Charlotte’s decades-long growth surge has largely been built on big companies in highly regulated industries. In a city sometimes called “Bank Town,” small, nimble tech companies and other innovators just aren’t popping up.
(TNS) -- Compared to similar cities, Charlotte is behind the curve on innovation, entrepreneurship and investments in startup companies.
That’s the conclusion of the first Charlotte Entrepreneur Growth Report, a new study being released Monday by a group of local business leaders and entrepreneurs. The study found the Charlotte region has a thriving core of high-growth companies with billions in revenue. But it lags behind similar cities in the amount spent on research and development and new business formation.
One example: If people in Charlotte started companies at the same rate as people in Austin do, Charlotte would see an additional 700 new businesses a year founded in the region.
Part of that is because Charlotte’s decades-long growth surge has largely been built on big companies in highly regulated industries: Think Bank of America and Duke Energy. In a city sometimes called “Bank Town,” small, nimble tech companies and other innovators aren’t what come to mind when people think of the business community.
“We were the Rodney Dangerfield of the business community in Charlotte. Got no respect,” said Dave Jones, founder and CEO of Peak 10, a Charlotte-based information technology infrastructure company. He is presenting the results of the report Monday to Charlotte City Council. “But the reality was, we never beat our chests. We never communicated anything.”
The report, a collaboration of the city-backed Charlotte Regional Fund for Entrepreneurship and other local groups, is the second in two weeks to highlight Charlotte’s deficiencies in entrepreneurship. A Brookings Institution study released last week by Central Piedmont Community College also found Charlotte is lagging on key measures such as patents and R&D spending, compared with peer cities.
Advocates say the latest report points to the need to invest more in Charlotte’s universities and attract entrepreneurs who will start the next generation of fast-growing companies. They caution that Charlotte can’t rely on its traditional big businesses to succeed forever, especially as disruptive technologies continue to reshape the economy.
Paul Wetenhall, president of Ventureprise at UNC Charlotte, recalled watching companies such as Kodak and Xerox decline while he was working in Rochester, N.Y.
“Even when you have iconic companies that look like they’re going to do this forever,” he said, holding up his hand to show rapid growth, “the day comes when those big companies, either due to a technical change or market conditions, they go in a direction you don’t want to see.”
The study concludes: “In the short-term, Charlotte needs more startups and higher-potential innovation-based startups.” Among the key findings of the Charlotte Entrepreneur Growth Report:
“We’ve never had a way to really congeal, connect all this and make it more visible,” said Terry Cox, president and CEO of the Business Innovation and Growth Council.
“If we started companies at the same rate as Austin, which is on the high end of that list, we’d have 700 more startups in metro Charlotte each year,” said Wetenhall. That figure would include both high-tech startups and more mundane companies, such as dry cleaners.
“You’d expect a high-growth city to be at the top of the list,” Wetenhall said. “(Business formation) is not here to the degree it is in other cities, and we can’t sugarcoat that. We’ve got great entrepreneurs and there’s a lot of activity, but there’s a lot less than you find in other cities we benchmarked.”
In response to the report, Charlotte city staffers plan to facilitate a one-day “Solution Design Sprint” in April to design a strategy to address needs raised in the report, which was created by Ventureprise, the Business Innovation and Growth Council and UNC Charlotte’s Urban Institute.
“The positive I take away from that is consistent growth” of the entrepreneurial community in Charlotte, said Jones. “The opportunity now is to set that strategy.”
©2016 The Charlotte Observer (Charlotte, N.C.) Distributed by Tribune Content Agency, LLC.