Entrepreneurship Means Adaptation

September 24, 2004

“Ladies,” said Sabelhaus at the briefing, “you are the economic powerhouse of the 21st century.”

Success in life hinges on many things. Talent, intelligence, and perseverance all play a role. So, too, does luck. Nothing, however, beats out adaptability. Change is constant; capitalize on it....or else.

by Thomas D. Rowley, RUPRI Fellow

http://www.rupri.org/editorial/Default.asp?edID=91&ACTION=READ

Successful rural communities know this. Faced with the loss of economic mainstays, they’re finding ways to build new ones. In a word, they’re being entrepreneurial by, among other things, helping their citizens become entrepreneurs themselves—starting and expanding businesses, creating new goods and services, tapping new markets.

These communities are also adapting to another change: the profile of would-be entrepreneurs.

“We are in a huge demographic shift in the way entrepreneurship looks in this country,” said Erik Pages, President of the economic development consulting firm Entreworks http://www.entreworks.net/ , at a recent Capitol Hill briefing on the subject. Increasingly, he said, entrepreneurs are women and/or immigrants.

According to the Small Business Administration’s Melanie Sabelhaus, women start businesses at twice the rate men do, and stay in business longer. Research by the Center for Women’s Business Research shows that women own a 50-percent or greater stake in nearly half of all privately held business in the nation; and over the past seven years, the number of women-owned firms with employees grew 28 percent, three times faster than the rate for all firms.

“Ladies,” said Sabelhaus at the briefing, “you are the economic powerhouse of the 21st century.”

She might also have included immigrants.

Rural communities across America are seeing tremendous growth in immigrant, especially Hispanic immigrant, populations. Because of limited career options, an entrepreneurial spirit that brought them here in the first place, and connections to a growing market of other immigrants, many will start their own businesses. That’s a boon for rural communities.

Pages described it this way. More ideas lead to more good ideas. And you get more ideas when you get people from different perspectives and backgrounds. On top of that, “places with more 25- to 44-year-olds will have more entrepreneurs. In rural America, those folks are often as not Hispanics and other immigrants.”

Yet experts I spoke with said rural entrepreneurs have a tough row to hoe. First, there’s isolation—from markets, capital, and networks of peers. Second, there are the frowns that greet risk taking, failure, and even success.

According to Leslie Scott, Director of North Carolina’s Institute for Rural Entrepreneurship, in small communities where everyone knows each other, social hierarchies still hold sway. Entrepreneurship, she said, bucks that system. Falling below, or rising above, one’s place creates discomfort. “Entrepreneurship looks reckless.”

Unfortunately, women and immigrant entrepreneurs have it even tougher.

“There is this culture that works against women and immigrant entrepreneurs, particularly in rural communities,” said Deb Markley, co-director of the Rural Policy Research Institute’s Center for Rural Entrepreneurship.

According to John Parker, Director of Good Work, a North Carolina non-profit that helps people start small business, “The older power structure has a tendency to be white and male. Women and people of color will run up against that.”

Both also mentioned specific, more concrete barriers to getting help. Some women have no personal credit history, and are often asked for their husband’s financial documents when applying for loans. Many immigrants speak little and read even less English.

Either of those obstacles can stop an entrepreneur dead in her tracks. Fortunately for Ana Guerrero, and her community, they didn’t.

Ten years after immigrating from the Dominican Republic and working for others, Guerrero took the entrepreneurial leap. With help from Good Work, she learned all about establishing her own business. The organization then helped her navigate the maze of financing, licensure, insurance, and taxes. She now employees three other Hispanic women and is looking for more.

Yes, it’s a small enterprise. But it’s four jobs, four incomes, and more for Roxboro, North Carolina, population 8,800. (Several experts said women and immigrant entrepreneurs tend to give back more to their communities than the typical white male entrepreneur.)

When asked for her advice to other would-be entrepreneurs, Guerrero says, “Be strong. Don’t think you can’t do it. If I can do it, you can do it.”

Let’s hope so. As Markley put it, “These places can’t afford to have anybody not succeeding.”