Creating an Innovation Ecosystem in Fairfax County
July 27, 2016
One persistent myth about economic growth is that it’s small companies that are engines for job creation. However, the truth is that it’s young companies that create the most jobs.
Most new firms are small, but economists now agree that it's age not size that matters.
Startups employ three percent of the nation’s workers every year—yet they account for 20 percent of net jobs created. This finding came from research conducted by economists from the U.S. Census Bureau and University of Maryland.
During the dot-com boom in the 2000s, startups, defined as firms less than a year old, and high-growth businesses created 70 percent of all new jobs created in the U.S.
This outsized impact is one reason Fairfax County officials are trying to foster more startups and greater entrepreneurship as part of their strategic economic success plan.
“We also want to grow the innovation ecosystem in Fairfax,” said Eta Davis, Fairfax County’s economic initiatives coordinator. “We have to think about how do we make connections between entrepreneurs, venture capitalists, future workers and big companies.”
To help spark this ecosystem’s growth, officials are working to create innovation districts, as well as encourage greater urban, mixed use development that offer a lifestyle that’s attractive to millennials to boomers.
Making Fairfax into a place that’s attractive to entrepreneurs is underscored by research from consulting firm Endeavor Insight. Their study found that entrepreneurs decided where to live years before starting their companies based on quality of life and personal connections; 80 percent lived for at least two years in the city where they started their business.
Officials are also looking to nurture an environment where successful entrepreneurship breeds more even more startup activity.
“To build a virtuous cycle in Fairfax County, I think we could do two things,” said John Backus, managing partner at venture capital firm Nav.VC. “Number one is as parents we can let our kids know that being an entrepreneur is actually a viable option. It wasn’t an option when I went to school. Number two, we can support small, fast-growing businesses with good ideas. Instead of taking the safe path and buying from the Fortune 500 company, if you see something you like that’s started by a local, talented entrepreneur, you ought to consider buying her or her product.”
In addition to building the ecosystem, Backus recommends other actions too, including encouraging individuals and institutions to invest in venture funds, lower tax rates, and luring small, rapidly growing firms to our area.
“We can’t do it alone,” said Fairfax’s Davis. “We need to partner with the other stakeholders in the community.”