Searching for the Spirit of the Erie Entrepreneur

Erie Insurance and Lord Corp. rank today among Erie's best-known and largest employers.That's not all they have in common.

Both began life 90 years ago, growing from the vision of Erie entrepreneurs.

Lord Corp., with more than 850 employees in Erie County, was born of frustration when patent lawyer Hugh Lord couldn't find anyone to manufacture the products he had invented.Erie Insurance, with more than 2,100 local employees, was the brainchild of H.O. Hirt and O.G. Crawford, middle-aged insurance salesmen who thought they could do better.

Those late business owners helped write two of the most prominent chapters in the long, proud history of Erie entrepreneurs.Growing evidence suggests, however, that dream-big entrepreneurs are losing traction in Erie County.And there's reason to believe that doesn't bode well for the future.

The Value of Startups

Economists have been arguing for years about the merits of small companies versus large companies when it comes to creating jobs.One recognized study pointed to a different conclusion -- that it's the age, not the size, of the firm that determines how many jobs it creates.

"Companies under the age of 5 tend to be the ones that create the most jobs," said Ken Louie, director of the Economic Research Institute of Erie at Penn State Behrend's Black School of Business.Statistics suggest Erie doesn't have enough of those.

While many remember the 1960s and 1970s as the height of manufacturing employment in Erie County, it was also a vibrant time for small businesses.

In 1969, 10 percent of all income in Erie County was earned from proprietorships, which are a proxy for entrepreneurial activity, Louie said. Today, proprietors account for just 5 percent of Erie County income.That's just a little better than half the national average, Louie said.

Concerns about entrepreneurial activity in Erie County have Louie looking for a way to measure our capacity for taking chances and starting businesses. The Economic Research Institute of Erie, which measures turning points in the local economy with the Erie Leading Index, is working on a different sort of index.

"We want to come up with a single composite measure of the degree to which our area is (engaged in) entrepreneurial activity," Louie said.He and the institute are among a long list of local groups that have begun to focus on Erie's need for new businesses that could grow into larger businesses.

Beth Zimmer, chief executive of the Innovation Collaborative, an Erie-based nonprofit organization dedicated to boosting entrepreneurism in the Erie area, said the organization is awaiting word on a grant application for $750,000 from the Erie County Gaming Revenue Authority.If the grant is awarded, she said, the money would be distributed to groups working to promote business startups.

"We don't have an attraction tool other than the facts," she said. "Now we will have money to give to people who are willing to step in and be part of the solution."

Zimmer sees no shortage of organizations working to help small businesses. If there is something missing, she said, it is a way for those groups to work together to help entrepreneurs find the support they need.More than anything else, though, Zimmer sees the need for Erie to unleash its creative energy and hold in check its fear of failure.

"The No. 1 priority is laying the groundwork to really change our culture over time to be less complacent and less risk averse," she said.

Signs of hope

Jeff Parnell knows what the statistics suggest about the lagging success of upstart business owners.But he also knows what he sees day after day as executive director of the Erie Technology Incubator at Gannon University.

"I am optimistic because I see the enthusiasm and the eagerness to learn," he said.

Parnell said he's also encouraged by the growing number of organizations, including the Gannon Small Business Development Center and Ben Franklin Technology Partners, that are providing funding and assistance for the next generation of Erie business owners.

What's more, Parnell said he's excited by the plans of incubator tenants, companies such as MedicalOpinionCenter.com, which will provide medical patients with second opinions, and Conduit Technology, which is working to streamline the flow of medical records.

Years ago, Erie made a name for itself as a center for plastics manufacturing; neighboring Crawford County, meanwhile, already had a reputation as a center for the tooling industry.

Parnell wonders if Erie might become a center for the development of medical devices or medical technology.

Only time will tell, he said.

Earlier generations, including the founders of companies such as Hammermill Paper and American Sterilizer Co., likely launched their companies without the helping hand of public grants, formal mentors or incubators.

But the old way isn't the only way. Zimmer, Parnell and a long list of others are confident that success stories will emerge from programs that offer a helping hand.

"I think the world is more sophisticated today," Parnell said. "There is a lot of competition out there. And (as an entrepreneur) you owe it to yourself to find people whose primary interest is helping you."

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JIM MARTIN can be reached at 870-1668 or by e-mail.