Subscribe to Entrepreneur for $5

When the Going Gets Tough for Local Economies, Utilize Existing Resources

Opinions expressed by Entrepreneur contributors are their own.

Over the past few weeks, I've chronicled the formula for building entrepreneurial ecosystems across the country that create jobs and keep our economy growing. First was capital, then people. When those two elements combine with local institutions, such as accelerators or universities, a strong entrepreneurial ecosystem can develop.

The importance of how people work with capital and the local institutions was driven home for me several years ago in my home state of Maine. After spending my career in the private sector, I got a phone call from Governor John Baldacci. The Naval Air Station Brunswick had been placed on the Base Realignment Closure (BRAC) list, which meant it was going to shutdown and many people would be out of a job. The governor asked me to help identify new opportunities for economic development.

As we considered a variety of options, we realized Maine was sitting on a huge asset that wasn't being fully maximized: our boat-building industry. The state had led the world in boat building for centuries and still had the world's best craftsmen and women, but the industry -- once a powerful job creator -- was lagging. The boats coming out of Maine were not built using the most up-to-date materials, and the costs were so high the builders were barely making a profit.

Ironically, a solution to the problem was being developed just a few miles away at the University of Maine, where researchers were experimenting with a new lightweight composite technology. This material held the promise of making boats stronger and more efficient, but the new technology required different training for the boat builders and their workforce. The university wasn't coordinating with the local community college and the boat builders weren't communicating with each other. Everyone was losing out on opportunities.

Yet, all the ingredients were in place to build a successful ecosystem. We brought the boat builders, researchers, the state economic development team and even the U.S. Department of Labor to the table. Together, we developed a regional economic cluster to train workers, market the end product as Maine Built Boats and positioned the industry to more successfully grow and create jobs.

Today, Maine Built Boats is going strong. The boats are light, fast and use the latest technology. Annually, boat building has become more than a $650 million industry, with about 450 companies and 5,000 jobs tied to it.

It may be tempting to think the proximity of the industry and university makes this a once-in-a-blue-moon story. But what's exciting about the ecosystem model is it can be replicated in communities across the country by leveraging existing resources.

It's true that at a time of continued fiscal austerity in state budgets, there's limited room for investing in innovative economic growth programs. Yet, creating an ecosystem does not require a huge investment -- even small incentives go a long way. At their core, entrepreneurial ecosystems are built on the belief that in local economies, the whole is stronger than the sum of its parts. While this insight may seem simple, its possibilities can be dramatic..

Entrepreneur Editors' Picks