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Mayors and Entrepreneurs
Mayors, city staff, entrepreneurs, and entrepreneurship supporters – including Maria Myers (center), executive director of KCSourceLink – discuss how to better connect with entrepreneurs in their community during a work session at the 2019 Mayors Conference.

Mayors and entrepreneurs should see each other as allies

In cities and towns where city leaders and entrepreneurs work together, they create communities with vibrant local economies where startups and small businesses thrive.

Mayors are a lot like entrepreneurs. They have a demand they have to meet; limited resources to meet that demand; limited time to meet that demand – and everybody has a better idea about how they should do it. Or, I should say more precisely, everybody is critical of the way they’re going about it, but nobody seems to have a better idea of how to do it.

Which is a lot like the entrepreneurial experience, right? You know, everybody’s an armchair quarterback, but nobody’s really there to help execute on the plan. Resources are often scarce and, then of course, things happen that change a plan on a daily basis.

That feeling can be very isolating, and it’s what you hear from entrepreneurs, and it’s what you hear from mayors.

Allies in creating conditions to thrive

There’s a long causal chain between what a congressperson or a CEO of a large company decides to do and the people that feel it. That is not true for a mayor or an entrepreneur.

Evan Absher
Kauffman’s Evan Absher presented at the Mayors Conference on Entrepreneurship in Kansas City, 2019.

Entrepreneurs know their customers, they know their team, they’re intimately involved. Same thing with the mayors. They know their team, they know their constituents, and they know their stakeholders. Just like entrepreneurs, they’re going to hear from them, they’re going to see them at the grocery store, they’re going to see them in town – and that creates another like-set of pressures and dynamics. Mayors and entrepreneurs live with their choices, as essayist Nassim Talib would say – they have skin in the game.

That sort of empathetic shared experience overlaps the two personas. Often, mayors are focused on trying to make their communities better and entrepreneurs are focused on making their firms better and because they’re both hyper-focused, they fail to realize how helping each other out, can help each other out.

Mayors and entrepreneurs should understand each other and see each other as allies. This is precisely why Kauffman’s annual Mayors Conference and ESHIP Summit overlap. This spring, mayors and their staffs, from across the country, not only committed to policies, programs, and initiatives to support their homegrown economies, but they did it with the opportunity to talk, learn, and work with hundreds of entrepreneurial ecosystem builders and entrepreneurs.

Partners in creative destruction

City leaders, ecosystem builders, and entrepreneurs working to build homegrown economies understand that where you are makes a big impact. Which is exactly where mayors and entrepreneurs find common ground – in the work of arranging conditions so that wherever entrepreneurs might be, they can have better chances of success.

Geographic and socioeconomic proximity to resources matter.

Here’s what we know: In the mid 1990s, 50% of new startups were spread across 50 cities. Now, 50% of startups are concentrated in the top five cities. Traditional economic indicators might show the economy is growing, but it’s only for a few. That means we have an economy that leaves most people behind.

Our political system has become calcified and unresponsive to this dynamic. I think that speaks to a lot of the frustration people feel on both sides of the ideological spectrum. I think people feel like no matter what they do, they can’t win, they can’t get ahead, they can’t succeed – even if they do everything they’re told they’re supposed to do. Even the traditional pathway of going to college and getting a job in a regional city is no longer a guarantee for economic mobility.

Mayors are left dealing with that dynamic with the policy mechanisms that they have, as limited as those are. That’s why entrepreneurship is so important to them, because the very act of entrepreneurship is destroying the status quo, destroying the incumbent, creating something new. Creative destruction.

Both entrepreneurs and mayors increasingly have less incentive in keeping the status quo, and so, they must disrupt or slowly fade. Further, mayors cannot become detached. Part of setting the conditions and solving problems at the local level is because they’re not being solved at any other level. Issue after issue that has typically rested at the state or federal level, cities have taken on because mayors know people will vote with their feet and go to places that offer more opportunities to succeed. Evidence shows that high-growth founders move to a city two years before they start their company; they move to the city to live in the city, and then they start their company.

Banding together for scalable, systemic change

Human capital, human talent is the new currency of economic development.

Former Kansas City Mayor Sly James

Instead of looking out to find where investment is going to come from or look out for a company you can bring in, mayors are looking at the resources their community already has to start building. The only way out for local economies, the only way to survive the impending recession, the only way to grow an economy, is to find the people who are going to do things in your community and support them.

During a five-year period, Kansas City-area entrepreneurs created 84,000 jobs. Every year, local entrepreneurs continue to add about 16,000 jobs each year, which combined far surpasses the 50,000 jobs promised by Amazon HQ2. New businesses contribute to all net new job creation and 20% of gross job creation. The next economy will be entrepreneurial and entrepreneurship is an innately human and highly personal endeavor. We should focus on people. Former Kansas City Mayor Sly James said at last year’s Mayors Conference, “Human capital, human talent is the new currency of economic development,” and that’s 100% true.

The economy will be changed at the community level by creating conditions for entrepreneurship to thrive. Bringing mayors and entrepreneurs together so they can not only learn from each other, but band together across regions in real structural ways takes this beyond the success of one city or a few firms. It demonstrates to other policymakers what needs to be done. It creates change that is not siloed but is scalable, systemic change.


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