With America’s post-pandemic geography shifting, local governments must partner with entrepreneurs to stay competitive.
America’s rapidly shifting post-pandemic geography poised to make winners and losers of various superstar and mid-sized towns, the business development approaches of local leaders are stuck in the past. State and local governments spend $61 billion annually to foster economic development, but more than three-quarters of this money is spent on subsidies for large corporations that rarely deliver significant growth. A new Manhattan Institute report from Ian Hathaway and Rhett Morris, senior fellows at the Center for American Entrepreneurship, suggests that economic development would increase significantly if local decision makers would prioritize partnerships with entrepreneurs. The report, part of the Manhattan Institute’s urban policy series, offers four steps to achieving what they call entrepreneur-led economic development. Those steps include:
- Identifying the successful entrepreneurial businesses in the region, the local strengths they represent, and the key leaders behind their growth.
- Building networks around successful local entrepreneurs to connect them with founders of upcoming businesses with the potential to grow.
- Partnering with entrepreneurial leaders to address the real needs of growing local businesses and their entrepreneurs.
- Collecting data on growing entrepreneurial businesses to track results and share findings with the community.
Entrepreneurial success depends on local networks. No single type of organization has all the data necessary for identifying every growing entrepreneurial business in a city, but if policymakers, funders, and service providers work together to generate local growth and productivity, their collective resources can complement existing economic development programs and enhance some of the most valuable economic assets already growing in their communities.
