The Startup Ecosystem Is Broken
Updated: Nov 16, 2018
Why does entrepreneurship matter? The socioeconomic benefits of entrepreneurship are numberless.
Entrepreneurs start a small business, create jobs and positively affect local economies, people, and politics. Hence, entrepreneurship becomes the primary mechanism to make economies grow and develop. Startups also empower communities and enable individuals to address societal problems in a sustainable fashion.
In the U.S., 99.7% of the companies are small businesses. They employ half of all private sector employees. Based on the Small Business Administration (2016), small firms have generated 63% of net new jobs per year. Moreover, entrepreneurship provides social mobility and progress: It provides hope, empowerment, and inspiration to people. Consequently, political benefits arise. Entrepreneurship brings prosperity, security, and stability to a community. It strengths an economic virtuous cycle which brings well-being and inclusion of groups.
Americans want to start their own companies. 61% prefer to be their own boss (Ross, n/d) while millennials show a greater desire for professional independence (Bentley, 2014). Thus, the American market and society seem to be open to entrepreneurship and small business startup.
However, a deeper research reveals that entrepreneurship has decreased in the U.S. This can be attributed to the 2008 crisis yet is influenced by several factors. Massive corporations came to dominate both physical and online spaces. While big companies become more entrepreneurial to attract great talent to work with them.
Moreover, higher startup generation rates belong to a small group of serial entrepreneurs that starts new businesses every time. However, a small percentage of Gen Y are starting more companies than previous generations (Alton, 2017).
To sum up, entrepreneurship is not thriving as we would expect. Thus, the lack of more entrepreneurs impacts the most vulnerable social sectors. Even so, entrepreneurship is always beneficial: it generates a win-win for everyone (people, business, politics). In the long term, more startups generate more jobs, growing the economy and reducing social inequalities. We must push for more entrepreneurs!
Small Business Administration (2016). Frequently Asked Questions. Retrieved from: https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf
Ross, Frank (n/d). Most Americans want to be their own Boss. AllBusiness. Retrieved from https://www.allbusiness.com/most-Americans-want-to-be-their-own-boss-12278487-1.html
Bentley University. (November 11, 2014). Millennials at Work. Newsroom. Retrieved from https://www.bentley.edu/newsroom/latest-headlines/mind-of-millennial
Alton, Larry. (February 15, 2017). Are Millennials More or Less Likely to Start Their Own Businesses? Forbes. Retrieved from https://www.forbes.com/sites/larryalton/2017/02/15/are-millennials-more-or-less-likely-to-start-their-own-businesses/#1a5c4a7713