Everyone is up in arms about the unemployment rate in the US being around 10%.
One of the best ways to create jobs is to encourage small business growth. According to the Small Business Association (SBA), small businesses:
- Represent 99.7 percent of all employer firms.
- Employ just over half of all private sector employees.
- Pay 44 percent of total U.S. private payroll.
- Have generated 64 percent of net new jobs over the past 15 years.
- Create more than half of the nonfarm private gross domestic product (GDP).
- Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
- Are 52 percent home-based and 2 percent franchises.
- Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.
And of course to get more small business growth you need more people starting small businesses.
So why don’t more people start businesses? Here’s a theory – our school system totally and utterly fails us. It’s not that people aren’t capable. It’s not that they aren’t interested. It’s that they never learn how.
Consider a Junior Achievement poll of 1,000 teens age 12-17:
- 92 percent of those surveyed believe that entrepreneurial skills should be taught in college or earlier.
- 51 percent of teens would like to start their own businesses someday
- 88 percent felt it would be “difficult but possible” or “somewhat challenging” to do so
Wtf people. We’re totally failing our kids. They want to learn when they’re young. They know that they should learn when they’re young. They know how challenging it will be. But no one is teaching them. No one is guiding them. They need to be taught so that they can practice. They need a mentor to guide them. They need to be around other students with the same interests.
All of the great resources on the web are great supplemental pieces to the puzzle, but for there to be true change I think that the seed needs to be planted in an educational environment. That’s how you reach everyone who is interested in starting a business at an age where they have enough time to develop the skills necessary to take a legit stab at making entrepreneurship their career choice.
We’ve built great support systems for future superstar athletes, but we’ve failed at building any system for the future superstar entrepreneurs.
I love this quote from an article about Jason Fried of 37signals:
Fried talks about how “making money is like playing the piano: The earlier you start, the more practice you’re going to have, the better off you’re going to be.” On the day he turned 13, Fried’s father, a Chicago Mercantile Exchange trader, took him to get a work permit. He worked typical jobs—grocery store, gas station, shoe store—but he always had a side business of his own. At 15, Fried got a resale license and began buying stereo equipment at wholesale cost, marking it up and selling it to friends. “I suck at playing the piano,” Fried says, “but I’m good at making money because I’ve had more practice.”
It makes total sense. It sounds obvious, but many times when you start a business you’re focused on everything but making money. You’re worried about funding, the technology, the people, the office space. Other skills are nurtured from a young age. Why should we expect running a profitable business would be any different?
Teaching entrepreneurship will encourage more entrepreneurship. Entrepreneurship will create more successful small businesses, which will provide more jobs (and also do many more great things).
I give credit to Junior Achievement. They have a high school entrepreneurship program that schools can participate in. I give credit to teachers like Professor Wales who has his students start a business as a part of his college entrepreneurship class.
But it’s not enough. I hope that people of influence are taking note. This is important stuff. It could drastically increase the quality of life that we as a people experience in the future. We teach lots of stuff in school. Much of which is trivial and unimportant to the lives of the majority of students learning it. Make just a little bit of time to teach this.
Side note: My partners and I are all passionate about helping to reform and improve education. In 2010 we’re going to start a scholarship fund at our former high school. We haven’t hashed out all of the details yet, but you can bet that it will encourage technology and entrepreneurship at the high school level. Hopefully it’s the start of us playing our little part.