Citrus Industry Demonstrates Importance of Start Ups

Commentary

Citrus Industry Demonstrates Importance of Start Ups

At last week’s Future of Florida Forum, leaders praised the economic benefits that the citrus industry has brought to Florida. But they neglected to discuss the lessons that industry teaches about the failings of current economic development policies. The early entrepreneurial beginnings of Minute Maid provide a serendipitous insight into history’s lessons about how jobs are created.

John M. Fox, the founder of Minute Maid, was an English immigrant to the United States at the age of two. He grew up here, was educated in business, and was eventually the Assistant to the President of the National Research Corporation (NRC) – an organization dedicated to converting research into business opportunities that led to many innovations, technological developments and even new industries. NRC was founded by a physicist, Richard Morse, who believed that good research just needed to be connected to entrepreneurs who could tap into it and develop ideas for innovative businesses.

To make a long story short, Fox was one of those entrepreneurs and Minute Maid was conceived out of the NRC. Fox moved the company’s operations to Florida to the great benefit of the state’s economy as an entire industry and tens of thousands of jobs grew up around that first company.

But even as recent research has cemented the importance of new firms in driving job creation, interest in organizations like NRC has faded as another form of “economic development” has risen to prominence over the last two decades – incentives.

Ironically Florida enjoys the benefits of an activity (entrepreneurship and research) which no longer plays a central role in economic development policies. This policy attitude has to change in Florida if citizens are to enjoy a high performing economy and jobs of the future.

The Florida Technology Seed Capital Fund represents an up and running opportunity for the government to support entrepreneurial activity in the state The legislature ordered the creation of this fund to be administered by the Florida Institute for Commercialization of Public Research (FICPR – they’re working on a better name) in 2013 with an initial deposit of $50 million. The goal of the FICPR – and this should sound familiar – is, “the Institute delivers both company building and company funding programs to create the leading products and companies of tomorrow.” Sounds an awful lot like the NRC, no? The approach may suffer a bit from the problem of “picking winners” but by orienting its assistance around patents and innovation it at least tries to help job creation from the bottom up and more organically than top-down incentive programs.

The fact is that the economy is changing before our very eyes, and policies should foster entrepreneurs who to create the economy and jobs of the future. Incentives will not get the job done.

Spence Purnell is a policy analyst at the Reason Foundation, where he works on pension reform, Florida policy issues and economic development.