Educational Materials for Rural Entrepreneurship

Jason HendersonCenter for the Study of Rural AmericaFederal Reserve Bank of Kansas Citywww.kansascityfed.org/ruralcenter

Presented to the National Public Policy Education Conference

September 20, 2004St. Louis, Missouri

What is the Center for the Study of Rural America?

• Part of the Federal Reserve System– Monetary policy– Bank regulator– Check and cash clearinghouse

• The Center provides economic analysis and insight into the rural economy.

What makes rural economies grow?What makes rural economies grow?

What Do We Tell Entrepreneurs?

• Entrepreneurship matters.

What Do We Tell Entrepreneurs?

• Entrepreneurship matters.

• Lots of information is available.

Do not reinvent the wheel !!!!!Do not reinvent the wheel !!!!!

What Do We Tell Entrepreneurs?

• Entrepreneurship matters.

• Lots of information is available.

Do not reinvent the wheel !!!!!Do not reinvent the wheel !!!!!

• We do not finance businesses.We do not finance businesses.

Entrepreneurship Matters at the State Level

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0 1 2 3 4 5 6 7

Proprietors Growth

Wa

ge

an

d S

ala

ry W

ork

er

Gro

wth

Source: Dept. of Commerce, REIS

Annualized percent change

State Proprietor and Employment Growth, (1970 to 2000)

Correlation = 0.74

Entrepreneurship Matters at the Local Level

U.S. Personal Income(by Class of Worker, 2000)

25.229.6

34.938.7

50.6

33.7

0

10

20

30

40

50

60

Private Government Self-Employed

Th

ousa

nd

Dol

lars

Rural Metro

Source: March 2000 Current Population Survey, Dept.of Commerce

Information is Available

The Center’s 2003 Conference

Main Streets of Tomorrow: Growing and Financing Rural Entrepreneurs

1. Entrepreneurs are Made not Born

2. Entrepreneurial Skills Can be Developed– Technical Skills – ability to perform key operations of business

– Managerial Skills – ability to organize and manage the operations

– Entrepreneurial Skills –ability to identify market opportunities

– Personal Maturity Skills – self-awareness, accountability,

emotional and creative development

A Major League System for Entrepreneurial Development

Technical Managerial Entrepre. Personal

Maturity

Major

League:

Outstand./

Exceptional

Outstanding Outstanding Outstanding

AAA: High High High High

AA: High Medium Medium Medium

A: High/

Medium

Low Low Low

Rookie

League

Low/No Low/No Low/No Low/No

Source: Thomas S. Lyons, “Policies for Creating an Entrepreneurial Region”, Main Streets of Tomorrow:Growing and Financing Rural Entrepreneurs, 2003.

A Major League Farm SystemThe A LevelThe A Level

• Skill Levels– Technical Skills: High/Medium– Other Skills: Low/No

• Enterprise Development Assistance Providers– Microenterprise programs– Small business development centers– Business incubation programs

• Weblinks– Association for Enterprise Opportunity:

http://www.microenterpriseworks.org/– Small Business Development Centers

http://www.sba.gov/sbdc/– National Business Incubator Association

http://www.nbia.org/

A Major League Farm SystemThe AA LevelThe AA Level

• Skill Levels– Technical Skills: High– Other Skills: Medium

• Enterprise Development Assistance Providers– Manufacturing extension programs– Small business development centers– High-technology incubation programs– Small specialized venture funds

• Weblinks– Manufacturing Extension Partnerships

http://www.mep.nist.gov/– National Institute of Science and Technology

http://www.nist.gov/– National Association of Seed and Venture Funds

http://www.nasvf.org/– Community Development Venture Capital Alliance

http://www.cdvca.org/

A Major League Farm SystemThe AAA LevelThe AAA Level

• Skill Levels– Technical Skills: High– Other Skills: High

• Enterprise Development Assistance Providers– Angel investors– Emerging Business Consulting practices– University tech transfer offices

• Weblinks– Association of University Technology Managers

http://www.autm.net/index_ie.html– Lists of Angel investors

http://www.entrepreneur.com/http://www.inc.com/guides/finance/24011.htmlhttp://www.minnesotaruralpartners.org/

A Major League Farm System The Major League The Major League

• Skill Levels

– Technical Skills: Outstanding

– Other Skills: Outstanding

• Enterprise Development Assistance Providers

– Venture capitalists

– Professional consulting practices

– Investment bankers

• Beyond my resource level

If they come to you for assistance, If they come to you for assistance, are they really in the majors?are they really in the majors?

Do Not Forget …

• The Scout who looks for prospective entrepreneurs.

• The Diagnostician who assesses the needs of entrepreneurs entering the system.

• The Performance Coach who helps entrepreneurs with mental and emotional needs.

• A Team Manager who brokers networks of firms at the league level.

• Alliance Brokers that facilitate partnerships across league levels.

• A General Manager who oversees the whole farm system.

Conclusions

• Entrepreneurship matters.

• Lots of information is available –Do Not Reinvent The WheelDo Not Reinvent The Wheel.

• Create a farm system that matches information with the skill levels of entrepreneurs.

• Good Luck in Spurring Entrepreneurs – The Pioneers of the 21st Century