Chattanooga's 'Layered' Entrepreneurial Ecosystem is a Small-Town Recipe, Kauffman Foundation Study Shows


Entrepreneurship support organizations, philanthropic foundations and the public sector interconnect to create a compelling startup environment  
(KANSAS CITY, Mo.) Feb. 24, 2016 – Chattanooga, Tenn.'s long history of collaboration and public-private partnerships paved the way for an entrepreneurial ecosystem that permeates the city's economic development strategy, according to a research paper released today by the Ewing Marion Kauffman Foundation.

The report, which outlines steps that provide implications for small cities around the country, identifies multiple layers of intertwined supporting organizations that have bolstered entrepreneurship in Chattanooga.

"Little Town, Layered Ecosystem: A Case Study of Chattanooga," was released as part of the Kauffman Foundation Research Series on City, Metro and Regional Entrepreneurship. Previous reports in the series focus on the entrepreneurial ecosystems in Kansas City, Mo., St. Louis and Indianapolis, as well as ways to measure and support ecosystems.

"Chattanooga organized and mobilized its assets to orient itself to entrepreneurial initiatives," said Yasuyuki Motoyama, director of Research and Policy at the Kauffman Foundation and one of the paper's authors. "This demonstrates what a small-size city can do when factions from different sectors focus on a common goal and collaborate to achieve that goal. This case of Chattanooga provides lessons for other cities to leverage their own unique assets and to create equally successful ecosystems."

In 2010, Chattanooga became the first city to launch a fiber-optic Internet network that provided residents with high-speed Internet service, known as the Gig. However, the report points out, creating the Gig was one step in a process to promote entrepreneurship in Chattanooga. Underneath the process, there are myriad layers of organizations involved.

The study identifies four strands of groups that have created and supported an environment that encourages entrepreneurship in Chattanooga:

  • Foundations and a group of leaders who organized angel investment
  • Entrepreneurial support organizations that provide space, resources and expertise to startups
  • Public entities, including the mayor's office, an Enterprise Center and the Electric Power Board, which think strategically about how governmental infrastructure can facilitate entrepreneurial growth
  • The Innovation District, a public-private enterprise to create a specific space for entrepreneurial development

The paper also identifies heavy involvement by the Mayor of Chattanooga with various entrepreneurship efforts as a key element and suggests four strategies mayors can enact to promote entrepreneurship:

  • Be a cheerleader. Discuss the importance of entrepreneurship and recognize successful local entrepreneurs.
  • Identify major local entrepreneurs and cultivate relationships with them.
  • Establish a committee or task force on entrepreneurship to set the vision of the city.
  • Convene and broker entrepreneurship supporters, such as non-profit organizations, local anchor companies and local universities.