Building an Entrepreneurial Infrastructure
Thats the name given to a relatively new measure, for lack of a better word, of entrepreneurial activity in a community. The index was created by the U.S. Small Business Administrations Office of Advocacy and the Edward Lowe Foundation, and it takes into account several different statistics with regard to business creation and subsequent growth.
The recently conducted study using the index involved 394 communities, and Springfield was one of them. The City of Homes placed 76th overall, just ahead of Providence, R.I., and behind a diverse group of cities and towns ranging from Las Vegas (2nd overall) and Boston (29th) to Bend, Ore. (7th), and top-finisher, Glenwood Springs, Colo. Springfield even finished first in one category something called "average annual change in new-firm births," at 11.73% between 1990 and 2001.
Thats what we know. What we dont know is what all this means. As one analyst said and we agree with him being highly ranked in this study cannot be a bad thing. But just how good a thing is it, and what does it say and mean for Springfield?
Indeed, while the study has good intentions, its results are certainly open to interpretation. For example, it does not differentiate between a new business with one employee and one with 100 or 1000, and Springfield obviously has far more of the former than the latter.
Through the efforts of several area agencies, including the Springfield Chamber of Commerce and its TAP (Technical Assistance Program), Springfield Technical Community College and its small business incubators, the Mass. Small Business Development Center (SBDC), and the Western Mass. Enterprise Fund (WMEF), many small businesses have been created and nurtured. But the vast majority of these ventures are very small, with 10 employees or fewer.
Contrast this with Las Vegas, where a new business might be a billion-dollar hotel and casino, or Boston, where the venture might be a pharmaceutical company. Whats more, Springfield finished 317th in terms of the percentage of firms growing "rapidly." Considering these factors, its easy to see why the value of the Regional Entrepreneurial Index, and a ranking of 76th, could be called into question.
But while there are some problems with this new measure and its findings are certainly subjective, if one looks past the numbers there are some positive qualitative indications that can be seen.
First and foremost, we believe, Springfields fairly strong ranking shows that there is a solid infrastructure in place to support startups and existing small businesses and help them survive the rugged first few years of existence.
The TAP, for example, offers technical assistance to existing small businesses, specifically minority-owned ventures, as well grants of up to $2,500, to be used for everything from equipment to marketing. The Andrew M. Scibelli Enterprise Center at the Technology Park at STCC houses two incubators, one for students and the other for more-established ventures. The former currently boasts fledging businesses in everything from energy bars to designer umbrellas, while the latter hosts several successful businesses, from Banana Publishing, which puts out a cross-border phone book, to a local franchise for ValPak.
The WMEF, meanwhile, has provided loans to businesses that dont qualify, for one reason or another, for traditional bank financing, and the MSBDC offers a host of services to start-ups and existing businesses, from help with a business plan to assistance with adjusting to changes in the marketplace.
Most of the businesses helped along by these agencies and others in the Valley are quite small a good number are sole proprietorships and many will remain small. But all have the potential to someday become major employers. And in the meantime, each small business puts more Valley residents to work and contributes, in many ways, to the overall health of the regions economy.
While the full meaning of the Regional Entrepreneurship Index is a subject for debate, this areas commitment to promoting new-business development is not. The infrastructure now in place should continue to swell the ranks of new ventures in Springfield and the surrounding region, and this certainly bodes well for the future.