As state and local officials continue to expand their understanding of the economic importance of new and young firms, more and more are moving away from traditional economic development efforts. For them, the approach is no longer “attract and retain” but rather “start and scale.”
The latest example is Oregon.
From a recent story in The Oregonian, the new head of the state’s economic development agency plans to scrap the traditional model of recruiting large out-of-state firms to relocate and focus instead on “growing our own companies.”
This, of course, is good news.
Sean Robbins, named director of Business Oregon earlier this year, told a collection of entrepreneurs and investors that he planned to name an "entrepreneurship and innovation czar."
The concept of growing new local firms started getting attention after Littleton, Colorado leaders noticed that only 3 to 5 percent of all companies were creating the great majority of new jobs -- and they decided to do something about it.
While Littleton’s economic gardening efforts focused on second-stage growth companies, data has emerged over the years that demonstrates the importance of new firms and increasing the volume of new business entry to maximize growth.
While there is still much work to do and many startup ecosystems to build, it's a good sign to see states moving in the right direction.
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