My friend and brilliant person, Robert E. Litan , recently co-authored a piece in Harvard Business Review reflecting on a thesis first proffered by another brilliant mind, William Baumol, about productive entrepreneurship vs. unproductive entrepreneurship.
The article serves as a great reminder to practitioners of economic development that not all entrepreneurship is created equal, or even of net benefit to society.
One could argue that in today’s hyper partisan environment, unproductive entrepreneurship (referred to as rent-seeking) is on full display. Need convincing? Just read through the House or Senate version of revised healthcare bills, and see how certain niche issues are being addressed to benefit narrow interest groups. Some might argue that those benefiting are merely being entrepreneurial in influencing the process, but the disproportionate remunerations extracted from this rent-seeking behavior is not in the interest of the greater good.
This is why NC IDEA carefully curates our programs and grants to encourage the right kind of (productive) entrepreneurship. It is also why we are working with a growing network of Ecosystem Partners to likewise promote productive entrepreneurship. In so doing, we expand the potential of greater economic participation throughout the state; rural, urban and everywhere in between.
I know it is a cliché to call this the rising tide approach to economic development, namely promoting entrepreneurial opportunity for all, but it’s accurate and better serves humanity.
To that end, we are thrilled to welcome our newest Ecosystem Partner, Venture Asheville. We now have eleven organizations working together, with many other groups also doing great work in the state, to promote the right kind of entrepreneurship in North Carolina. And this kind of entrepreneurship builds resilient economies, stronger communities, and better futures.
June 23, 2017
Written by NC IDEA President & CEO, Thom Ruhe