Do we need entrepreneurs?
25th Feb , 2016
Entrepreneurs occupy a central position in market economies. For it’s they who kick start the economy’s engine, activating and stimulating all economic activity. Nations’ economic success worldwide is as the direct result of encouraging and rewarding that entrepreneurial instinct.
Yes, entrepreneurs drive economic growth
“Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.” Ronald Reagan
How many entrepreneurs are there?
“Conservative estimates state that over 400 million people in 54 countries are actively engaged in entrepreneurship- (loosely defined as starting and running new businesses). This figure doesn’t include the (potentially) hundreds of millions more engaged in forms of pseudo-entrepreneurship in science, medicine and politics- their contributions no-less important to our society’s economic, social and intellectual growth.”
Vikas Shah, Thought Economics, March 2015
So what makes a good entrepreneur?
“Entrepreneurs should focus on what they believe is worthwhile, exercising their own judgment without blindly following the crowd. Find that sweet spot at the intersection of what you do best and what you love to do the most, and your odds of success are immediately much higher. If you do what you excel in doing, you’ll be better than your competition. And if you focus on what you love to do, you’ll be doggedly persistent even when faced with strong competitors, reversals of fortune, and beguiling distractions.” Sir Richard Branson
Do entrepreneurs get a bad wrap? Yes.
Often to explain historic recessions or great spurts in economic growth, the entrepreneurs are blamed. For example, when growth slows, it is blamed on a decline in entrepreneurship or in growth phases that the growth in entrepreneurship is responsible for the unprecedented expansion. William J. Baumol 1990
And there is historic precedent for this blaming… “From the fall of Rome (circa 476 AD) to the 18th century, there was little increase in per capita income in the West. However, with the advent of entrepreneurship, per capita income grew exponentially in the West by 20% in the 1700s, 200% in the 1800s, and 740% in the 1900s…“. Murphy, 2006
Famous bankrupt entrepreneurs compound the image problem
Back in the 1980s ‘entrepreneur’ became a dirty word in many parts of the world as some high profile entrepreneurs businesses failed and lost investors money. Fortunately, we all seemed to have learnt from mistakes and nowadays have a respect, albeit cautious, for the creative business thinkers in our midst who try to take their concepts off the ground and build businesses.
Famous entrepreneur bankrupts
Alan Bond
In 1992, the West Australian businessman was declared bankrupt with debts of $1.8 billion, then Australia’s largest collapse. He served time in jail, but is reportedly now mining diamonds in South Africa.
Christopher Skase
Another crash-and-burn 1980s entrepreneur who fled to Majorca, Spain after the spectacular demise of his company and eventually died there, pursued to the end by the Australian government.
John Elliott
Forever linked to his colorful language the former Carlton football club president declared himself bankrupt in 2005 but was released last year. He has now launched himself online with The John Elliott report.
Robert Maxwell
The suspicious death of the British media tycoon (found floating in the Atlantic ocean after an apparent tumble from his luxury yacht) triggered the sensational discovery that Maxwell had been illegally using the pension funds of his company to prop it up and fund his lifestyle. The Maxwell companies filed for bankruptcy protection in 1992. His two sons were later declared bankrupt.
But do entrepreneurs bounce back after a set back?
Yes they do:
- H.J. Heinz bankrupt 1875, then founded Heinz
- Henry Ford, bankrupt 1903 then founded Ford motor
- Walt Disney bankrupt 1921, then founded Disney
- Donald Trump bankrupt 1990 then prospered in real estate
- Kim Basinger bankrupt 1993, then famous acting career
Why are entrepreneurs so resilient?
Entrepreneurs are resilient because generally they love what they do and are passionate about it. They are creative, interesting and sometimes eccentric. Most have a gut feel and some have a clear vision about what they are doing and they are a persistence. Most have the ability to think nimbly and outside of the square, which allows for different concepts and diversification to be considered to get an edge in their markets.
The concept of entrepreneurship is seen as the process of seeking out and developing ideas that create value then with innovation and drive to seize those profitable market opportunities.
All business comes with risks. And although outstanding success is part of the motivation, sadly they will sometimes fail.
Entrepreneurs can reduce their risk by having a personal business Mentor
Fortunately there are ways to help, encourage and support our great entrepreneurs. Whether you are an entrepreneur or a business owner support is vital to minimise risks and to develop and enhance business performance.
A well matched International Business Mentor with a wealth of experience and the right background, experience and skills tailored to you can be of great assistance.
Call us and we can talk about it.
David and Chris Cartney May 2015