A big plan to promote small business in region
Sue McCartney, director of the Small Business Development Center, believes using hydropower funds to help entrepreneurs launch new businesses would be a smart investment. Sue McCartney can't contain her enthusiasm.
Head of the region's Small Business Development Center, McCartney sees a golden opportunity for Western New York to jump head-first into the new economy and help change its image as an economic has-been in the process.
"Entrepreneurialism is the new economy," she said.
She wants small-business entrepreneurialism to define and drive the Buffalo Niagara economy much the way high-tech does for the Silicon Valley, tourism does for Orlando, and gambling does for Las Vegas.McCartney has the plan.
And an idea on how to pay for it: use proceeds from the sale of low-cost hydropower that now flow to Albany.
About $24 million of hydropower earmarked for local use is instead sold at a profit and used by the New York Power Authority for other programs. A number of leading economic development officials interviewed by The Buffalo News believe money should be retained in the region and put to use promoting economic growth.
McCartney is among those who believe investing a portion of the proceeds to help entrepreneurs launch new businesses would be a smart investment. She has support from a number of economic development officials, including Jim Allen, executive director of the Amherst Industrial Development Agency.
"We know that's where the jobs are being created," he said.
Developing small business, Allen said, "is what a good economic development strategy should focus on -- finding the next Steve Jobs or Michael Dell who is going to create the next big thing."
Small business is taking on an increasingly larger role in the national economy. It accounts for nearly half of private-sector employment, including about 40 percent of jobs in the high-tech sector. Small business is an even bigger player locally: Firms with fewer than 50 employees account for 94 percent of the jobs in Erie and Niagara counties.
Nationwide, small business accounts for about two-thirds of the new jobs created over the past decade. It also is innovative, producing 13 times more patents per employee than larger companies.
Entrepreneurialism is on the rise for a variety of reasons.
"People are growing tired of the corporate world. There's more money out there and technology has really made it easier," said Rod Kurtz, a senior editor at Inc.com.
"What's happening is the entrepreneur has kind of become the rock star of the business world," he added.
Here's what McCartney, director of the center located at Buffalo State College, has in mind:
* Use proceeds from the sale of unused hydropower to establish an investment pool. McCartney would like at least $5 million allocated annually, which would be used to make grants up to $250,000.
* The grants would be awarded on a competitive basis to entrepreneurs who have graduated from college in the past 10 years, set up shop in Erie or Niagara counties and whose business would be involved in one of the six clusters economic planners have deemed to have the best potential for the region.
* Grant recipients would work with a certified business adviser and undergo evaluation during the early years to lessen the risk of failure.
McCartney said it would be vital to aggressively promote the program globally.
"We could become famous as a cool place to start a business," she said.
Doing so would require making enough investments to attract entrepreneurs en masse.
"Volume is the key. Essential," she said.
Kurtz, of Inc.com, termed McCartney's proposal "an interesting model," partly because it provides capital to start-ups.
"That definitely can be an incentive," he said. "Putting their money where their mouth is is important."
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