Life after elephants: Detroit's entrepreneurial awakening

Ten years ago, Michigan’s work in economic development, like many states, was about attracting "elephants," otherwise known as the next big company. The auto makers were getting pummeled; Michigan, by some accounts, was on its way to losing half of all the jobs lost in the entire country between 2000 and 2010;* and the search was on for the next big manufacturers.
In economic development circles, "pursue what you know" was the mantra, and what we had known for the previous 70 years were large-employer companies. These were the type of companies that didn’t always demand innovation from most of their employees, but whom they took care of from cradle-to-grave nonetheless. As recently as 2008, if you wanted an on-ramp to commercialize ideas or start a company (or grow an existing company, for that matter), you basically had to be a dogged serial entrepreneur willing to go it alone or be lucky enough to have access to the technology transfer office at a major university. There were only about four or five entities that were tangentially helping entrepreneurs – in fact, the term “entrepreneur”  wasn’t really even in Michigan’s cultural lexicon for economic development.
That was the world we faced in 2008 when 10 foundations collaborated and gathered $100 million to form the New Economy Initiative (NEI), an innovation in its own right. After gaining its footing, NEI began in earnest to push an agenda for an industry-agnostic approach to economic development – an approach that has not only diversified the economy through our grant making, but provided access for more people, and more types of people, to be a part of that economy. That meant building a network of support to foster entrepreneurs, small business growth, and innovation – from grass roots to high-growth. Our grant making includes the good work of nonprofit programs like ProsperUs, BUILD Institute and ACCESS helping neighborhood entrepreneurs, and others such as The Henry Ford Innovation Institute, Endeavor and Wayne State Tech Transfer working to commercialize ideas or grow existing companies to meet the needs of a global market.
With our grantees, we mutually pursued an agenda of economic inclusion to assure that women and minorities could access pathways to prosperity. We, and all of our partners, have always been intent on building a different machine. One that encourages, supports and rewards innovation. One that gives everyone the same access to the resources to help them grow and flourish, or in some cases, fail fast and move on. Perhaps most importantly, we see a system at play. Our grantees aren’t unconnected one-offs, but players in a larger ecosystem that continues to gain momentum as a single organism, handing entrepreneurs off to the next thing they need, at the moment they need it. It is young and fragile, but it is beginning to pay off in a big way.
Today you can find more than 50 entrepreneurial and small-business support providers for Detroit alone on the NEI-funded BizGrid, an infographic that maps area services. Our grantees have reported creating over 1,570 companies and assisting another 6,000, while creating 14,000 jobs across the region and fostering over 815 invention and patent disclosures.
NEI’s own $87 million investment has been leveraged more than seven times over ($610 million) by investment into the nonprofit organizations themselves or the businesses they serve. We’re also seeing great gains for women and minorities. Of the 1,400 company starts reported by NEI grantees, 44 percent of them are minority-run – three times the national average. For new high-tech companies started, 39 percent are minority – nearly 10 times the national average. Since the NEI was formed, over 155,000 individuals – the same amount of people that can fit inside Michigan Stadium with a small army still waiting in the parking lot – have been exposed to entrepreneurial services. That’s not a trend – that’s a movement.
However, there’s still plenty of work to be done. We need to continue to expand and strengthen the network of support so it reaches deeper into neighborhoods. There are tremendous opportunities to leverage our innovation assets – corporate, academic and beyond – so they can solve problems in our communities and use the solutions to those problems to create products and companies that reach global markets. We need to grow our local talent with the same fervor that we put into attracting new talent. And we need to see it all as a single, connected and related system and strategy.
Ten years ago, economic development was, by its nature, looking for ways to slice the pie, and the pieces were getting smaller and smaller. Today, were working to change the system so people can bake their own pie. And it’s beginning to taste better every day.
*Business Leaders for Michigan study.

David Egner is the executive director of the New Economy Initiative for Southeast Michigan and the president and CEO of the Hudson Webber Foundation. Follow him on Twitter @David_Egner.

Model D and its parent company Issue Media Group receive support from the New Economy Initiative and the Hudson Webber Foundation.
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