by Joyce Marcel
American Reporter Correspondent
July 8, 2010
DUMMERSTON, Vt. -- Earlier this week, in my day job as a business reporter, I interviewed the founders of a Vermont solar energy company. I found it interesting that it was only founded in 1998, yet from 2004 to 2007 its revenue grew 463.3 percent. That's a huge jump. Since then, it's doubled its revenue - and the number of its employees - again.
There are many entrepreneurial success stories like this in Vermont.
For a few centuries Vermont was a rural agricultural state. Then we added manufacturing; books, paper and railroads gave us a proud connection to the Industrial Revolution. By the 1980s, however, all of that had fallen away. Farms disappeared, manufacturing disappeared, jobs disappeared.
Now Vermont is involved in a great reinvention and the path forward is uncertain.
Some towns are trying to establish art economies; empty factories are being turned into art studios, performance spaces and museums and there's a sense of excitement about culture in the air.
Many farmers are going the "value added" route - turning milk into gourmet cheeses for high-end city consumers, for example, or creating large caves on their farms to age cheeses, or growing and shipping heirloom apples and tomatoes, or making wine, or packaging seeds. Some adventurous farmers are starting to grow wheat again - a crop that hasn't been grown here commercially in more than a century. There's a kosher matzoh company in Vermont now.
For every dull conservative who thinks that Vermont should spend its limited resources courting another IBM, there are hundreds of folks who are rubbing the bellies of their household gods - Ben and Jerry - starting a company and hoping for the best.
For the last eight years, the state has been hindering growth. Our now-retiring Republican governor took office in 2002 promising to wire the state for high-speed Internet access. Then he sat on his hands for the next eight years. His inability to act has left us far behind the rest of the world.
The economic fallout has been severe. Realtors report that they can't sell high-end homes to people who depend on high-speed Internet access - and these are exactly the kinds of people who might want to start businesses here. When Marlboro College was looking for someone to head its technical center, someone told me that candidates flocked to the interviews, went shopping on our lovely Main Street, discovered they couldn't use their smart phones and fled. I know a wealthy man who started an Internet business up in Burlington and had to put his servers in New Hampshire.
Clearly, the first thing a new governor must do is wire the state. Then what? When I talked recently to the executive director of the Brattleboro Development Credit Corp., Jeffrey Lewis, he mentioned a theory called "economic gardening" that is being tested in Colorado.
"Whoever was their economic development director said, 'The future is a bunch of small employers who we can encourage,'" Lewis said. "But he also said, 'There will be some losses. Not all of them are going to survive. We don't need a home run like Toyota with 5,000 employees. We need to hit a bunch of singles, say maybe 300 10-person companies, 60 percent of whom will survive to year five. But if they fail, it doesn't matter, because by then we'll have some more.' It's a very different understanding of economic development"
States - and politicians - are risk-adverse. Yet at the core of entrepreneurship is risk.
"The state has to develop a tolerance for risk," Lewis said. "It's got to be willing to help 100 companies and hope that 50 will survive. And it's got to be willing to let 50 go, and not know which 50. The time and money invested in the 50 that's failed? That's gone. States are not used to that."
State leadership has to be forward-thinking in terms of its tax policies. It might want to think about creating public venture capital funds. It can provide business advice and marketing assistance. I heard that when Madeleine Kunin became governor, she noticed all the little value-added agricultural businesses popping up and decided to help. So the state bought space in the New York and Boson specialty food shows and sponsored booths for Annie's Naturals and Vermont Butter and Cheese Co. and other small producers. That jump-started the first generation of large specialty food manufacturers here. The state can also spruce up the commercial real estate market.
"We have far more real estate than we have business activity," Lewis said. "We have no policy or investment plan where the state, seeing that we have an excess capacity of commercial real estate, empowers development corporations, towns and commissions to take those properties - paying adequate compensation to owners - and invest in them, make them productive, put them on the market and maybe rent them at below-market prices to entrepreneurs."
Vermont - with its do-it-yourself attitude, it's strong work ethic, the value it places on independence, its educated workforce, its small scale and its sense of community - could be an entrepreneurial paradise. And as an added bonus, it's such a beautiful place to live and work.
Joyce Marcel (joycemarcel.com) is a journalist and columnist. You can reach her at email@example.com.