Ecosystem is a term born from the field of biology (Tansley & Clapham) to characterize a community of interacting (biologic) organisms and their physical environment.
It has subsequently been coopted by other fields of endeavor, including economic development, frequently invoked to describe the nexus of economic, societal, and political systems (or lack thereof) affecting the economic potential of individuals and stability of communities.
And it has become a bit of a buzzword – maybe even over used. But, like another overused and favored word of mine [entrepreneurship], there is no obvious better word to describe the homeostatic characteristics of the economy. So it is that we recently launched our newest grant program, aptly named, the Ecosystem Partner Program; or EPP for short.
We are attempting to do several things with the Ecosystem Partner Program. From the start, the application process itself revealed many promising activities happening throughout the state to promote entrepreneurial activity. It was a rare and valuable chance to take inventory of the groups and individuals that have committed themselves to helping entrepreneurs take flight and succeed in North Carolina.
For the groups that received grants, (nine awards totaling $1,175,000) this begins an effort to link and coordinate their activities in the hope that doing so we can increase the reach and impact of the programs supported. By working with the organizations that support a diverse group of individuals, we have a great opportunity to share and learn from one another, which ultimately serves the best interest of our communities and the economy.
To be certain, we are not the only ones obsessing over ecosystems. Many groups, foundations, think tanks, and even governments are experimenting with activities and policies to energize entrepreneurial ecosystems. In my own experiences as an entrepreneur, investor, mentor and grant maker, I tend to characterize ecosystem partners as focusing on one or more of three primary ingredients of entrepreneurial economies: human capital, intellectual capital, and financial capital – or the 3Cs of entrepreneurship, so to speak.
Human capital encompasses entrepreneurship education; be that formal curricular offerings on college campuses to weekend or evening training programs offered by entrepreneurial support organizations, community development financial institutions (CDFI), or accelerator programs and special interest groups – veteran and women focused groups for example. And of course, it also includes the various and sundry mentoring or community-based coaching activities. In general terms, empowering more people with an entrepreneurial mindset is the work of expanding human capital (potential) and the proverbial low-hanging fruit of building an entrepreneurial ecosystem.
Intellectual capital includes the common variant of intellectual property(IP), namely the thought and work product of students, faculty, and employees for the purposes of commercialization. It also includes activities that support ideation as well as market validation. Confirming market solution fit is vital to turning “cool ideas” into good companies. Unfortunately, resources for improving intellectual capital (and human capital for that matter) too often can be a dog’s breakfast of well-intended but ineffective offerings. This is often evident in communities that ‘boast’ of entrepreneur service organizations that have jumped the shark years ago.
The final ingredient, in most cases, is financial capital. This is a field that has seen a fair amount of change over recent years with the advent of crowd funding, competitions, and even program related investments, into for profit companies, by non-profit foundations. Additionally, angel investing continues to grow in the U.S. and the coopetition between formal investors and other sources of capital may give rise to better outcomes … or not. One thing is certain, through social media, rapid prototyping enabled by advances in 3D printing, and crowd funded product validation, financial capital has more data points with which to consider investing in ideas and more would-be entrepreneurs are getting a chance to pitch their ideas.
Thusly, with an emphasis on the three Cs of E, we kicked off our first cohort of ecosystem partners. And as we now set about the work of this collective, we are hopeful to add to their ranks many more of the worthy programs that applied for funding.
Unfortunately, we are limited in our own financial capital and therefore could not fund additional partners (also worthy of support) at this time. But it is our hope that as time and progress warrant, others with the will and capacity to contribute to the entrepreneurial success of the state will join us on this worthy adventure. As a 501(c)3, your support for our mission qualifies as a charitable contribution and, more importantly, you will be investing in the future economic vitality of the state. So if you don’t need another building on your alma matter’s campus to bear your name, consider joining us in building a better future.
September 28, 2016
Written by NC IDEA President & CEO, Thom Ruhe