RAPID BUSINESS GROWTH INITIATIVE AND FORUM FOR GROWTH:
HARNESS THE POWER OF GAZELLES -- "GROW OUR OWN"

If Gazelles are the primary engine of job growth and economic prosperity, then why would the creation of gazelles not be the top priority for economic development?

Introduction

    Highly successful economic development happens as a result of pervasive business growth. Such growth occurs only in strong entrepreneurial cultures! These cultures can form haphazardly or accidentally, or deliberately.

    It is unfortunate that economic development initiatives have relied primarily on attempts to attract industry into the area instead of focusing on the formation of growth companies. Attraction of industries has been shown to be unreliable and costly because of the economic competition and tax concessions that are usually made.

    For reasons that are unclear, economic development specialists have generally ignored how economic growth in fact happens, for example, in those regions that have been economically most successful such as Research Triangle Park and Silicon Valley in the United States. In others words, policy makers have failed to study and emulate how economic development winners did it.

    Economic growth occurs as a result of fairly specific circumstances. Usually it occurs as a result of initial business formation, an entrepreneurial culture that emerges because of early business success, followed by the spin-off and formation of more businesses. Even in the Research Triangle area and in Silicon Valley the process was random more than it was deliberate, but a very clear pattern can be identified, which is that a "grow your own growth companies" strategy works best by far as an economic development strategy.

    The puzzling question is why other areas would not implement policies that make such a strategy real. The main answer to this question is that planners have relied on entrepreneurial incubation programs that have simply been too haphazard. For instance all over the country economic planners have depended on a "High Tech Fairy" who would wave a wand to create business growth. That is not how deliberate, rapid regional economic growth happens. There are simply too many random factors at work to assure that such growth will in fact occur.

    Homegrown business growth is much more important than any other factor in stimulating highly successful economic development. Consider, that Silicon Valley would not have occurred were it not for William Hewlett and David Packard, and later William Shockley, who started and grew their companies in the region. Microsoft’s presence in Seattle is the direct result of Bill Gates' desire to go back to Seattle, even though the company was well established in New Mexico.

The Rapid Business Growth Initiative

    Rapidly growing companies are referred to as "gazelles" and generate more than 75% of new jobs (see Inc. 500 list). To foster the formation of gazelles, it is important to stimulate the emergence of an entrepreneurial culture at a grass-roots level, where everyone can see the possibilities and rewards of business success. At the same time, existing businesses should be encouraged and supported to target and meet high-growth objectives. In addition it is important to apply the data and knowledge that has been accumulating in the last several decades about business growth. This means that a business growth strategy should incorporate the following goals:

• Stimulation and support of an entrepreneurial culture
• Assistance and support for potential business gazelles in the most promising market niches
• Action research on rapid business growth

    Business Growth Partners, Inc. has developed the "Enterprise and Community Support Model" (ECPM) that is designed to create an entrepreneurial culture in selected communities. There are seven key elements or activities that BGP identified as being critical to assuring entrepreneurial success. These are:

1. A specialized, tested, intensive entrepreneurial training program

2. Long-term business management assistance program

3. Facilitated, continuing peer support process

4. A business incubation facility

5. A phased, incentive- and performance accountability-based financing system

6. An as-needed "life management" training and support program

7. Coordination of family and community support activities

The seven components are implemented as part of a coordinated, comprehensive, "super-organized" strategy to generate the greatest level of community prosperity. Historically, all of these activities have been tried at one time or another. The problem has been that they have not been tried together as part of one system (or culture) that targeted a specific population with consistent messaging and reinforced behaviors.

Growth Niches

    The second goal of the proposed Rapid Business Growth Initiative is to establish and support a number of companies that are deliberately designed to be dominant in specific economic niches that are most suitable to a specific region, including:

• Global Internet Marketing and Technical Services
• Trade
• Technology

These three categories of economic activities are attractive because they can generally take advantage of circumstances that already exist in a region. They also offer excellent potential for growth. However, how each category should be implemented in an area depends on specific conditions, particularly the existence or creation of competitive advantages. Therefore, execution of the Rapid Business Growth Strategy must include a strong insistence on the creation and maintenance of competitive advantages in comparison with other regions.

    Competitive global Internet marketing and technical services can be developed in just about any area because of the enormous growth that still lies ahead for Internet-related business activities. Although the Internet industry has already experienced a growth bubble, most of the Internet's expansion will occur in the next decade. Currently there exists a world-wide need for in-depth knowledge and expertise to apply the numerous Internet technologies that have been developed in marketing and enterprise operations. There is also a shortage of quality technical support services in the industry.

    Trade has historically been the main foundation for regional prosperity. To every extent possible local leaders must identify one or two market niches that can result in trade expansion. This is critical because trade generates revenues that come from outside the region.

    Technology offers a third type of growth catgory that should be supported as part of the economic development strategy. It is not so important what technology is chosen, as long as its has good future growth prospects. What is important is that resources be concentrated to sponsor one or two specific technologies. It is also important to stress support of the rapid development of commercial applications.

Applied Research

    Business growth is not a mysterious, mystical process. It can be studied and the research findings applied to grow companies faster. The third and final goal is to implement an applied research program that supplies the data and knowledge base in support of "best practices" for prospective business gazelles. Such a program will address the following types of questions based on the research from David Birch on business formation dynamics and Business Growth Partners' research on growth companies.

1. How fast can companies actually grow in what time period?
2. What are the chances that a certain number of growth companies can be created in an area? How can those chances be improved?
3. What sort of scoring system exists to predict the likely success of a particular business?
4. What are the main factors affecting rapid business growth and how can those factors be influenced?
5. What sort of financing is required to executive a deliberated rapid business growth strategy?
6. What does it take to stimulate the development of an entrepreneurial culture and how long does it take?
7. How do you measure entrepreneurial culture?
8. What is the relevance of entrepreneurial training, community support and economic development activity to creating an entrepreneurial culture?
9. What resources are available to implement the regional business growth strategy initiative? What additional resources are required?

Phased Implementation of the Rapid Business Growth Initiative

    The implementation of the proposed initiative will require two phases. In the first phase it is important that the support of business, government and community leaders be obtained for the proposed programs. In the second phase program activities will be implemented. To familiarize business and other leaders with the data and knowledge base pertaining to rapid business growth, we usually recommend that a "Forum for Growth" be held as a one- or two-half day event. The planning and implementation of such a Forum will therefore constitute most of the Phase I activities.

1. Appointment of an Action Planning Committee to implement the Forum for Growth with a steering group consisting of high-performing regional leaders. The careful recruitment and organization of the Committee members will likely determine the success of any follow-up.

2. Recruitment of Co-Sponsors to support and fund the Forum for Growth, initially and preferably on an on-going basis.

3. Invitation of Forum participants to consist of business and government agency leaders in the region.

4. Pre-Forum coordination activities to insure that participants are ready and prepared to commit to action during and after the Forum.

5. Forum execution - venue, logistics, food and materials.

1. Implementation of Enterprise and Community Prosperity Model in selected communities tied to commitments from Forum participants and other funding sources.

2. Implementation of "Rapid Business Growth" support services (BGP is already executing part of this activity as its business model (see http://www.bizgrow.com).

3. Implementation of "Action Research" to determine how best to apply the factors and patterns that are most successful in fostering rapid business growth, tied to grants from funding sources.

    It is clear that the overall long-term success of the proposed initiative will depend on the preparation and execution of the Forum for Growth. The Forum's objectives and proposed schedule follows:

Forum for Growth Objectives The objectives of the Forum for Growth are to

1. Present the proposed rapid business growth initiative
2. Seek feedback and participation from business and government leaders
3. Determine how businesses and organizations can leverage existing resources and programs in implementing a deliberate entrepreneurial and business growth initiative
4. Obtain commitments to follow up with a business growth plan

Sample Forum for Growth Format - One-day program

8:30 Welcome

9:00 - 10:30 Presentation and discussion of regional business growth strategy initiative

10:30 - 11:00 Morning break

11:00 - 12:30 Group meetings on identifying and leveraging of resources to implement business growth initiativ

12:30 - 2:00 Lunch break - Luncheon Speakers2:00 - 3:00 Group meetings to discuss coordination on use and leveraging of resources

3:00 - 4:00 Group meetings to make specific follow-up commitments on use and leveraging of resources