Thursday, April 2, 2009

Economic development, staying local makes sense

Who says the monster job centers of New York, Chicago, and Los Angeles are the only places to find capital to start new adventures. This Business Week article does a good job of explaining how and why smaller cities are attracting, or in many cases, keeping the entrepreneur at home instead of heading to the coasts to relocate a start up. It might seem contradictory on some levels, it seems to make sense to leverage local resources to keep these jobs local because the money at least we recirculate within the community and city, instead of larger city centers. Here are some favorite excerpts:

Philip Eggers has started six medical device companies in his Dublin, Ohio, hometown. His last five followed a pattern: Eggers would develop the product in his Ohio lab, fly frequently to the Bay Area or Boston to raise money, then relocate the company to one of the coasts when ready to commercialize the product. But Eggers has a different plan in mind for his latest startup, Cardiox, founded in 2006 to develop a noninvasive way to detect heart shunts: He wants to find funding locally and keep his five-employee business in Dublin.

In fact, places like Boulder, Colo., (population 91,000) and Fairfax, Va., (23,000) are just as favorable for startups as San Francisco (733,000) and New York (8.2 million), according to research conducted for BusinessWeek by GIS Planning, a San Francisco-based geographic data firm that helps companies select optimal sites via its online tool ZoomProspector. The analysis weighed 11 factors to gauge an area's entrepreneurial climate, including the number of small businesses and startups, the quality of the workforce, how many universities were in town, and measures of innovation such as the number of patents issued and the amount of venture capital invested.

Startups also found skilled workers—especially younger ones—drawn to the perception of a higher quality of life. "A lot of people say, in rural areas, sometimes people are concerned they can't find employees, but my experience is that the quality of life and amenities actually draw people to the area, and they tend to be underemployed," says Bill Moseley, president of GL Suite, a Bend, Ore., 40-employee firm that makes software for regulatory agencies. "You have a really strong talent pool that's not nearly as expensive as in a big city."

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