Government Support for Startups in Athens
Last week, I explored some options on how the University can support the entrepreneurial ecosystem in Athens. In a similarly important vein, the government should play a crucial role in supporting entrepreneurs. Like the University, the government is a feeder – the community must be led by entrepreneurs and not government officials. Yet, the government can play important supporting roles by listening to entrepreneurs.
The government makes a poor venture capitalist – it should not be involved in investing in startups. A local government backed fund should be constrained to local deals which would make the scope of government deal flow and investment opportunities are too limited to make quality financial decisions. The government has the capability and power to be a positive influential force in two areas for entrepreneurs: policy and, potentially, space.
First, policy. Entrepreneurs are trying to build big companies with minimal resources. Jumping through bureaucratic hoops is costly, time consuming and inefficient. Entrepreneurs time is best spent building. Big companies have the capacity and resources to file endless paperwork; startups do not. Improving policy procedures to streamline the process for companies just starting out will lead to more companies being formed. More companies directly correlate to more jobs and more taxes. It’s a clear win for the government to simplify their procedures for young companies.
Looking around the Southeast, many local governments have done a great job on the second front – space. Cities like Birmingham, Chattanooga, Charleston and Greenville have all created private-public partnerships that create innovative, creative space for young companies that not only livens up property that was previously an eyesore, but provides great workspace to rapidly growing companies. Having an office isn’t about the office. Most young companies shouldn’t spend money on rent. Having space is about being in close proximity to others and that is important and worth spending a minimal amount of money on – spontaneous interaction leads to business success. Having a shared work space creates that density.
Thankfully, in Athens, the Athens Downtown Development Authority has partnered with Four Athens to provide rent subsidies for startups. It is a great first step. Over time, it would be even better to have a dedicated startup space in downtown that ensures the continuity and visibility for startups – it is a visible sign that the town is committed to this incredibly important sector of economic development. Great examples are the Innovation Depot in Birmingham, the Next Innovation Center in Greenville or the Co.lab in Chattanooga. Private-public partnerships of this kind have a long track record of success in spurring economic development.
Athens has a window of opportunity to become a hub of startup activity in the Southeast. As a well-known creative town already, Athens is uniquely positioned to capture the upside of this creativity by leveraging software and technology. In order to be successful, the entrepreneurial community needs supportive community institutions. Space is a crucial component of sparking the community. The government can play a crucial role in supporting this sector of economic development.