Virtuous/Vicious Cycles

I live in a region rich in resources, well-located and blessed with more (better) water than we know what to do with. The area should be thriving; it is not. The reason? We have stupid people, lots of them. They like to conduct public and private business in the old familiar way. There are oligarchies, power cadres and even entrenched grassroots organizations that to put it graphically – eat their young. Everyone is at each other’s throats, all of them convinced that it’s a zero-sum game. The region is in line to receive a massive region-targeted grant to develop economic conditions. Some remarks from a local watchdog (with names and regional references removed):

small business “pack a better buck for the local economy.”

They are more likely to procure good and services locally, less likely to relocate and retain profits within the community, he said.

Consider that “region” ranked 68^th among the nation’s 100 largest metro areas for small businesses (under 100 employees) per 1,000 residents in a 2010 survey done by American City Business Journals. That same survey ranked “region” 80^thfor small business vitality.

Older studies ranked the region last in both net firm creation per 100,000 inhabitants and number of initial public stock offerings among major metro areas.

The study, called “Securing the Future,” prepared for the Institute for Local Governance and Regional, lamented “the conservative and risk-averse culture that currently exists within the region.”

The problem continues, and it extends beyond the business culture. Start up and expansions are being hampered throughout “region”, by an absence of venture capital.

“”Region” is a venture capital desert,” proclaimed “Etc.” Partners of “region” in a landmark study in 2009.

The lack of VC is undermining the commercialization of research and development produced at universities and research institutions throughout the state, including the “region”. “State” receives some $4 billion a year in federal research and development funds.

Many government and business leaders have pinned “region”’s economic future on capitalizing on “regional university complex”, but the lack of private VC and what some see as the region’s poor climate for entrepreneurs stymies that effort. “Governor”, to date, has not mentioned VC as a potential use of some of the “massive capital infusion”. Lawmakers last year, however, established a statewide venture capital fund that begins to fill the gap.

Money, attention and energy help. But in the end, I think the primary reason for the lack of growth and innovation and just plain ‘life’ is the way people think. It’s also the reason that young people who grow up here leave in droves. They know. The net result is an increasing concentration of people who prefer stasis and/or stagnation.