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If you really want to understand the unfolding presidential race, check out a little-known economic theory called "public choice." Public choice theory argues that economic self-interest is the driving force of politics. According to public choice theory, people will vote for the...
In my new book An Entrepreneur's Manifesto, I have proposed an Entrepreneur's Bill of Rights, modeled on the great amendments to our Constitution that have helped preserve and extend liberty and prosperity to more and more sectors of our society since the founding of our Republic.
I believe the values that the Entrepreneur's Bill of Rights expresses below are timeless and should be enjoyed by every entrepreneur--in every industry, class and country. Today, youth entrepreneurship education is booming and is at the core of the philanthropic programs at Microsoft, Ernst & Young, Goldman Sachs, Koch Industries, Citibank and MasterCard. What better time to begin to define what it means to be an entrepreneur and the rights all entrepreneurs should enjoy.
Truthfully, we are all entrepreneurs! Whether we work for ourselves or someone else we are selling what we own - our time and expertise. As Steve Jobs laid out so clearly in his 2005 commencement address at Stanford, we all have unique knowledge and creative impulses that we can use to develop a business or move our careers forward. We just need to know that we have the right to be entrepreneurial in all that we do.
1. The Freedom to Create
We take our creative freedom for granted, but there remain barriers to basic entrepreneurship both in the United States and around the world. These include legal barriers, as well as commercial ones like complicated tax codes and subsidies that skew resources and make it difficult for entrepreneurs to respond to market forces.
A more profound barrier, however, is the psychological limitation inside the minds of potential entrepreneurs. When I first began teaching in Bed-Stuy, Brooklyn, in 1982, I discovered that my students had no idea that entrepreneurship was an option for them. They did not perceive any alternative to a future of low-end, low-paying work in an unwelcoming job market. No wonder the local drug dealer was a hero!
I founded the Network for Teaching Entrepreneurship in 1987 to tackle and change this mindset--but what we really need is a national shift in consciousness. Entrepreneurship and entrepreneurial principles should be an integral part of every public school's curriculum starting at the pre-K level. The consistent message of those lessons should always be that everyone has the right and the unique talent to create a business.
2. The Right to Disrupt and Destroy
Every entrepreneurial idea is a revolutionary act, a pebble thrown into the pond that creates ripples. The pebbles thrown by Henry Ford, Bill Gates and Jeff Bezos changed the world. But don't underestimate the power of a new corner deli or marketing website. They disrupt the status quo, too, because they challenge the current market dominators to improve and compete--or step aside.
Austrian-American economist Joseph Schumpeter coined the term "creative destruction" as a core concept of entrepreneurship. Entrepreneurs must have the right to disrupt and even destroy other businesses, in order for real growth and progress to occur.
One could hardly blame, though, a young entrepreneur today for fearing that his right to "destroy" - to offer a service or product that upsets the existing balance of market forces - is under attack. Look around us. Banks that make bad loans are bailed out; car companies that fail to adjust to changing tastes and foreign competition receive taxpayer dollars to keep them going. Entrepreneurial start-ups struggle to get a foot in the door, while giant competitors wield their influence when regulations are written or laws are passed.
If the entrepreneur has a better idea than the established interests, he or she should be able to take them on. And it should be a fair fight.
3. The Freedom to Fail
We must de-stigmatize failure. I am devoted to reducing the rate of failure among rising generations of entrepreneurs. I want to help them work smarter, faster and better at job-creation as the best way to raising global living standards. But failure must always be a part of the equation.
Some of the world's greatest fortunes were built by entrepreneurs who had suffered as many as a half dozen, painful failures. We want to reduce the failure rate of our entrepreneurs, yet at the same time acknowledge that a nation without commercial bankruptcies lacks dynamism. A failed entrepreneur will be smarter on his or her next startup.
In his important new book Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse, Thomas E. Woods Jr., a senior fellow at the Ludwig von Mises Institute, gives a devastating analysis of how our refusal to honor the "right to fail" undermined the housing market, crashed the stock market, tanked the economy and ran up bills that will take decades to pay off.
Woods writes that the longer Wall Street banks are subsidized, "the more they drain capital and resources away from fundamentally sound firms that could put those resources to much more productive use from the consumers' point of view. Keeping such firms alive via government bailouts discourages rather than encourages capital formation and economic recovery."
4. The Right to the Fruits of Your Labors
If we want to see the coming entrepreneurial revolution succeed, it is imperative that governments correctly incentivize their tax codes. Currently, these tax codes sometimes unfairly favor existing businesses or industries, or place undue burdens on job creators and entrepreneurs.
"Tax and regulation are key levers for improving a country's business environment," according to the 2013 Ernst & Young G20 Entrepreneurship Barometer. "Countries that offer favorable tax rates, simplify procedures and provide entrepreneurial support will more likely enjoy high numbers of startups. In turn, these ventures become significant creators of jobs and tax revenue as they progress up the growth curve."
Worryingly, the United States currently ranks 13th out of 20th in the EY tax and regulation survey, trailing such countries as Saudi Arabia, Japan and Russia. We must simplify our tax code and enable our entrepreneurs to enjoy the fruits of their labors so they will be inspired to great things.
5. The Freedom to Collaborate
The entrepreneur is sometimes stereotyped as a loner; an obsessive who cares only for the next big chance. In my experience, the opposite is true. An entrepreneur by necessity must be a social creature. You can't understand the market if you don't understand the billions of individual customers who make up that market.
In any start-up business that grows beyond the founder, the entrepreneur must also be a manager and a mentor. Thomas Edison, often portrayed as the classic loner-genius was in fact a world-class collaborator. He managed a vast team of innovators and created some of the largest commercial organizations in the country.
We must develop incubators at our universities and in our high schools to bring entrepreneurs together with scientists and other potential collaborators. We must encourage and support the freedom to collaborate, if we want to see a boom in entrepreneurship and global economic growth.
6. The Right to Seek New Opportunities
There's no question that the winners in the forthcoming entrepreneurial revolution will be those nations most welcoming to those with new ideas--wherever they come from. While researching An Entrepreneur's Manifesto, I came across so much data that proves beyond a shadow of a doubt that immigrants are a vital source of entrepreneurial energy for a society.
An analysis done by the National Foundation for American Policy in 2011 found that, of the top 50 venture capital-backed companies in the country, just under half were founded or co-founded by immigrants. The immigrant-founded companies in the survey employed 153 people and were adding workers at the rate of 27 employees a year.
Immigrants are by nature people seeking new opportunities in a foreign land--they tend to be brave and entrepreneurial, often starting businesses and opening up new streams of customers beyond their country of origin. From DuPont to Procter & Gamble, from Google and Yahoo! to eBay, the U.S. economy has long profited from the entrepreneurial efforts of immigrants.
All people should have the right to seek new opportunities. All the world's governments should have the wisdom to protect, not whittle away, that right.
7. The Right to Be Different
Entrepreneurs come in all shapes, sizes, and personality types, from all walks of life and every corner of the globe. As long as you can create something that fills a need and finds a market, you should have the right to pursue that dream.
We all have our talents. We all have our challenges: I struggled with dyslexia as a child in school, overcoming my troubles with reading with the patient help of my parents. Richard Branson turned his dyslexic frustrations into the multi-billion-dollar Virgin Group.
I know what it's like to start a business and then to watch that business fail. When I was mugged in the 1980s, I felt traumatized and in need of counseling.
I was very nearly a failure as a teacher, too, before entrepreneurship saved me. I can't run a marathon, can't throw a football 70 yards, and can't dunk a basketball. But, the market doesn't care.
8. The Right to an Entrepreneurial Education
Trade may be a basic instinct of the human spirit, but entrepreneurship is not a weed that grows wild. My restless, unmotivated Boys and Girls High School students had no idea of the power of entrepreneurship and no conception that they actually could start their own business. But when I held a watch up for them one day and led them through a lesson on buying low and selling high, you could almost see the ideas sparking. I didn't plant the seed, but I moved it away from the hard and stony ground where it was close to dying.
Owner-entrepreneurship education empowers young people to make well-informed decisions about their future, whether they choose to become entrepreneurs or not. Disadvantaged youth are seldom let in on the connection between ownership and wealth creation; but an entrepreneurial education can change all that.
I have written an award-winning high-school textbook on entrepreneurship, as well as books for junior high and junior college students. My most heartfelt wish is for our nation's public schools to add entrepreneurship education to the curriculum, starting as young as kindergarten, so our kids grow up knowing how to participate in our economy.
9. The Right to Solve Problems
Entrepreneurs are the world's great problem-solvers. We don't have all the answers to what should be done in the next 20, 50, or 100 years to promote entrepreneurship because we don't know yet what many of the questions will be. But we do know this: the Entrepreneurial Revolution will reward the agile and the imaginative, the visionaries and the problem solvers.
Tomorrow's entrepreneurs deserve an economic system that encourages and rewards them for solving problems, and does not stymie their creativity with red tape or oppressive tax codes.
10. The Right to Prosper
The entrepreneurial revolution may be the first revolution in history without winners and losers. Everyone will benefit from an increase in entrepreneurship globally.
I strongly believe that if we encourage the entrepreneurial mindset worldwide, starting with the education of our youth, and our governments are disciplined enough to get out of the entrepreneur's way and let market forces be felt, the global economy can put itself on a path for an unprecedented leap forward. If we can do this, I believe we're on the cusp of an age of unrivaled creativity and broadly shared...
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An interview with High Impact Social Entrepreneurship (HISE)
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An interview with High Impact Social Entrepreneurship (HISE)
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