For decades, traditional economic development initiatives have focused on the attraction and retention of existing well-established businesses. Entrepreneurship, or the process of starting new businesses, was often considered not immediate enough to address the urgent demands of economic development. More recently, however, that conventional view of entrepreneurship has begun to evolve, as its vital role is increasingly recognized. Recent economic development initiatives in upstate New York underscore the point.

Entrepreneurship has many dimensions. First, it generates jobs and strengthens local economies. Largely under-recognized is the fact that new and young businesses create virtually all job growth in America. On top of that, entrepreneurship expands economic equity, because it creates the opportunity to not just get a job but create a job. Research published by the International Journal of Professional Business Review in 2023 shows that for every 1% increase in the entrepreneurship rate in the United States, the poverty rate decreases by 2%. Additionally, locally created businesses tend to hire local residents and contract with local businesses, which strengthens the economy further. 

Second, entrepreneurship is crucial to refilling downtown storefronts left vacant by the COVID-19 pandemic or earlier economic struggles. Not enough storefronts can be filled by attracting businesses from afar and even if it could, franchised stores would not provide the distinctiveness that downtowns need. Only entrepreneurship can do this.

In America today, main street businesses largely define the character of the community. Most mayors and county executives whom I advise as an economic development consultant see their downtowns as their jurisdictions’ brands. Those downtowns are the face of the region, and they define its vibrancy. That’s true whether you're talking about Albany, Rome, Watertown or smaller communities like Lowville.

In Lewis County, where my team has worked on several projects with Naturally Lewis, officials have been using creative financing, technical assistance strategies, and education to encourage a wave of entrepreneurship. That in turn is leading to the rebirth of downtown Lowville, which just received a $10 million grant through the New York state Downtown Revitalization Initiative (DRI). 

Third, it’s increasingly clear that entrepreneurship is also necessary to maximize the potential of traditional economic development attraction and retention. To attract high-tech companies, for instance, you need to be able to demonstrate that a robust entrepreneurial ecosystem exists in your community because companies considering relocation need to know that diverse and skilled talent is available locally to support their evolving needs. 

The act of being entrepreneurial, whether that means starting a new venture or taking risks within an existing business or organization, requires a rapid exchange of new ideas and information with varying perspectives. The networks, or entrepreneurial ecosystems, within which those ideas flow are crucial for supporting overall economic growth. 

The Plug Power project in Albany offers a case in point. I was involved in developing an economic development strategy for Albany County in 2018 that prioritized green industries, innovation, and entrepreneurship. That strategy also recommended creating an economic development entity for Albany, which led to what is now the Advance Albany County Alliance. A few years later, Albany won the Plug Power Project, which was named the NYSEDC project of the Year for 2023. 

My team recently interviewed officials of Plug Power for a workforce strategy for the Capital Region and learned that entrepreneurial people are key to their success. Plug Power is in the Clean and Renewable Energy industry, an emerging highly competitive sector, and they need people on staff, within their supply chain, and within the community who understand and take risks. In other words, they need entrepreneurs.

In my own experience growing up in the Tug Hill Plateau region, entrepreneurship was not presented as a viable path. In fact, I can recall more than one occasion where the idea of starting your own business was presented as something scary that should be avoided, and only attempted as a last resort. It wasn’t until years later, when I started working in economic development and meeting entrepreneurs, that I realized that yes, while entrepreneurship carries risks, it’s also thrilling and creative, and is what drives an economy forward. 

Entrepreneurs are our very best problem-solvers, which is why entrepreneurship is vital to the Capital Region, to New York, and to the nation. That’s the reason I have recently become an ambassador for Right to Start, the national nonprofit organization advancing entrepreneurship as a civic priority. 

Entrepreneurship not only offers the prospect of increased business and job growth in every community but also the prospect of being more competitive in attracting and retaining existing businesses. Including it prominently in any economic development strategy is a must.

Christa Ouderkirk Franzi is vice president and director of entrepreneurship for Camoin Associates, Saratoga Springs, N.Y.