When Practice and Theory Meet Brian Dabson, Rural Policy Research Institute

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When Practice and Theory Meet Brian Dabson,
Rural Policy Research Institute

• McQuinn Center for Entrepreneurial Leadership
  Conference
• Entrepreneurship Where Practice and Theory Meet
• St. Louis, Missouri
• November 6-7, 2008

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The new face of entrepreneurship?
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Will the real Joe stand up!
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Some Starting Points

• Key working assumption entrepreneurship should
  be the core rural economic development strategy
• Recruitment is irrelevant strategy for most
  communities, except for those with particular
  locational attributes
• Entrepreneurs and small businesses are the
  drivers of local and regional economies
  represent appropriate scale of activity for rural
  places

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Three policy principles

• Regionalism
• Careful dance between reaching across
  jurisdictional and institutional boundaries to
  achieve scale while recognizing importance of
  place resources, capacity, markets not the
  same as consolidation.
• Systems
• Connecting the dots across programs and
  initiatives to better serve needs of
  entrepreneurs
• Assets
• Leveraging of local and regional assets to create
  new economic opportunities

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and one more

• Interconnectedness between rural and urban
• Regionalism rural and urban linkages
• Systems rural and urban resources
• Assets unique rural and urban strengths and
  markets
• Rural people and places as equal partners with
  urban counterparts
• entrepreneurship as safeguard against outside
  control and exploitation

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What we think we know

• Entrepreneurs are diverse in education, skill,
  motivation and found in many contexts defining
  characteristic is willingness to innovate
• Innovation can be found anywhere not restricted
  to certain sectors or places

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What we think we know

• Entrepreneurs are diverse in education, skill,
  motivation and found in many contexts defining
  characteristic is willingness to innovate
• Innovation can be found anywhere not restricted
  to certain sectors or places
• Only one in ten entrepreneurs will succeed in
  creating significant jobs and wealth, but total
  numbers are large (750,000 businesses/year)
• Unwise to try to pick winners need to create
  diverse pool of aspiring and early stage
  entrepreneurs

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What we think we know

• Main challenge in US is to increase conversion
  rate of early stage entrepreneurs into
  established businesses
• Context for economic development is rapidly
  changing global integration means both threats
  and opportunities entrepreneurial approaches
  more important especially in rural
• Some rural areas better endowed than others for
  sources of innovation or entrepreneurial climate,
  but all can benefit to some degree

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Thoughts on academic contribution

• Extensive literature with historical roots very
  active fields of academic inquiry for economists,
  sociologists, anthropologists, psychologists, and
  political scientistsand Peter Klein
• Tend to focus on what makes entrepreneurs do what
  they do the who, the why, and the how
• But very limited empirical literature on
  place-based entrepreneurship pragmatic learning
  from peers
• Major challenges in secondary data what are we
  measuring?

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Thoughts on academic contribution

• Walzer -- some useful insights into groups who
  may have greater propensity for entrepreneurship
  farmers, homemakers, unemployed, incomers,
  youth and pre-retirees. Not usual suspects.
• Johnson -- importance of favorable local
  attitudes, networks issue of community scale
  the continuing challenge

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Large scale efforts

• ARC Entrepreneurship Initiative and Kellogg EDS
  project had five aspects in common
• Significant investments in the idea of
  entrepreneurship
• Bodacious transformational goals
• Generated substantial cross-sectoral interest
• Lacked theory of change
• Lacked appropriate upfront evaluation plan

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Thoughts on ARC Evaluation

• Catalytic investment in changing regional culture
  provided a platform for social innovation
• Scattershot approach appropriate at outset but
  more focused transformational strategy now needed
• ARC works through state governments gatekeepers
  determined extent of impact but extraordinary
  work of ARC manager provided counterpoint
• Forensic evaluation needed in absence of built-in
  framework only able to capture part of 10 year
  effort
• Concept of portfolio of measures a critical
  advance

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Thoughts on EDS project

• In spite of daunting expectations 184
  applications the money or the concept?
• Absence of uniform evaluation framework prevented
  learning which of the nine design principles were
  important
• Mismatch between short-term project and long-term
  process
• Valuable insights into system design
  transformational/demand-side vs. big
  tent/supply-side
• Collaboration hard and costly more work needed
  on carrots and sticks
• Three areas of traction coaching, youth,
  capacity for policy

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Thoughts on practice

• Mississippi River Hills Association
• Three principles of regionalism, systems, and
  assets in practice built on appellation
  concept still work in progress
• Dakota Rising
• New and very focused effort to cultivate
  entrepreneurs dedicated to developing themselves,
  their businesses, and their communities
• boundary crossing counties and tribal
  communities
• entrepreneur fairs in selected communities
  mentoring, coaching, peer support to selected
  entrepreneurship fellows generating great
  community interest

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Thoughts on practice

• Greenstone Group in NE Minnesota outcome of EDS
  project, adaptation of ELS, direct attack on
  mediocrity as a cool place to be
• Important conceptual development
• Transactional activities focus on the
  enterprise business planning and development,
  succession
• Transformational activities focus on the
  entrepreneur professional coaches, networking,
  peer groups
• Twin track emphasis varies over time
• Recognize long-term process 10 years and 11
  million

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Thoughts on practice

• Grasslands useful typology on hard and soft
  components
• Hard
• markets, competition, asset availability, climate
  (real), politics
• Soft
• Culture, education, quality of life, personal
  preferences

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Insights from the conference

• Inherent focus on transformational potential of
  entrepreneurship
• Increasing focus on the individual entrepreneur
  through mentoring, coaching, peer learning
  transformational skills
• Increasing understanding of systems approaches to
  connect the dots, break down institutional
  barriers shifting from supply to demand
  orientation
• Increasing recognition of importance of place
  both positive and negative influences (assets and
  attitudes)

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Insights from the conference

• Critical importance of being clear about goals
  and outcomes, theory of change
• Concept of design teams visionary client
  program designer builder/implementer
• Need for integrated evaluation process baseline
  assessment, agreement on appropriate portfolio of
  measures, regular monitoring, rigorous
  evaluation, dissemination of findings

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Insights from the conference

• Separation of agriculture and rural development
  leads to overlooked opportunities
• 80 of farm household income is from off-farm
  sources
• Successful farming dependent on vibrant rural
  communities
• Important part of new opportunities in rural
  America bio-energy, local food systems,
  ecosystem services all offer farm-based
  entrepreneurship possibilities
• Few system linkages between business support
  services and farm organizations unique role of
  Extension
• Important lessons on collaboration between
  enterprises, across sectors organizations

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What we need to know

• Does entrepreneurship yield equivalent or better
  returns to public investment than conventional
  economic development?
• Which contextual factors have greatest impact on
  entrepreneurial development? Which can best be
  influenced by policy?
• What are the most cost-effective ways of
  increasing conversion rate from start-up/early
  stage to sustaining business?

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What we need to know

• Do system approaches really need collaboration or
  would competition be more effective? What
  incentives are most likely to achieve effective
  collaboration across jurisdictions and
  organizations?
• How can innovation and entrepreneurship be
  spurred in low density rural regions? Are
  consolidation and external control inevitable?

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Musings

• Many wonderful success stories not well
  reflectedslipped into whats wrong with rural as
  opposed to assets
• Alarming scenario about governments and
  universities doing hard work of start-ups and
  handing onto managers
• Shift in focus on Kauffman from every community
  has a culture related to entrepreneurship to
  more elitist view of university-centric high
  performance entrepreneurship

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Further musings

• Entrepreneurship an all-embracing concept that
  means everything and nothing
• Set of personal traits and attributes innate
  and acquired also used for organizations,
  institutions
• Generic process of starting and growing
  enterprises
• Specific process of transforming assets into
  economic opportunity through innovation
• Creates challenges for research, policy and
  practice
• Talking at cross-purposes
• Inappropriate expectations
• Inadequate learning
• Is entrepreneurship losing its edge? Whats
  next?

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• Brian Dabson
• brian_at_rupri.org
• www.rupri.org
• www.energizingentrepreneurs.org