When one examines the growth of economies in cities, states or small nations, it is apparent that those with the highest rates of job creation and salary growth owe this growth to entrepreneurs who are using high-tech to start new companies with high-growth potential.
The dominant religions in an area, through impact on local culture, seem to be very important to an economy. This impact can be either positive or negative. For example, two of the fastest growing high-tech economies, Israel (Jewish) and Northern Utah (Mormon) are particularly successful at producing entrepreneurs. Conversely, New Mexico (Catholic and Protestant), despite a high density of technical talent and R&D spending, is unsuccessful in building an entrepreneurial economy.
Examining economies leads to the following conclusions.
Local and regional economies can grow by government spending increases or entry of an existing company; however, long-term, sustainable job creation and salary growth requires entrepreneurs to start companies that provide new services or goods that satisfy unmet public needs.
The Kerns Family Foundation, an entrepreneurship advocate, believes that entrepreneurially minded individuals:
• Have a constant curiosity about our changing world, question with boldness and explore contrarian perspectives;
• Habitually connect information from many sources to gain insight and manage risk and place old ideas in new contexts; and
• Create value for others from unexpected opportunities as well as persist through, and learn from, failure.
When a region focuses on attracting government research and development funding, e.g., New Mexico, it:
• Wastes its political capital on maintaining a slow-growth economy;
• Develops a dependent, bureaucratic, low-risk, group-think, politically correct culture that focuses internally; and
• Builds a narrowly-focused technical culture that prefers excellence in science over innovation that leads to local economic growth.
Like leaders, entrepreneurs are not born, but are developed through education, training and experience.
Today’s start-ups that grow to become unicorns – $1 billion in corporate value – are generally service-sector firms built on information technology, data mining, artificial intelligence and software.
Growth of economic ecosystems into industry clusters requires interactions and communications between entrepreneurs. As an economic ecosystem grows, it will attract companies to move into this ecosystem because of the excellence of employees in the ecosystem.
Regions where entrepreneurs have successfully built thriving economic ecosystems, e.g., Israel and northern Utah, have cultures shaped by a common bond of religious beliefs that endorse spiritual growth, individual responsibility, service to others, hard work, a strong belief in the importance of education and are not hierarchical.
Given these conclusions, how can New Mexico institutions promote the development of a local economic ecosystem? Changes must be made in local culture, i.e., K-12 education, government, universities and government-owned laboratories.
Churches can incorporate into their messages the importance of service to the greater Albuquerque community and emphasize that few acts of service are as impactful on people’s self-respect and their rejection of crime and addiction as creating jobs.
K-12 schools can help students develop entrepreneurial mindsets by hiring teachers educated in entrepreneurial thinking by universities.
K-12 schools can increase emphasis on STEM education and connecting information from multiple sources, but link these to examples of successful entrepreneurs.
The local and state political systems must reduce their attraction to cronyism, extortion and un-researched opinions and make merit-based hiring and economic development research part of their cultures.
Universities recognize and reward faculty for contributions to scholarship, education and service. UNM must value contributions to entrepreneurship the highest form of all three areas, incorporate development of an entrepreneurial mindset into all of its programs and favor programs most likely to produce entrepreneurs, e.g., STEM-based programs.
Government-owned laboratories, despite their handicap of being affiliated with bureaucratic, low-risk, defensive, hierarchical federal agencies, must build entrepreneurial cultures. This will improve their ability to do mission-focused work, stimulate innovation and increase their spin-off of entrepreneurs into the local economy.