NGA: States must nurture new economy

Nurturing and investing in local entrepreneurs must be a top priority of

states, a new National Governor's Association report says this can only

done by closely working with the private sector.

As entrepreneurs have become such an integral part of the new economy, states

have realized that by investing in local business, they can create wealth

and jobs for citizens. However, because it's a new practice, states need

assistance in determining whether to invest or use other ways to encourage

economic growth.

"Growing New Businesses with Seed and Venture Capital: State Experiences

and Options" analyzes state programs and charts common traits among the

most successful. All successful programs made use of the private sector,

the report says.

Some of the characteristics of successful state programs and policies are:

* State leaders launch the program, but use private-sector managers to make

daily decisions.

* State leaders realize that success is more about knowledge and communication

with the business community than about money.

* State leaders make a long-term commitment to progress and understand there

may be no significant results for at least five years.

* States are treated as a valued financial partner and are entitled to an

equal return on investment.

* States are not afraid to make money, and adopt a philosophy that companies

growing the quickest are the best investments.

* The program is large enough to make a difference; they create large sources

of venture capital to persuade entrepreneurs to join.

* The program is not governed by typical state rules, but at the discretion

of trained professionals and experienced laymen.