The Canadian Federation of Independent Businesses recently published their annual paper “Communities in Boom.” The interesting chart is Table 1 – City Entrepreneurial Index. It purports to rank 107 cities in Canada in terms of how entrepreneurial the city is. It ranks on 3 metrics – presence, perspective and policy. There is a breakdown of sub-metrics within each. I might quibble with some of the indicators but it is worth a look.
Calgary at 67.6 of 100 is the highest ranked. My hometown of Peterborough is at 47.5, just .2 away from making the top 90%. What does that say?
Economics is a crucial part of civic responsibility and satisfaction. Local governments cannot make a city entrepreneurial and they cannot be that themselves. They can though, make entrepreneurship more difficult. Municipal governments cannot make it work but they can develop the business spirit or they can make it harder. Seems an easy choice.
Cities are entrepreneurial because people within them are entrepreneurial. If you read the history of Peterborough you will find that in the 1800’s there were several entrepreneurs. George Cox prime among them. One of his achievements as mayor was to arrange the arrival of what became the huge Peterborough works of General Electric.
GE has shrunk by 80% since the mid ’60’s and with it went more than jobs. GE was the seed bed for many local industries that arose from talented people who were trained there, learned business there, and left to set up their own enterprises. Miltronics, (now part of Siemens) and Fisher Gauge, (now Dynacast) were two of the prominent ones.
Somewhere the city lost its way. Outboard Marine is gone, GE has shrunk, many smaller manufacturers moved away. DeLaval, Johnston & Johnston, Ovaltine, Domtar and others. There are many entrepreneurial businesses in Peterborough now, but they exist almost in spite of the city, not because of it. Some grow and leave, while others expand elsewhere. Faceless and remote management is usual excuse. More likely, other places were better.
What to do?
Oshawa with the shrinkage of General Motors and Waterloo with the shrink of Blackberry have similar and more current problems. They seem to be handling them differently.
Earlier this week I talked to people in Waterloo about the systems issues with Obamacare and came away with other information. As Blackberry shrinks in Waterloo, highly skilled employees are creating start-up businesses. They have skill, creativity, connections, experience and in some cases money.
What should the local government do about it?
Pretty simple really. Provide any support they can, which support will generally be minimal and unimportant but perhaps useful. Mostly they should just stay out of the way. No foolish paperwork or requirements. No delays in approvals. It is not their purpose to create obstacles. It is certain that the city bureaucracy has little to add.
City government needs to recognize that they cannot help much and that is okay. Not helping is acceptable. Harming is not.
The first rule of government promotion of entrepreneurship should be “The best business incentive is the absence of disincentives.”
It will take a generation to turn a non-entrepreneurial city around, but developing focus, inventorying the local short-comings and strengths and then providing a sense of purpose can begin immediately. Tactics will become apparent as the process moves forward. You need not know “How?” in the beginning, only the general direction of movement.
I have done industrial strategy work in the north and I know that one strong motivator for entrepreneurship is that parents want their children to have the chance of a good job close to home. For example, I met an old friend recently. Both his children and all of his grandchildren are 2,500 miles away. That is unsatisfactory.
Knowing what the basics are is important for community governments. Most are merely common sense and easily learned. But the ego arises. There is a rule in business that says, “You can accomplish almost anything if you don’t care who gets credit.” Politicians and bureaucrats need to be aware.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
firstname.lastname@example.org | Twitter @DonShaughnessy | Follow by email at moneyFYI