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Week of October 16 - 22, 2006

Edmund Phelps on Entrepreneurship

Columbia University’s Edmund Phelps has been in the news this month as the winner of the 2006 Nobel Prize for Economics. Phelps is best known for his work explaining the linkages between inflation and unemployment, but he can also be quite eloquent on the topic of entrepreneurship. In a recent op-ed for The Wall Street Journal, Phelps presents a compelling case for the power of entrepreneurs to foster innovation and to build economic prosperity. Phelps notes that economic dynamism helps create efficiencies and foster productive improvements. It also helps trigger personal growth by stimulating new ideas which in turn provide opportunities for mental stimulation, engagement, and problem-solving. This compelling article presents a strong economic and ethical case for the power of dynamic capitalism.

The article, “Dynamic Capitalism,” by Edmund S. Phelps, appeared in the October 10, 2006 issue of The Wall Street Journal. It is available on-line at two locations:

http://www.opinionjournal.com/editorial/feature.html?id=110009068 or

http://online.wsj.com/article/SB116043974857287568.html?mod=opinion_main_commentaries.

Entrepreneurial Culture in Northeast Ohio

A new study out of Cleveland State University paints an interesting picture of the environment for entrepreneurship in the region around Cleveland, Ohio. The study is the first in a series of annual surveys designed to assess entrepreneurs’ confidence in their ability to start and sustain a business in Northeast Ohio. The initial results are pretty good. Surveyed entrepreneurs were optimistic about their business prospects, and felt that the region was strong in a number of key areas including worker availability, cost of living, and commuting times. They also felt that the region’s residents were supportive of entrepreneurship. Entrepreneurs were less sanguine about their ability to access local capital source, or about the ability of state and local government to effectively respond to their needs and interests. They also felt that the weak regional economy was a potential problem, but they also held the typical entrepreneur’s opinion that the weak regional economy would not pose a major obstacle to the growth of their own companies.

The September 2006 report, Northeast Ohio Entrepreneurship Confidence Survey: First Year Findings is by Jill S. Taylor. The study was published by Cleveland State University in cooperation with JumpStart, Inc. and is available at: http://urban.csuohio.edu/economicdevelopment/reports/entrep_survey_0906.pdf.

Exit Strategies for Women-Owned Firms

For some time, the conventional wisdom was that women are more “attached” to their businesses than men. As a result, some observers felt that women entrepreneurs were less open to clear exit strategy (IPO or a sale) than their male counterparts. This belief has little grounding in reality according to new research from Center for Women’s Business Research and MassMutual. In a survey of successful business owners (firms more than five years old with more than $1 million in annual revenue), researchers found few differences between men and women in terms of their development of a long-term exit strategy. Both men and women entrepreneurs had developed such a strategy, and both groups deemed price to be the key factor in determining whether to sell a business. Women business owners did express a greater concern about the sale’s impact on their employees. First time women business owners were more reluctant to sell their companies. Serial women entrepreneurs showed no differences compared to men when it comes to propensity to sell their business.

To learn more about the October 2006 Center for Women’s Business Research Report, Exit Strategies of Women and Men Business Owners, visit
http://www.womensbusinessresearch.org/press/details.php?id=141.

Cooperation and Competition

For many, the word ‘innovation’ is synonymous with technology and California’s Bay Area – loaded with research institutions, human capital and entrepreneurial assets. A new report takes a look at innovation initiatives happening in that area and around the world, asking the question, “How are we linked to other economies by cooperation as well as competition?” The report, The Innovation Edge: Meeting the Global Competitive Challenge, is a collection of essays on the economic challenges brought on by the emergence of China, India and other markets throughout the world. Leading with the title essay, The Innovation Edge also includes pieces on “The Emerging Global Labor Market,” and “Services Innovation as a Competitive Response to Globalization.”

To download The Innovation Edge: Meeting the Global Competitive Challenge, published by the Bay Area Economic Forum, visit: www.bayeconfor.org/pdf/InnovationEdgeSept2006.pdf 

Are They Really Ready for Work?

There’s one issue where you can find strong agreement from nearly all business owners - from small businesses to the FORTUNE 500. Talent is the primary ingredient for business success. Firms with the most talented individuals will generally be more efficient, profitable, and productive. If this is indeed the case, business owners better start worrying about the results of a new study from the Conference Board. The study, Are They Really Ready to Work?, reports on recent surveys and interviews with human resource managers who were asked to assess the work readiness of American high school graduates. Their opinions make for grim reading. Nearly three-quarters (70%) of respondents said that US high school graduates were deficient in applied skills such as professionalism and work ethic. Deficiencies in other basic skills - especially writing - were also identified. These weaknesses are leading many employers to avoid hiring workers who only possess a high school diploma. The survey also asked employers to identify critical areas that will determine future success in the workplace. Creativity and innovation was the most cited skill. Other top areas included knowledge of foreign languages and cultures, and an ability to work in a team.

The October 2006 report, Are They Really Ready to Work? Employers’ Perspectives on the Basic Knowledge and Applied Skills of New Entrants to the 21st Century Workforce, by Jill Casner-Lotto and Linda Barrington was sponsored by the Conference Board, Corporate Voices for Working Families, the Partnership for 21st Century Skills, and the Society for Human Resource Management. To access the report visit: http://www.conference-board.org/pdf_free/BED-06-Workforce.pdf.

Correction: In last week’s story “Measuring Tech Transfer: Revenues vs. Deal Flow”, we erroneously reported the amount universities receive in return for each dollar invested in technology transfer offices. The amount should have been $6, not $6 million.

The correction has been made in the NDE-news archives, available at www.publicforuminstitute.org/nde 

The National Dialogue on Entrepreneurship, an initiative of the Public Forum Institute made possible by a grant from the Kauffman Foundation of Kansas City. Through NDE-news, we bring you short summaries and analyses of various trends driving the innovation economy. Subscribe now to receive your weekly copy. Archived issues are available online. Links to the day's entrepreneurship stories from across the nation and around the world are posted each weekday on the NDE main page - bookmark it and stay informed about the latest entrepreneurship news.

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All stories © 2006 The Public Forum Institute
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