Is entrepreneurship dying a slow death in America? Every entrepreneur should pick up a copy of the July/August issue of Inc. Magazine. It’s a call to arms to fight for the future of this country. The army that will save America’s economy is an army of entrepreneurs.
|Photo Credit: U.S. Army|
There is a shift occurring in America, a shift from a culture of entrepreneurship to a culture of dependency. Since 1991 the population of the United States has increased by 24%, yet the number of new business startups has remained about the same in real numbers. Inc. Magazine cites the Kauffmann Foundation, saying that the number of new startups has remained constant since the early 90’s, about 500,000 per year. That’s effectively a 19% decline in entrepreneurship. But the news gets worse. Economist Gary Shilling has calculated that 58% of the American population is now dependent on the government for “major parts of their income.” And predicts that by 2018 that figure could reach 67% of the population (U.S. News & World Report). For some perspective, that number was just 29% of the population in 1950.
A year ago, I issued a Call to Action for Entrepreneurs to take control of this economy and stop government growth. In 2009, U.S. Government spending was 42% of our GDP, one year later in 2010, it is nearly 44% (GDP is the measure of our economy). The problem with this is that Government does not produce anything. It subtracts things. Every time government takes a person from the private sector, and places them into the government sector, it is subtracting production capability from the economy. The effect is to shrink the pool of producers that can become entrepreneurs, or be hired by entrepreneurs. But that’s not the worst part. It’s generally more financially rewarding to work for the government than it is to work for an entrepreneur, because benefits are usually better in government jobs. In other words, we have a system that rewards people for subtracting production capability from our economy.
It’s a recipe for implosion. We are nearing the tipping point, a point where more people will be subtracting from the economy than adding to it. The shift needs to stop.
A culture of entrepreneurship needs to be revived in America, and the only people who can reverse the shift are entrepreneurs. The business owners of today must cultivate the business owners of tomorrow. We need to foster entrepreneurship by encouraging the next generation to become entrepreneurs. Let them know that entrepreneurship is a higher calling. Educate them on how rewarding it is to be the fuel that runs this country’s economic engine.
What can you do to revive the culture of entrepreneurship?