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Entrepreneurs needed for strong economy
July 22, 2010 Jerry Purvis   

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A strong economy for Nebraska will be accomplished by entrepreneurs building their own business opportunities, not from communities chasing after low-paying jobs.
Jerrod Haberman, executive director of Panhandle Area Development District (PADD), said the top four local employers who provide larger numbers of high-paying jobs are all government or quasi-government institutions: Gering and Scottsbluff Public Schools, Regional West Medical Center and Western Nebraska Community College.
“That’s not necessarily bad,” Haberman said. “It would be just as good if a community had a large number of private sector businesses that offered maybe five to 10 high-paying jobs each.”
He added a small business with a few high-paying jobs is preferable to a larger employer that has 1,000 jobs. If that business closes or moves, a lot of people are suddenly unemployed.
“I can’t see a large employer coming here and offering a lot of high-paying jobs,” he said. “The competitive advantage of moving here is low-cost labor. We already have plenty of low-paying jobs here.”
Haberman advised against hoping that someone from outside the area would move here and save our local economy. Instead, he encouraged local people to start and grow their own businesses.
He pointed to Cabela’s in Sidney and Kelley Bean in Morrill as examples of home grown businesses.
He said neither business, if they were located somewhere else, would consider moving here. Why they’re here is because both businesses were started by local people. And Department of Labor statistics show that 84 percent of businesses started in a local area stay in that area.
“We’re going to have to take a slower, longer term approach to building entrepreneurship from the ground up,” Haberman said. “That means we’re going to have to offer more entrepreneurial education in the schools to get kids into that frame of mind of creating their own businesses rather than working for someone else.”
The Kaufman Foundation, a nationwide entrepreneurial organization, ranked Nebraska as 49th among states in educating and developing entrepreneurial activity.
“The top state is Oklahoma,” Haberman said. “That doesn’t surprise me, as they have a wide network of business development centers across the state in the rural areas.”
He said too much of local and statewide economic development is geared toward providing incentives for companies to relocate. “If we provide incentives for creating new jobs, the companies will take the money. Then the politicians can say that XYZ Company received money from the state for creating those jobs and they made it possible. It’s all about the politicians’ own political benefit.”
He said when the politicians saw the state’s low entrepreneurship rating, most of them just made excuses or tried to rationalize the low ranking rather than admitting the state could do better.
Business development centers, sometimes called business incubators, don’t provide an immediate fix. The centers help grow local businesses and it may be close to a decade for real growth to be realized. They provide the basic business expertise, such as coaching, to help a new entrepreneur get his or her small business off to a good start. The program also helps shorten the learning curve for the new business owners.
The City of Mitchell recently took a first step in that direction with the announcement of an entrepreneurship and business development program in conjunction with PADD.
The project, which will be implemented over the next several years, calls for the redevelopment of the old Mitchell City Hall building as a business resource and technology center. Part of the plan is to implement a student entrepreneurship and business incubator program.
“The goal of the project is to help and grow entrepreneurial businesses in Mitchell and the region,” said Chuck Karpf, who works with Haberman at PADD. “The program will provide students of any age the resources to research and possibly start their own entrepreneurial venture.”
Haberman said innovation is what drives economic growth, and entrepreneurship makes it happen. “We need more innovation in rural Nebraska. Governance is an important factor as well. We need to realign our interests and networking to work with the university system to bring the innovation out here.”
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