 If you are serious about entrepreneurship, startups, or venture-capital and you don’t know about the Kaufmann Foundation, you should take a few minutes to visit their web-site and most likely bookmark it. From insightful essays on entrepreneurship and education, to a dedicated Kauffman Fellows program that aims to identify and educate future leaders in the venture capital industry, their site is simply awash in useful information and interesting perspectives. Recently, they published Version 2.0 of their research and policy guide, titled On the Road to an Entrepreneurial Economy. This paper is not a short read by any means, coming in at a nice and healthy forty pages, but don’t let this scare you away for the paper is well written and covers a wealth of topics. In a nutshell, it concentrates on policy measures that the federal government ought to follow in order to promote innovative entrepreneurship. While this paper mainly focuses on the current state of affairs in the United States, the outlined policies are general in nature and can be implemented in other countries as well.
Here are a few key takeaways. For the economy to continue firing on all cylinders, it is in the government’s best interest to ensure that individuals that enter the workforce not only have twenty-first century skills and knowledge, but also have the ability to overcome the fear of using these skills to generate and commercialize new ideas, products and services. In the same sense, individuals need to be encouraged to view themselves as their own firms, who are selling their labor to others or to themselves, should they want to start their own businesses. For this to happen on a large scale, entrepreneurship needs to be instilled in individuals at an early age, and not be relegated to MBA courses at universities. Additionally, the paper argues for the disbanding of the H1B visa cap, based on an analysis of the amount of businesses that have been started by foreign workers over the last several decades. While this is a good point, I think it needs further study as recently there has been an increasing trend for foreign nationals to obtain an education in the United States, but to return home afterwards to start their new enterprises in their homeland. This of course, can be countered with the fact that several of the companies started abroad have since expanded and have a significant presence in the United States hiring workers over here as well. Another interesting point that the paper makes is a call for healthcare to be decoupled from employment. The argument being that startups, because they lack critical mass in terms of employees, are unable to provide affordable healthcare, and are thus at a disadvantage compared to large companies. This in turn limits the number of individuals that are willing to take a risk of starting or joining a startup. But fostering startups and innovation is key to ensuring the future prosperity for the United States – for example, did you know that firms with fewer than 500 employees generate thirteen to fourteen times more patents per employee than larger firms? And to add insult to injury, these patents are usually twice as likely to be cited by other patents and papers.
I could go on for pages discussing all the info contained in the policy guide, but you are probably better off reading the actual paper yourself so that you can draw your own conclusions. In any case, whether you agree with the points in the policy guide or not, the Kauffman Foundation web-site is a very good resource for entrepreneurial information.
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