NGA: States must nurture new economy
- By Daniel Keegan
- May 08, 2000
Nurturing and investing in local entrepreneurs must be a top priority of
states, a new National Governor's Association report says this can only
done by closely working with the private sector.
As entrepreneurs have become such an integral part of the new economy, states
have realized that by investing in local business, they can create wealth
and jobs for citizens. However, because it's a new practice, states need
assistance in determining whether to invest or use other ways to encourage
"Growing New Businesses with Seed and Venture Capital: State Experiences
and Options" analyzes state programs and charts common traits among the
most successful. All successful programs made use of the private sector,
the report says.
Some of the characteristics of successful state programs and policies are:
* State leaders launch the program, but use private-sector managers to make
* State leaders realize that success is more about knowledge and communication
with the business community than about money.
* State leaders make a long-term commitment to progress and understand there
may be no significant results for at least five years.
* States are treated as a valued financial partner and are entitled to an
equal return on investment.
* States are not afraid to make money, and adopt a philosophy that companies
growing the quickest are the best investments.
* The program is large enough to make a difference; they create large sources
of venture capital to persuade entrepreneurs to join.
* The program is not governed by typical state rules, but at the discretion
of trained professionals and experienced laymen.