Highlights of the Federal Reserve’s Economic Development podcast series.
Can an economic development strategy that is focused on fostering small businesses and a culture of local entrepreneurship truly grow a local economy? While these approaches have been actively deployed in some communities as a defined strategy, what results have been achieved?
At a high level, grow your own is developing an economic system that exclusively focuses on entrepreneurship as the primary form of economic development. That doesn’t mean you can’t do some attraction-based economic development, but the primary focus of that is the creation of and the scaling up of existing businesses within your particular area.
Economic gardening is a subset of grow your own in that it focuses specifically on stage-two growth companies between 10 to 99 employees and have usually normal revenues between $1 million to $50 million. Research shows between 1995 and 2012, these stage-two companies, who only represented about 12 percent of the total U.S. small businesses, generated almost 35 percent of all the new jobs and almost 35 percent of the sales.
There’s really not much difference in the way that you do entrepreneurship-based economic development in rural and urban communities. The biggest difference is that in rural you’re often focusing on a small town or small county, and in urban areas you’re really focusing on a geographic area within a city, such as a block, neighborhood, or set of communities to do this form of economic development in.
Hear from two groups who will answer those questions. The Kansas City Fed’s “Grow Your Own” research focuses on approaches that seek to grow small businesses and encourage local entrepreneurs. And Gallup’s researchers and economists embarked on a decadelong study to identify talents that successful entrepreneurs possess, and from that developed their Entrepreneurship StrengthsFinder.