Why Start a Business?

Did you know there are four times as many entrepreneurs per capita in Peru than there are in the U.S.? Who knew?!

In fact, who knew that there are more entrepreneurs in agriculture-based locations than in metropolitan ones? More per capita, that is. It turns out that Laramie, Wyoming is the entrepreneurial capital of the country. All of which hinges on the question, "who is an entrepreneur?"

Entrepreneurs, according to Merriam-Webster and Scott Shane, PhD, (Weatherhead School of Management at Case Western Reserve University and author of the book, The Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By) are those people who organize, manage and assume the risk of a business or enterprise. That covers a lot of territory.

I’m reading this book as part of my research on entrepreneurship and here’s what I’ve learned - Entrepreneurship is much more commonplace than we might have suspected. Take a look at these statistics:
  • Over 11% of households in the U.S. own a business
  • In 2005, approximately 13 percent of people in the U.S, between 18 and 74 were in the process of starting a business
  • Most entrepreneurs work more and earn less than those with similar skills who are employed by someone else.
In NE Ohio many people look to entrepreneurs and new businesses to create new jobs to help reduce our unemployment.  People who start their own businesses are often unemployed, so when they start their company, there is one less unemployed person.  Yet, another data point from Shane:
  • All the job growth created by all the firms started in a given year comes in its first year; in every subsequent year the cohort loses more jobs through company failure than it adds through company expansion.
New businesses may not be the engine of growth we hoped they’d be. 

But wait!  Let’s not rush to conclusions.  Many mom and pop shops support families for the time that the company is in existence.  Many give Greater Cleveland its character.  And some even spawn innovations that grow into larger entities, employing lots of people.  Maybe another point from Shane’s book is the best reason of all to start a new business:
  • People are so much more satisfied when working for themselves that they need to be paid 2 ½ times as much to be just as happy doing the same job for someone else.

Comments

Popular posts from this blog

An Example of Resilience Thinking

Reflections on the Course I Just Finished Teaching

Urban and Rural Paradigms