What makes a person leave their friends and family and strike out into the unknown with nothing but the clothes on their back and a dream? The spirit of entrepreneurship is deeply American, from the pilgrims to the western expansion. Yet with the frontier colonized and most lives comfortable, how can we keep this spirit of innovation and adventure?
Recent census data shows that startup business creation continues to decline, according to an analysis by the Kaufmann Foundation. In 2010, the U.S. business startup rate fell below 8% of all firms for the first time in history. In the 1980s, the number was 13%. Young firms five years old or younger comprise only 35% of all firms now, compared to around 50% in the ‘80s.
Entrepreneurship seems much more attractive to the less educated, with high school dropouts having the highest likelihood of starting a new business. The largest decrease in startup creation from 2010-2011 was seen in college graduates. This seems to indicate an aversion to risk for those who have higher earning potential based on education. The irony is that some people end up working for employers with less education than their employees. It is unfortunate that those who seem best poised with knowledge to start a successful business are unwilling or unable to take the risk involved.
Perhaps this trend is relates to educational indoctrination and training to function in a corporate system. When the corporate job isn’t there, the reaction is anger or disillusion instead of ingenuity. On the other hand, maybe the increased burden and risk of creating startup companies deters would be entrepreneurs. It might be more fundamental, however. It might be a reflection of the greater safety we afford ourselves in life, at the expense of opportunity.
Comfort always has been the enemy of courage, and we’re getting pretty comfortable these days. Unemployment benefits are lasting years instead of months, and we should ask if we are doing ourselves a disservice. If necessity is the mother of invention, there is no wonder we are lacking in innovation.
With Independence Day a week ago, we should focus on our own independence. Independence is measured by self-reliance, self-governance and self-determination. These are values that should be applied to individuals as well as nations. After all, the government is merely a reflection of its citizenry.
Kauffman Foundation Number of New Firms Continues to Slide: http://www.kauffman.org/newsroom/number-of-firms-continues-to-slide-according-to-new-census-bureau-data.aspx
The Fiscal Times The American Entrepreneur: A Dying Breed? http://www.thefiscaltimes.com/Articles/2012/05/03/The-American-Entrepreneur-A-Dying-Breed.aspx#page1