentioned it as a key factor in their decisions for where to
live and work (many specifically prized access to technically trained
workers). Entrepreneurs explained that they proactively sought out the
places that educated and ambitious workers want to be.
EU-Digest
