Independent Thinking Blog

11 Keys to Powering Up the Entrepreneurs

We all know the U.S. economy is entering a jobless recovery, which is really a sanitized way of saying that if you’re unemployed you can expect more of the same. We clearly need a jobs creation strategy, and fast.

So where will the jobs come from? If history is a guide, the answer is entrepreneurs. According to David Gray, director of the Workforce and Family program at the New America Foundation, entrepreneurs and small businesses account for 75 percent of all new jobs. Gray moderated a terrific program yesterday that looked at what needs to happen to pave the way for new opportunities for America’s entrepreneurs.

My key takeaways:

1.The Kauffman Foundation‘s Robert Litan pointed out that big firms don’t want to obsolesce what they’re making money on. As a result, all the sexy stuff is created by entrepreneurs.

2. Litan cited a study of Fortune 500 firms that found that one-half of them were formed during a recession or a bear market.

3. Don’t equate entrepreneurship with venture capital. Litan said that only 16 percent of the fastest growing companies were financed by venture capital.

4. Health care is a major barrier to entrepreneurship because people can’t leave their jobs.

5. Paul Glastris, editor-in-chief of the Washington Monthly, said that America needs to put “an entrepreneurship lens” around many of the policies being discussed.

5. We need to invest in broadband, health information technology, and a smart grid. Glastris said investment in these platforms is key to the ability of the U.S. to create cutting-edge, high-wage jobs.

6. Think U.S. broadband is fast? Australia’s broadband system is 4x faster; France’s is 9x faster, and Japan’s is 21x faster.

7. So what might these platforms look like? Mariah Blake, an editor at the Washington Monthly, talked about the need to turn the electric grid into a vibrant, interactive network.

8. Consider our grid today: There are no tools to manage the flow of electricity or to diagnose problems.

9. A smart grid would allow consumers and companies to manage their electricity usage on a micro-level. Blake said that this could spur innovation in dozens of industries. Why? Because consumers will have access to information about their usage, and entrepreneurs will be open to creating all kinds of software and services to help people use energy more efficiently.

10. Blake compared the smart grid to the iPhone Store. Apple owns the store, but it’s open in a way that allows for phenomenal innovation.

My final takeaway came via a question from a participant who said that entrepreneurs typically create things you never thought you needed. But here we know what we need. Litan suggested that we had the broad outline, the platform, but we still can’t see the applications.

That’s where entrepreneurs come in.

Photo by Kevin Dooley (Flickr).

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