Better Together: How the economic sausage gets made

May 28, 2024 / Share:

A bi-weekly column exploring the intersection of entrepreneurship and community by Sam Davidson

Last week I traveled with over 100 friends to Phoenix, Arizona for the Nashville Area Chamber of Commerce’s annual Leadership Study Mission. We heard from officials in The Grand Canyon State about how they’re tackling key issues, some of which parallel Nashville’s. 

While a running joke was the topic of running water, it was clear from the start that we’d also hear a lot about transit, affordable housing, and workforce development. 

These ideas aren’t usually on my regular reading list, but I was eager to examine each through the lens of what my team and I get to do every day: work to make Nashville the best place to start and grow a business by increasing the likelihood of success for entrepreneurs. 

Nashville has a chance – right now – to think deeply and plan deliberately to address these issues. After deep diving them in the desert for three days, I’ve come to the conclusion that if we don’t, the city will become less entrepreneurial. 

Here’s what I mean.

New business ventures (entrepreneurship) are vital for any growing city and region. Often, these start-ups first become small businesses, and many stay that way. But others grow over time and become big businesses that employ hundreds of people while serving as benefactors to our nonprofit, educational, and social sectors. 

From a national perspective, there are 33,185,550 small businesses in the United States. In fact, most businesses are small – 99.9% of American businesses. Small businesses employ 61.7 million Americans, totaling 46.4% of private sector employees, and from 1995 to 2021, small businesses created 17.3 million net new jobs, accounting for 62.7% of net jobs created since 1995. (Source)

Ok, the opportunity is there, but how can a city attract or keep people who want to start businesses? 

Answers default to traditional ecosystem answers like capital, tech talent, and capital and capital. (See what I did there?)

But, capital abhors a vacuum. 

What helps talent to take a risk?

Transit, affordable housing, and workforce development. 

Yes – entrepreneurs need capital, but this capital takes many forms. At its earliest stages it looks like personal funds – funds saved and contributed by close friends and family. 

At that stage, every dollar matters. A dollar saved or not spent on rent or gas can be used to grow or sustain an idea. 

So when I heard that Phoenix rents had decreased 4% year over year while Nashville rents have started to increase again, I was alarmed. If I’m someone looking to grow a company and every dollar matters, Phoenix may have jumped ahead of Nashville because I can send my money to product development or marketing teams, rather than sending it to my landlord.

Phoenix has light rail transit, meaning I have time to spend on meetings and working rather than being stuck in a car (plus all those associated costs). Workforce development ideas abound and that’s critical for any growing city, but it also can ensure that as I grow my job searches will be shorter and deeper, saving me money. 

This is not to say Phoenix is perfect or better than Nashville. Quite the contrary. We’re working hard to make Nashville the most entrepreneurial city in America and as a municipality we take cake over The Valley of the Sun every day. 

Yeah, I’m biased.

Now time for how and why this matters.

City governments, state officials, chambers of commerce, and economic development nonprofits (that’s us!) are focused on growth. 

Imagine that growth is up on a pedestal. That’s the goal, the trophy, the vision, the story, the destination. It’s what we’re all striving and reaching for. (And it’s rare; many cities would happily beg, borrow, or steal for what we’re experiencing in Nashville.)

But what is that pedestal resting on? Clouds and dreams alone don’t hold that up high. As Henry David Thoreau said, “If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.”

I think that a city’s pedestal of growth rests upon three pillars:

Attracting companies, growing companies, and starting companies

Growing cities relocate companies and create opportunities for them to expand. They provide resources for small and medium businesses to grow. And they are great places to launch new ideas. 

Nashville has a pivotal decision to make: are our pillars of attracting, growing, and starting companies made of straw or of oak?

Straw pillars that support growth are made of temporary, glitzy flashes: incentives, flashy branding, hip trends, and momentary headline grabs. In other words, temporary weak ideas (aka straw). 

Oak pillars are decisions and visions that solidify a city’s priorities and focus that can stand tests of time: transit, workforce development, and affordable housing. Do these things well, over and over again, and growth stays, buoyed and bastioned by solid policy.

Ultimately, this was on display in Phoenix last week. The city leaders who traveled and made time for the conversation didn’t merely think that Nashville is in a good spot and we should keep it up. Rather, we left committed to the team sport that is economic development for generations to come. 

No one hoists trophies and builds pedestals alone. We can grow better. Together.

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