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Public-Private Partnerships: The Recipe for Thriving Entrepreneurial Ecosystems

There’s a lot that goes into building an ecosystem that cultivates entrepreneurs and startups. It takes many hands, and it usually doesn’t happen quickly. I was lucky enough to be plugged in with both the Little Rock and Memphis ecosystems over the past year, in large part due to business accelerator programs.

During each program, I saw that the entrepreneurial ecosystem’s framework is a special mix of private organizations, nonprofits and publicly funded initiatives.

This article sheds light on the amazing people and organizations that support and build our entrepreneurial ecosystems. To understand these public-private partnerships better, I interviewed community leaders in both Little Rock and Memphis.

The first contact I ever had with an entrepreneurial organization was with Innovate Arkansas. With help from Jeff Amerine, I became an IA client, which was a pivotal moment for me. IA works with new, tech-based entrepreneurs to turn inventions and high-tech concepts into viable businesses. Winrock International and the Arkansas Economic Development Commission sponsor the IA program.

IA directed me to apply to the ARK Challenge accelerator, a program made possible by funding from Winrock International, Gravity VenturesFund for Arkansas’ Future and Arkansas Development Finance Authority. I paint this picture to show that in my first two steps into the ecosystem, it took support from a nonprofit, a venture capital fund, an angel investment group and a governmental program.

To see where the rubber meets the road in the Little Rock ecosystem, I talked with Lee Watson, president of the Venture Center. In its first year, the VC held two pre-accelerator courses, launched a systematic mentorship program, held dozens of programs and supported the creation of 53 jobs, 41 active startups and $1.5 million of investment capital in its member companies.

One of the key accomplishments that fueled the VC’s success was the corporate partnerships they fostered. “One of the most important pieces of building a sustainable ecosystem is creating corporate partnerships,” Watson said.

Another ingredient that cannot go unmentioned is the seasoned entrepreneurs who contribute their time. These battle-tested mentors are key in building the programs and processes that transform ideas into investable businesses.

After describing the different groups supporting of the VC, Watson explained, “When you have that type alignment of resources, you can really move the needle.”

The Little Rock Chamber also plays a special role as the principal business-driven leadership organization responsible for fostering the economic growth and development within the region.

Jay Chesshir, president and CEO of the Little Rock Chamber of Commerce, highlighted the time-intensive nature of entrepreneurial development. “Entrepreneurial initiatives really started in 2005 around the tech transfer of UAMS BioVentures and supporting it with a research and tech park,” Chesshir said. “That physical space that the VC and the tech park provide is vital, but what you do inside it is what makes the difference.”

“Space in and of itself isn’t the answer, we have to focus on the industry clusters that already exist and that differentiate us from other ecosystems,” he said.

The focus on industry clusters is a fundamental theme that I found to be present in the Memphis ecosystem as well.

The Zero to 510 program that brought me to Memphis is a nationally ranked medical device business accelerator. While Memphis might be best known for barbecue and the Memphis Grizzlies, it’s also a hub for medical giants such as Medtronic, Smith & Nephew, St. Jude Children’s Research Hospital, and Regional One Health. This is important to note, because in 2010, when the Memphis Bioworks Foundation was choosing the industry cluster around which to focus their accelerator, this regional medical industry was the driving factor.

Understanding the importance of coordination between the various programs in the region, Memphis launched the Entrepreneurship-Powered Innovation Center. The EPIcenter serves as an entrepreneurial resource in the region, and coordinates services from accelerators, incubators, mentors, investors and networking programs; additionally, it offers technical assistance programs for entrepreneurs.

I sat down with Leslie Smith, president and CEO of the EPIcenter, to understand her experience with economic development. After serving as the president and CEO for TechTown, a Detroit-based business innovation hub, she migrated south (and we couldn’t be happier). When I asked her about necessary players in ecosystems, she said “it includes for profit and philanthropy, because both of these have a platform and network that can help influence and spread enthusiasm, but also, they have the cash to invest and cut checks to make things happen.”

Throughout our conversation, it was apparent that the ecosystem has to come together not only to voice its needs, but to do so with a cohesive and strategic approach that the private sector can rally around.

“When cities face great challenges, the scarcity of resources creates an unhealthy type of competition amongst the resources available. That forces an aggregation of shared strategy amongst the public players needing resources. The organization of resources into a strategic bucket is the reason Detroit moved forward,” she said.

Smith credited the Brookings Institution as an important tool for analyzing the regional economic situation, which allowed the community at large to build a blueprint for economic growth. When you’re building that plan, you have to make sure that you have representation of all the parties voicing their needs.

“You have to have clear intention when you organize that choir, but you need the variety and diversity,” Smith said. “The complexity and diversity of your ecosystem is where the richness is created.”

Two difficulties that these initiatives face are that these bets are very long term, and evaluating their successes is tricky and complex. It has to be a delicate balance between showing that you’re changing peoples’ lives, and at the same time, creating a metric-driven narrative of activities and outcomes; think of it as qualitative and quantitative data of a given initiative’s regional economic impact. An organization that really helps depict economic successes is the Kauffman Foundation, which focuses on advancing entrepreneurial education and training, promoting startup-friendly policies and understanding what ecosystems need.

I intended for this article to be about half the length that it is, and even though I tried my best to keep it brief, it could have easily been four times as long. I say this to highlight the large number of dedicated factions it takes to build a sustainable entrepreneurial environment. And within those numerous factions, it takes an army of passionate and devoted individuals. While a few of these people were kind enough to contribute to this article, there is a long list of people who I wish I had time to give credit to. So next time you see an invite for an entrepreneurial networking event, or get a chance hear some startup founders pitch their hearts out, take advantage and attend. You just might end up catching the entrepreneurial bug!

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