Job Growth Depends on Reducing

Entrepreneurial Risk
by Maxwell Wessel and Neil Khare | 2:17 PM September 19, 2011
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Building businesses and creating jobs in America during the twentieth century was like taking a test
with an answer key. We had it all strong capital markets, rich natural resources, unparalleled higher
education, and geographic separation from two devastating wars. It was our not-so-secret formula for
success. The problem with that formula is that its gone.
Todays America will need to find a different formula for competitiveness and job creation. Its our
belief that the best path to sustainable competitive advantage will come from lowering the risk to
entrepreneurship and encouraging its pursuit not from reducing corporate tax rates and providing
subsidies to the firms that already survived. We simply cant legislate in a way that turns large, lowgrowth, earnings-driven businesses into job creators tomorrows job creators will be found in the
startups of today.
The only path to sustainable job creation in the States is to facilitate the formation of new, highpotential startups.
Entrepreneurs still have many reasons to build businesses here. The United States has a massive
consumer population and many of the worlds most specialized industrial clusters, but those
advantages are diminishing. To offset job losses, we must do better.
Policymakers have historically used subsidies in the form of deductions, grants, and loans as
their tool of choice to encourage business creation. Although well-intentioned, these programs often
have the unintended consequences of benefiting the wrong businesses, favoring sub-optimal
technology, and creating market distortion.
More importantly, these sorts of market subsidies only increase the value of a firm that survives. They
do not decrease the cost to the entrepreneur if his venture fails. Its a bit like piling money at the end of
an unstable tunnel; enticing to a few, but many people simply wont enter for fear of collapse.

This collapsing-tunnel problem is particularly important today, as the Great Recession breeds a
generation of risk-averse Americans. Because about 85% of startups fail within four years, increasing
the potential returns to entrepreneurship to these risk-averse individuals seems like the wrong
incentive.
So what does the solution look like? There are many variations, but they all focus on three basic
goals:
1. Reduce the upfront costs of starting a high-potential business.
Starting high-potential businesses is expensive. Incorporation, patent, and licensing fees are just the
beginning. Businesses seeking to scale need space, permits, access to capital, and more.
Instead of manipulating the tax code to encourage startups once they are profitable, we should do
everything we can to remove these early costs in the system. Try envisioning a system where nonprofits or government entities guided high-potential entrepreneurs through these legal, accounting,
and licensing hurdles for high-potential businesses that meet certain qualifications, thereby minimizing
those costs. It would greatly reduce the cost and risk of early failure.
2. Provide resources along the way.
Succeeding as an early-stage entrepreneur is still very much about who you know. While its easy to
get meetings with VCs, clients, and advisors if an entrepreneur has a degree from Harvard, MIT, or
Stanford, there are great ideas everywhere. We should enable anyone with a good idea to secure
these opportunities.
Right now incubators such as Y Combinator and TechStars are performing this task for the best
existing entrepreneurs. But imagine the impact non-profit or government facilities available to
everyone could have by providing access to business plans, pro-forma templates, industry reports,
and good, old-fashioned mentorship. Starting a complex business could seem accessible.
3. Lower the cost of failure.
Programs such as Steve Cases Startup America are attempting to complete this task by making
entrepreneurship a profession. The belief is, if programs like this can reduce the negative
connotations associated with entrepreneurship, it might be easier for unsuccessful founders to
transition to the private sector.
But increasing public awareness of entrepreneurial skills isnt all we can do. We should also be
instituting programs in the public and private sectors that encourage individuals to start businesses. If
entrepreneurs meet certain milestones, but their business still fails, they should be guaranteed
placement in firms in need of entrepreneurial leadership.
Picture something like a rotational program for innovation. Entrepreneurs in the Clean Energy sector
would make invaluable assets to the Department of Energy. Entrepreneurs building businesses in
telecommunications could predict the next wave of disruption for the FCC. And Microsoft may have

avoided disruption from Android and iOS if it had been bringing on entrepreneurs from the mobile
space.
We need to find a way to get our best and brightest to consider entrepreneurship as a viable career
option. It needs to be de-risked to the point that everyone can see it as a step along a path not a
leap of faith.
Would a program like this be expensive? Sure. Would it be effective? Definitely. Would it be far
cheaper than our current policies addressing this issue? Absolutely. In the best-case scenario, it
would create jobs by facilitating the growth of large new businesses. In the worst-case scenario, a
program like this could get talented people into government and could revitalize stodgy, slow-growth
firms.
There is one thing thats certain: we cant simply pile on more money at the end of the long, unstable,
tunnel of entrepreneurship. What we need to be doing is making the tunnel structurally sound.

CAREER OPTIONS - ENTREPRENEURSHIP

What is Entrepreneurship?
Entrepreneurship can be defined and examined in several different ways. Formally, it can be defined as the
capacity and willingness to undertake conception, organization, and management of a productive venture with all
attendant risks, while seeking profit as a reward . The entrepreneur is then a person who sees an opportunity and
acts upon it. Entrepreneurs are leaders who are creative and innovative, ambitious and driven, but at the same
time are dynamic and energetic.
The entrepreneurship option prepares students for an entrepreneurial career by offering a combination of
coursework and practical experience. The required coursework lays out the fundamentals of entrepreneurship
including the necessary tools and perspectives in strategy, marketing, and finance.

Possible Career Opportunities

Entrepreneurship in New Ventures
New Ventures (more commonly referred to as start-ups) involve having a strong foundation in key functional
business areas, such as financial organization, negotiation, management, and product development. It is also
important to be knowledgeable with finance, accounting, marketing, and management. These skills are essential
because while having a great idea is part of entrepreneurship, your idea will not equate to success without a welldeveloped business model.
Entrepreneurship in Large Organizations
Another pathway to becoming an entrepreneur is to spend time working for a larger or more established firm.
These firms also have opportunities for you to exercise your creativity by finding new ways to innovate products
or services. Entrepreneurial activity in this environment centers on managing innovation and product
development, as well as turnarounds (the process of reorganizing and managing change within a company or
unit).
Private Equity Financing: Venture Capital and Leverage Buyouts
Venture capital firms continuously seek innovation and new opportunities by investing in other individuals ideas.
Private equity financing provides financial and advising support to many start-up companies whom need the
support to operate. Many investors are forward thinkers and are constantly looking for the new thing to
contribute funds to.
Social Entrepreneurship
The goal of social entrepreneurship is to apply entrepreneurial business principals to provide social benefits in
areas such as the environment, workforce development, education, and health. Implementing social
entrepreneurial ideas enables sustainability and growth. While some will start or work for social ventures, others
will participate in social entrepreneurship as business or financial consultants, social venture capital investors,
mentoring entrepreneurs, or as board members for these organizations.

Entrepreneurship
Introduction
Entrepreneurship as a career option can be an exciting opportunity to be explored. This career
path can take many directions and goes far beyond the sole idea of owning a small business
and being your own boss.
Entrepreneurs identify needs, develop a vision, take action, and turn dreams into reality. They
create products, companies, or even industries. They change individuals' lives or an entire
society. Some work for themselves and others do entrepreneurial work within traditional
companies. Some entrepreneurs' focus on money and others focus on leading social change.
There are more resources and tools than ever before for entrepreneurs to gain the knowledge
needed, exploring this interesting career option. On college campuses across the country there
is an increased interest in entrepreneurial careers. We hope the resources and information
below will be of assistance. Make an appointment with a UB Career Services Counselor to
discuss the wide variety of entrepreneurial career options!

Profile of an Entrepreneur
Common Skills, Traits, Qualities

Total Commitment

Perseverance

Initiative/Take Charge Person/Proactive

Strong Work Ethic

High Energy Level

Strong Self-Confidence

Flexibility/Adaptability/Ability to Change

Excellent Communication Skills

Creativity/Innovation

Opportunity Focused

Ability to Partner with Others

Ability to Sell

Competitive Spirit

Resourcefulness

Ability to Exploit New Markets and Create Opportunities

Can Develop a Vision

Accepts Challenges and Risks

Basic Business Knowledge

Management Skills

Accounting Skills

Marketing Skills

Negotiation Skills

Foreign Language Skills (companies are becoming more global)

Motivations of Entrepreneurs

Being Your Own Boss

Making a Name for Yourself

Accumulating Wealth

Solving People's Problems

Creating Something Lasting

Needing to Achieve and Compete

Paths to Entrepreneurship
Start Your Own Business

Small Business Entrepreneurship - Small businesses have been responsible for

creating 60%- 80% of new jobs in the economy in recent years Small Business
Economy . There are 5.7 million small businesses in the U.S. which make up 99.7%
of all companies and employ 50% of all non-governmental workers (Steve Blank).

Buy a Franchise - A franchise is an agreement between a small business owner and

the parent company. The parent company gives the franchisee the right to sell the
company's products and often provides support services like advertising and supplier
relationships, in return for a franchise fee and percent of the profits. Franchising
makes up 40% of all retail sales in the U.S.

Buy an Existing Business

Be a Self-Employed Professional
Become a 'one person' firm (such as a subcontractor, consultant, business analyst, inventor,
independent agent or broker, builder, developer, craftsperson, artisan).
Be a Corporate Entrepreneur at a Traditional Firm
Such as new product development, research, change agent, innovator.
Be a Social Entrepreneur at a Traditional Firm
This is an employee of a firm who operates in a socially entrepreneurial manner, identifying
opportunities for and/ or initiating socially responsible activity in addition to helping the
organization reach its business goals.
Be a Social Entrepreneur
Social entrepreneurs focus on creating social capital and further social and environmental
goals locally, nationally, or internationally (applying capitalistic strategies to achieve
philanthropic goals).
Sample Career Titles of Entrepreneurs

Self-Employed Owner/Operator

Family Business Manager

Start-Up Manager

Product Manager

Mergers & Acquisitions Analyst

Business Development Manager

Small Business Consultant

Marketing Specialist

Insurance Sales

Real Estate Sales

Entrepreneurship
Development

Home/Entrepreneurship Development

Entrepreneurship development is the process of improving the skills and knowledge of

entrepreneurs through various training and classroom programs. The whole point of
entrepreneurship development is to increase the number of entrepreneurs.
By doing this, the pace at which new businesses or ventures are made gets better. On a wider
level, this makes room for employment and improves the economy of a business or country. The
steps below will explain how to create an effective entrepreneurship development program and
how to go about enhancing it.

1. Outline the objectives of the program and focus on the venture

development
Entrepreneurship development aims at individuals who want to start or possibly expand a
business. Entrepreneurship development also focuses a lot on enhancing the ideas and
potential of an entrepreneur.
The aims of a program have to be clearly explained otherwise the program will never
reach its full potential. The development of a venture also has to be outlined in the
program. Without these two, there will be no clear goal.

2. Select educated people who have high entrepreneurial potential

An entrepreneurship development program requires that various people be selected.
However, most programs tend to look for a specific group of educated people rather than
target everyone. Ideally, you have to look at the education and traits that you are looking
for, in an entrepreneur, and match them with the people who have applied for the
program.
Most people say that public funds should be spent on people who need the most help.
The resources of an entrepreneurship development program are usually (and
unfortunately) limited. It is hence better to choose people who will prove to be really
useful and benefit the entire community.

3. Select uneducated people who have high entrepreneurial

potential
A development project on womens entrepreneurship in Nepal was recently conducted. It
was found that women who couldnt meet the essential needs of their family or
themselves were usually more eager to learn about different ways to earn money as
compared to women who were better off. However, such women usually face many
problems.

Even though such women are not educated, they have great entrepreneurship potential
because they have the right motivation. Such people need to be aided by assistance
packages where training can be given on entrepreneurship. This will instill confidence
and teach them the skills they need in order to provide for their family.

4. Identify the local market and search for people who have
potential in it
Entrepreneurship development programs should first identify the local market and aid
potential entrepreneurs who know a lot about it. These people need to be able analyze
and then design unique ideas based off the needs of their surroundings.
By concentrating on select local entrepreneurs, the effects of the program can be easily
and quickly seen within the community. Later on, programs can help improve their
knowledge in their sector. In fact, it is creativity and the thirst for innovation that truly
matters rather than the markets size. In later programs, the introduction of new products
and product features can be added. This will add value and increase the size of the
market

5. Provide support through private sector-based organizations

Support should be obtained from private organizations that are both financial and
knowledge-based. This helps reduce the cost of the entrepreneurship development
program and increases its effectiveness.
Private organizations that could support entrepreneurship development programs include
universities, consulting companies and various NGOs. Large enterprises are also
encouraged to support entrepreneurship development programs as this their sponsorship
that will help reduce unemployment.

6. Provide an easy yet detailed methodology that will help

entrepreneurs improve in the short and long-run
Entrepreneurial development programs aim at being simple to understand and teach
skills that entrepreneurs can use after the program. It also contains courses that aim at
developing their skills and ideas. These are required if entrepreneurs wish to successfully
exploit the local market.
They also need to be taught how to gather the required resources in order to meet the
goals of their venture. The program also needs to have outlined methods through which
entrepreneurs can improve the performance of their business in the long run.
Entrepreneur development training proves to be highly effective when finance, quality
assurance, marketing and productivity are linked to the training program. As an example,

when development banks are involved earlier in the process of training, an entrepreneur
will easily understand credit processes and the also praises the banks business plan.

7. Implement special measures to improve the usefulness of

trainers and facilitators
The Success of an entrepreneurship development program also relies on the
commitment and quality of the many facilitators and trainers. Any trainer or facilitator in
the program needs to understand the culture and lifestyle of the group in order to better
integrate themselves and serve the group.
The selection of proper trainers is based on the amount of business experience they have
and the how much knowledge they have about their local business environment. Training
facilitators can significantly improve their usefulness in tackling the needs of
entrepreneurs.

8. The selection of areas for pilot programs must be right

Entrepreneurship development programs are usually too restricted in terms of where it is
done and what people are involved in the program. Selecting pilot target areas will
usually depend on the ease at which support institutions are available.
It will also depend on the interest people take in entrepreneurial development programs.
These facts can never be the same for any two geographical locations and hence must
be considered carefully.

9. Launch pilot ED programs and develop as needed

Analyzing pilot feasibility is an effective way of launching a major entrepreneurship
development program. If the program shows signs of high promise, it can be launched on
a national level. By relying on the sponsors for support rather than donor support, the
program will be able to expand past local development while maintaining high quality.
This is especially important when the support of donors starts to fade.

10.
A successful entrepreneurship development program
requires government policies
Entrepreneurship helps the economy of a country grow and creates new jobs.
Government policies usually have a substantial impact on the number of entrepreneurs in
a country.
While there are many governments that say they do support entrepreneurial businesses,
they usually do not have many specific policies and programs that effectively support
entrepreneurial development.

Creating an effective entrepreneurship development program may not be easy but then again, it
is not impossible either. By carefully following the ten points above, you are well on your way to
creating an entrepreneurship development program that not only benefits your company in the
short run but in the long run as well.

Case Studies
This EU funded initiative involved the development of 30 new case studies, one from each of
the 27 EU member countries, and one each from Liechtenstein, Norway and Russia. All of
these 30 contemporary entrepreneurial case studies are available on this website for teaching
purposes. Furthermore, they are available in the five most spoken languages in the EU;
English, German, French, Italian and Spanish. Additional case studies already in existence are
also available. As the resource centre grows, so too will the number of cases available from
the case study library.
This library of case studies aids third level teachers who wish to use a more practice-based
action-orientated approach to teaching, which also overcomes time and resource constraints
that inhibit lecturers from producing their own case study material for instruction purposes.
These European entrepreneurial case studies are freely available to entrepreneurship
educators across Europe. This library resource ensures that third level educators can engage
students in entrepreneurial thinking and business problem solving that are reflective of the
environment in which students live and work.