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Cleveland State University and JumpStart Report on Entrepreneurial Confidence in Northeast Ohio

Tuesday, September 26, 2006

The Center for Economic Development (CED) at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs and JumpStart Inc. released a new report that summarizes the findings of a survey conducted from April 26 to June 2, 2006. CED researchers Ziona Austrian, Ph.D., Director, and Jill Taylor, Program Manager, led the effort with JumpStart providing the promotional and technical support to execute the survey. The objective of the survey was to assess the entrepreneurial climate and entrepreneurs’ confidence in their ability to start and sustain a business in Northeast Ohio.

With approximately 350 individuals participating in the survey, many responses specific to business development resources and quality of life factors were optimistic. Respondents generally held favorable perceptions of the local workforce, business support organizations, colleges and universities, and networking opportunities. Most felt that attitudes toward entrepreneurs are positive and approximately two-thirds of respondents were very confident (4 or 5 on the 5-point scale) in their ability to start or sustain a business in Northeast Ohio.

Two questions in particular, however, did stand out with relatively low scores. Respondents had negative perceptions about the economic health of the Northeast Ohio region. The mean score (2.23) fell well below the midpoint of the scale; with 60 percent of respondents strongly disagreeing (1 or 2 on the 5-point scale) with the statement that the economic health of the region is strong.

The numbers were even more discouraging when participants were asked specifically about access to capital. Of the respondents, 68 percent strongly disagreed that access to angel capital is easy and 71 percent strongly disagreed that access to venture capital is easy.

Whereas these two questions did score low, they weren’t particularly surprising. “We saw responses that echoed findings that The Fund for Our Economic Future concluded through their Voices and Choices initiatives,” stated JumpStart Chief Marketing Officer Thom Ruhe. “As for the pessimistic view on access to capital, here too, we find validity in entrepreneurs’ claims as was identified last year by NorTech in their Early-Stage Capital Task Force Report,” Ruhe added. “I think a main take away from the survey is that Northeast Ohio Entrepreneurs know we have our work cut out for ourselves, but we are overall optimistic that we can do it,” Ruhe concluded.

“Although entrepreneurs are known to be both optimistic and risk-tolerant, I was surprised at the high level of confidence in their ability to start or sustain a business” added Ziona Austrian, the Center’s Director. “Despite overall negative perceptions about the region’s economic health, most believe they can be successful here.”

The report was funded by the Cleveland State University Presidential Initiative for Economic Development, JumpStart, and the Economic Development Administration of the U.S. Department of Commerce. The complete report, titled "Northeast Ohio Entrepreneurship Confidence Survey: First Year Findings" can be found at: http://urban.csuohio.edu/economicdevelopment/publications.shtml

About The Center for Economic Development
The Center for Economic Development encompasses research and technical assistance activities aimed at furthering the development potential of the Cleveland region. It concentrates on economic impact analyses, industry clusters, economic indicators, and investigating innovation and entrepreneurship. The CED is one of 15 research centers within the College that provide applied research, technical assistance, and training to public officials, community leaders, and the private sector with the objective of enhancing the quality of life in urban communities.

The Maxine Goodman Levin College of Urban Affairs (http://urban.csuohio.edu/) is ranked among the top eight schools of urban affairs in the United States. The College is ranked second in the graduate specialty of city management and urban policy in the U.S. News and World Report’s 1998, 2002 and 2005 issues of “America’s Best Graduate Schools.” The College offers 12 degree programs including bachelor’s, master’s, and doctorate degrees. Dual degree programs are also available and provide the opportunity to earn a Juris Doctor with a Master’s in Public Administration (JD/MPA) a Master’s in Urban Planning, Design, and Development (JD/MUPDD), or a JD/Master of Arts in Environmental Studies. The College is also home to Economic Development Quarterly (EDQ), the leading journal in the field of economic development.

About JumpStart Inc.
JumpStart (www.jumpstartinc.org) accelerates the growth of early-stage businesses and ideas into venture-ready companies by delivering vital, focused resources to entrepreneurs in Northeast Ohio. JumpStart identifies and invests in early-stage companies that have strong potential in the marketplace, solid prospects for high growth, and are likely to qualify for later-stage funding. Beyond investing, the JumpStart team provides a continuum of business development services to its client companies to help ensure their success.