Arnobio Morelix Senior Research Analyst, Kauffman Foundation April 2016 C2ER (Council for Community and Economic Research) –State Chapter

1. © 2013 Ewing Marion Kauffman Foundation
Arnobio Morelix
Senior Research Analyst, Kauffman Foundation
April 2016
Council for Community and Economic Research – State Chapter
FOUR INDICATORS FOR
VIBRANT ENTREPRENEURSHIP
ECOSYSTEM

2. © 2013 Ewing Marion Kauffman Foundation
Acknowledgments – Research & Policy Team
• Alicia Robb
• Amisha Miller
• Chris Jackson
• Dane Stangler
• EJ Reedy
• Emily Fetsch
• Jason Wiens
• Jordan Bell-Masterson
• Josh Russell
• Rob Fairlie
• Yas Motoyama

3. © 2013 Ewing Marion Kauffman Foundation
Four Takeaways
1. Understanding inputs versus outputs in entrepreneurship ecosystems
2. What makes a vibrant entrepreneurship ecosystem
o Four Dimensions and How to Measures Them
3. Data on Entrepreneurial Outputs
o the Kauffman Index of Entrepreneurship
4. Entrepreneurship Ecosystem Toolkit: Data, and Resources

4. © 2013 Ewing Marion Kauffman Foundation
Why measure?
“How do I actually know if my city is
doing better terms of
entrepreneurship?”
• Paraphrased here from Paul Glastris, editor in chief of the
Washington Monthly. He asked this to me on an entrepreneurship
event in St. Louis.
• A question we get often here at the often, in all shapes and forms.
• We will never be able to fully answer, but we are working on it. Photo by Becas Oea GCUB

5. © 2013 Ewing Marion Kauffman Foundation
1. Thoughts on Entrepreneurial Inputs and Outputs
• Inputs
o E.g.,
• Venture capital
• Patents
• Labor
• Outputs
o E.g.,
• New companies
• Employment growth
• Revenue growth
• Business survival

6. © 2013 Ewing Marion Kauffman Foundation
2. What makes a vibrant entrepreneurship ecosystem
Four Dimensions and How to Measures Them
• Density
• Fluidity
• Connectivity
• Diversity
o Inputs and outputs

7. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Density
dimension #1
• Number of new & young companies: by population
• Employment share of young companies
• High-tech startup density

8. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Fluidity
dimension #2
• Population “flux”
o Inflow and outflow of people
o Brain circulation more relevant than brain drain
• With people with the un-matched skills are staying, that is bad for them and for your ecosystem
• Labor market velocity
o Movement (“reallocation”) between jobs and companies
• High-growth firm presence

9. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Connectivity
dimension #3
(probably least studied dimension – knowledge limitation)
• Program mapping
• Spinoff rate
• Peer and mentor relationships

10. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Connectivity
dimension #3
• Program mapping
• More info at
o http://www.kauffman.org/blogs/growthology/2015/04/presentation-at-facebook-headquarters-building-a-robust-
entrepreneurial-ecosystem

11. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Connectivity
dimension #3
• Spinoff rates and maps
• More at
• http://www.heikemayer.com/spinoff-regions.html
• http://www.kauffman.org/newsroom/2013/06/new-map-tracks-evolution-of-entrepreneurship-in-kansas-city

12. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Connectivity
dimension #3
• Endeavor Insights -- Tech Maps
o E.g.,
• Most Inspirational Founders
• Employee Spinouts
• Mentorship Among Founders
• Investor Relationships
• More info at
o http://nyctechmap.com/

13. © 2013 Ewing Marion Kauffman Foundation
Entrepreneurial Diversity
dimension #4
• Number of “specializations”
• Social and economic (income) mobility
• Outsiders / immigrants

14. © 2013 Ewing Marion Kauffman Foundation
4) Entrepreneurial Outputs
the Kauffman Index of Entrepreneurship
www.kauffmanindex.org
Startup Main
Street
Growth

15. © 2013 Ewing Marion Kauffman Foundation
What it looks like

16. © 2013 Ewing Marion Kauffman Foundation
4) Ecosystem Toolkit: Data
• Measuring an Entrepreneurial Ecosystem
o http://www.kauffman.org/what-we-do/research/city-metro-and-regional-
entrepreneurship/measuring-an-entrepreneurial-ecosystem
• Kauffman Index of Entrepreneurship
o Startup Activity
o Main Street Entrepreneurship
o Growth Entrepreneurship
• Available at national, state, and metro levels (40 largest metros)
• www.kauffmanindex.org

17. © 2013 Ewing Marion Kauffman Foundation
4) Ecosystem Toolkit: Resources
o Entrepreneurship Support Programs
• http://www.kauffman.org/what-we-do/entrepreneurship
o Growthology (research blog)
• www.growthology.org
o New Entrepreneurial Growth Agenda (book -- free)
• http://www.kauffman.org/neg/
o Policy Digests
• http://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest
o State of the Field (encyclopedia-like summary of entrepreneurship presearch)
• http://www.kauffman.org/microsites/state-of-the-field

18. © 2013 Ewing Marion Kauffman Foundation
Challenges
• “More entrepreneurship is better” assumption
o “more is better” (especially young and growing) is an useful heuristics
• New and young firms create most net new jobs
• New firm creation is on a historical decline in the U.S.
o but at least conceptually not always true
• Data lags
o Nowcasting?
• Inside city (e.g., street level) missing

19. © 2013 Ewing Marion Kauffman Foundation
What are we missing?
• What’s missing on the framework?
• Which ingredients connect to which “output” indicators?
• How to get more granular (e.g., interventions that affect ingredients?)
• What are you doing in your region?

20. © 2013 Ewing Marion Kauffman Foundation
Conclusion and questions
“if you can’t measure it,
it doesn’t exist”
- Bill Gates, quoted on the Economist
Photo by Steve Jurvetson from Menlo Park, USA

21. © 2013 Ewing Marion Kauffman Foundation
Thank you
Four Takeaways
1. Inputs and Outputs
2. Four Indicators of a Vibrant Entrepreneurship Ecosystem
3. The Kauffman Index of Entrepreneurship
4. Tools, Data, and Resources
• Arnobio Morelix
o @arnobiomorelix (Twitter)
o amorelix@kauffman.org
o www.growthology.org (entrepreneurship research blog)
o www.kauffmanindex.org