The Institute for Entrepreneurial Excellence at Pitt announced (here is the full press release):
Pittsburgh, Pennsylvania- February 23, 2009 - While corporations look for handouts and major firms around the globe teeter on the edge of collapse, the entrepreneurial firms of Western Pennsylvania are proving that businesses can thrive in a difficult economy with the help of innovative strategies, flexible strategic plans, and organizations like the University of Pittsburgh Institute for Entrepreneurial Excellence (IEE). In 2008, the Institute helped the region’s entrepreneurial business community raise more than $44 million in loans and investments. ...
The IEE is dedicated to leading economic growth and revitalization in our region, one business or entrepreneur at a time. For every dollar invested in the IEE, it raises approximately $49.11 in loans and investments for Western Pennsylvania businesses. The IEE’s efforts reach thousands of businesses that provide more than 50,000 jobs and $9.5 billion in annual revenue.
I don't want to single out the IEE. A current profile of Innovation Works by Pop City notes:
Since 2000, Innovation Works has invested about $40 million in start-ups, which have used that financing to leverage $550 million in additional capital. IW portfolio companies have created nearly 5,000 jobs, positions that typically pay roughly double the average wage in Pennsylvania. Most significantly, of all the local companies that received venture financing in 2008, about 70 percent were in the IW portfolio.
Notes on these things:
One, I think of myself as a friend to the local entrepreneurial community and at times, even a cheerleader. But that doesn't mean that skepticism isn't warranted sometimes. And this is a moment for some skepticism.
Two, statements touting millions of dollars and thousands of jobs created (or "reached") should be recognized for the PR puffery that it is. The IEE "reaches" 50,000 jobs? IW companies have created 5,000 jobs? As if the IEE and IW are responsible. These organizations have their role, but they are investors and counselors; they aren't running these companies themselves.
Three, what's more, the PR focus on job creation may understate and even undermine the real role that these organizations (and others in that space, such as PLSG and Idea Foundry) can play in the local economy. They focus on job creation because they get money from state and federal governments, and state and federal legislators want to see results -- especially employment-related results. What that means is that the organizations do retail economic development: A small company comes in, gets some support (strategic advice, a little money), then goes on to be a larger company and, in a perfect world, hires a bunch of people.
Jobs are essential, and they are getting more essential by the day. But politics of state financing aside, it's an error for new company brokers and advisors like IW and IEE to focus their efforts primarily on job creation. A better role for them would be wholesale economic development, creating platforms or environments where local supply can meet -- and grow -- local demand, and vice versa. Here's an example from last year: The Pens partnering with the Tech Council last year to help to "future-proof" the new arena via technologies under development in the region:
The Penguins and the Pittsburgh Technology Council kicked off the initiative last month [this is Spring 2008] when the team discussed the types of innovations it was looking for as part of a Web-cast. More than 400 companies viewed the presentation, and about 70 submitted 200-word descriptions detailing ways their company could provide the kind of technology the team wanted.
That's balancing retail economic development with wholesale economic development.