Well, sort of…for women at least.
According to the Global Entrepreneurship Monitor (GEM), total entrepreneurial activity for men went down in 2008 from 10.7% to 9.8%, when compared to 2007. Women seemed to take more risk between 2007 and 2008 as their entrepreneurial activity increased from 6.1% to 7.5%. Of those who started a business, 87% did so because there was an opportunity to do so. The report also concludes that women start their businesses with eight-times less funding than men and women start more consumer-minded businesses than business-service, like their male counterparts. And social entrepreneurship? Those firms are largely being started by women.
Financing. Yep, the barrier some believe to be the ultimate deterrent to starting a business. The GEM report brings an interesting point. You know those informal investors, like mom and pop, aunt Susie and neighbor Tim? Well, they a vital to entrepreneurial activity. Not only does their seed money help get the business off the ground (and provide employment to the owner, at least) but the funding helps the new business purchase goods from other businesses, which helps grow the GDP and keeps people employed. If you think things are bad now with our economy and the lack of job growth, just wait until you see what the Susie’s, Tim’s, mom’s and dad’s of the world could horribly do if they didn’t continue to invest in new ideas.
So, the US is an innovation-driven economy, right? Well, we’ve actually seen a decline in the creation of innovative products between 2007 and 2008 and younger firms are innovating more than established firms. Innovation is a good thing because it helps creates jobs (new businesses), increases competition and keeps prices lower. The effects of introducing innovative products to the marketplace isn’t just a benefit for us here in the US; it’s what will allow us to compete globally.
What does this have to do with kids, with little Jimmy who spends his afternoons at soccer practice and can’t wait for spring and summer break to lounge around? A whole lot. With a blink of an eye, little Jimmy will become big Jimmy. He’ll need to have money in his pocket, a roof over his head and food on the table. If little Jimmy were graduating from college today, he’d have over a 50% chance of returning home, unemployed and rummaging through your pantry. Meanwhile, there’s a whole world out there waiting for little Jimmy to take a risk and turn his ideas into something real.
You don’t just wake up with a business idea one morning and have a profitable business the next day. Of all the successes out there, there’s rarely mention of the struggle that took place before the entrepreneur made his mark. Entrepreneurial skills need to be learned and honed and the earlier we start to teach kids about entrepreneurship, the better off we will all be both now and in the future.
Success to you!
Melissa
