I recently talked with Carl Schramm, president of the Kauffman Foundation, about his new book, The Entrepreneurial Imperative. Here are excerpts of our conversation.
Who are entrepreneurs?
That goes to the question of are they born or made? It's very hard from a personality perspective to identify them. You can't tell from shaking hands with someone whether [he or she is] an entrepreneur. They believe they can tell who's the entrepreneur in the room. They think they have certain special traits such as being gregarious, or they radiate risk-taking readiness. It's a nice thing to want to believe.
When you look at successful entrepreneurs and see what sets them apart, it is a readiness to take risks. It's a willingness to leave environments where all the rules are clear. It's a willingness to go to work everyday and not know what to do. They have a huge ability to work in ambivalent situations. They have the ability to get other people to work with them and get them excited. They are magnetic and able to convince people about a future that other people can't see. They are more visionary and ready to work in the future.
Are they particular to the United States?
We grow entrepreneurs more readily than any other economy. We have the conditions that make this happen. With the unemployment rate at 4 percent, the risk of failure is low. You can always get a job. More importantly, we have a culture that understands who entrepreneurs are and has enormous respect for them. Every kid in school knows Sergey Brin, Steve Jobs, and Bill Gates. They also know the guys who started YouTube. So it's kids like them, and they see they are not unapproachable careers. Adults see that they are respected people. You have lots of role models. People who do this can make a lot of money and can control their destiny. That's even more important these days in terms of people not wanting to work in big bureaucratic companies. We also have the most educated labor force in the world. Twenty percent have college degrees. They have a much wider view of what's happening out there and a strong technological base. We have a culture of continuous innovation, compared with lots of other economies. All these ingredients make for a U.S. economy that is an entrepreneurial vending machine.
Why do we need them?
We have become a new type of capitalist economy. There are 700,000 companies started every year. If we didn't have that, the economy would come to a stop. Half of the new jobs created are in firms less than five years old. We need entrepreneurs to provide employment. We also need them for creating new things. They make life easier, make medicine safer, make the Internet better. That continues to make the economy stronger.
What needs to be done to promote entrepreneurs?
The key single thing is to make sure that more kids in college know how entrepreneurship works. Then make high school kids understand. It's about increasing awareness of how businesses get started and what entrepreneurs do. Show them that this is an alternative to your career.