Why Entrepreneurship?

Entrepreneurship as an economic development driver

Entrepreneurs and the new companies they launch are crucial to the state’s economic development future. “Research shows that productivity, new job growth, the economy of tomorrow, and community-level economic health are driven by new and young companies,” says Julie Heath, VP of Entrepreneurial Ecosystems at the Indiana Economic Development Corp (IEDC).

Helping aspiring business founders and entrepreneurs isn’t a new idea, but recently community leaders have learned the power of new and young businesses for the purposes of economic vibrancy and quality of place. Creating the conditions for people to successfully start companies, also known as #entrepreneurship ecosystems is a recent chapter in economic development.

“The Kauffman Foundation is the national thought leader in this space and at the 2019 ESHIP Summit, Dell Gines shared a framework that breaks economic development into four parts – four waves of creating prosperous and growing economies. The first wave is industrial recruitment, the second is #smallbusiness support, the third wave focuses on clusters, and the fourth wave, entrepreneurship ecosystems, started around 2010.”?

Community wellbeing

The economic impact of new businesses can be felt across the state, beginning with the neighborhoods where they establish roots.

“If there is one successful new company start–even a web-based microbusiness–it increases the median household income for households nearby,” says Heath, citing research from Venture Forward, a GoDaddy initiative started in 2018 and their work with UCLA to measure the economic impact of 20 million U.S. microbusinesses.

Venture Forward also found that on average, two or more jobs are created by every microbusiness entrepreneur, not counting their own. New businesses hire employees, pay suppliers and spend money in the community, supporting other businesses. All of this has a multiplier effect.

“We are seeing local and regional leaders take action. Leaders in Noble County have come together to launch entrepreneurial ecosystem efforts because they want to see their homegrown companies flourish,” shares Heath.

New job growth

With the #connection between new job growth and young companies in mind, in early 2022 the Entrepreneurship & Innovation team at IEDC worked with Indiana Business Research Center at Indiana University to figure out job growth driven by young Indiana companies between 2000 and 2019.

Using U.S. Bureau of Labor Statistics data, they found Indiana companies in their first five years created more net-new jobs in #Indiana than any other “age group” of companies, accounting for over 36,000 new jobs in 2019 alone.

Heath and the IEDC team consider it their mission to celebrate the #entrepreneurs who are thriving across a diverse range of evolving entrepreneurship ecosystems in Indiana—and to support them with the #resources necessary to continue to grow their businesses and enrich their communities.

The stories shared in these pages are just the beginning of the conversation, one that IEDC hopes continues in #collaborative workspaces, conferences, and board rooms across the state. These are vital conversations that might very well lead to one Hoosier connecting with another and creating a more prosperous economic future for everyone.?

Read more in the Entrepreneurship Indiana yearbook to learn more about how entrepreneurship is impacting the state's economic development and the stories behind the inspiring individuals making it happen. #EntrepreneurshipIN22