Entrepreneurship and Technology in the National Capital Economy

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Entrepreneurship and Technology in the National
Capital Economy

• Roger R. Stough
• NOVA Endowed Chair and Professor of Public Policy
• Director, Mason Enterprise Center
• School of Public Policy
• George Mason University
• rstough_at_gmu.edu
• http//cra.gmu.edu

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Objectives

• Entrepreneurship and Enterprise Development
• Global trends and policy implications
• Trends in the National Capital Region and
  policy/program gaps
• Technology Sector Performance in the Region
• Performance 1990-2003
• Compared to other regions

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Enterprise Development

• Global surge of interest in enterprise
  development policy and programs
• In the U.S. 600,000 jobs per year
• 6 million small businesses create most new jobs
• Major role of rapidly growing small businesses
• Entrepreneurs produce 67 of inventions, and
• 95 of radical innovations
• Create 45 of mfg. value added
• Enterprise development in Europe and Asia

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Why the surge of interest?

• Reasons
• ICT revolution
• Increased access to knowledge - destabilizing
• Increased information more innovation
• Globalization and Political Change
• ICT revolution information diffusion increasing
• Opening up of formerly inaccessible markets

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Why Surge of Interest?

• Reasons (Contd.)
• Competitiveness dynamics
• Wage cost competition
• Capital substitution
• Continuous innovation
• Urban agglomeration
• Knowledge concentration
• Increased innovation
• Increased venture formation

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The National Capital Region and Enterprise
Development

• Non-wage employment as a proxy for
  entrepreneurial activity
• 700,000 or 20 of labor force in non-wage
  employment (same as national average)
• But of the 3.5 million in the labor force
• 12 employed by the federal government
• 12-13 by federal contractors
• Thus, 700,000 non-wage positions is about 30 of
  the adjusted labor force of 2.7 million
• Region has a high level of entrepreneurship

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Models for Enterprise Development

• Entrepreneurial fountain static model
• Entrepreneurial fountain dynamic model
• Policy relevance and policy gaps

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Launched Ventures
Figure 1. Entrepreneurial Fountain The Process
Capitalization
Business Plan
Resource Development and Acquisition
Idea Development
Entrepreneurial Turbulence
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Launched Ventures
Figure 2. Entrepreneurial Fountain Static Model
Growth. Cos.
New Growth Cos.
Tier II Companies
Tier I Companies
People with Ideas
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Launched Ventures
Figure 3. Entrepreneurial Fountain Dynamic
Equilibrium Conditions
Average Conditions
Dis-equilibrium Conditions
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Source Bureau of Labor Statistics, Dept. of
Labor and Bureau of Economic Analysis, Dept. of
Commerce, US Gov.
12
Source Bureau of Labor Statistics, Dept. of
Labor and Bureau of Economic Analysis, Dept. of
Commerce, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor and Bureau of Economic Analysis, Dept. of
Commerce, US Gov.
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Figure 7. Incubators in the National Capital
Region 1999

• Northern Virginia 2
• Suburban Maryland 3
• District of Columbia 1

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Figure 8. Incubators in the National Capital
Region in 2004

• Northern Virginia 10
• Angle Technology LLC
• Bio-Accelerator (Fairfax County)
• Growth Accelerator Program (CIT)
• Greater Reston Chamber of Commerce
• Incubator America (three way partnership)
• LaunchFuel
• Mason Enterprise Center
• Milestone Equity partners, LLC
• Scottish Technology and Research Center

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Figure 8. Incubators in the National Capital
Region (Continued)

• Suburban Maryland 12
• Center Bus. and Tech. Development (Columbia)
• Chesapeake Innovation Ctr. (Annapolis)
• Dingman Center (University of Maryland)
• Emerging Technology Center (Baltimore)
• Human Vision Incubator (Landover)
• Maryland Technology Development Center
  (Montgomery)
• Neotech (Columbia)
• Prince Georges Co. Tech. Assistance (TAC)
• Technology Advancement Program (University of
  Maryland)
• Technology and Economic Development Corp. (TEDCO)
• The Rosen Group (Baltimore)
• UMBC Technology Center (Suburban Baltimore)

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Figure 8. Incubators in the National Capital
Region (Continued)

• District of Columbia 4
• Affinity Lab, LLC
• George Avenue Business Resource Center
• Howard University Small Business Dev. Center
• U.S. Technologies

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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
21
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
23
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
24
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
25
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
26
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
27
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
28
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
31
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
32
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
33
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
35
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
36
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
37
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
38
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
39
Source Bureau of Labor Statistics, Dept. of
Labor, US Gov.
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Some Conclusions

• The technology sector in Washington is different
  than in other technology intensive regions
• The Regions technology sector is focused in the
  stronger parts of the technology sector
• The Regions technology sector is well positioned
  for continued growth
• -Demand is strong in both public and private
  sectors
• -Relatively small emphasis on weaker
  technology sectors