There’s a move afoot that began at the local community level and is steadily taking hold at the statewide level in places like Florida, Kansas, Michigan and Oregon.
It’s a business development strategy known as “Economic Gardening.” Economic Gardening, the act of supporting and cultivating local growth companies, as opposed to the more traditional economic hunting practice of recruiting large employers, was pioneered in the City of Littleton, Colorado by Chris Gibbons as a reaction to the relocation of the area’s largest employer at the time.
Gibbons based economic gardening on the concept that you can grow your own local economy by focusing on and nurturing entrepreneurs.
In the ensuing 15 years the City saw a 136 percent increase in new jobs while creating a prototype that has since become a rapidly expanding movement for generating sustainable economic growth.
An economic gardening initiative connects entrepreneurs to resources, encourages the development of essential infrastructure and provides entrepreneurs with needed information.
The Littleton economic gardening initiative provides local entrepreneurs with access to competitive intelligence on markets, customers and competitors that is comparable to the resources customarily only available to large firms.
Gibbons noted that his team doesn’t do Quickbooks or insurance or succession plans. “That’s not to say those things aren’t needed, but my experience is that businesses fail because of big strategic issues -- markets and competitors and commodity traps and inability to build teams --but rarely because of insurance,” he said.
The program also makes speakers and education available to local companies at no cost.
GrowFL, a statewide initiative in Florida, recently allocated funds to make market research and education available to high growth companies across the state. The program is restricted to second-growth companies with annual revenue of at least $1 million.
According to the Edward Lowe Foundation, second-stage companies in Florida were responsible for 36 percent of job growth between 2005 and 2007. Economists estimate that 40 percent of Florida’s job growth will come from second-stage companies over the next five years.
Based on the projections of companies already enrolled in the program, more than 600 new jobs could be created by the end of the first year. Economic modeling shows that extending the program to 900 companies could create more than 6,000 jobs in three years.
The idea behind most economic gardening strategies is to promote job creation locally by giving high growth local firms that have moved out of startup phase the boost they need to become hugely successful as a homegrown company.
While many programs have focused on getting businesses started or attracting major employers from other parts of the country, few resources have been allocated to the “local gazelles” – companies that often account for the most sustainable long-term job creation.
For an explanation of the different company stages, as well as comprehensive statistics on entrepreneurial activity in the United States, visit YourEconomy.org, produced by the Edward Lowe Foundation.
For a full description of how to implement an Economic Gardening Strategy read - Seven Steps to Developing an Economic Gardening Implementation Strategy.
According to an article recently authored by Gibbons, “Economic Gardening is not a quick fix – a silver bullet. It is a long-term strategy. It is not a fad diet; it is a lifestyle change. It takes a while to put the infrastructure in place and to get to a scale large enough to make a difference. It also takes a while for a company to start to grow and add jobs. With patience and commitment it has proven to be a viable alternative to the traditional practices of economic development.”
Saturday, November 27th is Small Business Saturday – a kind of local economic nurturing. The idea is to throw your support and shopping towards the local economy and help shine the spotlight on businesses that keep a far greater percentage of their revenue and job creation in the local economy.
I know I’ll be out in the streets of my community sowing the seeds of growth and maybe picking up a holiday gift or two.
John Jantsch is a marketing consultant and author of Duct Tape Marketing and The Referral Engine.