For the second year in a row, Tennessee topped the nation in the number of events celebrating Global Entrepreneurship Week (Nov. 12 – 16, 2012). That’s pretty amazing, considering the statewide support for it. Let me explain.
Some of our instructors talk about a three-legged stool required for entrepreneurship: technology, capital, and talent. An additional element, public and private community involvement and support, is the supporting ring at the base of the stool that circles the legs, providing the steadying foundation. How do we fare as a state in each of these areas?
Technology is the primary driver of innovation that can create new products and services to benefit society. It is abundant, especially here in East TN, but also across the state. In East TN, we have UT and Oak Ridge National Laboratory as the big technology generators. Nashville has Vanderbilt, and Memphis has both the UT Health Science Center and St. Jude Children’s Research Hospital. Although we have technology, we have some difficulty converting it into something that is usable in the market. Most of it is very early stage in its development, requiring both capital and talent to develop it to the point where it can be introduced in the market.
Capital isn’t quite as strong as we need it to be, but we’ve got some (many states don’t!). We have several venture capital funds across the state, primarily thanks to the TN legislature that approved the TNInvestco funds a few years back. We have a lot of angel investors, too, although here in East TN, they want to remain anonymous and unorganized, so you have to know someone who knows someone. As a result, deals are opportunistic. Angels are more public and better organized in other areas of the state, which results in regular, systematic deal flow and ultimately, more launches of new companies.
Talent has been one of the areas where we have been lacking in the past, but we’re starting to see some improvement. It is virtually impossible to “recruit” entrepreneurs to any given place (except maybe Silicon Valley). That means we have to grow them, which is a long-term endeavor that requires both patience and tolerance for risk-taking. Every year, UT and other schools across the state churn out business and technical graduates who pursue starting businesses while they are in school. We’ve had several successes (see the Ventures section of our website for some examples) and will see more as the programs for developing talent continue to grow.
Our biggest challenge is the foundation supporting the stool — without that foundation, it is impossible for the legs of the stool to remain stable.
From the public side, we have a very supportive Governor who has introduced several programs to encourage entrepreneurship and innovation. It would be great if local politicians embrace this philosophy. I’m surprised they haven’t because the resulting economic growth and prosperity should help them get re-elected! We all need to encourage them to get involved and become champions for the cause. From an educational standpoint, we are making good strides in advancing STEM (science, technology, engineering and math) education, which is critical for launching innovation. But we also need to implement entrepreneurial education and training starting as early as elementary school to help encourage and develop aspiring entrepreneurs. This will help us to continue to build the entrepreneurial culture across the state.
On the private side, there are three critical players: entrepreneurs, industry, and the media, who all have to work with the others to advance entrepreneurship and innovation. We have several successful entrepreneurs in the region who are willing to give back to those who need help, but there is an even greater number who don’t. We need the entire entrepreneurial community to mobilize and get involved (read Brad Feld’s book, Startup Communities: Building a Successful Entrepreneurial Ecosystem in Your City). Additionally, research recently conducted by ACEI shows that industry champions are critical for supporting the entrepreneurial community. Industries (and communities) know they need to innovate to stay relevant, stay solvent, and survive. We need active industry champions to drive political change, and embrace and support both the development of entrepreneurial talent and new companies they could partner with or acquire to advance their businesses. Lastly, the media could help advance the cause by becoming more positive about the successes, promoting the activities, and celebrating the risk takers.
We have a proliferation of government entities here in the Innovation Valley that makes the environment very stable (and conservative) — we’ve never suffered the highs or lows that other areas of the country have seen during economic booms or recessions. That makes it too easy for us to stay at status quo (unless government funding continues to dry up…. hmmm … that doesn’t sound too far fetched, does it?). So it’s not surprising that some of the legs and the foundation for entrepreneurship stool are wobbly. But if we ever want to capitalize on the entrepreneurial assets we have (and diversify our economy), we ALL have to work together to strengthen the legs and beef up the foundation. We ALL can do this by getting involved, helping each other along, communicating its importance to our leaders, celebrating our collective successes, and learning from and celebrating our failures.