BIZTIPS - February 12, 2006
Biz Tips: Venture Capital Trickles Into Oregon Businesses
Sunday,February 12, 2006
By Art Hill
Washington Business magazine reported in January "Oregon Economy Growing Rapidly." Seems we have the sixth fastest growing state economy in the nation. No bad when you consider that the first five include hyper growth states like Nevada, Florida, and New York.
So you might conclude that if we keep doing what we're doing, we'll be a national leader in economic growth, at least until the next recession.
But why these "boom and bust" cycles? What investments should we make now for steady economic growth over the next 10 years?
There are lots of theories about who's to blame -- short-sighted state government, business obsession with short-term profits, inconsistent economic policy. But there's someone driving this engine that controls economic stability far more than any of these -- investors, especially venture capitalists.
Venture capital is the term for firms with millions of dollars to invest in growing companies with the potential to make it really big -- not only technology companies, but also companies in traditional industries with exceptional products, vision, and market potential.
In his famous "Lexus and the Olive Tree" and more recently "The World is Flat," Thomas Friedman points out that money follows opportunities. Right now, investors see only modest opportunities in Oregon. In the words of one venture capital partner, "I don't know of anybody here who went for the big win and made it." What's his definition of the big win? Think Google, Amazon, Cisco.
In fact, in stunning contrast to having the sixth fastest growing economy in the nation, Oregon has fallen from the sixth most active state for venture capital funding in the 1980's to 45th in the nation for entrepreneurial activity according to a report issued by Entrepreneur.com.
So what should we be doing about it?
First, we have to recognize and promote our strengths. Last year Eastern Oregon University had the highest enrollment growth rate in the state, offering a state-of-the-art technology facility second to none in the Northwest. We are at most a couple of hours' drive from Pacific Northwest National Labs, one of the top incubators of patented technology products available to business in the country. The list goes on, but nobody wins if we don't make the most of it and get the word out.
Second, we need public policy that makes it possible for growing companies to locate and thrive here. Taxes need to be proportionate to a level of infrastructure and services attractive to business owners and employees.
Third, and this is a big one -- we need to demonstrate our public and private support of business owners and investors to drive a business success rate second to none. We have two major business parks under development in Pendleton alone, and other prime sites from Boardman to Baker City. We have a skilled workforce and top training programs for new recruits. We need to turn that trickle of venture capital into a gusher. It's our choice for our region and our children.
Content © 2006 East Oregonian