Delore Zimmerman of Praxis Strategy Group gave this presentation to the Mid-America Chamber Executives on 5/8/13.

1. Enterprising States 2013
Getting Down to Small Business
Mid-America Association of Chamber Executives
May 8, 2013

2. Economic research, strategy & development company
that works with leaders, innovators & entrepreneurs
to create more competitive communities & companies
Delore Zimmerman

3. ENTERPRISING STATES PROJECT
1. Which state policies have the biggest
impact on creating jobs?
2. Are there best practices that states are
putting into action to create new
economic opportunities and
prosperity?
www.freeenterprise.com/enterprisingstates

4. Small Business Startups Stalled
0%
5%
10%
15%
20%
25%
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
U.S. Employment in Firms Five Years Old and Younger
Source: U.S. Small Business Administration, Office of Advocacy, from data provided by the
U.S. Census Bureau, Business Dynamics Statistics

5. Small Business Outlook Low
-40
-20
0
20
40
60
80
100
120
140
2003
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
113
-28
12
-3
23
-11
9
Wells Fargo/Gallup Small Business Index
Owners' Ratings of Current Situation and Future Expectations
Wells Fargo/Gallup Quarterly Small Business Index

6. U.S. Chamber Business
Outlook Survey
 16% of small businesses added
employees in the past year
 82% feel the U.S. economy is headed in
the wrong direction
 January 2013: 54% expect outlook to get
worse over then next year, up from 24%
the previous October

7. Employment by Business Size, U.S. Economy
Self-Employed (1)
Stage 1 (2-9)
Stage 2 (10-99
employees)
Stage 3 (100-499)
Stage 4 (500+)
0
5
10
15
20
25
30
35
40
45
50
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
NumberofJobs
Millions
Source: National Establishment Time Series

8. Small Business Growth & Vigor
 Minority-owned businesses
 Immigrant-owned businesses
 Women-owned businesses
 Baby boomers
 Self-employed & solo entrepreneurs

9. Energy & All Other Sectors
10.1%
2.3%
Energy Jobs All other Sectors
2010-2012

10. States and Small Business
All states have policies and programs to
encourage entrepreneurs and support small
business
 30% increase in program funding 2012-13
 Most states have loosely integrated
programs but some have
comprehensive, policies and programs
intended to create “ecosystems”
 Many states are focusing on high-growth
potential firms with job generating capacity

11. Policies
That
Produce
Entrepreneurship
& Innovation
Talent Pipeline
Exports &
International
Trade
Business
Climate
Infrastructure
States Impact Economic Growth & Job
Creation in 5 Key Policy Areas

12.  Moratoria on new rules and
regulations
 Fast-track permitting
 Eliminate rules, regulations and
statutes that are job-killing
 Impact statements for newly
proposed rules and regulations
 “One-stop” offices for state
government
Business Climate: DURT Busting
Many states are bringing business
leaders to the table to help with
regulatory and policy reforms

13.  Tax credits for:
o Investors in startup and expanding
businesses
o Hiring employees
o Businesses in targeted industries, e.g.
data centers
 Regulations tailored for targeted
industries, e.g. financial, energy, and
vehicles
Business Climate
Highlights

14. Top Business Climate States
14
40
3720
1

15.  Focus on emerging growth companies, a.k.a.
high-growth firms
 Economic gardening initiatives for expansion
stage companies
 Technology-based economic development
programs; “ecosystem” initiatives
 Investment funding for startups and expansions
 University-business-government partnerships
 Business plan competitions
Entrepreneurship & Innovation
Big shift towards entrepreneurship and growing
existing businesses.

16. Top Entrepreneurship & Innovation
States
15
27
4438
42

17.  Expand access to broadband
 Target and incentivize specialized
infrastructure and equipment
 Upgrade ports & airports
 Establish state infrastructure banks and
funds
 Encourage Public Private Partnerships
(PPP)
Infrastructure
Southeastern states upgrading ports to trade with
Central and South America

18. Top Infrastructure States
22
6
4219
41

19.  Programs at colleges and universities
tailored to industry sectors and/or specific
companies
 STEM initiatives – secondary and
postsecondary
 Middle-skill jobs that require less than a four-
year degree
 Internships
Talent Pipeline
Economic development and workforce development
systems are becoming more integrated.

20. Top Talent Pipeline States
13
6
1122
10

21.  Training and support for companies to
develop their export skills and connect to
foreign markets.
 Governors as international business
diplomats –> door openers and deal closers
to attract foreign companies
Exports & International Trade
Small businesses are a major target for state
export programs

22. Top Exports States
21
25
1223
36

23.  Energy industries
 Reasonable regulations and taxes
 A pro-growth culture and attitude
 Strong talent pool and training systems
 Sound fiscal policy that invests in the basics
-
 Governors providing high-level leadership to
build local networks and international
connections
Top Performing States

24. Top Performing States
1
15
1013
12

25. Conclusions After 4 Years
Each state has its own unique economic
DNA
A state can neither cut nor tax itself into
competitiveness & prosperity
To simply proclaim an enterprise-friendly
environment is no longer adequate. A story
must be backed
up by actions.

26. Using Enterprising States
Governor’s roundtable with business
leaders
Customized state report
Presentation at statewide chamber events
or other business conferences

27. ACKNOWLEDGEMENTS
Delore Zimmerman, Ph.D.
Mark Schill
Matthew Leiphon
Ryan Aasheim
Zina Klapper
Joel Kotkin
Presidential
Fellow, Chapman
University