Communities that intentionally invest in entrepreneurs and young businesses are the ones that will grow and thrive in the 21st century, according to Ross DeVol, president and CEO of Heartland Forward, a nonprofit think tank focused on improving economic performance in the center of the U.S.
Delivering the keynote address at this morning’s annual CPEX Smart Growth Summit, DeVol presented new data and statistics to support what may seem like common sense: Innovation and entrepreneurship are critical components of places and can create jobs and vitality in sustaining growth over the long term.
“It’s not small firms that create growth,” DeVol said. “It’s young firms that scale up. … It’s important to innovate and create new firms because eventually your anchor firms are not going to be as dominant.”
DeVol presented maps showing metropolitan areas, and smaller micropolitan areas, where entrepreneurial activity and investment is high. Unsurprisingly, those communities tend to be wealthier, better educated and located in California, the Pacific Northwest, Texas, Massachusetts and south Florida.
Much of the heartland, including Louisiana, lags far behind. One Louisiana city, however, ranks among Heartland Forward’s 30 most dynamic metropolitans: Lake Charles, coming in at No. 13 in the U.S.
While DeVol acknowledged that much of Lake Charles’ growth is fueled by the booming petrochemical sector, he said: “Clearly, Lake Charles is trying to diversify its economy.”
New Orleans-Metairie came in at No. 262 on the list, while Baton Rouge ranked 264th.
“We must do more to participate in the knowledge-based economy and invest more in human capital,” said DeVol, noting that smaller and heartland communities have an opportunity to market themselves to companies looking for places to locate that “have a lower cost, a higher quality of life, less expensive housing options.”
It’s important for communities in the heartland to take advantage of existing resources like community colleges, which he says are underutilized and underappreciated, and also to do more to encourage financiers to support new and emerging businesses.
“Financiers must become more comfortable investing in early-stage companies that don’t have a lot of capital,” he said.
Planning is a key component in this dynamic becomes it gives communities a road map to move forward.
“Creating your own firms determines your destiny,” he said. “You need a shared vision, a plan people buy into. Without a plan, you don’t know where you’re headed. Planning is absolutely critical.”
The CPEX summit continues through today. See the day’s lineup here.