Economic development folks always mention that new companies with new ideas are a good source of new jobs. An article in Inc. Magazine (July/August 2010) cites a statistic that young companies, (younger than 6 years old) provided the bulk of new jobs. In 2007 they accounted for 64% according to a Kauffman Foundation survey conducted in 2009. So, how do we support the folks that start these new companies—an average of 500,000 per year?
There were a number of suggestions provided in the article, and interestingly New Mexico was used as an example of how to grow a local investment community. The program created through the state committing funds to venture capital firms that opened an office in New Mexico greatly increased the number of VCs in the community. The presence of national venture capital companies has more than one benefit.
Initially of course this presence provides a more direct access to capital for local entrepreneurs. Add to that the fact that these representatives provide invaluable feedback to startup companies in the state and it does give entrepreneurs a leg up. It also makes it easier to attract investment from out of state, as the investor usually wants a local firm to partner with who knows the territory.
Another suggestion that New Mexico has also followed is having local non-profits that provide resources and training to entrepreneurs. Technology Ventures Corporation, University of New Mexico’s Science and Technology Corporation and local economic development groups can give entrepreneurs access to tools and learning to help them with their startup efforts. The national laboratories, Sandia National Labs and Los Alamos National Lab offer tech support grants to small businesses, and encourage technology business development.
Other ideas were to expand microfinancing, fund big science, rework the SBIR and expand funding, cutting paperwork overall, and passing an energy bill. All these ideas would have a positive impact. Finally, for those who have been looking for their next job opportunity, there are opportunities to work for yourself building your dream company. Historically in times of high unemployment there are more small business startups. Good luck.
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