The person: Earlier this year, Kate Noble, an economic development specialist with the City of Santa Fe and part of the support network behind MIX Santa Fe (see page 30), created a business development plan for Santa Fe. The concept behind the plan is a three-pronged approach that Noble says cities should take in order to encourage economic development: maintaining and investing in quality of life, providing good service for businesses, and promulgating an economic development program aimed at “diversifying the economy and creating high-wage jobs.” Sound like a bunch of jargon? Consider the possibility of a pilot project that not only applies that concept, but tests it at the same time.
The plan: “Ignite the entrepreneurial ecosystem” by creating a pilot program to assist selected “entrepreneurial fellows.”
How it works: Rather than targeting certain industries, Noble proposes a broader goal: fostering entrepreneurship. “I think about it more as a general entrepreneurial culture,” she says. “One size doesn’t fit all, so if we can find ways for entrepreneurism to be the thing, even the industry—that we cultivate, that we celebrate—we’re really good at that.”
Creating a culture of entrepreneurialism is, in fact, what government should do, Noble says.
“The outcome you want is the job creation, but I think the history of where governments have most effectively played in economic development is in creating the environment,” Noble explains.
Noble’s business development plan describes a pilot program that would competitively select six to 12 “entrepreneurial fellows.” The fellows would “commit to a three- to six-month term of intensive work to grow their business,” according to the plan and, in turn, would receive free workspace, “free space to display their progress” and a stipend from the city.
The program, Noble says, could be “a rough-and-tumble way to take elements from these [economic development] programs around the country that are successful and figure out what pieces fit here.”
It’s also an opportunity to take advantage (yes, advantage) of the recession’s tendency to prompt what Noble describes as “a burst of entrepreneurial activity.”
“There’s actually a lot popping there,” she says—and a program that recognizes and unites entrepreneurs may help Santa Feans realize that fact.
As yet nothing’s set in stone, but as Noble puts it, “The process is the point.”
Bottom line: By offering targeted support to motivated entrepreneurs, Santa Fe may be able to create not just jobs, but a larger, job-creating atmosphere. “Hopefully, we can create that feeling of possibility…the culture of entrepreneurialism,” Noble says. “The word ‘ecosystem’ is overused, but it’s a really good one: to try to enliven that ecosystem.”
Well, no, government should not be picking losers and winners or "investing" taxpayer money with such a goal in mind.
Has Noble ever run a business of her own? How about time with a venture capital outfit, making decisions and having her paycheck depend on good ones? How does she know who is likely to pick up the entrepreneurial cudgel? And if they do, does it make sense in a product and economic sense?
Playing venture capitalist with other people's money has become a fashionable role for government, and the results, from redevelopment agencies to Solyndra, much more populated by defeat, corruption and cronyism than succcess and a positive return to taxpayers.
If Noble were an entrepreneur herself, she would be. Not working in government.
I have been running a small company since 1995, spent 03-06 functiionally broke. Gone from 50 people to 130 and now at 20. You really have to want a lot of risk and stress to keep at it, or at least be prepared to tolerate it. It is something that often is genetic, you are suited for and desire it even if you aren't doing it. If you aren't, stay away from it.
This plan is just another variation on the theme that government should be the source of all things and for polticians to claim they really are important and visionary, without risking any of their personal funds or doing the hard work. Things are not different because this is Santa Fe and "we have a new plan".
The best thing Noble could do to aid business development, if she has the skills, is to work on streamlining government processes for businesses to establish themselves and go forward. Every dollar and hour spent filling out forms, doing inspections and hassling with red tape is a a dollar and an hour not spent building a business.
Some red tape is absolutely necessary and proper. The question a streamliner asks is whther all of it, and if not, it goes.
Columbia under Uribe is a great example, as Eastern Europe was after the USSR collapsed, of how the decimation of red tape can invigorate an economy and speed business formation and activity.
Recall that the City Council candidates generally had plans primarily featuring "hope". They are who Ms. Noble reports to. Maybe some of them participated in hiring her. She may be very competent and credentialled, I don't know.
Book learning is important. Imparting the "culture of entrepreneurship" based only on book learning and hope, the odds are against success.
Between 1930 and 1960, almost every major business failure in the US had a Harvard MBA near the epicenter, if not in the lead. It's content, not process or credentials that tends to win.
I might summarize the above as follows:
"Hi! I am from the government and we have a program for you. When you finish doing what we tell you to do, YOU WILL BE BETTER than you are today. You need a new culture and I am here to teach it to you."
A common trait amongst entreprenuers is independence. We don't want to work for someone else. Make that, sometimes, a visceral need to call the shots.
People who haven't done that at personal risk are not always appreciated, even when they should be, but by no means should they always, whatever their noble motives or credentials. Such people can be ineffective in encouraging others to hang themselves out and risk.
Often, confidence in self (different entirely from "self-esteem"), or wanting to talk instead of listen, is also present. A nice government minder laboring to "make me better" may not be received well. Sort of like someone telling me how my obesity shall be fixed, or that today is fish day, because I will be "better" for it. I need somone to make sure I get enough fish. I am too stupid to make such choices for myself, various people think.
"The sales and other taxes I pay are for the salary to pay you to make me better than I am...according to you. I don't measure up to you, whom I pay. Really?"
Job training programs like this, a variant of social engineering, grossly fail historically. Governments continue to try to find "the right plan" and there is an inverse relationship of success and spending. A small waste of money to change human nature almost always leads to more money spent at the same goal...more failure, more money.
The basic question..."are we jumping a bridge too far?"...is rarely asked, or only when the money runs out.
If you don't want the money to run out, you better be asking that question a lot. Especially if your checkbook is the barrier between you, yours and the abyss. And if you have a fiduciary duty to taxpayers to spend their hard-earned money effectively.