Growth Comes from Entrepreneurship

There is no country in the world where the culture of entrepreneurship is more central to life for millions of people than the United States. Think of the greatest innovations of the past century, and beyond. How many of them came from the United States?

The Atlantic Magazine surveyed scientists, engineers, entrepreneurs, and technology historians to list the most important innovations in history, coming up with a list of 50. Of course, some date to before the United States even existed; but of the 30 since 1776, more than half (16) originated in this country.

Where do the brightest minds from around the world come to study and work? Here. According to the Kauffman Foundation, there are more than 540,000 startups in the United States every single month, representing an incredible number of entrepreneurs looking to live the American dream, creating value and solving problems for other people.

But as Bill Keller for the New York Times noted in a recent column, that legacy of innovation, creativity, and entrepreneurship is at risk. “There are signs that our innovative dynamism is diminishing,” he suggests. “The pace of new business creation, on a per-capita basis, has been in a slow but steady decline since the mid-1980s.”

Some possible reasons for this problem?

• A decaying education system
• Depleted stores of startup capital
• Erosion of human capital

Of course, the United States’ culture of entrepreneurship can be in decline while still being stronger than anywhere else—the question is what happens when the trend is heading the wrong way, and keeps on going.

The end results of weakening a spirit and culture of entrepreneurship are bad news. Paul Krugman wrote asking whether the United States might not be mired in a long recession or weak recovery, but rather just dealing with the “new normal.” He asked, “What if depression-like conditions are on track to persist, not for another year or two, but for decades?”

It’s the same argument that Larry Summers, former Secretary of the Treasury, Director of the National Economic Council, and President of Harvard University, has been making. “We have, [Summers] suggests, an economy whose normal condition is one of inadequate demand—of at least mild depression—and which only gets anywhere close to full employment when it is being buoyed by bubbles.”

Krugman speculates on possible reasons for the weak (and no end to the weakness in sight) economy. Perhaps it’s the result of demographics, an aging population and slowing population growth. Or perhaps it’s the consequence of years of trade deficits.

Well here’s what I think: America’s growth has always been linked to entrepreneurial passion, the willingness of millions of people to go off on their own, start their own businesses, and add value to their communities. It’s about a culture of entrepreneurship.

The way to growth isn’t about pushing and pulling on economic levers in Washington, or even bemoaning unstoppable outside forces. It’s about encouraging our people to think different. To take risks. To create value. To help other people.

Without that, we are nothing.