Why America must cultivate successful entrepreneurs
America was built by visionary entrepreneurs, yet today most people believe that the path toward safety and security is through landing a job. The statistics show that jobs are declining in the US in particular. In fact, according to a report released by the McKinsey Global Institute in 2012, “by 2020 90 million low-skilled jobs will be eliminated and the replacement jobs, 45 million medium skilled and 38-40 million high skilled jobs will be filled mostly by college educated workers from China and India.”
According to the American Economic Review in 2012, small firms, especially during periods of high unemployment, are the major job creators.
Bill Gates shared in 2014 while speaking at an economic think tank, The American Enterprise Institute in Washington, DC, “Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. … Technology over time will reduce demand for jobs, particularly at the lower end of the skill set. … 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”
According to Staffing.com, several trends are emerging. “Increasingly globalization will move jobs and businesses to look for the best combination of low cost and highly qualified talent, wherever in the world they are located.
After the recession starting in 2009, large American corporations slashed payrolls by a net 500,000 jobs. At the same time these corporations hired 729,000 workers overseas.
In fact this trend started from around the turn of the century. From 1989 to 1999 multinational corporations with headquarters in the US created 4.4 million jobs. After 1999 to 2009 these companies eliminated 3 million jobs in the US whilst adding 2.4 million jobs abroad.”
America needs new entrepreneurs!
Kauffman Foundation Vice President of Research & Policy Dane Stangler asserts in an article featured on RealClearMarkets.com, why the United States needs an entrepreneurial renewal. He shares, “With venture capital funding at its highest levels in ten years, strong growth in angel investment, astronomically high startup valuations, and the proliferation of business accelerators and incubators, entrepreneurship in America is buzzing. However, research has found that new firm entry rates are actually falling and young firms are closing at higher rates than before.”
Why are we failing to cultivate successful entrepreneurs?
Stangler offers, “Many markets have become either entrepreneurially stagnant, or are experiencing massive efforts by incumbent businesses to use their political and economic power to protect themselves from new competition.”
According to the article, The Other side of innovation, “Organizations are not built to execute innovation”.
Entrepreneurs foster innovation.
Organizations are too often risk adverse and continue to invest in sameness rather than diverse perspectives. American companies need to foster diverse thoughts by encouraging different perspectives. In too many organizations mediocrities prevail as the same people, with the same background work on the same problems and avoid differences in perspective. This is why group think is so rampant while organizations struggle with innovative thinking in response to an ever increasingly complex market environment.
We need to make it okay to take risks again and find innovative solutions. In many cases we need to break our own business model and core products to make them better. In so many organizations intrapreneurs could be cultivated using existing resources, thereby generating the possibility for significant discoveries. Firms like 3M have a bootlegging policy which encourages using the products and creating new products; this is how Post-it notes were created following a failed attempt at creating a stronger adhesive.
American can cultivate more entrepreneurs and you can help by contributing your talents today!
I posit that part of the solution begins closer to home. Perhaps it begins at the dinner table.
It has been said that the families who cultivate entrepreneurs, share the details of the family business over dinner and the children gain advanced insight. Too many parents are still telling young people to go to school to get a job. Some of these kids should be encouraged to consider how they might create a job. I recall hearing stories that wealthy families in particular, reared their children with the words of wisdom to go to school and look for business partners. This may explain why a Mark Zuckerberg could build a multibillion dollar company from his dorm room.
I took the latter position with raising my own son who when he was in kindergarten each morning as he dressed, I reminded him that all he had done was spend money on other people’s products – washed his face, brushed his teeth, and putting on clothes. As I walked him to school I encouraged him to think about what he might invent by considering what problems he could solve. His exposure to business at an early age has helped to nurture his own entrepreneurial goals. He’s earned over $500,000.00 as a part-time SAG-AFTRA actor, and has pitched several business plans to venture capitalist. At 16 years old, he won a pitch competition held by K5 Ventures.
We must and can socialize the importance of being innovators and job creators to strengthen the entrepreneurial ecosystem.
This was Speech #7 for Toastmasters Liftoff group in Irvine, CA.
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