Last week, I explored the “innovation economy,” defined what it was, why it mattered for New York and how education plus career-skills development were its building blocks. This column is the second part of that series focusing on the role of entrepreneurs who are the heart and soul of New York’s innovation economy. This edition will discuss what state government can do to remove obstacles and unleash the job-creating potential of entrepreneurial start-ups that are so important to our innovation economy.
NEXT FORTUNE 500 COMPANY MIGHT BE IN THE GARAGE NEXT DOOR
Quick question: What do Fortune 500 companies such as Apple, Microsoft, Amazon.com, Harley-Davidson, Walt Disney, Google and Hewlett-Packard all have in common, other than their tremendous success? They all had their origins – in some form or fashion – in someone’s garage (or, in Harley-Davidson’s case, a shed). That’s right, some of the largest, most recognizable and profitable multi-national corporations first started where most of us keep the lawnmower and snow shovel. The larger, original list of garage-to-Fortune 500 success stories referenced above is by writer Nick Tart, located on-line at retireat21.com, a blog founded by Mike Dunlop, a successful entrepreneur who has launched dozens of websites.
ENTREPRENEURS ARE INNOVATIVE THINKERS AND RISK TAKERS
Another trait each of these Fortune 500 companies shares is that, at their earliest point, they were simply ideas that existed in someone’s mind, be it the mind of Walt Disney, Steve Jobs, Bill Gates or Jeff Bezos, the founder of Amazon.com. Before becoming captains of industry, these individuals were entrepreneurs. Entrepreneurs are a different breed: they are innovative thinkers and risk-takers with an idea for a product or service that will fulfill a need and meet a demand. Entrepreneurs don’t wait for someone else to blaze a path – they fearlessly forge ahead, bust through barriers, break new ground and are true pioneers of the innovation economy.
SMALL BUSINESSES EMPLOY MORE THAN 60 MILLION AMERICANS – AND OVER HALF OF ALL NEW YORKERS
While their potential for growth is virtually limitless, the majority of entrepreneurial start-ups are in fact small businesses, defined be the Federal government as having fewer than 500 employees. However, don’t be fooled – small businesses are a big deal! According to the Small Business Administration, in 2006 small businesses employed more than 60 million Americans and over half of all New Yorkers.
ENTREPRENEURSHIP 101: FOUR ESSENTIAL ACTION STEPS FOR SUCCESS
For any aspiring entrepreneur reading this column wondering if they have what it takes to be part of the innovation economy and become the next Steve Jobs or Jeff Bezos, consider the following “4-Step Formula for Guaranteed Success,” by Karl Stark and Bill Stewart for Inc.com. Here are their four action steps that all entrepreneurs must master, each of which I put into practice as the president of Refractron Technologies and co-founder of the North American Filter Corporation:
- Develop an understanding of customer value;
- Create a better product or solution for a specific customer;
- Determine how to scale the product from one customer to many customers; and
- Develop a business model that allows you to build scale while generating incremental return on investment.
In addition to Stark and Stewart’s four steps, Inc.com contributor Glen Blikenstaff lists a must-have attribute for all successful entrepreneurs: Optimism! Specifically, in his recent article “Secret Trait of Every Successful Entrepreneur,” Blikenstaff discusses the role of optimism in the business world: “The ability to rebuild the economy rests with you and me. Our voice, optimism and ultimately the power of small business will adapt and overcome.”
AMERICA NEEDS MORE ENTREPRENEURS
The need for optimism among entrepreneurs is more than just feel-good rhetoric; it is crucial because America’s entrepreneurial start-up edge is eroding. Forbes.com reported Census Bureau statistics showing that in 2010, entrepreneurial start-ups as a percentage of all firms had fallen to historically low levels of eight percent in 2010, from a high of 13 percent in the 1980s (“When Will Entrepreneurship Come Out of the Cellar?” by EJ Reedy at the Kauffman Foundation of Entrepreneurship for Forbes.com).
With the number of entrepreneurial start-ups shrinking, we must build a strong pro-growth, pro-jobs, pro-entrepreneur culture, beginning here in the Empire State. We need public policies in place that will unleash the creativity, ingenuity and can-do spirit of the next generation of entrepreneurs. Here are my smart solutions to make this happen by removing bureaucratic obstacles and building New York’s innovation economy:
- Enact the “BizBoom” business startup program which will cut all application fees for new businesses by 50 percent, eliminate business income taxes for the first year and reduce income tax rates for the second and third years;
- Establish the “Division of Regulatory Review & Economic Growth” (D-RREG), led by a Commissioner who has a fixed term, to review and make binding recommendations for the elimination of burdensome, job-killing regulations on private sector businesses;
- Increase the Linked Deposit Program to $1 billion (currently $560 million) and designate $200 million to be solely available for business start-ups;
- Create an “Angel Investment Tax Credit” to encourage private investment in business startups; and
- Implement an “economic gardening” pilot program known as “GrowNY” providing grants to economic development entities that give assistance to Second Stage companies that employ 5 to 99 individuals.
LET’S MAKE NEW YORK HOME OF THE INNOVATION ECONOMY!
Removing job-killing regulatory and bureaucratic barriers, leveraging private investment to support emerging start-ups to ensure they have access to capital and credit, helping second-stage small businesses with guidance and expert assistance, these are common sense ways we can strengthen New York’s entrepreneurial sector. The emergence of New York’s innovation economy won’t happen by accident – we must make it happen! Pro-education, pro-entrepreneurship, pro-free enterprise public policies are the backbone of this effort I am launching to make New York State home of the innovation economy, more jobs and increased prosperity.
NEXT WEEK: Part III and the conclusion of my series on building New York’s innovation economy focused on developing our emerging high-tech, nanotech and biotech industries.
As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at email@example.com.