In 2013, when I was a reporter for The Wall Street Journal, I flew to St. Louis to learn about the city’s budding startup scene. The city, like the rest of the U.S., was stuck in a decades-long entrepreneurial slump that had left its economy dependent on a handful of big, staid corporations — corporations that were pulling up stakes to head overseas at a rate that alarmed local leaders. (The city’s iconic brewer, Anheuser-Busch, had been sold to a Belgian conglomerate five years earlier.) But an informal coalition of local business leaders, wealthy investors and ambitious 20-somethings weretrying to spark an entrepreneurial revival in the Arch City. They had launched a fund to invest in local ventures, created entrepreneurship clubs at local universities, and converted part of a massive downtown office building into an unlikely startup hub.

I was impressed by the group’s enthusiasm but skeptical of its prospects. Countless cities had tried similar strategies — “incubators,” “accelerators,” venture funds, tax breaks — in an effort to capture some of Silicon Valley’s elusive magic. Few had succeeded.

But maybe my skepticism was misplaced. Data from the Census Bureau released last week showed that in 2014, 9.7 percent of the businesses in the St. Louis metro area were startups less than a year old, up three percentage points from 2009. Only Elizabethtown, Kentucky, saw a bigger increase during that period. In just five years, St. Louis rolled back 15 years of decline in its local startup rate.

The news is grimmer in the country as a whole. The national startup rate fell in 2014 for the second straight year, to 8 percent. The rate at which Americans start businesses has been falling for more than three decades, and while the decline has slowed in recent years, it has shown no sign of reversing. The trend worries economists because new businesses play a vital role in creating jobs, improving productivity and spurring economic growth; some researchers believe the decline in entrepreneurship, and in other measures of economic dynamism such as labor mobility, could be part of the reason the U.S. has experienced such a slow bounceback from the past two recessions.

Over the long term, the decline in entrepreneurship has been strikingly universal, cutting across industries and regions. But as the St. Louis example shows, some areas are seeing signs of progress. From 2009 to 2014, the startup rate rose in about a third of U.S. metro areas and 12 of the 50 states, with Missouri leading the way. Three of the five most-improved cities were in Missouri — St. Louis, Springfield and St. Joseph — and Kansas City was number 12.

On the one hand, it isn’t surprising to see Missouri making progress. Both the state’s public and private sectors have been unusually aggressive in promoting entrepreneurship. The state has its own investment fund, theMissouri Technology Corporation, which invests in local businesses; the fund, together with newly formed private investment groups, have helped the state emerge as a regional leader in startup financing. The Kauffman Foundation — a prominent nonprofit that researches and promotes entrepreneurship — is based in Kansas City.

But it’s hard to know whether those efforts — or those of local boosters in St. Louis — are what’s making a difference. That’s partly because the limited data on entrepreneurship makes it hard to study the impact of government policies. Reliable data on business creation and destruction, even at the national level, has only been available for the past few years; until relatively recently, economists didn’t even know that the startup rate was declining. Even now, the measures are crude, making it hard to distinguish a fast-growing startup from a local mom-and-pop store.

Our knowledge is improving, however. Earlier this month, the Census Bureau, in a joint effort with the Kauffman Foundation, released the firstAnnual Survey of Entrepreneurs, which provides new information on America’s businesses and the people who found them. The report’s most valuable insights will come in future years, as trends become clear, but even the first year’s data contains interesting nuggets. For example, by far the largest share of new businesses in Missouri — nearly a third — are in health care, an area the state has actively promoted. Also interesting: Women own a higher share of startups in Missouri than in any other state. That could be a hint that one way to help turn America’s entrepreneurial slump around is to help more women to start businesses.

“What we’re seeing is a lot more gender and ethnic diversity in our newer businesses than we had in our older businesses,” Secretary of Commerce Penny Pritzker, herself a former entrepreneur, said in an interview. “This is the kind of information that is really vital for policymakers.” Armed with better data, perhaps leaders in both the public and private sectors will at last crack the code for promoting entrepreneurship — and reverse the startup slump in the process.

Hunger in America

Here’s some welcome news: Fewer Americans, and particularly fewer children, are going hungry. According to data released by the Agriculture Department this week, 15.8 million U.S. households, or 12.7 percent, experienced “food insecurity” at some point in 2015, meaning their access to food was limited by financial or other constraints. That’s a big improvement from 2014, when 14 percent of households were food insecure, and from 2011, when the food insecurity rate neared 15 percent in the wake of the Great Recession. The share of households that experienced actual hunger — what the government calls “very low food security” — fell too, though not quite as quickly. Children went hungry in 274,000 households at some point during the year.

Hunger rose during the recession and has been slow to decline in the recovery. The issue has at times become a political cudgel — just Google “Obama” and “food stamps,” or, better yet, don’t — but this week’s report shows the pace of improvement is finally starting to accelerate. That’s just the latest sign that with unemployment falling below 5 percent, the economic recovery is starting to reach some of the most vulnerable American households.

Slower growth

The jobs report earlier this month showed that U.S. employers added 151,000 jobs in August, a solid though somewhat disappointing number. But on Wednesday, the Bureau of Labor Statistics said that pretty much all of those jobs will effectively disappear from the data when it revises its numbers early next year.

Hold on, Jack Welch, don’t go trumpeting any conspiracy theories quite yet. The announcement was part of a standard annual process of “benchmark revisions.” The monthly jobs figures are based on a survey of businesses, which is the only way to make estimates available in a timely manner. But the government also collects a much more precise count of the jobs in the economy via state unemployment insurance records. Every year, it reconciles the survey-based numbers with the more reliable unemployment records and makes whatever adjustments are necessary.

This year’s adjustment is relatively small by historical standards. According to a preliminary estimate from the BLS, there were 150,000 fewer jobs in the U.S. as of March than previously believed. That’s a downward revision of 0.1 percent, smaller than the 0.3 percent average adjustment over the past decade and much too small to change our understanding of how the economy as a whole is doing. By far the biggest revision, on a percentage basis, came in the mining sector, which isn’t surprising; the oil and gas industry, which is part of the mining sector, has been extremely volatile in the past year due to tumbling oil prices. That kind of volatility can be hard to track in real time.

The week ahead

Hiring is up and unemployment is down, but as of 2014, Americans still weren’t making any more money: Median household income has beenessentially flat since the recession ended in 2009. This week, we’ll learn whether 2015 was the year that finally began to change. On Tuesday, the Census Bureau will release its annual report on income and poverty in the U.S. and the individual states.

It’s likely the report will show at least some increase in household income in 2015. Sentier Research, a private firm working with publicly available government data, estimates median incomes began to rise in mid-2014 and are now essentially back to where they when the recession began nearly nine years ago, after adjusting for inflation. Even if Sentier is right, however, it is unlikely that the poverty rate is anywhere close to its prerecession level. The U.S. poverty rate was 14.8 percent in 2014, up from 12.5 percent in 2007.

Elsewhere

Scott Patterson, John W. Miller and Chuin-Wei Yap of The Wall Street Journal tell the remarkable tale of a Chinese billionaire who stockpiled 77 billion beer cans’ worth of aluminum in the Mexican desert.

Inequality is up in the U.S. — that’s well-known. But the picture looks different from one state to the next. Quoctrung Bui of The New York Times charts the trends and finds some interesting patterns.

State and local governments aren’t the only ones that spend public dollars to build private sports stadiums — the federal government does, too. And it’s every bit as bad an idea as it sounds, according to new research from Ted Gayer, Austin J. Drukker and Alexander K. Gold of the Brookings Institution.

Derek Thompson of The Atlantic interviews Economist columnist Ryan Avent about his new book on how technology is reshaping the global labor force.

Article courtesy of Ben Casselman at FiveThirtyEight, see the original story here.

Startups should know what differentiates their product from others. Building around an unique strength, a facet that’s difficult to emulate, offers small companies a chance to gain critical mass. New companies should focus on a strength and own one particular piece of their market. Startups that fail to do this can quickly become commodities.

The same can be said for cities and regions looking to make themselves into destinations for tech. Simply trying to emulate the Bay Area and its vast net of tech-related disciplines makes for an impossible task. As I wrote about Chicago and its tech ecosystem recently, there’s more to getting true traction than simply giving startups places to work. Just as a startup needs to do one thing exceedingly well before it tackles other missions, cities should take the same tack and concentrate on one sector of tech to make their own.

I recently was in St. Louis and, while there, I talked to some of its VCs, startups and people who run its incubator and accelerator spaces. Just like anywhere, there exist startups doing all sorts of things in the St. Louis area, but many of the most interesting companies have coalesced around the bioscience space. This isn’t by chance. The city’s tech players have seized on some of the area’s inherent strengths in healthcare and biotech. Washington University, which has one of the top medical schools in the country, is constantly throwing off ideas and graduates who have new ideas in the space. DuPont’s bioscience arm is based here, as is Monsanto, the king of engineered macro-crops. And perhaps most important in all of this, St. Louis was the site of a major set of layoffs by Pfizer in 2010.

The hazard: If the St. Louis community couldn’t find jobs for these people, they would be forced to leave the area, depriving the metro of elite brains that Midwestern cities like St. Louis can sometimes struggle to attract. The opportunity, as Gulve saw it: “These people had been in biotech for years and had great ideas, far better than first-time entrepreneurs coming from outside the industry.”

Gulve asked Pfizer if, before the last day of work, he could come in and present to employees about what working a startup is like and what the landscape was like for funding and founders. Pfizer, which wanted to find new roles for its employees as much as Gulve did, said yes. Gulve came in and gave his presentation to Pfizer employees on-site, and then took five in-person meetings the same day. Biogenerator ended up funding four groups from those meetings, one of which turned into Confluence Life Sciences, which now employs 35 in St. Louis.

At the same time, Gulve was hustling to complete a new building and set of labs for Biogenerator. He wanted it ready to catch some fo the fallout of the Pfizer layoffs. A pilot set of labs opened in the fall of 2010, just a few months after Pfizer made its cuts. The 5,600-square-feet of space was filled within 18 months. Biogenerator used that success to raise a total of $145 million and fund 54 companies that have attracted another $250 million in outside capital. The incubator, part of the Cortex Innovation Community, has also added another 12,400 square feet of lab space.

“If you have layoffs in a city and you don’t have this kind of infrastructure in place, you’re not able to take advantage,” explains David Smoller, a partner at St. Louis’ Cultivation Capital who holds a Ph.D. in molecular biology and has been part of several biotech exits. “A lot of the best intellect in the area is now at these biotech startups.”

The lab space is free for Biogenerator companies—and many of them stay there for years after their initial funding, even after finding traction and hiring a significant number of employees. Lab equipment—stuff like mass spectrometers and automated robotic arms for preparing large numbers of samples—is expensive. Small companies can’t afford to finance a lab all their own—but they also don’t need the lab every hour of the day. This allows several startups to easily share the same lab equipment. It’s a unique infrastructure for rearing biotech companies for which St. Louis has found a niche.

The city may have a chance to repeat the feat with 2,600 global layoffs just announced at Monsanto. It’s unclear where exactly those job cuts will take place around the world, but it’s likely that a few hundred will be in St. Louis. “Hopefully a subset of those people won’t want to retire,” says Sam Fiorello, chief operating officer of the Donald Danforth Plant Science Center. “They know the ag space in and out and we need to be ready to provide them support.”

Danforth has multiple missions, including the pursuit of agricultural solutions to mitigate hunger and disease across the world, but it’s also one the U.S. hubs for new companies focusing on the ag tech space. With labs, office space, mentors and a complete talent network, companies here can stay focused on their product.

Fiorello, who was the chief of staff for Henrik Verfaillie when the latter was Monsanto’s CEO, has been grinding to create a complete program for nurturing ag tech companies and, just as important, a base of employees who can easily be plugged into growing ag ventures. “You can’t just build lab space and expect people to come,” he says. “It’s not a real estate play.”

The biggest pain point for Danforth’s companies has been finding skilled workers for the lab. To that end, Fiorello has worked with St. Louis Community College to create a plant science training program that now boasts a 98% job placement—the remaining 2% go on to get bachelor’s degrees. Danforth, now with two buildings and attracing ag-tech from around the world—including multinational companies from Germany and Israel—now houses 575 people with an addition on its main building that will make room for another 100.

The next project for Fiorello is yet another new building for Danforth that can help him catch Monsanto refugees. One company already using Danforth’s resources, Arvegenix, was founded by three former Monsanto employees who are developing hearty strains of Pennycress, a winter annual plant, as a revenue crop for during what’s normally a dormant period for North American farmers. The plant will provide animal feed as well as oil that can be used in biofuels. Arvigenix has raised $9 million and is now using the core lab at Danforth to develop its seed. Arvegenix has set up shop in St. Louis’ Helix Center biotech incubator, yet another local platform aimed at the space.

St. Louis, like Chicago, has a lot of work left to achieve its goals as a destination and long-term home for tech, but it has made the shrewd choice of identifying sectors where its infrastructure and intellectual capital already had a head start.

Article is courtesy Christoper Steiner at Forbes.com. See the original article here.

Stadia Ventures, the two-year-old sports-focused business development firm and accelerator that helps early stage sports startups connect with investors, brands and teams, today announced it is moving its headquarters into the CIC@4240 building in the Cortex Innovation District next month. Since Stadia started in 2015, its headquarters have been located in T-REX downtown.

“We’re thrilled to move into the Cortex district inside CIC and further engrain Stadia in the growing St. Louis startup ecosystem,” said Art Chou, Stadia Ventures co-founder and Managing Director. “T-REX and CIC play vital roles in the entrepreneurial ecosystem and we look forward to continuing to support both facilities, holding events such as our Spring 2017 Finalist Pitch Day event  at T-REX in late February.”

T-REX, which plays hosts to over a dozen entrepreneur support organizations, has been home to almost all of St. Louis’ startup accelerator programs. Prosper Women Entrpreneurs Startup Accelerator, SixThirty and SixThirty Cyber accelerators and the Purina PetCare Innovation Prize are based in T-REX, with the Yield Lab accelerator also having a T-REX office. Capital Innovators, previously headquartered in T-REX, moved to CIC@4240 in 2016 as part of a partnership with Maritz, Inc.

Stadia Ventures focuses on fostering connections between startups and its partners in the $150 billion sports business market including the St. Louis Cardinals, St. Louis Blues, ESPN, CBS Sports, Rawlings, Wilson, Dick’s Sporting Goods, Under Armour, the San Francisco 49ers, the Jacksonville Jaguars, the Philadelphia 76ers and others. Stadia just completed its third cohort.

“The Stadia Accelerator has been a game changer for our business,” said Joe Shuchat, founder and president of Winning Identity, a Stadia Ventures portfolio company and accelerator graduate. “The guest speakers they’ve brought in have been world class industry leaders. The advisory team has put us in a position to take our business to the next level.”