The Role of State Government in Arizona To Nuture A Strong Entrepreneurial Community

What do entrepreneurs want?

When asked what the role of state government should be to nurture a strong entrepreneurial community, entrepreneurs had a number of suggestions. The suggestions given in order of frequency were:

Bring More Corporate Headquarters to the State

More Information and Assistance to Entrepreneurs

Change the Taxation System, Simplify Regulation

Incentives for Starting and Investing in Companies

Change Focus of Economic Development Efforts

Stepped-Up Public Relations/ Media Activity

Improve the Educational System

Selected comments by entrepreneurs are in quotes below each recommendation. The number of quotes doesn't reflect how often the recommendation was mentioned.

Bring More Corporate Headquarters to the State

"Work with economic development groups to bring corporate headquarters to Arizona and stop considering call centers a 'big win' for economic development."

"Attract headquarters of Fortune 500 companies to provide the demand for emerging technologies and services and to bring talented top management to the state."

"Encourage big business. If entrepreneurs fail, they like to know there are alternatives for work. They also need to know that maybe their service or product can be sold locally. It's certainly easier to network with big players when they're just down the street."

"The Government needs to attract the large businesses to Arizona. This will bring in skilled and intelligent individuals to help build the infrastructure of the entrepreneurial community. The government should attract these businesses with tax and land incentives."

More Information and Assistance to Entrepreneurs

"When registering a new company more information should be provided on how to work/sell to the city or state. Many new companies fail because they are not aware of the opportunities that the cities and states provide for projects. For example, a 'doing business with the state' packet would be very helpful to a start-up."

"Populate the business development offices with people who have actually built and run companies."

"I think the government employees need to be more knowledgeable and know what is going on. There is a lack of communication between government agencies and the employees don't want to help you. If we can't get information and answers from them, where do we go?"

"Conduct formal focus groups with the entrepreneurs in the valley. Many of us are unclear as to what is available to us. You know how the saying goes often times 'you don't know what you don't know' and this can be crippling to a small business."

Change the Taxation System, Simplify Regulation

"Provide equal taxation for all businesses. The large business should pay the same percentage as the small business."

"Cut down on paperwork for the smaller business (less than 10 employees). An under $1M company with 4 employees shouldn't have to do the same amount of paperwork as a $50 M company with HR department and CFO."

"Level the playing field by cutting out large corporate welfare and tax breaks that cause small businesses and individuals to pay more than their fair share of taxes."

"RAISE TAXES, if necessary, to invest in education; arts; better city planning and land use; environmental protection; historic preservation; public transit; and other quality-of-life indicators. We need bright, energetic, committed political leaders who will take a stand on these issues. Ultimately, we need to do a better job of attracting and keeping people who can help build our communities for the long run. Cheap land, inexpensive housing, and disengagement from community involvement is a recipe for stagnation and decay."

"Stay out of the way."

"Decrease taxes."

Incentives for Starting and Investing in Companies

"Increased tax incentives for early stage companies, incentives for training (especially in technologies)."

"Give established businesses tax breaks if they use vendor entrepreneurial startup companies. Enable entrepreneurs to introduce new and innovative products to the state procurement system-this is a nightmare at present."

"Provide stronger tax credits and other incentives. For example, public monies have been used to finance infrastructure for large companies, sports facilities and tax credits for land and other incentives. They just are simply not available for small business."

"Bring the capital to AZ venture capital firms, encourage private investment - maybe through tax breaks to investors."

"Tax incentives for early years of a company's development."

"I believe the Arizona government should give incentives (e.g. tax incentives) to investors to invest in startup companies that could bring tremendous wealth to the state of Arizona."

"Reward angel investors who invest in local companies with some sort of incentive."

"Provide more benefits to small growing companies that create jobs and generate tax income for the state. Training assistance, publicity, incentives, etc."

"Lower taxes, incentives for state institutional funds for investment in local VC firms, less embarrassing brain-dead policy and political positions."

Change Focus of Economic Development Efforts

"Focus all efforts on three emerging industries that are currently low level of revenues but have huge potential, and where AZ could create a competitive advantage."

"1. Identify key industries that Arizona wants to grow.
2. Focus all available Arizona state, educational & industry resources on development and expansion of those identified industries."

"Target selected 'high value' industries and support their development through universities, etc."

"Encourage senior level talent to stay in the community once they are brought from another state. This can be done by stopping the focus on valuing real estate investors over business development investors."

Stepped-Up Public Relations/ Media Activity

"Promote coverage through press releases. Start the 'built in Arizona' campaign, very much like Colorado has done."

"Promote the state as a 'entrepreneur-friendly' environment much more strongly outside the state."

"State government can create a public relations campaign aimed at bringing attention to Arizona's entrepreneurial community. It has done this with industry clusters to some extent. However, the State could create a more focused goal of getting Angel, VC, and Institutional investors to look to Arizona more frequently, then that would be a good start. If the State could get more VCs to open Arizona offices, that would be very helpful."

"Create the public relations blitz that will, at least, cause some investment capital to turn their eyes to Arizona for opportunities."

Improve the Educational System

"The state needs to address our severely lacking educational system that is not even coming close to producing the talent of people we will need in the future."

"Replace the board of Regents --- the University system does not support the business Community."

"Improve the technology transfer programs at all the state universities."

"Concentrate on improving the public educational system to make it the best in the nation instead of the worst."

"Start teaching pro-business items in school, and not the current anti-business propaganda. It would also help to not have one of the bottom 5 public school systems in the country."

Direct Involvement by State Government

"Convert the Department of Commerce programs from a 'banking attitude' into a venture capital attitude. Currently Arizona requires that a business be in profitable operation for 2 years in order to benefit from any of the grants, loans and business tax incentives offered. This attitude will not ever foster the proper growth and support environment for high risk/high return start-ups."

"Create a state early seed fund to assist start-up companies."

"Instead of all this investment in sports stadiums in AZ, how about state sponsored venture capital funds for serious AZ start-ups?"

"State government talks a good story, but has had very little positive action. They have been arguing for years about creating a state supported venture capital program. We're still waiting. The state has not really been pro-business since Symington left office. Every time we try to institute a program to help attract or grow business, the anti-business loudmouths and their 'giving money to the rich' rhetoric win out."

"Actually DO more business with entrepreneurs, not just give it lip service."

"It starts at the top. The Governor should be pro-business and pro-business development (like Utah) then mandate that the state pension funds invest in local venture capital funds so there is more money available. Create a state-backed venture capital fund to aid in technology transfer and accelerate entrepreneurial growth."

"Become a champion for building a viable, thriving knowledge based economy starting at the governor's level. Recognize that a knowledge economy is the future of this state if it is to remain competitive nationally and globally."

"Like education, the State should treat entrepreneurial enterprise as a key resource, which must be proactively developed, and linked by policy to the economy. Funding in this area should be treated like an investment in the State's economy."

Better Capitalize on Current Opportunity

"There is no focus on Information Technology, yet my friends from Silicon Valley are very envious of the lifestyle and potential...and wary of this area's ability to capitalize on it."

"There's no reason Phoenix shouldn't be able to become another Silicon Valley. We've got great schools, easy transportation to CA, affordable cost of living, and talent from Motorola, Intel, Honeywell, General Dynamics, etc. I'm looking at leasing development space for $0.80 sq. foot vs. $3 to 5 in San Jose. Housing is 1/3 or less than San Jose. Now is the time for AZ to start pushing to get the next wave of entrepreneurs and replace jobs being lost as the big companies cut back."

Listening to Entrepreneurs

"Enlarge the circle of business leaders who are consulted for their opinions--so often, 'community leaders' cited are a tired list of executives from large corporations, often blind to the realities of more entrepreneurial business people."

"Starts with commitment to do so, and after that, learn what that means to be supportive and nurturing. This survey is a good start to listen to the community, and if the State actually listens, and is committed, good things might happen!"