In hindsight a lot has happened over the course of the last five years regarding the state of the economy, and of entrepreneurism itself.
Economists (all with differing opinions) tell us things are better than they were compared and contrasted with the last five years. For most of us, it depends where you are placed in the economy, hence your perspective from that place. Data and statistics are useful tools and can be interpreted in many ways, such is why the diverse opinions of the economists defending their subject matter turf viewpoints.
They tell us jobs have returned to pre-recession times and one measure, unemployment, is at the level where the economy should be vibrant and growing. They also tell us that we have several years more ahead of us for the economy to return to some additional measure of the growth rates that produce trickle down economics for us all. Pay attention to the debates regarding minimum wage laws (read law, not supply and demand), and the risks and rewards that come from increasing wages when the economy growth is not where it needs to be, yet at least.
But what about North Carolina, you might ask. Well, in 2007 when people felt that the economy was moving and growing the unemployment rate was 4.6%. At the worst part of the recession, the unemployment rate hit 11.3% in January of 2010, the long term wave of bad economic date crested and started to reverse. But today, the latest figures for 2014 show a rate of 6.2% as of the April numbers. That is one reason why the economy does not feel like it is moving forward or exhibiting growth.
Now turn your attention to the entrepreneurial community for a moment. In recessions, historically, people turn to unorthodox means to sustain themselves if they lost a job. They go to school, look for other lines of work in positions outside their comfort zone, or, they sometimes get entrepreneurial and start something on their own.
According to the Council for Entrepreneurial Development in North Carolina, in their 2013 Innovators report issued June 4 of 2014 [http://www.cednc.org/?page=innovatorsreport], they focused on trends in the funding of technologically advanced companies requiring significant funding to bring them to the market. 2013 turned out to be a strong year from the perspective of the venture investment community.
The number of investors and startups is impressive for North Carolina versus many other states. According to the CED findings, the bulk of the investments were in the area of life sciences, placing North Carolina consistently fourth in the nation for that market sector. The number of investor deals, and the amount of money invested was more than twice as much as that for technology-based companies developing software, systems, hardware items, networks, and other items, and eclipsed the investments in advanced manufacturing of materials and complex products. Each of these mentioned sectors is capital intensive and carries with it high risks. But is those companies are successful they contribute to the demand for educated scientist, engineers, and skilled manufacturing personnel.
The other entrepreneurial community in and around the greater Raleigh area consists of people who begin their ideas at the kitchen table, in their basements, garages, and some find their way into small scale incubators and accelerators to bootstrap themselves into existence.
This latter community is the group that contributes the most to the growth of the economy. How is that you might ask? Primarily because as single entrepreneurs are growing and improving their businesses they tend to high people at a significant rate. For example, ten life sciences companies who have long term product development cycles might initially hire a select few highly skilled and specialized people, say ten to twenty per company at the core. The total employment comes to one hundred to two hundred contributing to the company’s development. On the other side of the equation, of the thousands of people unemployed, laid off, or seeking to take the individual risk to launch their dream, there are hundreds if not thousands of them, and if a fraction of them are successful they hire more people, perhaps one or more, and the numbers of employed people increase rapidly without the intense capitalization required of the long term startup companies taking high risks.
There is no doubt, even in the economists minds, that the grass roots entrepreneurial activities contribute to economic growth, the problem is measuring the factors that drive the enablement of significant numbers of them. Not only the statistics, but the visible nature of looking around and observing entrepreneurs in your backyard, and the surrounding areas, will give you the sense of the success rate.
The greater Raleigh area is active, as active as many other areas of the country perhaps even more so, for encouraging and supporting people to give their ideas a try. The essential point to make for anyone is, refine your ideas, invest your time and resources in research and planning to understand your opportunity and the inherent risks you will face, and you improve your chances of success and sustainability.
In other words, think, decide, and act. Get moving. Do something.