By Dan McCue
Staff Writer

The Angelou report cites the rising cost of living and lack of affordable housing in the Lowcountry as impediments to the expansion of the region’s creative cluster.

But John Clarkin, director of the College of Charleston’s Tate Center for Entrepreneurship, said he believes there may be an even bigger challenge ahead: redefining what people mean when they talk about the entrepreneurial activity they’re supposed to be striving to support.

“To most people, entrepreneurship is all about starting a business. So, efforts to encourage entrepreneurship have focused on training people how to write a business plan, how to get a business license, how to secure funding, and so on,” Clarkin explained. “While these are important activities, they represent a very small part of the picture. Think about it: All you need is a few dollars and a business license and you’re an entrepreneur?”

Clarkin, on the other hand, sees entrepreneurship as being about that ability to recognize an opportunity, developing an idea into a way of seizing that opportunity, and creating economic value for potential customers, who will then pay more than it costs to produce it, resulting in profits.

“That’s very different than just starting a business ... is it not?” he said.

In this view, one can see that the need to develop creativity, innovation, business skills, research skills, networking, selling and management capabilities.

Without these skills, there is little hope of survival, much less success, in today’s business environment, Clarkin said.

“While the existing approach of encouraging a large number of people to create businesses does result in some success stories, the small business landscape is littered with casualties, both dead and wounded,” he said. “A similar approach is evident in the sciences, where the focus is on increasing the number of patents, in the hope that one in 100 patents will actually find its way into the market.

“Creativity is an important part of opportunity recognition and the idea-to-innovation phase of this expanded view of entrepreneurship,” Clarkin continued. “But it is just a part.”

Showing business sense

One of the things about the Angelou report that seems to trouble Clarkin, at least when it comes to the creative cluster, is this idea of creating an environment that will embrace creative people prompting them to migrate here and then look for or create their opportunities.

“While a business that does creative things is likely where creative people will hang out, it may not be the kind of business that an angel (investor) would back with his money,” he said. “For example, an ad agency has a lot of creative people working there, but the business is not one that is likely to attract investors.”

If one of the creative people found a way to exploit a previously untapped market with an innovative product and went off to form a business, that might attract investors, Clarkin said.

But first the person would have to convince the investors that he or she could actually run a business that does that kind of work. Research has proven that investors bet on the management team rather than the product or concept, he explained.

Education efforts are key

Fostering the creative cluster begins with education, Clarkin said.

“First, we have to educate those who want to support entrepreneurship to expand their view of the field, and get them current with what is known about the field,” Clarkin said. “Second, I would suggest that we support early intervention, and that begins in the K-12 system. Programs like Youth Entrepreneurship South Carolina reach the young minds and legitimize creativity and entrepreneurship in what has become a highly structured and standardized learning environment.”

The best source of value creation and innovation lies in existing businesses, Clarkin said.

“Providing educational programs that help existing businesses become more competitive and grow is a much more practical way of creating positive economic impact,” he said.

Economic developers and the educational establishment need to encourage investment in knowledge-based businesses, the kind of companies that pay higher wages, attract and retain creative talent, and serve as hatcheries for new products and ideas.

“They provide employment opportunities for our graduates, and encourage our young people to continue their education,” Clarkin said. “We, as a community, need more Automated Trading Desk- and BenefitFocus-type businesses. We need the headquarters of companies like Vought, not just their manufacturing plant. While the number of jobs is important, the caliber of those jobs is equally, if not more, important.”

A key ingredient to fostering a cluster, Clarkin said, is envisioning it as a three-dimensional object, rather than a pie chart or graph of success measures.

“Looked at as a sphere, one quickly realizes that it is better to be on the top,” he said. “Boeing’s headquarters moving to Chicago was an important move for that town. Organizations like the Charleston Digital Corridor understand this concept very well, while some others do not.”

Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.

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