The Economist is the best source of information on world news, business, and politics bar none and is read by the leading movers and shakers of our time. The Kauffman Foundation spends $90 million annually promoting entrepreneurship, innovation, and education and in researching the factors contributing to entrepreneurship and innovation. So when the two of them combine to do a study on entrepreneurialism, the world’s outliers in education, innovation, and achievement (that’s you) need to take notice. The message is this: the entrepreneurial dog is having his day, and the statist and corporate/industrial models are weakening, but will go down fighting. Ultimately, entrepreneurialism will triumph as, according to Victor Hugo, “You can resist an invading army, you cannot resist an idea whose time has come.”
What do they mean, “Entrepreneur?”
The study defines entrepreneur as “someone who offers an innovative solution to a (frequently unrecognized) problem.” I prefer “someone who makes things happen and gets shit done” but the spirit is the same. “Innovation,” however, is the key distinguishing term between and entrepreneur and someone who simply works for themselves.
What’s in it for you?
As entrepreneurs we tend to keep a laser focus on our immediate tasks at hand, solving problems, satisfying customers, and keeping the lights on and the baby fed. All these and 10,000 things more must be done, but we still need to shift our focus to the horizon and do some serious long-term thinking and planning from time to time. For this you need a grasp on the “Big Picture” and that is exactly what this study brings to the table. Would it be important to you to identify future hot spots of entrepreneurialism? How about what the common misconceptions of entrepreneurs are? For me, I took away the importance of innovation, that age is no barrier in the formation of an entrepreneur, and that we are just at the beginning an entrepreneurial revolution that will require new skills and perceptions for those who wish to be at its vanguard. Finally, while I’ve read the Economist ever since a Greek Cypriot classmate turned me on to it back at the university, I really developed an awareness of some of the incredible resources the Kauffman Foundation offers for free, including blogs and its annual “Thoughtbook” on entrepreneurialism.
Synopsis
What are the 5 great myths of entrepreneurialism?
- Myth 1: that the entrepreneur is a lone wolf or a geek sequestered away in a lab or garage. The Reality is that entrepreneurship is a social activity, bringing together many talents and resources to create and innovate. What does distinguish entrepreneurialism from the corporate model is the harnessing of genius, entrepreneurialism unbuttons the corporate man or woman and rewards for results more than teamwork.
- Myth 2: Entrepreneurialism is a young man’s game. The Reality is the average entrepreneur starts at age 39. So it’s never too late to innovate.
- Myth 3: Venture capital drives entrepreneurialism. The Reality is most entrepreneurs rely upon, as the study puts it, “the three f’s, friends, fools, and family.”
- Myth 4: Entrepreneurialism is product driven. In other words great inventions of objects that you can drop on your foot are the end-result of entrepreneuralism. The Reality is that many entrepreneurs are process oriented as much as product oriented.
- Myth 5: Big companies are anti-entrepreneurial. The Reality is that many big companies fight hard to keep their entrepreneurial drive and are quite successful. Think Johnson & Johnson, General Electric, and Nokia.
In the global economy the United States is still the biggest dog on the block and so you would expect it to be a leader in entrepreneurship. After all, that’s were Silicon Valley is, right? The study makes the case that U.S. leadership isn’t only in absolute terms, i.e. they’ve got more start-ups, but also in relative terms, start-ups and newer companies are a larger component of the U.S. economy than in most other countries. Indeed, the anglophonic countries are among the tops in terms of innovation and ease of doing business, with continental Europe lagging and Japan back further still.
China, India, and a few others in the developing world may be late to the ball but they are taking on the entrepreneurial challenge with passion. Both China and India have large expatriate populations and both are appealing to them to come “home” and help in the revolution. Already they have carved niches, India in software, call centers, and entertainment while China is the great manufacturing imitator. Both continue to have huge inefficiencies from their more state controlled pasts, but expect them to continue to move up the food chain. Others, including Denmark, Singapore, and Israel have developed their own paths to hosting entrepreneurial activity.
What makes a region a entrepreneurial hot spot
Silicon Valley had the benefits of two world class universities and an important financial center to give it birth, but what’s a late developer to do to grow into an entrepreneurial hot spot? Three models are suggested: first, an Anchor Firm, preferably high tech, that can help launch supporting businesses and offshoots (think Research Triangle in North Carolina), second, an economic crisis that can lead to people innovating to replace lost jobs (not the preferred path), and third, a local hero that starts an innovative firm in their home town (good luck). They go on to say that an emphasis on higher education and an openness to immigration also are important.
Doing Good by Doing Well
Entrepreneurs aren’t just reshaping business, they are impacting charitable organizations as well. Entrepreneurial seeds have been sown in many aid organizations and more entrepreneurs are embracing social roles by donating, directing, and bringing their skills to the not-for-profit arena.
Tyler, I agree that it is important to keep an eye on the big picture. In fact, even you’re not an entrepreneur you have to understand what is going on with your profession or business.
This is very true, I try to keep ahead of the curve both in my profession, accounting, and in entrepreneurship, because that’s what my clients do.
[...] it is a fantastic resource for the entrepreneur. I have already written about their study of entrepreneurialism, done in partnership with the Economist, no less. The heart of the course is material gathered [...]
[...] already posted on some myths about entrepreneurship but what was really fascinating was hearing just how diverse the sample [...]