Sometimes it helps to remind ourselves why we need to foster startups and innovative new companies. One big reason – we simply can’t count on large corporations to create jobs. We need startups and lots of them, because they don’t create the number of jobs per company we saw with manufacturers. In fact, when Facebook acquired Instagram for $1B in 2012, it had just 13 employees! Consider our own multi-billion-dollar rock stars – Live Oak Bank with 550 local employees – or nCino with 675. We’re still talking hundreds, not thousands of jobs for even the most astonishingly successful ventures.
Jobs aren’t the only issue. We need startups and young growth companies to combat churn in the market. The lifecycle of corporations keeps getting shorter. The average tenure on the S&P 500 is expected to be 12 years by 2027 – down from 33 years in 1964. Seventy-five percent of the current S&P 500 companies are predicted to merge into other companies, be acquired, go out of business, or drop off the index for some other reason in the next 10 years. Those are companies like Bank of America, Home Depot, Johnson & Johnson, Intel Corp., Mastercard, and Verizon. In other words, companies that are household names today.
So what can we expect for 2020? The recently released report by the Kenan Institute of Private Enterprise and the UNC Entrepreneurship Center, 2020 Trends in Entrepreneurship, gives us some interesting insights. It documents what we’ve seen: Young firms have a positive impact on job creation. Young firms are the main drivers for introducing new technologies and products. And, interestingly, the number of high-growth firms being started has declined substantially since the dot-com bust in 2000, but since 2010 there has been an upswing in the number of successful startups formed and the accumulation of entrepreneurial potential for growth. The report also points to the importance of an engaged ecosystem in fostering quality firm creation.
Fortunately, we continue to add more ecosystem-fostering activities and launched two new programs in February: the NC Bioneer Venture Challenge and 1 Million Cups. The Bioneer challenge was announced by the NC Biotechnology Center and the UNCW CIE is a supporting partner. It’s a competition designed to grow high-potential life sciences and biotechnology ventures. Our region was selected for the pilot – if it works here, next year NC Biotechnology will grow the program across the state. Four companies will be selected as finalists to receive mentoring over the next two months and awards between $5,000 and $20,000.
Wilmington is now part of a national network of more than 160 communities hosting weekly gatherings of entrepreneurs for 1 Million Cups. Our launch was February 12 and, with 80 people at the CIE, it was the largest launch event according to the Kauffman Foundation representative that attended. Now everyone can come to the CIE on Wednesday mornings to see our entrepreneurial ecosystem in action.
We’re continuing to grow Givitas. It’s our on-line knowledge-sharing platform that offers a simple way for entrepreneurs, educators, students, and community members to ask questions and to give and get help on any business issue. Our Givitas network is open to anyone that wants to support our entrepreneurial ecosystem.
Entrepreneurship in our region is built on a strong foundation. Indicators point to 2020 being our best year yet.
Diane Durance, MPA, is director of UNC Wilmington's Center for Innovation and Entrepreneurship (CIE). The CIE is a resource for the start-up and early-stage business community to help diversify the local economy with innovative solutions. For more information, visit www.uncw.edu/cie.
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