The Nexus of Financial and Political Interests between Crowd Funders and Regional Economic Development Professionals: The New-New Innovation Economics

Abstract

Crowdfunding does not magically create jobs and economic growth, as securities officials in Kansas note about their 2 year old intrastate crowdfunding initiative. In Kansas, only six companies have claimed the intrastate crowdfunding exemption in more than two years, according to Lynn Hammes, director of finance and administration at the Kansas Office of the Securities Commissioner. The unexamined assumption about crowdfunding and job creation is just like an earlier fascination in the economic developer community about clusters, whose promotion, it was assumed, would automatically lead to more jobs and increased regional income. Just like roads and sewer lines formed the infrastructure resource base of the older industrial recruitment strategy, crowdfunding requires its own type of regional capital market infrastructure in order to become a viable economic development policy tool. Innovation economics has the right theoretical framework to guide the build-out of that bigger capital market infrastructure because it covers the entire capital market process involved with technological innovation.