What It Takes to Build a Startup City: Meet 7 Mayors Promoting Entrepreneurship
In its second year, the Kauffman Foundation’s Mayors Conference on Entrepreneurship saw mayoral attendance more than double from 16 to 39, signifying how city officials are more engaged in what’s working – and what’s not – when it comes to supporting local entrepreneurs, according to Jason Wiens, policy director at the Ewing Marion Kauffman Foundation.
“Mayors increasingly understand that entrepreneurs drive local economic growth, job creation and innovation. But knowing how to spur entrepreneurial activity can be a challenge,” Wiens says. His research with Dan Stangler, VP of policy at Kauffman, has found that some traditional approaches get it wrong.
One common error by local lawmakers is erecting a downtown incubator and relying on the piecemeal measure. “If you build it, they will come’ does not work for entrepreneurship,” according to their research. “Studies show there is no evidence that incubator firms perform better than non-incubator firms.”
Related: How to Scale NYC's Startup Ecosystem
Instead, they say officials should first eliminate common burdens that entrepreneurs face at the local level, such as complex tax codes and strict occupational licensing requirements, and then develop incentive programs for small business. Mayor Andy Berke, of Chattanooga, Tenn., says he hopes eliminating barriers to city data will empower innovators to solve civic problems.
Another tip from their research is to support entrepreneurs across various entrepreneurial stages. And because data has found immigrants are twice more likely to start a business than a native-born citizen, Mayor Svante Myrick, of Ithaca, N.Y., says it’s important to intentionally build an entrepreneurial environment that is both resourceful and "welcoming."
We looked at various initiatives from across the country to learn innovative ways municipal leaders are capitalizing on unique assets to promote startup activity. In no particular order, here are fresh ideas from seven mayors who are aiming to build the next entrepreneurial hub:
1. Raleigh, N.C. Mayor McFarlane: get proactive and build public partnerships
Mayor Nancy McFarlane has been heavily involved in the city’s startup efforts – leading a team that traveled to SXSW earlier this year to recruit entrepreneurs. She also hired the city’s first Entrepreneurship Manager to closely track the activities and needs of local business owners. Mayor McFarlane recently announced the city’s plan to put $100,000 towards Citrix’s new accelerator at the company’s new headquarters. It will be the global software company’s first accelerator outside Silicon Valley. As a public partner of the HQ Raleigh-Citrix Accelerator, the city will enable teams to access capital connections and civic resources, and also offer an opportunity for teams to apply for city funds, if they locate their ventures in Raleigh. Raleigh also partnered with Citrix through an economic development grant to support their new headquarters.
2. Cincinnati Mayor Cranley: provide funding and operational support for the city’s startup ecosystem
Cincinnati Mayor John Cranley, for the first time in history, has included operational support for Cincinnati’s startup ecosystem in the city’s budget. The funds will support a 30,000 sq. ft. building that will house Cincinnati’s entire startup ecosystem: Cintrifuse (an organization that offers mentoring and co-working space), The Brandery (a local accelerator) and CincyTech. CincyTech is a public-private, seed stage investor that has invested in local companies that, cumulatively, employ approximately 175 people and bring in millions of dollars in co-investment. They will all be located in two neighboring spaces, worth $16.7 million, in the city's revitalized Over-the-Rhine neighborhood.
3. Chattanooga, Tenn. Mayor Berke: offer direct incentives to small businesses
Known as the Gig City because it has the fastest internet in the Western Hemisphere, Chattanooga, Tenn., is home to a thriving startup community. Mayor Andy Berke earlier this year launched an incentive program that offers credits worth $500 per worker for small businesses that add five or more full-time employees. In addition to incentive programs, Mayor Berke has pushed an Open Data Policy. He hopes that making city and government data more transparent will empower Chattanoogan innovators to develop fresh business ideas and solutions based on the statistics. The city is in the first stages of developing an Innovation District – a literal district in the city – to pull together advanced technology, entrepreneurs, existing industries and higher education into one location.
4. Detroit, Mich., Mayor Duggan: support startup activity beyond downtown area
Detroit is experiencing a tech renaissance, and companies like Microsoft Ventures have recently announced plans to locate downtown to help the Detroit startup community. Earlier this year, Mayor Mike Duggan announced the launch of a $3 million program for entrepreneurs. He also hired the city’s new head of entrepreneurship, who is tasked with fostering and attracting entrepreneurs who want to do business “not just downtown but also in the neighborhoods,” he said in an interview with Crain’s Detroit Business.
5. Los Angeles, Calif., Mayor Garcetti: welcome entrepreneurs to City Hall
L.A.’s "Silicon Beach" is growing. In Q1, $520 million was invested in LA's more-than 1,000 startups. The city has hired two entrepreneurs to work on the city’s behalf as part of L.A.’s Entrepreneur in Residence program, launched in May 2014 by L.A. Mayor Eric Garcetti and Ernst & Young LLP. The entrepreneurs, who will be housed in City Hall for a one-year term, will aim to develop strategies and policies to boost job creation and the overall economy.
6. Ithaca, N.Y., Mayor Myrick: don’t confine innovation within local campuses
Since becoming mayor three years ago, the 27 year-old mayor of Ithaca has rezoned the city to allow for larger commercial buildings to attract entrepreneurs and startups, developed Ithaca’s downtown to make the city more vibrant and has allowed for more mixed-use space in the city. Mayor Svante Myrick advocated for the city’s new incubator, Rev, be built downtown instead of on-campus so that it could engage more locals and boost the local economy.
7. Louisville, Ky., Mayor Fischer: earn federal support and build local partnerships
Before he was Louisville’s Mayor, Greg Fischer co-invented the SerVend automated ice/beverage dispenser used in many convenience stores and restaurants. He also started Iceberg Ventures, a private investment firm, and co-founded bCatalyst, the first business accelerator in Louisville. As an entrepreneur who happens to be mayor, Fischer recently announced that Code Louisville landed a $2.9 million federal grant. Government and tech leaders hope the one-year old, free software training program will fill the thousands of vacant tech jobs in the region. For the past year, Code Louisville has been partnering with the Louisville Free Public Library to use Treehouse, an online video and interactive learning platform, for its training. Says Mayor Fischer: “We must build the support networks and systems in place that reward, encourage and foster not only great ideas but support and encourage the businesses that come out of those.”