3 Problems Stunting Entrepreneurship Across the U.S.
Entrepreneurship seems to be on the rise. The rate of new entrepreneurs has increased by more than 15 percent in the last two years, and the proportion of new entrepreneurs driven primarily by opportunity (rather than need) reached 84 percent in 2015. But if this last election has taught us anything, it’s that the opportunity and promise of the American dream isn’t reaching everyone. Large numbers of Americans, including rural populations, those with limited education opportunities and minorities, are simply being skipped over.
The President is a man who seems fascinated and driven by the idea of legacy, not to mention someone who prides himself on his entrepreneurial journey. While his total potential term may be eight years, he could create a foundation for entrepreneurialism and job growth that extends far beyond any factory deal with Carrier or Intel.
To do that, this administration should recognize the problems impacting the very Americans who put them in power, and put policies in place to correct them.
1. Affordable education solves obsolescence
The great jobs boogeyman in the U.S. isn’t an immigrant, it’s a robot. According to a White House report, 83 percent of the jobs where people make less than $20 per hour will be subject to automation or replacement.
We need to educate unskilled workers to succeed at tasks that aren’t quickly disappearing. We should be thinking of contextual, interpersonal and creative skills, not to mention many new and developing skillsets around the automation ecosystem itself. Additionally, graduates should tap into the realistic opportunities available while also getting an education on running a business.
By developing curriculum around how to run a business effectively, budding entrepreneurs will not only build more businesses themselves, but also tap the talents of others -- the class of graduates that are self-employed as freelancers or soloprenuers.
2. Millions lack internet access.
For some American would-be entrepreneurs, there’s still a substantial hurdle to overcome, and it’s something almost anyone reading this takes for granted; internet access.
In 1977, more than two out of every ten U.S. startups were in rural areas. Today, when high-speed internet service is a business essential, that ratio is just over one in ten. The reality is that 39 percent of rural Americans (23 million people) lack access to broadband internet speeds. Rural areas often receive “hand me down” equipment after it has been used in larger urban areas, which means rural internet service is forever behind the times.
Joel Young runs his video and animation business out of his rural Ohio home where he struggles with unreliable connectivity and speeds a fraction of what urban and suburban communities get. Joel’s is the exact kind of business that could flourish in a rural area, pulling in customers from a global marketplace without relying on local demand, but without reliable access and equal speed, businesses like Joel’s struggle to ever get off the ground and simply don't have the same chances to succeed.
The Obama Administration introduced the National Broadband Plan in 2010, following the example of previous generations that brought electricity and telephone connectivity to every home in the country. They understood universal access is crucial for the development of the country. While President Trump and Congressional leaders have made statements around infrastructure spending, the FCC is killing a program to bring high-speed internet to low-income households with children. You could argue the administration is working against expanding crucial infrastructure.
3. Packing a backup chute.
Providing the education and the internet access for budding entrepreneurs creates opportunity, but what about stability? Fiftyfive million Americans work independently and another 23 million are self employed entrepreneurs already. President Trump and his administration need to create a foundation that allows for the new ways people work.
That means looking beyond just health insurance to create options for new entrepreneurs and non-employer businesses to reach their potential without sacrificing their well-being. A 2008 Harvard study revealed that 11 million Americans were in “job lock,” meaning they kept their jobs only for fear of losing health coverage if they quit. The iron bond between your job and your health insurance stunts entrepreneursh and undermines the dynamism of the U.S, reducing the number of startups that hire workers and boost the economy.
As an Israeli, I often hear people refer to the book Startup Nation. It’s a good book, but it’s more of a history lesson than anything else at this point. The dynamics of economies simply move too fast, and the landscape has already changed. Updating curriculum that can adapt to future work demands, delivering internet access throughout the U.S. and shifting the safety net to be in line with the ways people are actually working should be major building blocks to create long term job growth in the United States. Not just for individual families, businesses and entrepreneurs, but for the entire country.
This absolutely requires great political courage and capital to carry out, and it won’t be easy. But then again, isn’t that the exact stuff legacy is made out of?