This is part of the series of articles ScaleUP USA is authoring on the nexus of the Federal Government, Industry, Innovation, Growth, and Regional Economic Development. These articles are part of the ScaleUP USA’s — Digital Business Growth Accelerator Program. Readers are encouraged to share this article and get engaged in the program for improving the capacity and capability of USA.
Illinois is the 5th most populated state in the US with over 12.8 million citizens. The state ranks 25th in the nation in terms of land mass. Its median household income was $60,413, 19th in the nation in 2016. The question for this report is what can be done to increase the wealth of the Illinois citizens so it can rank in the upper echelons of the nation. For example, if the median household income can be “bumped-up” by $10,000 per household, the state would rank 5th and if it can be bumped up by $15,000 per household it could rank 1st. However, as we all know, these kinds of “bumps’ are not easy to achieve. So what is the sustained strategy that the State of Illinois, its businesses, and citizens can embark on to gradually move its positioning as one of the wealthiest states in the nation?
(1) Inorganic Vs. Organic Growth.
(a) The Wisconsin Formula:
Clearly, there are two diverse strategies Illinois could deploy for growth and innovation. The first is what I call the inorganic or the big-bang approach. In this approach, the State can engage in one or more mega-projects that can fundamentally alter the realities on the ground for economic development. For example, Wisconsin’s recent $3 billion to Foxconn may be one of the largest-ever ‘gift’ by any state to a foreign company and could create over 3,000 jobs costing upwards of 500,000 per job created to the taxpayers of the State. While this “investment” is likely to bring a “new” industry to Wisconsin, economic developers doubt it will have a lasting impact across the State in terms of sustained growth and innovation.
(b) The California Formula:
The other alternative is organic growth. Both California and Virginia are leaders in this area but in very different ways. California is synonymous with Silicon Valley and the VC community. According to PWC Money Tree Report, the VC’s funded a total of approximately $62 billion in the US economy in 2016. Of this amount, the VC’s pumped in over $34 billion in the California economy alone via funding of start-ups and later stage companies. In contrast, the VC funding in Illinois was only approximately $1.1 billion. Clearly, this number is not large enough for Illinois growth and is pretty much capped by the total VC funding available in the nation. So the California model may not be appropriate for Illinois.
(c ) The Virginia Formula:
Virginia, taking advantage of its proximity to the Federal Government and Pentagon has persisted on the “federal” strategy. The US Federal Government is the world’s largest customer spending approximately over $1.1 trillion annually through grants and contracts on products and services each year. In FY 2016 alone the US Federal Government spent $666B on grants and $461B on contracts.
Virginia has built its growth strategy on attracting federal contracting dollars and leads the nation in this regard. As per the USA Spending report, Virginia (with a population of 8.4 million against Illinois population of 12.8 million) attracted over $50 billion in federal contracts funding as against Illinois’ $8.7 billion.
In strict number terms as per the table below, for each Virginia resident, the state attracted $6000 in 2016 as against only around $700 per resident for Illinois.
What if Illinois can attract a few additional billion dollars from the Federal Government each of the following years? What will be the impact be on creation and growth of new companies, jobs, and competitiveness? The federal spending pie is very large, plus we know it will always grow and grow even faster in times of recession through stimulus packages. The Federal Government is the key potential driver for Illinois’ growth and innovation — provided it embarks on an aggressive strategy of preparing thousands of businesses that can win federal contracts — just like Virginia has done over the years. It will require, some resources, dedication, and patience. But it can be done just as Virginia has shown. Let us explore how.
(2) The Federal Opportunity.
Even though the Federal Government is the world’s largest customer, less than 1% of all the 28+ million businesses in the USA ever registered to do business with the US Federal Government! Even lesser number of organizations know how to do business with the “Feds.” The result is that the “winners” keep “winning” and the “losers” keep losing! What if we can get thousands of Illinois individuals and businesses trained on doing business and selling to the US Federal Government? Surely, many will win federal contracts and bring in the additional federal dollars to the State. But how does one create such massively scalable yet affordable program?
ScaleUP USA has answers to both these questions. Using technology called the cloud, we have been able to build a massively scalable Federal Business Accelerator Program that we are launching with local partners. Our goal is to train over 3,000+ individuals, entrepreneurs, and businesses in the next 3 years in Illinois and we need your help in communicating and implementing this Program to potential applicants!
(3) Who Should Learn to Sell to the US Federal Government?
The short answer to the question is — all, including individuals, men, women, moms, dads, students, employed, unemployed, entrepreneurs, start-ups, businesses, non-profits, and even the state and local governments should explore these opportunities because the Federal Government pretty much buys everything through contracts and awards a large number of grants for the public good! The truth of the matter is that the Federal Government has projects going in all parts of the country and you have a chance to work for it either directly (prime) or indirectly (subcontractor). But here are some specifics of who should absolutely and specifically explore these opportunities:
a) Fedpreneurs: These are entrepreneurs seeking to focus on Federal Government start-up business opportunities.
b) Women and Women-Owned Businesses: The feds have a special “set-aside” category of projects for them.
c) Veteran and Veteran-Owned Businesses: The feds have a special “set-aside” category of projects for them.
d) Minority and Disadvantaged Businesses: Businesses owned by socially and economically disadvantaged individuals.
e) Hub Zone Businesses: Businesses in designated historically underutilized business zones in the US.
f) Small and Medium Businesses: With innovative and transformative products/approaches.
g) Large Businesses: With the industry proven transformative products, methodologies, and successes.
h) Non-Profits: Interested in federal grants and contracts for innovative or proven programs.
i) State and Local Governments: Interested in winning federal grants for economic development and infrastructure.
(4) The Impact of Winning Federal Opportunities:
Obviously, if you win federal grants or contracts you will secure federal funds to complete the program or project you proposed to the government. But the impact of these wins goes far beyond you. The best way to measure this impact is what we at ScaleUP USA call is the CJC factor and the impact on your community including economic success. CJC stands for Companies, Jobs, and Competitiveness. Specifically:
· Companies: New companies created, grown or saved from closure
· Jobs: New jobs created, grown or saved from retrenchment
· Competitiveness: Increased revenues, increased profits or decreased losses
ScaleUP USA, therefore, encourages Illinois based individuals, entrepreneurs, startups, businesses, and non-profits interested in the Federal Government opportunities to work with their local economic development organizations, entrepreneurship centers, small business accelerators, incubators, co-working spaces, and university clubs to promote, join, and grow the Federal Business Accelerator Program locally.
Ultimately, the success of this federally focused strategy will depend on how many well-trained companies pursue federal contracts and grant opportunities and win them. ScaleUP USA is there to help. To learn how, watch the video.
(5) Applying for US Federal Government Opportunities:
Unfortunately, for those who do or plan to do business with the government, there is no formal learning process to vision, strategize, plan, implement, and continuously improve their federal business growth strategy. Many therefore muddle their way and lead by trial and error and often fail. ScaleUP USA, therefore, designed the Federal Business Accelerator Program after significant research, brainstorming, pilots, and interviews with government and industry professionals. If you want Illinois to compete with a well old machine like Virginia, the number will have to be in the thousands of companies. Your job is to share the news about the Program and get ambitious Illinois applicants to successfully register and complete the 40 hours Federal Business Accelerator Program. Then help them pursue federal opportunities actively!
The Program is delivered digitally to desktop or mobile devices, is always on, highly scalable, low investment, very affordable, requires no equity dilution, and operates across America.
ScaleUP USA’s goal is to increase the US business participation rate in the federal government contracts and grants from less than 1% today to 2% in the future and thereby increase the competitiveness, efficiency, and the effectiveness of the Federal Government. Finally, here are some inspirational top 25 Illinois based government contracting companies and their local offices from whom you can draw motivation. They all have done exceptionally well in winning federal contracts. And you can too!
Get involved, get prepared, and win!
If you like this article, we will appreciate “clapping” and sharing the story on your Twitter and Facebook accounts!
About the Author:
Nitin Pradhan is the former award-winning CIO of the US Department of Transportation, a first-term Obama Appointee and the Managing Director of the Center for Innovative Technology. He is the current CEO of Launch Dream and leads their ScaleUP USA — Digital Business Growth Accelerator initiative and is also the Managing Partner of GOVonomy, an innovation as a service for governments and government contractors. He is also a Mentor at Mach 37, the nation’s top Cyber Accelerator, Z-nation Labs (Indian Business Accelerator), and on the External Advisory Board of Accenture. Business and Government leaders can connect with him on LinkedIn or follow him on Twitter.