The Council on Competitiveness has just released a new report on entrepreneurship in the United States. The study finds that while U.S. entrepreneurial performance continues to lead the world by almost any measure, other nations are starting to catch up. Click here for the report (hat tip: Sandy Maxey).
February 20th, 2007 at 6:44 am
Distinct differences between the policy frameworks in different regions/countries may account for some of this competitiveness gap closure. The US has consistently held to a “small business” framework, which, through deregulation and other policy levers, focuses precisely on existing SME’s.
Entrepreneurship policy focuses on a broader scope of policies, including developing a pipeline of entrepreneurs (as compared to SME’s being the unit of focus). This framework includes existing SME’s, but also potential entrepreneurs. These policy levers include developing the skill sets of entrepreneurs, different financing options for varying levels of entrepreneurial experience and numerous other support options.
This very different unit of focus, along with the finance mechanisms, and more cohesive entrepreneurial support services, will, over time, further close the gap. The US does not respect the difference between Small Business Development and Entrepreneurship policies. Schramm seems to believe that deregulation is THE big imperative, however he’s missing the big picture shift: entrepreneurs require entrepreneurial communities, the rich context for innovation. Entrepreneurship policy necessitates a level of civic and social innovation which is difficult to find in the US. Entrepreneurial support remains fragmented and categorical. The policy focus remains on existing businesses. By way of example, a recent study concluded that of the extensive allocations for economic development nationwide, only 1% is allocated towards entrepreneurship.
February 20th, 2007 at 10:58 am
Sandy – You are so right. What else would you expect from a country that at the policy/ national level is so thoroughly fordist. I did a lot of research on this with Martin Kenney, and Martin plans to write a book on this some day. What we found is the small business stuff comes out right after World War II when key elites were terrified that the US would lapse back into depression. The entrepreneurship stuff never fully made it on the table. Instead the Boston folks, who were at the forefront of the national debate, like Filene, launched local initiatives like the early venture firm ARD which invested in DEC. The evolution then moved further when Terman moved from MIT to Stanford and eventually a series of “experiments” led to the modern venture capital limited partnership. Schramm is a smart guy and a good friend but I agree with you the key is the local eco-system, what I long ago with Martin Kenney termed a “social structure of innovation” in our late 1980s research on venture capital (available in the library at creativeclass.org) and our book The Breakthrough Illusion.