Alaskans need to encourage imagination, innovation and entrepreneurship if we want to develop a competitive and dynamic economy.
We are fortunate to be endowed with a vast storehouse of natural resources, but we shouldn't be lulled into complacency by neglecting our most valuable resource: people.
Too many of our youth have moved away from Alaska due to a lack of opportunity. It has been noted that between 1990 and 2000, the percentage of 25- to 34-year-old Alaskans fell from 20 percent to 14 percent. National studies show that this age group is absolutely essential for private sector growth.
The University of Alaska Scholars Program is helping to reverse this trend, but it will not be sustainable unless we create challenging opportunities to keep the youth here. If the public-and private- sector policy makers were to become more proactive toward entrepreneurship, more individuals would pursue entrepreneurial opportunities. Those opportunities in turn create jobs instead of limiting careers to the existing job market.
A diverse economy with numerous small employers is much healthier than an economy that is solely dependent on a few large employers. Small local employers tend to be more committed community stakeholders, and their profits and decision-making remain local.
Most people agree that a strong educational system is extremely critical to the economic vitality and quality of life issues important to Alaskans. Imagine what might happen if the University of Alaska Foundation or the Alaska Pacific University Foundation created a special segregated donor's account specifically supporting student, alumni and faculty entrepreneurship. This endowment would be used to organize business plan competitions, fund selected winning plans (which would create new challenging jobs for graduates), create new equity investments for the endowment fund and grow stronger relationships with the community for the educational institution.
The essence of this mission would be the nurturing of lead active capital in the community. Lead active capital is the least amount of capital needed in priming our entrepreneurial pump but it is the most important and least available in Alaska. Lead active capital has smart minds and accountability attached to the investment. It frequently augments management, brings in strategic relationships and occasionally salvages the business.
Business angels (successful business owners, executives and service providers) associated with the foundations or the educational institutions could be advisors, mentors or potential sponsors of these student or alumni derived ventures. The educational experience of the business plan competitions could be just as valuable a learning experience for the business angels as it would for the students. Once some of the business angels become investors or advisors with multiple successful startups under their belt, they would be sought after by new budding entrepreneurs and sophisticated investors alike.
Some of these successful investors will become known as "business validators," and their association with a new venture would attract significant capital just from the business validators established reputation. These business validators would become the seed corn of a successful private equity mentality that can positively affect the financial, social and cultural direction of our economy. Alaska will attract little venture capital until we have a local financial infrastructure that includes business validators, turn-around management teams and an entrepreneurial mindset.
Most of the business angels are typically "emitters" and are willing to share their expertise and contacts for the common good. The early stage supporters of this development process are called civic or social entrepreneurs. This group appreciates the importance of sharing and building support groups in the community, even if they do not directly benefit from the relationship. We have many of these civic and social entrepreneurs currently living in Alaska (such as the University of Alaska College of Fellows, alumni associations and other similar groups) but we do not have many ways for them to easily interact with energetic students and entrepreneurs.
I believe that we have a great opportunity to make a significant impact on our quality of life by nurturing entrepreneurship and empowering individuals to perform. If you would like to assist or participate in a statewide support network for entrepreneurship please e-mail me at allanrjohnston@yahoo.com. A growing number of students, entrepreneurs, service providers, mentors and educators are participating through a free electronic networking service called LinkedIn at www.linkedin.com. This service has the potential of being a very powerful vehicle to facilitate new business development in Alaska if enough emitters and supporters elect to participate. It is easy to join and just watch until you see how and when you might want to become involved.
Current business plan competition contacts: Rick Wolk of APU, rickw@alaskapacific.edu; Bogdan Hoanca of UAA, afbh@uaa.alaska.edu; David Porter of UAF, ffdop@uaf.edu
Allan Johnston is regional manager for Wedbush Morgan Securities in Anchorage. He can be reached via e-mail at allan.johnston@wedbush.com.
