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Entrepreneurship as economic development strategy

It’s no secret that a lot of cities out there want to become the next Silicon Valley (or San Francisco, since a lot tech companies seem to be now setting up shop there instead). With the shift towards a knowledge/information/networked economy (pick your favorite name), cities around the world are betting that entrepreneurship is going to be the key to future economic growth.

As an example, I was reading yesterday about a Buffalo-based business plan competition called 43North. It’s allegedly one of the biggest business plan competitions, ever:

With $5 million in cash prizes, including a top award of $1 million, six $500,000 awards and four $250,000 awards, 43North is setting out to turn the best new business ideas from around the globe into reality.

In addition to cash, winners will receive mentoring and free office space for a year. But while the competition is open to anyone in the world, you have to relocate to Buffalo for a minimum of one year if you win. 

It’s a bold move. $5 million is a lot of money. But it strikes me as a step in the right direction to reinvent a city that was once the 8th largest in the US. I’m a big believer in the power of entrepreneurship.

But 2 considerations do come to mind.

The first is that this move can’t, or at least shouldn’t be, purely about business and economics. To create an entrepreneurial hub, I think you need to also ensure that you have a city that young people would love to live in.

I’m not saying that Buffalo isn’t one of those cities (I don’t know it well enough to comment), but I am saying that it should be part of any economic development strategy. Why do you think more and more startups are moving from Silicon Valley to San Francisco?

The second is that I worry we may end up with too many cities trying to become the next Silicon Valley. The industrial economy allowed for the creation of a certain number of thriving metropolitan regions (see: The Rust Belt).

But I’m not so sure the networked economy will require as many. I could be wrong, but the data seems to suggest that we’re heading towards a spikier economic landscape—both within cities and across nations.

In any event, here’s my question for the community: Would you move to Buffalo?

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