Policy makers and economic development specialists throughout America and around the globe are asking the question, “What makes regions prosper?”
It appears everyone wants to get around the table of knowledge for regional prosperity.
Seminars and programs have been convened and scholars have authored books and research articles attempting to discern a “regional advantage” to explain why some regions prosper and others do not.
As a professor who studies wealth of regions, the titles ring in my head like great songs: David Kaplan’s Silicon Boys and their Valley of Dreams, David Rosenberg’s Cloning Silicon Valley, Annalee Saxenian’s The New Argonauts: Regional Advantage in a Global Economy, Susan Rosegrant and David Lampe’s Lessons from Boston’s High-Tech Community Route 128 and, mine and David Gibson’s book, Global Perspectives on Technology Transfer and Commercialization: Building Innovative Ecosystems.
The music of regions and wealth is clearly in the air with questions of how to create regional prosperity ringing loudly.
What we know is that innovative ecosystems combine with entrepreneurship to drive regional prosperity, job and wealth creation.
Mature regions such as Silicon Valley and Austin have produced startups, which scale into firms that place science and technology at their very center.
Silicon Valley has created hundreds of firms, including Apple, Hotmail, eBay, and Hewlett-Packard.
The Texas region has claimed its share of enterprises, including National Instruments, Tracor, Southwest Airlines, Dell Computers, Golfsmith, Whole Foods, LegalZoom, Bazaarvoice and Rackspace.
These regions have well-developed business ecosystems which, like a rich garden soil, enhance the production of great enterprises from startup to maturity.
What should regions such as north Louisiana strive for as they endeavor to grow their own versions of economic prosperity at home?
We must first analyze some of the elements of a great ecosystem that grows companies and thus jobs and prosperity.
Fundamental elements common to successful ecosystems include but are not limited to the following:
1. Local communities furnish financial support for startup engines such as incubators, business accelerators, and business parks. This community support is enhanced through the promotion and assistance of a local champion or champions.
These startup engines evaluate entrepreneurial ideas. The visionary brings wealthy individuals together into accredited angel networks for investment into technology startups.
Our champion in the Texas Region was George Kozmetsky, who created the Austin Technology Incubator and the Capital Network, composed of accredited investors. This public-private partnership enhances market identification and of course, the funding of the enterprise.
In north Louisiana, similar public- private partnerships exist between the Caddo Parish Commission, City of Shreveport and the BRF’s Entrepreneurial Accelerator Program. Entrepreneurs in the region also have access to certified angel investors, such as the 53 accredited angel investors who make up the New Louisiana Angel Fund 1.
2. Intellectual property lawyers assist entrepreneurs to create patent portfolios, and legal structures that enhance and protect their enterprises.
Accountants, bankers, management and financial experts, and angel investors mentor companies so they emerge as mature entities prepared for any possibility, including acquisition or perhaps even an Initial Public Offering.
North Louisiana is building this kind of support through entities such as the Louisiana Startup Prize, CoHab, EAP and the Louisiana Patent Academy at LSU-S Continuing Ed.
3. University programs provide the “spirit of enterprise” that exists among students and the new ideas from science and technology.
Google Patents has made it possible for all regions to access new ideas and place a business model around them.
Great entrepreneurs who started companies such as Dell, Microsoft, Apple, and Federal Express were in their teens or early 20s.
That spirit is being advanced by north Louisiana higher education institutions and through science and technology internship programs. There’s progress to be made, but Rome was not built in a day.
Those regions that nurture technology startups and new job creation by incorporating these elements create a synergy that draws like-minded companies to the region.
New corporate foundations enhance their communities: real estate, great restaurants, wonderful hotel chains, and great music enter the formula.
And more importantly, a region is able to provide opportunities for its children, and they are able to stay at home.
Yes, successful models are there for the taking. But we acknowledge the difficulty of our task. The formula is always in the becoming, and we are all still learning.
John Sibley Butler is the J. Marion West Chair in Constructive Capitalism at The University of Texas at Austin. He has written and lectured globally on regions and wealth creation. He is the former director of The University of Texas at Austin IC² Institute and helped develop the BRF’s Entrepreneurial Accelerator Program.