Fearful Symmetries

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11 February, 2014

How Can Madison Attract More Entrepreneurs?

Over at the Atlantic Cities blog Richard Florida writes about a report on what entrepreneurs seek out in cities where they would locate their companies. The report was done by a group called Endeavors Insight did surveys and interviews with the founders of fast-growing companies. The results were interesting.

For one, size matters. These top business-creators gravitated towards cities with at least a million residents in the metro area. This offered the scale and diverse array of offerings needed to attract talent.

A city also needs to be able to appeal to the young and the restless. The entrepreneurs surveyed were a highly mobile bunch when they first started out...But eighty percent of respondents had lived in their current city for at least two years before launching their companies, meaning that cities had to catch them early. And once they started their first company, these business leaders rarely moved. So attracting this mobile group at an early age is key.

The top rated factor by far was access to talent. Nearly a third of those surveyed mentioned it as a key factor in their decisions for where to live and work (many specifically prized access to technically trained workers). Entrepreneurs explained that they proactively sought out the places that educated and ambitious workers want to be.

The study found that two other key factors in the location choices of entrepreneurs are major transportation networks (like airports and highways that can connect them to other cities) and proximity to customers and suppliers.


Can Madison learn anything from this?

We are not a metro area with 1+ million people. A strike against us. But Madison surely does have some appeal to the young and the restless. We have bike lanes, farmers markets, and a good cultural scene for a city our size, though it cannot compete with that of larger metros. (On a side note, I will say that I met a gentleman at last year's Gamehole Con from out of state who said that Madison has the best cultural scene in the Midwest outside of Chicago.) I would think that the UW provides a good pool of technically trained workers but perhaps they all leave after graduation because Madison is not large enough.

The whole customers and suppliers part isn't really something I can comment on since I don't know enough about those factors. But the transportation bit made me think. We've got the highways that lead to Chicago, Milwaukee, and the Twin Cities in addition to much smaller cities. While we do have an airport that offers some direct flights, it shuffles many people off to larger cities where airlines have hubs that can take them onto their destination. While there is just no way for Madison (nor any city in the entire Midwest) to compete with Chicago here, might it still be possible to leverage the Dane County Regional Airport to our advantage?

Recall the report by the Progressive Policy Institute which was released last autumn. It ranked Dane County 9th in growth of tech/IT jobs from 2007-2012. The Milwaukee Journal Sentinel article on the report quoted a Madison computer science professor and entrepreneur named Paul Barford who said, "There's no direct flight between Madison and San Francisco. If we could get that, it would unlock amazing opportunities in the state."

When I first read that I thought, "Well, Mitchell Field in Milwaukee has direct flights to and from San Francisco." Then I heard that the state of Indiana was subsidizing direct flights between San Francisco and Indianapolis in order to bolster the latter city's tech sector. Even the state's Republican governor was in favor of the subsidy. Given the Endeavor survey results, the testimony of one entrepreneur here in Madison, and the desire for such flights from Indianapolis' tech community, it is certainly something for us to look into. Has the Madison tech community approached the governor and/or the WEDC about a similar setup here? In another article, which I cannot locate the moment, someone from Indy was criticizing the the times of the service offered there. He maintained that they need an earlier flight to Indy as apparently venture capital likes to get in, get down to brass tacks, and then head home that same day. So it's worthwhile to keep an eye on how things go down in Indianapolis.

The Endeavor report also noted, in Florida's words:

At the very bottom of the list were taxes and business-friendly policies, which are, unfortunately, exactly the sorts of things so many states and cities continue to promote as silver bullets. Just 5 percent of the respondents mentioned low taxes as being important, and a measly 2 percent named other business-friendly policies as a factor in their location decisions.

I have to wonder just how much common ground tech entrepreneurs in Wisconsin have with the "old guard" WMC members. The former group is asking for an educated workforce, infrastructure, and quality of life while the latter is seeking tax cuts and supporting politicos who cut education, seem to ignore infrastructure if it's not a road, and don't seem to care much about quality of life issues because taxes must lowered at all costs.

And I can't help but tie this into Madison's preternatural preoccupation with having a public market. The article at hand doesn't mention it but it can surely be argued that it falls under quality of life for attracting a talent pool. But does it really help all that much? The last time I wrote about this subject, local tech entrepreneur Phillip Crawford left a comment saying, "We don't need a public market. That's a boondoggle. High speed internet _everywhere_ which would have been just as amazing 10 years ago as it would be today, would be great." I don't mean to imply that Mr. Crawford's opinion prevails amongst his peers but I do think that pitching a public market by saying that it is a big quality of life factor to attract young tech people is a claim to be skeptical about. In light of the Endeavor report, perhaps investing in high-speed internet access would be a better use of public money.

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|| Palmer, 4:20 PM

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