Getting Local and State Governments Involved

What We Learned

One way to create a more sustainable entrepreneurial environment is to put into place policies that will support your efforts over the long term. These policies can help to make permanent a focus on entrepreneurship as a development strategy in your community, and to help eliminate some of the obstacles that entrepreneurs face as they start and grow their businesses. What we learned from our exploration is that examples of policy change from across the country can provide insights to guide your work in communities and across the state.

When we talk about policy in support of entrepreneurship, for the most part we are focused on change at the local and state levels. Local leaders have little influence over federal policy decisions that affect their entrepreneurs; policy decisions at the local level, in contrast, can make a big difference. In an assessment of the entrepreneur and small business policy environment in Kentucky, Brian Dabson and Deborah Markley identified three roles for state policy makers that also apply to local officials:

  • Providing resources – Supporting entrepreneurs will require resources, either from new sources or by redirecting economic development dollars to new uses. For example, leaders in the town of Ord, Nebraska in Valley County and the local Chamber of Commerce created an inter-local agreement to support the first ever economic development position in the region, focused on entrepreneurship development.

    McCook, Nebraska passed a local option sales tax to create a pool of funds to support economic development. In the late 1980s, the city of Littleton, Colorado decided to devote all their economic development dollars to an entrepreneurial alternative to economic development, economic gardening.

    At the state level, Kansas has been a leader in supporting entrepreneurship through legislation in 2004 to create a statewide entrepreneurship center, Network Kansas, and through follow-up legislation to authorize and fund a tax credit program to support a statewide small business loan pool.
  • Creating an effective regulatory environment – Regulation is often perceived by entrepreneurs as a “necessary evil.” While regulation may be unavoidable, improving consistency and clarity in the regulatory environment is often welcome by entrepreneurs. Local community leaders can take steps to provide information to entrepreneurs so that they know what regulations apply to them and how to be in compliance, such as through dissemination of a “how to start a business guide.”

    Another way to improve the information flow is to create an entrepreneur advisory committee whose members can bring to the attention of local elected officials regulatory concerns that entrepreneurs have.

    For example, this committee might provide input on zoning decisions for a downtown bypass or for a big box retail development that might impact Main Street merchants. Some states, like North Carolina, have taken this one step further by creating a Small Business Ombudsman who is available to help entrepreneurs with regulatory or other issues they may encounter as they try to start and grow an enterprise in the state.
  • Helping create awareness about the role of entrepreneurs and entrepreneurship – Policy decisions can help to shine a light on new initiatives, bringing increased attention and needed legitimacy. For example, National and Global Entrepreneurship Weeks have created a groundswell of movement around entrepreneurship, involving communities, states and even countries in planning activities to celebrate entrepreneurship. In West Virginia, an entrepreneurship coordinator in the state Department of Education provides assistance to schools seeking to incorporate entrepreneurship classes, making it easier for local schools to expose their young people to the opportunities associated with starting their own business. For example, the Department of Education sponsored The Lemonade Stand Project where elementary students opened lemonade stands at the state legislature during Entrepreneurship Week, getting first-hand experience in running, and profiting from a business.

Policy innovations are varied individual communities and states. An assessment of the entrepreneurship work of six collaboratives across the U.S., sponsored by the Kellogg Foundation, provides useful examples and lessons learned from other policy innovations that you might want to consider.

Getting Local and State Governments Involved