Back when Mayor Curtis was on TV to talk about Provo’s top Forbes ranking for business, he emphasized Provo’s entrepreneurial culture. At least to me, it seemed like the host was trying to find out why existing businesses should move to Provo and Mayor Curtis was telling her that actually it’s all about generating new companies.
In any case, the fact is that Provo’s recent success is due at least in part to new companies starting up in the city. It also seems reasonable to say that the nearby universities play a vital role in creating a startup-friendly environment.
So are there things Provo, as a city, could do to create an even greater business environment? Could the city generate even more jobs, more growth, and more innovation?
Spain appears to think that governments can do all of those things, as evidenced by a new program designed to incubate new businesses. As reported by NPR, the Spanish government is offering new startups free rent, tutorials and networking events in an effort to bolster a lagging economy.
And the effort apparently is working:
On average, half of Spanish start-ups never make it. But those who get this public help have a 95 percent chance of surviving five years. So amid budget cuts, this kind of public investment makes sense, says economist Gonzalo Garland, at Madrid’s IE Business School.
Spain is obviously doing this in response to a massive recession, and it has a much larger economy than Provo. But the lesson still applies and there’s no reason this type of program couldn’t be adapted for municipalities looking to make themselves hubs of innovation and economic development. And in Spain at least, the culture evidently is flourishing:
De La Espada and his friends are amateur musicians from Panama and Argentina but decided to start their company in Spain, partly because of this fledgling startup culture.
That’s exactly what needs to happen in Provo: offer incentives to lure innovators who might otherwise choose another city. Those incentives could benefit locals, college students, or anyone else, but the point is that they’d generate economic growth that would enrich everyone.
As it turns out, this is more or less the idea that I previously argued would have been superior to City Creek. My feeling was that rather than build a $2 billion dollar mall — which exports the vast majority of it’s economic impact to out-of-state corporate headquarters — a city would be wiser to take that money and seed thousands of startups. Within a matter of years, the investment would pay off and generate new retail opportunities at a more organic pace.
Spain shows that this idea basically works. Though the retail part of the equation is still down the road, the Spanish program shows that governments can invest money in startups, help those startups succeed, and reap the rewards. There are few things that Provo would be better off investing in.