Why “Competitiveness” Is the Wrong Mindset for Supporting Entrepreneurship

In many economic development circles, there’s a natural tendency to lean on competitiveness as the driving force for growth. You have to look no further than your local business news to see the efforts made to recruit the next Apple/Google data center, the next electric car plant or chip manufacturer. Economic development leaders are then required to champion the idea of "winning" against other cities, regions, or states to attract and retain these businesses. While this mindset works in traditional opportunities, it falls miserably flat when applied to encouraging new founders to build their companies locally. Here’s why.

At its core, competitiveness implies a zero-sum game: for one city to succeed, another must lose. This “recruit great founders” approach implies that you actually know who the great founders are.?

Hint - at the idea stage, nobody knows who is going to succeed.?

The only thing worse is someone acting as if they already know who is going to succeed.

I remember sitting in an ad hoc meeting of my local Raleigh Durham ecosystem leaders over 10 years ago when one of the old guard actually said that we should pick 1 or 2 of the better entrepreneurs and just put all our collective assets behind them. In other words, crown a winner. (I just felt the heat run up my neck again. Please don't do this!)

Another reason the competitiveness approach does not work is that it focuses energy on external rivals instead of focusing energies locally on building a sustainable and aspirational entrepreneur pipeline. Every community needs this to play the long game.

New founders don’t need a city focused on being the best; they need a city that’s the right fit for their entrepreneurial journey.

Lastly, the competitiveness mindset requires us to obsess over rankings or capital raised as markers of success (we need something to measure ourselves against our competitors). Right? It creates pressure to achieve outsized results quickly, leading to burnout or discouragement. Worse, it may alienate entrepreneurs who don’t see themselves fitting into a high-stakes "win or lose" narrative.

So, let’s move past the idea of "winning" the startup game. Instead, let’s focus on what truly matters: building an ecosystem that founders want to be part of—not because it’s the best, but because it’s theirs.