The Kauffman Foundation, the widely followed nonprofit focused on entrepreneurship, has provided another important validation that the greater Washington region is a business-forming hotspot.
According to the foundation, the greater Washington region is the number one entrepreneurial location in the United States. And, Virginia and Maryland are the number one and number two most entrepreneurial states. Nationally, the areas of entrepreneurship with the most growth are industries where our region has an established ecosystem of growing companies: IT, advertising and marketing, business products and services, healthcare and software.
Given those findings, it is important for us to ask why. Why are we such profitable entrepreneurs here? Which factors make us a success and how do we foster those factors to drive us to heightened success?
It’s not enough for us to celebrate our emergence as a recognized entrepreneurial community — we must capitalize upon it.
Over the last six months, as I worked with the civic- and business-minded 2030 Group to prepare its Roadmap Innovation Initiative, we learned that the “why” for our region’s success was more related to proximity to the federal government than many acknowledge.
Our entrepreneurs use proximity to the federal government as an opportunity to obtain capital, find customers, gather regulatory insight or to benefit in other ways. Our region’s entrepreneurs are like sunflowers following the sun across the sky. They see opportunities and adapt: Whether it is developing the technological approaches to win the Space Race, commercializing the Internet or creating innovative cybersecurity technologies.
However, in our adaptability as a region, we run the risk of being followers and not leaders. Our work showed that there are significant risks to our entrepreneurial success. The government is looking elsewhere for technological innovations despite our local achievements. Funding for research and development (an important driver for our region’s economy) is under scrutiny. Many of the industries that will lead job growth and opportunities are taking root in other places. Venture capital pools elsewhere.
Interestingly, these conclusions seemed to surprise people. Many in our region thought their own entrepreneurial journey and successes were unique or occurring in a narrow pocket of activity limited by industry, location or customer. Very few of them perceived the diversity and density of our region’s strengths.
There are an impressive number of innovative triumphs right here in the capital region. That’s a reality, confirmed by the Kauffman report. Now, we should make it an expectation. If we create an expectation of entrepreneurial excellence, our political representatives, educational institutions and community leaders will follow. Having the validation of the Kauffman Foundation is important; taking the findings as a challenge to continue to be entrepreneurial is essential.
Jonathan Aberman is a business owner, entrepreneur and founder of Tandem NSI, an Arlington-based organization that seeks to connect innovators to government agencies. He is host of “Forward Thinking Radio” on SiriusXM, a business and policy program, and lectures at the University of Maryland’s Robert H. Smith School of Business.