3.1 Growth-Oriented Entrepreneurs Fuel New Job Creation and Create New Wealth for Societies

During economic crises, global dialogue focuses on how best to drive economic growth and facilitate recovery. The Ewing Marion Kauffman Foundation, one of the world’s largest foundations dedicated to entrepreneurship, has worked to highlight the critical role of entrepreneurs in the economy:

  • Most new inventions, ideas, and technologies are born in growth-oriented firms created to bring a new product or service to market. Without those enterprises, societies would not benefit from new innovations.
  • Population growth, migration, and entry of young people into the workforce means that the United States needs to create about three million new jobs a year. Historic trends show that almost all of that growth will come from firms under five years old. Established companies focus on reducing the cost of their product, generally by reducing the number of people needed to make it while new firms need employees to begin.
  • Entrepreneurs create new wealth for the society. Even the most successful entrepreneurs take less than one percent of the net wealth that they generate for society.

3.1.1 New Tools: The Kauffman Foundation Provides Awareness-Raising and Advocacy Tools for Entrepreneurs

In order to raise awareness on the importance of start-ups and growth-oriented enterprises to economic recovery, the Ewing Marion Kauffman Foundation created a short video, titled “The Three Things Entrepreneurs Do for Our Economy”, to help policymakers understand the need to support enterprise development. The three things the Foundation states entrepreneurs do are: 1) create innovation; 2) create jobs; and 3) create new wealth in society. The Kauffman Foundation has circulated compelling statistics that illustrate the critical role entrepreneurs play in the economy, from job growth to the impact of immigrants. Examples include:

  • 54 percent of the nation’s Millennials either want to start a business or already have started one (see “Young Invincibles Policy Brief”, November 2011: http://bit.ly/v4RCpM)
  • Despite the fact that around 46 percent of the U.S. workforce and more than 50 percent of college students are female, they represent only about 35 percent of startup business owners (see “Over the Gender Gap: Women Entrepreneurs as Economic Drivers”, September 2011: http://bit.ly/qN4fsv)

A compilation the most compelling statistics from the Kauffman Foundation´s data treasure chest is available at http://bit.ly/Z7WWv. To access the video, please visit: www.kauffman.org/KauffmanMultimedia. aspx?VideoId=1148130737001.