The Power of Entrepreneurship

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Barnard Carson
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1 The Power of Entrepreneurship CSG Entrepreneurship Days Kauffman Foundation May 13,

Our founder I think the greatest satisfaction I have had, personally, is helping others, doing something that either inspires them or aids them to

2 Our founder I think the greatest satisfaction I have had, personally, is helping others, doing something that either inspires them or aids them to develop themselves in their future lives so they ll not only be a better person but be a better productive citizen of the United States. Ewing Kauffman

3 Our mission Helping people attain economic independence through education and entrepreneurship, which Ewing Kauffman saw as two ends of a continuum.

4 Kauffman at a glance $2 Billion in assets Grantmaking + Operating Local roots, national impact, global reach Significant local employer providing 200+ jobs State-of-the-art conference center available for use by qualifying nonprofits; a record 71,000+ guests utilized the space last year

5 Overview 1. Data on why entrepreneurship matters 2. Data on entrepreneurship in Tennessee 3. Policy Ideas

6 Job Creation & Dynamism

7 Startups Drive Job Growth Source: Haltiwanger (2012)

New Business Creation, 1978-2011 900 600000 800 700 500000 Startups/100,000 People 600 500 400 300 400000 300000 200000 Number of Startups 200 100 100000 0 1978 1979 1980 1981 1982 1983 1984 1985

8 New Business Creation, Startups/100,000 People Number of Startups Number of Startups (right axis) Per 100,000, Prime Age (left axis) Per 100,000, Working Age (left axis) Source: US Census Bureau

9 Where Tennessee Stands

10 Falling Entrepreneurship: Startups as % of Total Firms 25.00% 20.00% 15.00% 10.00% 5.00% Georgia Missouri National North Carolina Virginia Tennessee Arkansas Kentucky Alabama Mississippi 0.00% Source: US Census Bureau

11 Tennessee, like the Nation: Lots of Small Businesses, Small Share of Employment 60.00% 50.00% 40.00% 30.00% Share of firms Share of emp 20.00% 10.00% 0.00% a) 1 to 4 b) 5 to 9 c) 10 to 19 d) 20 to 49 e) 50 to 99 f) 100 to 249 g) 250 to 499 h) 500 to 999 i) 1000 to j) 2500 to k) 5000 to 9999 l) Source: US Census Bureau

12 Startup Funding Deals in Tennessee Total # of deals, TN # deals 1+ firms, TN # deals startups, TN Source: Crunchbase

13 High-Growth Firms in Tennessee Tennessee Total Nashville-Davidson--Murfreesboro-- Franklin, TN Knoxville, TN Memphis, TN-MS-AR Chattanooga, TN-GA Morristown, TN Clarksville, TN-KY Cleveland, TN 20 Jackson, TN Johnson City, TN Kingsport-Bristol-Bristol, TN-VA Source: Inc magazine, Inc.com.

14 Thumbtack Survey of Small Business Friendliness in Tennessee Category Grade Overall friendliness B+ Ease of Starting a Business A- Regulations B+ Health and Safety B+ Employment, Labor, Hiring A Tax code A Licensing B Environmental B+ Zoning B Training and Networking Programs B Source: Thumbtack and Kauffman:

15 Policy Implications

16 Old Top-Down Strategy

17 New Entrepreneur-Centered Approach

Reinvent Incubators and Investments Provide a shared space for entrepreneurs to interact and collaborate Foster mentorship and peer-learning

18 Reinvent Incubators and Investments Provide a shared space for entrepreneurs to interact and collaborate Foster mentorship and peer-learning Avoid awarding one large prize. Instead, award many smaller prizes so a cohort of entrepreneurs can face the entrepreneurial journey together

19 Remove Barriers to Entrepreneurship Licensing Immigration Non-Compete Agreements

20 A Role for Public Officials

21 Entrepreneurship Policy Digest Created to educate policymakers and entrepreneurship supporters about relevant and actionable policy resources and recommendations that are born out of the Foundation s extensive research. Sign up at

22 Thank you Jason Wiens Lead Policy Engagement Manager

What Kind of Entrepreneurial Future?

What Kind of Entrepreneurial Future? Council of State Governments: Entrepreneurship Days in the Capitol Dane Stangler, Kauffman Foundation Phoenix, AZ, March 24, 2014 www.kauffman.org Overview Entrepreneurial