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The Coming Age of Entrepreneurialism

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As this great country continues to work its way out of difficult financial times, many people look to the future and wonder what will be the “next great thing” that will invigorate the business world. My contention is America is at the forefront of a great new wave of entrepreneurism. For far too long the smart people went into banking, financial services, large high tech companies and other large enterprises like General Electric. Times are changing. Smart people are leaving these industries in droves, both voluntarily and involuntarily. You talk to almost anyone in large corporations and they complain about the daily life, lack of decision-making, and general malaise of corporate life. Many stay because they have a job and lack risk tolerance to go on their own.

Again, times are changing. In the past, MBA schools weren’t open and eager to teach entrepreneurialism either because many of it’s students had their tuition paid by large corporations, or because these same corporations support the schools financially, or students saw it as the fastest way to a corporate job. However, many MBA schools have now embraced teaching entrepreneurialism and are seeing students gravitate in mass to these studies. With the pullback in corporate support, students are now driven to make their own decisions and what gives them the most risk/reward potential. As Gen X and Gen Y become more of the leaders in society, their motivations are driven beyond the classic normal factors. Fulfillment of life goes beyond salary, and building something that will have a more meaningful impact, either by employing people or giving back to their community through services, have become priorities.

My contention is that these corporate “nomads” will start to find each other. They are highly educated and understand the operating principles of business. What they need help with is the risk profile of an entrepreneur. Through education, and most of all through trial and error of running a small business, this group will lead the resurgence of the business community. America needs this to happen and the government should offer incentives to promote the growth of entrepreneurialism. Let’s look at the numbers that the Kauffman Foundation released this year after studying the US government’s data set called Business Dynamics Statistics. From 1997 to 2005, existing companies were net job destroyers, losing one million jobs annually, while new businesses in their first year added an average of three million jobs annually. Corporate America is NOT where the jobs are created. Entrepreneurs and Small Business leaders are the job creators in this country. We need to embrace and exploit this fact as the New Entrepreneurialism Age grows over the next decade. Federal and local governments need to embrace this growth and cater to small business, as these are the growth engines of the future. Over the next eight years, America and Corporate America will struggle in a tough environment due to the deleveraging that needs to continue happening, deflation then inflation, and the end of a nasty debt driven recession.

Entrepreneurs will also struggle, but they understand the ups and downs better because they live with these day to day in their business. They also have an optimistic attitude and a drive in their gut to succeed. Entrepreneurs are passionate about what they do and will work day and night to get their job done. They are problem solvers. Corporate America has lost this trait over the last several years as making money became somewhat easy. No more. The other key to the entrepreneurial rise is access to capital. With debt tight but opening in the future, entrepreneurs have sought out capital through equity offerings. Much of the smart money looking to be placed understands this fact. Investors continue funding entrepreneurs even through these tough times. Returns still look attractive in these investments, even on a risk-based standard. The Wall Street Journal recently ran an article talking about the growth of “Super Angel” investor groups. I believe the growth in angel investing groups will help drive the smaller entrepreneur at a faster pace than ever before. The next decade will be very tough, but I believe the following decade will be the new “Roaring Twenties”. Now is the time to either be an entrepreneur or invest in one. The new wave is coming and I for one am excited every day to have the opportunity to not only be an entrepreneur, but invest in other entrepreneurs as well. We will as a country, get through our issues and the entrepreneur will be a driving force to bring this country to a new level.

Photo from Guerrilla Futures / Jason Tester on Flickr


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