A recent report boasting the global rise of entrepreneurism encourages me; not only will workforce policy across the globe need to increasingly shift to accommodate the flex time, opportunities and innovation that we self-employeds require, the workforce has crossed into a threshold of optimism that’s, well, a bit nutty… good nutty.
By definition, entrepreneurs are optimistic; we better be, when, as I mentioned in a previous post two-thirds of entrepreneurial ventures don’t make it. We build businesses despite the odds. But the entrepreneurial process is one that I believe has only made me a more resilient and resourceful person. And you know what they say, what doesn’t kill you…
According to the eighth annual study by Global Entrepreneurship Monitor (GEM), a global research project focusing on entrepreneurs and entrepreneurship,
Start-up entrepreneurs are the most optimistic—20.1% expect to create more than ten jobs and 50% growth in five years compared to just 7.5% of established business owners.
U.S. entrepreneurs have created most of the 6.8 million new jobs in the nation since 2003.
The growing prominence of entrepreneurial ventures is a good thing for corporations as well; after all, where do former entrepreneurs go in-between self-employed gigs? Who acquires their companies? Who is getting increasingly exposed to the entrepreneurial ethic, making them smarter and more agile?
According to the report:
30% of new business start-ups offer more in terms of innovative products and services compared to established business owners. U.S. entrepreneurs are early-adopters too of current technologies; 32% of start-up companies use the latest compared to just 16% of established businesses.
Entrepreneurs offer the workforce qualities that companies are seeking to stay competitive. We’re innovative (we must be, or we can’t grow our businesses with limited resources); we work holistically and cross-functionally (in the early stages we don’t have the “luxury” of siloed departments and red tape; we must wear many hats); we see the big picture; and–perhaps most important–we execute.
Additionally, entrepeneurs don’t expect handouts. Workforce Management Magazine points out that in 2001, 33 companies on Fortune Magazine‘s list of America’s 100 Best Companies to Work For covered 100 percent of employees’ health care, and that in 2006 that number was reduced to 14. Benefits are a nice thing, but they are dwindling. I haven’t had them for years now; I’ve stopped expecting them and have learned to “rough it” in this respect. But for the majority of American workers who have never been self-employed this transition is bound to be more painful, akin to detox, with anger at their employers and anxiety a likely result–not good preconditions for top performance. The workforce will have to learn to accept more precarious long-term prospects. Employers will increasingly take the entrepreneurial tack with employees, offering performance-based bennies and making flextime a given, but also the stipulation that freedom is earned.
Results-based structures are standard for entrepreneurs, who are used to bartering services, offering low-upfront/high upside arrangements for people who can deliver, and altering major initiatives in a single deliberation–not after a fiscal year of failure.
A natural byproduct of more entrepreneurial ventures is increased venture capital. As stated in the GEM report:
VC (investment) in the U.S. has leveled out to $22-$24 billion in the last three years—way off its 2000 peak of more than $100 billion—but is a five-fold increase over the level in the early 1990s.
I see this trend as an increase in the demand for defensible businesses. In order to get the support they need entrepreneus must see business opportunity and know their markets. We must be able to see viable paths from A to B and to persuade others of our vision. This won’t be the purview of MBAs any longer, but also of the stay-at-home mom with a part-time business and fresh college graduate, too. Business building will become a basic skill, like using the computer. Though not just yet.
This is scary news for corporations, who will continue to lose talent to entrepreneurism, but it needn’t be. As I said, the rise in the enterprising spirit makes all of us smarter.