Dave Nicklaus from the Post-Dispatch had an interesting article today (10-25) about the area's history of slow economic recoveries. The expert he interviewed for the story, Jack Strauss of Saint Louis University, believes the St. Louis economy is so sluggish during recoveries because of its dearth of small, fast-growing businesses. This seems to make sense. After all, it's small business that usually creates the new jobs and pulls communities out of economic rough patches.
It's no secret that studies have shown St. Louis has a low rate of business startups and lacks an entrepreneurial culture.
It's too late to turn around for this economic downturn, but there are some things the region can do before the next downturn. Here's three things we can do today:
1. Get Our Leaders Onboard. It starts at the top. Stop with the condescending talk about how important small companies are and start putting your money where your mouth is. This goes for RCGA (quit spending money to lure businesses from other regions) and use it to help our own homegrown firms prosper. There are many successful small firms that can become future Fortune 1,000 firms, but only with support. This goes for civic progress, state and local politicians and communities as well. Do our leaders realize that 95% of area companies have less than 20 employees?
2. Change The Mindset of Area Lenders. There are MANY area lenders that won't even talk to an entrepreneur unless his business has $5 million in revenue. Interesting...didn't Build-A-Bear, Enterprise, World Wide Technology, Pangea Group, Scottrade, etc., all start out with much less in revenues? I'm not asking to take risky loans, I'm saying maybe you should think outside the box when it comes to funding area companies. Maybe more programs like the St. Louis Business Development Fund (pooling many lenders together to lesson the risks) would help. Listen...if we as a region don't nurture some of these smaller firms, where will the bank's find these $5 million companies to lend to 5 years from now? Oh, right, we'll have RCGA steal one from Cleveland!
3. Change The Mindset In St. Louis. This is a tough task for a town that wants to know where everyone went to high school. I know this used to be a corporate town and people here just flat out don't like to take risks. Well, that's part of the problem. This is a risk-reward society. The ones that take the most risk get the greatest rewards. We've got to start embracing new ideas and take a chance every now and then. In some towns, an entrepreneur who failed at a business is seen as experienced. In St. Louis, that entrepreneur is seen as "no good," "washed up," a "failure." If we're going to encourage more entrepreneurship in the region, that mindset has got to change.
--Ron Ameln, SBM