Editor’s Note: Chris Wink’s keynote at the Builders Conference at Philly Tech Week 2023, presented by Comcast, included a version of this column.
If in 2019 you were an entrepreneurial advocacy organization or, say, a publisher of startup news, you were seemingly vain, but completely based on your convictions. Since the 1970s, the number of businesses started by Americans has declined year by year. One proponent told Technical.ly in 2019 that millennials tend to be the least entrepreneurial generation in U.S. history.
The pandemic changed everything. The number of openings has skyrocketed. Three years after the crash, Americans are still incorporating companies at a pace not seen since the 1980s. And this surge comes from nearly every demographic group, with black women in particular starting new businesses at a disproportionately high rate.
That may be one reason for the tight labor market. Recruiters need to pay more attention to startup trends than ever before. It’s because of economic activity, but also because the workforce is succumbing to its effects. But, annoying or not, on the whole, America’s entrepreneurial boom is a bright spot for the economy.
What is the problem?
First, individual entrepreneurs increasingly reflect America’s demographics. Anyone with employees? Not much. In other words, women, blacks, and Hispanics have started a significant number of businesses. They are just less likely to grow.
And we know growing companies matter. This is the most economically productive wealth creation tool we have, better than raising Zillow’s valuation.
Jobs will also come from there. A 2013 analysis found that all net new jobs came from start-ups. Big companies are important because they employ most Americans. they operate on a large scale. SMEs are important because they give us culture.
But if we want to give more Americans more jobs, if we want wealth to be distributed more proportionally by race, if we want to develop new products and services, we must take care of entrepreneurship. .
What does that mean for companies and ecosystem builders?
- To Entrepreneur Support Organizations: It’s good to help start a business. Better to help them grow.
- For Employers: You will lose more candidates and employees to entrepreneurship. good. Let them go and come back.
- for both: M&A has already replaced R&D in many companies. It will increasingly become a recruitment strategy as well.
One of Technical.ly’s clients told me recently that he was surprised that big corporate employers weren’t considering startup founders as candidates. Some entrepreneurs proudly boast that they would never work for another person, but more commonly, professionals experiment with both traditional businesses and self-employment. Contrary to the rich man’s fable, research has found that the median income of entrepreneurs can be lower than those with regular jobs. For every winner, there are many losers. Employers may shy away from people who have worked for them. that seems to be a mistake. With entrepreneurship booming and the labor market continuing to tighten, employers may be forced to reconsider.
Knowledge is power!
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