The Entrepreneurs Center (TEC) got some fantastic news this past November: an award of $10.8 million from the Ohio Third Frontier for the next three years to support technology entrepreneurs in the Dayton region. This represents the greatest investment any person or organization has ever invested in Dayton’s entrepreneurs; and we are proud, hopeful, and determined. The technology startups in the Dayton region are filled with promise, addressing identified needs with innovative solutions.
But even with this incredible award, those of us who work with regional entrepreneurs and small businesses every day see some glaring gaps in the Dayton region’s entrepreneurial support; gaps so large that our economy may not be as resilient until we address them as a community.
For decades, economic development across the United States has followed the “buy” approach to job creation. Working with companies headquartered elsewhere, communities compete for a manufacturing or logistics location in their area. Usually using tax incentives and other economic subsidies, companies choose the community that will cost the company the least amount to move there.
This appears to be a good strategy, as winning communities can bring thousands of jobs to town at once, immediately providing opportunities to people who have lost their jobs or haven’t found employment. What isn’t to love about that? After Dayton’s massive job losses in 2008, it makes sense to do whatever it takes to bring new jobs to Dayton.
But “buying” jobs means that communities sometimes compete on the basis of its weaknesses — the community with the lowest wages, taxes, and costs of doing business often wins. The jobs that follow are frequently low-wage positions that add little to the tax base, and the corporations themselves often enjoy tax benefits as part of the relocation. And those jobs can disappear with one executive decision at a headquarters far away.
A more sustainable strategy is to help Dayton build new jobs. Building new jobs means supporting the region’s entrepreneurs and small businesses. TEC’s award to provide support to technology startups will help us do that. Technology startups are the best bet to build jobs and attract investment capital to the region. Today The Entrepreneurs Center has a portfolio of over 70 startup companies that are commercializing technologies developed at Wright Patterson, at our local hospitals, and at our universities. These companies are making new product and service offerings and making new jobs.
Yet technology startups take time — as much as ten years to get to commercial success. And not only that, but they have to compete with cash-heavy Silicon Valley, Boston, and New York startups. Technology startups are also underrepresented from a diversity perspective: less than 10 percent of venture-backed companies have a female founder, and only 1 percent have an African-American founder.
But you know who can start making money today without ever competing with those places? Our neighborhood and community entrepreneurs, representing women, minorities, immigrants, and any others with an idea and a plan to make it happen. Our region’s small businesses can reach a profit in a short time period of time, and they don’t have to compete globally. Cafes and restaurants, artisan-crafted products, and local service companies are just a few examples of job growth opportunity in our community. The Small Business Administration credits small businesses with 62 percent of new job growth in the US, and 47 percent of the workforce.
The best support Dayton can give to our small business community is our business. Shopping locally and supporting local businesses helps to keep capital within our community and supporting local jobs.
But there is more to do too. Some local entrepreneurs need small investments to start or scale their businesses. Others need legal, accounting, and marketing help to grow and expand. Coaches, mentors, and business advisors are also great assets for entrepreneurs as they face constant challenges that can impact their business.
Businesses built in the Dayton Region — supported by local service providers, customers, investors, and more — are more likely to stay here. Our community is not held hostage by decisions made by headquarters elsewhere or by another community’s promise to offer lower wages and taxes. When we invest in and support our local entrepreneurs, we get to control our own community’s economic future. We actively make economic development happen.
Ultimately, TEC seeks to support entrepreneurship and innovation, whether technology startups or local small businesses. But we need our community to back us, as building jobs in the Dayton region will require all of us to participate.
That’s what TEC’s focus will be in the next decade: increasing outreach and support programs for all entrepreneurs regardless of where they are, what stage they’re in, and what industry they serve. At the same time, TEC will work to engage the rest of the community by showcasing the region’s entrepreneurs and the work that they’re doing, partnering with communities and neighborhoods to host events that identify entrepreneurs, and raising funds to continue our work to directly support entrepreneurs.
Please follow our work through our social media channels and our web site. Find a way to participate by donating time and money, serving as an advisor, being an investor, or most importantly, being a customer!