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Reviewing Your Entrepreneurship and Innovation Ecosystem:
A Case Study for Portland, Oregon
Jon Down, Ph. D. & Peter RachorUniversity of Portland
(Oregon)
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Project Background• City Economic Development Agency
Commissioned Study of “State of Entrepreneurship” in Portland
• Univ of Portland was awarded project competing with 12 other proposers, included researchers from other organizations to form “dream team”
• Rob Wiltbank, Ph. D. – Willamette Univ.• Joe Cortright – Impresa Consulting• Project Start – May, 2010
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Project Scope and Methodology
• In Person Interviews and Follow Up Online Survey – 100 KOL• Online Surveys to Members of Relevant Industry Associations• Review of Literature and Prior Studies• Benchmark Cities – SFO/SEA/DEN/AUS/MSP/CVG• Determination of Appropriate Metrics
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Entrepreneurship: What Is It?
• For the study “entrepreneurship” is broadly defined to include starting and growing high potential businesses that may be likely to take advantage of outside funding, as well as established small businesses that are innovative and growth-oriented.
• GEM, Kauffman, Lowe Foundation, SBA, Census of Business Owners
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What Matters to Policy Makers?
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Employment & Wealth Creation
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A City is More Entrepreneurial If…
• more spin outs and patent activity, a large number of smaller firms, with many people starting new firms, more highly educated workers with positive migration, more spin outs and patent activity, more venture funding activity, and a large number of wealthy people.
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Key Areas of Assessment
• Talent/Workforce• Innovation• Capital Access• Ecosystem• Activity
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Log Firms/ Worker
(Glaeser) Self employed %Univers ity Spinouts
College Attainment
# $1M Net Worth
$1M Net Worth Per/K
Kauffman Index of Entrepreneurial
Activity
MSA MSA MSA MSA STATE STATE STATE
%
Austin -2.78 11.80% 10 38.20% 350,727 27.4 0.45Cincinnati -2.94 9.20% 0 28.10% 203,404 27.8 0.27Denver -2.69 11.90% 11 37.50% 89,896 31.8 0.38Minneapolis -2.89 10.50% 1 37.60% 99,246 31 0.22Portland -2.67 13.10% 4 33.30% 63,943 28.7 0.38San Francisco -2.76 13.50% 15 43.40% 663,394 35.7 0.41Seatt le -2.73 11.50% 9 36.40% 118,132 30.3 0.24
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Educational Attainment Bachelors
Patents Per Capita Per 100K/Pop
VC Activity Deals 2001-
2005
VC Activity $ 2001-
2005
CITY STATE STATE STATE
%
Austin 25.7 67.7 921 7141.5Cincinnati 18.8 62 172 727.8Denver 23.1 104.8 403 3417Minneapolis 28.1 122.4 100 522.1Portland 25.4 149.2 140 749.5San Francisco 30.5 161.5 5745 52129.4Seatt le 32.6 127 519 3,447.30
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PDX AUS CVG DEN MSP SEA SFO0
10
20
30
40
50
60
BachMast/Prof
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2008 Research Funding
($M)
2006 - 2008 Research
Funding ($M)
2008 Univers i ty Spinouts
2008 License Income
($M)
2008 Patents Issued
Geography MSA MSA MSA MSA MSA
MSA
Austin-Round Rock, TX (MSA) $527.14 $1,450.11 10 $11.60 25
Cincinnati-Middletown, OH-KY-IN (MSA) $211.39 $503.10 0 $1.60 8
Denver-Aurora-Broomfield, CO (MSA) $661.00 $1,931.37 11 $6.00 28
Minneapolis-St. Paul-Bloomington, MN-WI (MSA) $583.52 $1,726.37 1 $84.70 37
Portland-Vancouver-Beaverton, OR-WA (MSA) $320.00 $924.99 4 $4.70 15
San Francisco-Oakland-Fremont, CA (MSA) $4,761.88 $12,662.46 15 $197.70 350
Seatt le-Tacoma-Bellevue, WA (MSA) $1,026.79 $2,924.63 9 $80.30 56
Innovation Measurements Research Universities
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Angel, 8%
Friend or Neighbor, 29%
Close Family Member, 47%
Other Relative, 7%
Work Colleague, 9%
Sources of Start Up & Growth Capital
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Venture Capitalists,
6%
SBICs, 1%
EntrepreneurFamilys, 4%
Informal Investors,
53%
Entrepreneurs, 40%
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San Jose-Sunnyvale-Santa Clara, CA (MSA) 2,473
San Francisco-Oakland-Fremont, CA (MSA) 1,489
Boston-Cambridge-Quincy, MA-NH (MSA) 541
San Diego-Carlsbad-San Marcos, CA (MSA) 404
Seattle-Tacoma-Bel levue, WA (MSA) 252
Raleigh-Cary, NC (MSA) 243
Austin-Round Rock, TX (MSA) 213
Denver-Aurora-Broomfi eld, CO (MSA) 169
Salt Lake City, UT (MSA) 158
Minneapol is-St. Paul-Bloomington, MN-WI (MSA) 141
Los Angeles-Long Beach-Santa Ana, CA (MSA) 135
Washington-Arl ington-Alexandria, DC-VA-MD-WV (MSA) 131
New York-Northern New Jersey-Long Is land, NY-NJ-PA 94
Phi ladelphia-Camden-Wilmington, PA-NJ-DE-MD (MSA) 93
Dal las-Fort Worth-Arl ington, TX (MSA) 87
Atlanta-Sandy Springs-Marietta, GA (MSA) 77Baltimore-Towson, MD (MSA) 76Portland-Vancouver-Beaverton, OR-WA (MSA) 69
Pittsburgh, PA (MSA) 62
Cleveland-Elyria-Mentor, OH (MSA) 60
San Antonio, TX (MSA) 56
Houston-Sugar Land-Baytown, TX (MSA) 54
Phoenix-Mesa-Scottsdale, AZ (MSA) 49
Buffalo-Niagara Fal ls , NY (MSA) 46
Chicago-Napervi l le-Jol iet, IL-IN-WI (MSA) 44
Indianapol is-Carmel , IN (MSA) 44
Orlando-Kiss immee, FL (MSA) 41
Providence-New Bedford-Fal l River, RI-MA (MSA) 25
Nashvi l le-Davidson-Murfreesboro-Frankl in, TN (MSA) 24
St. Louis , MO-IL (MSA) 22
Kansas City, MO-KS (MSA) 20
Detroit-Warren-Livonia, MI (MSA) 19
Sacramento-Arden-Arcade-Rosevi l le, CA (MSA) 19
Birmingham-Hoover, AL (MSA) 17
Louisvi l le-Jefferson County, KY-IN (MSA) 17
Cincinnati-Middletown, OH-KY-IN (MSA) 16
Venture Capital $ per Capita (2008)
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Clusters and Venture Capital
Q3 Deals
Software 20.79% 190 Biotechnology 19.58% 108 Medical Devices and Equipment 11.88% 82 IT Services 9.40% 64 Industrial/Energy 9.14% 59
% age
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VC Will Become More Competitive and Fewer Companies Will Access It
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2005 2006 2007 2008 20090
2000
4000
6000
8000
10000
12000
Number of Business Tax Accounts Created by the City of Portland
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FIGURE 1: Number of Top 5 Percent Growing Firms, by Age
Top 1% Performing Firms by Size
FIGURE 1: Number of Top 5 Percent Growing Firms, by Age
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Economic Development DynamicsNumber of Top 5 Percent Growing Firms, by Age
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Take Aways
• Cities will High Levels of Entrepreneurial Activity Don’t Necessarily Produce The Highest Levels of Large Employer Firms or Wealth
• Time and Historical Horizon Matters A Lot in Evaluation of Results…But What About the Future?
• Attitude and Aspiration Are Very Significant Influencers of Firm Creation and Growth
• Are High Wages Jobs and Wealth the Best (or Only) Measures of Entrepreneurial Economic Development?