Part 1: Baseline
Aired September 2, 2002
Business start-ups are a vital part of the health of the region's economy - they create jobs, increase the tax base and encourage more entrepreneurs to start business. The downturn in the economy is related to the lack of entrepreneurship in the region; still, 6,500 people make a go of owning their own business every year. There is a concern that Northeast Ohio is missing the train of the new economy since there isn't as much entrepreneurial activity as there is in other cities. This week we continue our series A Quiet Crisis with a focus on entrepreneurship in Northeast Ohio. 90.3's Shula Neuman spoke to several entrepreneurs and found there are plenty of people already on board.
When you ask entrepreneurs why they decided to start a business, a common refrain is heard. Hair Salon owner John DiJulius probably states the case most clearly.
John DiJulius: I was a born entrepreneur. When I was in college I couldn't sleep at night because I was worried that I would never own my own business.
Whether hi-tech, lo-tech, service or manufacturing-entrepreneurs exist everywhere. So, why is it that some areas - like Seattle or Austin - seem to attract entrepreneurs like mosquitoes to stagnant water, while other areas - such as Northeast Ohio - have to beg businesses from around the world to come here to set up shop? Part of the answer, says Rob Winings, director of the Start-Up Alliance, has to do with a region's track record.
Rob Winings: Where there are a number of successful startups, people made a lot of money and then were willing to invest in that. People have seen success in those areas, we haven't seen success in those areas, so the willingness to invest in those areas has been limited.
Winings says that could change because all the right ingredients are already here: money, intellectual power, geography, reasonable cost of living. Still, Northeast Ohio's track record isn't stellar. The Ohio Department of Development has found a progressive drop in the number of new business start-ups in Northeast Ohio.
Several national surveys don't portray Northeast Ohio in a positive economic light either. In its 2002 Survey of "Best Cities for Entrepreneurs," Dun and Bradstreet ranked the Cleveland metropolitan area dead last.
At the same time Ohio placed 40th in the nation in the Small Business Survival Index - a yearly state-by-state assessment that measures how hospitable states are to small business based on how high the taxes are. At least one researcher argues that high tax rates are not always indicative of the actual number of business start-ups.
But let's say someone decides to look the other way, ignore the high taxes and government red tape and dive in anyway. There's still a problem of mentality.
Todd Finkle: The most common mistake is people don't understand what entrepreneurship is… most people don't even know how to spell it.
Todd Finkle is associate professor of entrepreneurship at the University of Akron.
Todd Finkle: Entrepreneurship is a way of thinking, a behavior, it's an attitude. It's not just starting companies, could be buying companies, could be within existing corporations, a team to develop new products, new markets, new ways of saving money. It can be used in big markets, small markets, universities, everything you do in life is entrepreneurial - seeking opportunity wherever you go, it's a behavior.
Finkle says the goal for Northeast Ohio should be to instill the entrepreneurial instinct in every student that passes through the school system, no matter what his or her interest or major. It isn't just teaching the skills necessary to start a business either, Finkle says, it's teaching that some of the best training for business start-ups is failure.
For that reason David Deeds, professor of entrepreneurship at the Weatherhead School of Management, wants to see the state start investing in education, rather than trying to award grants to companies that may or may not succeed.
David Deeds: I don't want the government picking winners. I don't think they're good at it. The state's role, the local government's role is to invest in education, invest in research; bring in great minds; create great minds. Put the dollars funding towards the research efforts at state universities, at Case Western, wherever. And also put the money into building a great employment base, a great work force.
Deeds points to Minneapolis and even Pittsburgh as examples of cities that made the long term investment in education - and are now reaping the benefits. Deeds thinks Northeast Ohio is beginning to get it. Afterall, he says, there is more discussion about entrepreneurship now than there was five years ago, and he says that is the first step. In Cleveland, Shula Neuman, 90.3.