Tag Archives: Economy

How Raleigh Can Learn From Chile

In the May issue of Entrepreneur Country, Joe Haslam of Stratemic Capital enlightens readers about the start-up scene in Chile. Most Americans know Chile for its rich produce, not its economic strength in South America, and definitely not for the ecosystem that has been created for entrepreneurship that is paying off handsomely.

Going back to the 1970s, Chile has taken a progressive stance on key economic decisions. Milton Friedman and a number of his associates from the University of Chicago inspired free market systems that have been customized by local conditions. Nicolas Shea and Vivek Wadhwa in the past decade have sought to make Chile a destination for entrepreneurship. Shea attended Stanford University and set about to do a Southern hemisphere version of Silicon Valley. Wadhwa challenged the start-up model of some groups who provide office space near a university and hope for something wonderful to happen. Instead, he advocates a people-centered approach:

To create a tech center like Silicon Valley, you need to first attract smart entrepreneurs from all over the world. Then you have to create entrepreneurial networks; instill a spirit of risk-taking and openness; and build mentoring systems. You also need to provide seed financing to start-ups. The money is easy; everything else requires a change in culture that usually takes decades.

Wadhwa and Shea launched Start-Up Chile at the beginning of 2011. Here’s the concept:

  1. Anyone from anywhere can apply
  2. Winners would be required to move to Santiago, Chile
  3. A one-year visa is provided to facilitate entrepreneurship
  4. $40,000 in seed capital is offered as a prize
  5. The Chilean government would NOT take an equity stake

When Haslam met with the director of Start-Up Chile and a representative from CORFO, the government agency tasked with improving competitiveness in global markets, he asked a lot of questions about how the program was put together. They admitted that bureaucracy had to give way in recognition of results.

  • The website for the contest received more attention than the official national tourism site. 
  • Visitors of the program spent about as much in tourism dollars as the awards themselves.
  • Well-known entrepreneurial icons are “dropping in” on the Chilean scene these days.
  • 1600 applications from 70 countries.
  • 220 foreign start-ups in Chile now, employing 180 locals and 143 abroad.
  • $8 million in VC money has been raised by the first batch of award winners.

Chile has realized some important economic development principles. Notably:

  1. Start-ups are a strong job creation tool.
  2. Large companies are more costly to attract and retain.
  3. Diverse populations experience economic growth.

Earlier this past week, we blogged about Pittsburgh’s Experienced Dreamer contest to attract entrepreneurs to town.  Whether the locale is Santiago, Pittsburgh, or Raleigh, the principles work. We need to do all that we can to foster entrepreneurship–it just may be the key to a healthier world economy!

On a purely local note, Innovate Raleigh has followed some of the steps in the blueprint. We need help from Raleigh Wake Economic Development, mentoring organizations like EntreDot, and fresh sources of seed capital. Additionally, more collaborative workspaces like some of the incubators in our area (Cary Innovation Center being an example) will help foster the natural network nurture necessary. We can do this–but it requires “all hands on deck!”

 

 

Raleigh Needs Experienced Dreamers

This week, I became aware of a very unique contest held in Pittsburgh that recently concluded. The Experienced Dreamers contest was born out of a survey taken by residents in 2009 that indicated that the city must rely on young residents to drive growth. The recommendation of the survey team was that, if the city could attract 1250 entrepreneurs who are 45 and over to move to the area and start a business, the economic impact over the next two decades would be $2.5 BILLION!

Here were the rules:

  1. The applicant must be 45 or older as of the date of application,
  2. The applicant may not have lived with 100 miles of the city for the past 10 years, and
  3. The applicant must be a U.S. citizen or permanent legal resident as of the application date.

The applicants were charged with locating a new business, philanthropy, or artistic endeavor in Pittsburgh upon award of $50,000 in cash and an additional $50,000 in charitable trust in the recipient’s name. This year’s winner is Tess Almendarez Lojacono, a 55-year-old artist who has been living in East Aurora, NY. Her proposal was to move and enlarge Fine Art Miracles, a five-year-old company she started that teaches fine art classes to residents of assisted living facilities and nursing homes. Lojacono has  a stated objective to provide intellectual stimulation for older people and to help them tap their creativity.

In her own words, “I like to show people that they’re still able to create.” “We’re offering something a little more intellectually challenging for them than painting between the lines, and a lot of them really like that. We have older gentlemen who sign up for our classes who wouldn’t do crafts.”

An article at http://www.SecondAct.com told a little more of her story:

She incorporates art history and a lot of visual aids into her classes. After showing participants reproductions of Georgia O’Keefe’s floral portraits, for example, she invites them to create their own versions on black art paper. She’ll provide as little or as much assistance as her students need.

“We find that even people in their eighties and nineties are interested in learning something new,” Lojacono says. “I’ve developed a lot of respect for their intellects.”

Part of her job is helping people who haven’t previously tried making art to get over their perception that it’s an activity only for a creative elite. “They’ll say, I can’t draw a line with a ruler,” she says. “I’ll say, ‘that’s great. I don’t want any straight lines in here.’ We start with a blank sheet of paper. What I find, though, is that when I help them to draw, pretty soon they’re sitting up straight and smiling.”

The amazing thing that occurs to me is “why aren’t more cities doing this?” Raleigh, North Carolina, where I live, is a top-rated city and part of the Research Triangle Park region, known to be a hotbed of entrepreneurship, but with little emphasis on attracting “boomerpreneurs.” Clearly, experience counts in running a business. Older start-up founders are seemingly more likely to have more capital than their younger counterparts. Since under-capitalization is the bane of many new businesses, an effort to attract entrepreneurs with greater net worth would make good sense as part of an economic development strategy.

Innovate Raleigh has identified a number of initiatives to foster greater cross-institutional cooperation for the betterment of the local economy. While we need to continue to foster business start-ups coming out of the education of our young students, we should also have a strategy for the bigger demographic of “Experienced Dreamers!”