If "innovation" is the name of your business growth game — and you demand talent, processes, vendors, suppliers, and strategic allies who share your out-of-the-box mindset — you must determine a community's entrepreneurial quotient (E-quotient) before selecting it for relocation or development.

Why is a community's E-quotient important?

One of the biggest American myths is the belief that innovation — or entrepreneurship — occurs randomly when a Chosen One stumbles onto the next great idea. Wrong, wrong, wrong. Innovation is a rigorous, by-the-sweat-of-the-brow process. Think Benjamin Franklin; you've gotta fly a lot of kites before you discover the next big thing.

Innovation does not happen accidentally. Consistent, high-quality breakthroughs occur when smarties have access to one another, and can learn and collaborate together in a systematized way. You would not build a drinking fountain on a site with no water. Why would you relocate your company – one that demands innovative, fresh ideas – to a community void of entrepreneurial spirit and a "let's do it" attitude?

Companies committed to the process of innovation must relocate or move their new site to a community that values innovation and has a built infrastructure – both physical and social – to support its growth.

How to evaluate a community's E-quotient

If only the economic development professionals with whom you're working with could tell you the E-quotient of their communities! But they can't. Why? Because they're not trained to measure it. Economic development is only a 40-year-old industry, and for 39 years, we've been beating ED pros over the head to measure one thing and one thing only: job creation.

There are three legs on the economic development stool. Only the first two receive much pressure from the economic development community:

1. Attracting new businesses

2. Retaining, sustaining, and expanding existing businesses

3. Incubating new businesses

The third leg is growing in strength. The high-tech boom of the late 1990s made entrepreneurship sexy again. In the 1990s, U.S. small businesses and entrepreneurs created 20 million jobs while large businesses eliminated 10 million. And the next generation workforce, born 1961-1981, is made up of free agents. They have a predisposition to starting businesses. Somehow, economic developers still don't get it.

This is a long way of saying that if you're to find out a community's E-quotient, you will have to either:

A. Ask a consultant

B. Do a little digging

Here's the sweetened condensed version of how to determine whether the future home of your business has what it takes to support and sustain your innovative pursuits.

Step One: Measure the patents and new business start-ups within communities.

These two measures are the best proxy data available to determine how entrepreneurial and innovative a community really is. Patent information by city and county is available at the U.S. Patent and Trademark Office, http://www.uspto.gov/. New business incorporations are available through state departments of financial institutions or a related entity.

Critical Note: Inspect these measures to see whether there's a "cluster" of patents and/or new business start-ups in your industry's SIC code. Why are all the pharma's jonesin' to set up shop in the Research Triangle Park? Because that's where all the drug innovation seems to be happening, and a snow ball effect is occurring.

Step Two: Set up a stealth meeting with someone from the community's research park, preferably an actual bench scientist, digi-geek or ground floor innovator, not the person you would "normally" talk to.

At this meeting, ask questions like:

* How do you get your talent? Listen for clues as to the ease with which they're attracting and retaining talent to the region. If they're having a hard time getting people to come, either the industry cluster isn't strong or the community is not livable.

* Which are the best industry or community organizations to join? Listen for clues about vibrant groups that have members and momentum. Is there a Grand Poo-Bah – a figurehead within the industry - who's started an industry exchange group?

* Do you feel that you "fit" in this community? Innovators and entrepreneurs sometimes have a hard time fitting in. But communities with high E-quotients generally have made a place at the table for even the most obscure scientist.

* What do your peers do after 5 p.m. or on weekend? Do the things that others do with their after-5 p.m. time match what your key talent likes to do? Dell relocated to Austin, Texas because it knew that Austin's music scene would resonate with its young, digital workforce.

Step Three: Find out how much SBA funding and venture capital was poured into the community.

In Wisconsin, Green Bay is kicking Milwaukee's butt on the innovation game. Why? Some of it has to do with patents and business start-ups. But in Green Bay, the banks have figured out how to get new businesses the capital they need. Green Bay banks have some of the highest draw-downs on SBA funding of any community its size.

When you do your due diligence and relocate or build a new site at least partially based on a community E-quotient, you will reap the following benefits:

* Your key talent will be happy with its new home. Your company's smartest people ache to be around other smart people, at and after work. In surveys of more than 4,000 knowledge workers less than age 40, we asked, "What makes a community cool?" More than 60 percent said they valued communities where they could hang out with "people like them" and network with other knowledge workers. It's why organizations like Young Professionals of Milwaukee has grown from zippo to 2,400 in two years.

* You will be recognized as "visionary." Communities with high E-quotients generally grow more quickly and evenly than other cities. Your company's new home is probably already recognized as an up-and-coming community.

* Communities with high E-quotients have a solid infrastructure (fiber, wireless networks, and the other social and digital connective tissue that feeds good ideas) that you can capitalize on immediately to hit the ground running.

*Your company will benefit – both financially from the tax write-off and psychologically from the good will of the community – when you "spin off" or "tech transfer" your unsuitable patents and ideas to local entrepreneurs.

International note: Australia, New Zealand and Mexico are among the most entrepreneurial countries in the world, compared with the United States, which dropped sharply in the level of new business start-ups, according to the Global Entrepreneurship Monitor. If you don't have to stay in the United States and a community's E-quotient is critical to your site selection process, you may want to consider another continent.

Rebecca Ryan is founder of Next Generation Consulting, which studies workplace and community trends. Ryan was named "Entrepreneur of the Year" by the US Association for Small Business and Entrepreneurship. Her Hot Jobs-Cool Communities index has been applied in communities ranging from Ft. Dodge, Iowa to Nashville, Tenn. Contact Ryan at rr@nextgenerationconsulting.com or by calling (888) 922-9596.