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Report Analyzes Entrepreneurship in Maine, Nevada and Pennysylvania

January 31, 2003

State and local governments are starting to develop entrepreneurship programs, but the past decade's progress could be threatened by the looming fiscal crisis facing the states, according to a new study released by the National Commission on Entrepreneurship (NCOE) and the Center for Regional Economic Competitiveness (CREC).

Understanding Entrepreneurship Promotion as an Economic Development Strategy: A Three-State Survey is part of preliminary research dedicated to understanding the growth of entrepreneurial development programs and the effect of these investments on new economic activity.

Economic development leaders in Maine, Nevada, and Pennsylvania, surveyed for the study, were asked to detail the nature of their entrepreneurial development programs, as well as efforts to measure their impact. Several results emerged from these initial surveys, which will be used to help refine a larger study of entrepreneurship investments across the U.S. The results include:

  • Entrepreneurial development programs receive more than half their funds from various state government sources. The current state fiscal crisis greatly threatens program viability.
  • Entrepreneurship programs are no-longer stand-alone pilot projects. They have become an integral component of mainstream economic development offerings. And,
  • Program managers must improve their ability to measure the economic effects of their investments and educate elected officials about how these programs work and succeed.

If entrepreneurial development programs are to survive, the report suggests, they should draw funding from a wider range of range of sources and include fees for their services. Smaller communities often are unable to support the necessary resources and participants to make these services available at a reasonable cost, so regional programs should be emphasized, the study argues. The report finds, "The average budget available is about $1.5-$1.6 million for regional and state entrepreneurial development initiatives as opposed to the average single-jurisdiction initiative, which has only $248,000 available."

Funded by the Ewing Marion Kauffman Foundation, NCOE is a nonpartisan, nonprofit organization that focuses public policy on entrepreneurship. The CREC is affiliated with ACCRA, a nonprofit membership organization, and with George Mason University's School of Public Policy. The NCOE/CREC report is available at: http://www.ncoe.org/research/3statesurveyfin.doc