WASHINGTON (05/08/2000) - 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 economic growth.
"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 daily decisions.
* 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.