DETROIT – New Economy Initiative announced Monday it will invest $9.25 million over three years and work closely with the Ewing Marion Kauffman Foundation to help minority auto suppliers find new non-auto partners. The program will be based at Wayne State University’s TechTown and help an estimated 800 entrepreneurs annually, creating an estimated 400 new start-ups per year over three years.
The Kauffman Foundation will bring programming development, staffing, materials and expertise to the initiative. NEI also will invest $5 million in TechTown, which is a business accelerator.
?With the region?s tremendous assets – from a talented workforce to intellectual capital in research and technology to an unparalleled work ethic, and beyond ? we have some amazing tools for developing the ideas and companies that will be the foundation of our future economy,? said NEI interim director David Egner. ?These efforts will help activate those assets and accelerate the increases in new businesses and jobs that the region needs.?
The core pieces of the initiative are the proven Kauffman programs FastTrac and Urban Entrepreneurship Partnership. As part of the package, Kauffman will deploy staff to Detroit, implement the programs, and analyze their operations.
?As Michigan knows from its rich history, entrepreneurs are the base of our nation?s economic recovery during down times,? said Lesa Mitchell, Kauffman Foundation vice president for Advancing Innovation. ?The Kauffman Foundation is dedicated to providing the expertise and tools that help people advance their talents and ideas towards building businesses and creating new jobs. With the nation?s highest unemployment rate, perhaps nowhere is this work more critical than here.?
FastTrac is a premiere business development program that has been operating for 15 years. More than 300,000 participants throughout the United States have been through the program. FastTrac is comprised of quick, intensive 3-to-10 week training initiatives for unemployed or underemployed individuals seriously considering entrepreneurship instead of finding another job.
Two versions, FastTrac NewVenture and FirstStep FastTrac, will initially be coming to Detroit. Similar in approach, FastTrac NewVenture is specifically designed for individuals who have been displaced from their job, while FirstStep FastTrac focuses on people with low-to-moderate incomes who are starting or expanding a small business.
Each helps aspiring entrepreneurs define and evaluate business concepts and provides a blueprint for next steps. Included is a feasibility study that covers everything from marketing to product and service details to price and profitability assessments. It is estimated that 800 individuals will enter the Detroit FastTrac program annually, creating 400 new start-ups per year over three years.
With the auto industry in dramatic transition, many suppliers have been forced to close or rethink their business. The Urban Entrepreneur Partnership (UEP), a non-profit program created by the Kauffman Foundation, will target minority automotive suppliers, offering one-on-one, hands-on support to retool their businesses into other industries. Four initial industries will be targeted: aerospace, alternative energy, medical devices, and military and homeland security. Approximately 150 minority suppliers will be trained, coached and mentored over three years. Of the $9.25 million NEI investment, about $3 million will be applied to the UEP efforts.
In addition to the core entrepreneurial programs, the initiative will invest in and leverage other resources and partnerships, providing a well-rounded approach that increases the potential for success. All initial programs, for example, will take place at TechTown, located in Detroit?s Midtown/New Center area. As part of the initiative NEI will invest about $5 million with TechTown.
Another key partnership of the initiative has been established between the NEI and Shorebank Enterprises Detroit. The NEI will provide $1.25 million to SEB to establish and manage the Detroit Business Innovation Development Fund. The fund will finance and support Detroit-based growth companies and start-up ventures, focusing on businesses that create or retain jobs for Detroit residents. An employee recruitment and support services program will link neighborhood residents with new job opportunities generated by SED-supported businesses and anchor institutions.
Implementation of the programs will begin immediately. FastTrac will be launched in June, at which point individuals will be able to apply. UEP will be launched in July.
The New Economy Initiative is one of the nation?s most expansive philanthropic partnerships dedicated to economic transformation in the region hardest hit by manufacturing job loss and the global economic crisis. NEI includes $100 million in funding commitments from the Community Foundation for Southeast Michigan (Detroit), the Max M. and Marjorie S. Fisher Foundation (Southfield, Mich.), the Ford Foundation (New York), the Hudson-Webber Foundation (Detroit), the W.K. Kellogg Foundation (Battle Creek, Mich.), the John S. and James L .Knight Foundation (Miami), The Kresge Foundation (Troy, Mich.), the McGregor Fund (Detroit), the Charles Stewart Mott Foundation (Flint, Mich.), and the Skillman Foundation (Detroit). The 10 participating foundations are leading the implementation and governance of the Initiative. The Community Foundation for Southeast Michigan, which initiated the collaborative, is serving as its administrative home.
The Ewing Marion Kauffman Foundation is a private nonpartisan foundation that works to harness the power of entrepreneurship and innovation to grow economies and improve human welfare. Through its research and other initiatives, the Kauffman Foundation aims to open young people’s eyes to the possibility of entrepreneurship, promote entrepreneurship education, raise awareness of entrepreneurship-friendly policies, and find alternative pathways for the commercialization of new knowledge and technologies. It also works to prepare students to be innovators, entrepreneurs and skilled workers in the 21st century economy through initiatives designed to improve learning in math, engineering, science and technology. Founded by late entrepreneur and philanthropist Ewing Marion Kauffman, the Foundation is based in Kansas City, Mo. and has more than $1.8 billion in assets.
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