On the Rise of Nonmarket Entrepreneurship

Peter Klein writes:

A surprising aspect of the recent growth in the entrepreneurship literature is the number of papers, projects, courses, centers, etc. studying entrepreneurship in non-market settings: “social entrepreneurship,” “cultural entrepreneurship,” “environmental entrepreneurship,” and so on. At my own university students can take entrepreneurship courses not only in the Colleges of Business or Engineering but in the College of Agriculture, the School of Natural Resources, the College of Journalism, and even the School of Social Work. (One of my colleagues organized a conference last year aimed at cattle ranchers seeking to market their, um, byproducts as fertilizer, with the classic title: “Manure Entrepreneurship: Turning Brown into Green.”

The Week Ahead in Entrepreneurship Policy

Entrepreneurship.org has a handy guide to the week ahead on its Entrepreneurship Blog. It provides basic info on upcoming Congressional hearings related to entrepreneurship policy. Take a look.

Entrepreneurial Spirit During Downturns

Catherine Rampell, in a good post at Economix, writes:

There isn’t a terribly obvious relationship between the business cycle and self-employment rates. The percentage of workers who are self-employed seems to go up during recessions — but it also goes up sometimes during expansions, too.

[...] Professor [Robert W.] Fairlie explains that whether during a boom or a bust, there are two competing forces urging people toward or away from self-employment. One is opportunity: how much demand there is in the world for the good or service your new company would offer. The other is opportunity cost: what you’d be giving up by starting your own business.

How to Change the World with (only) $750 Million

What difference can $750 million make in our brave-new-billion-dollar-denominated world? We're going to find out. Ten days ago at the Skoll World Forum in Oxford the Aspen Network of Development Entrepreneurs (ANDE) announced the creation of a new $750M fund, backed by a network of entrepreneurial service providers, designed to support potentially high-growth enterprises in developing countries.

This is what Julia Novy-Hildesley of the Lemelson Foundation had to say: "Funding start-ups and young ventures is more important now than ever before, given the current global economic crisis. There is no better way to build a middle class from the bottom up than through small and growing business."

I've written about the "invention to innovation" challenge faced by technology entrepreneurs, for example here. ANDE's new fund addresses another category of challenge: that faced by potentially high-growth new enterprises in developing countries. What is promising about ANDE's approach is that it recognizes that promising new ventures need more than money to get to the next level of success. Access to expertise and global networks are at least as important as cash.

The promise? Everyone believes that there is real money to be made in, say, China and India--even while advancing human development. But what about a company started in sub-Saharan Africa, serving Africans, for example? Can such an enterprise ever prosper? One anwer is to check out the story of CelTel, a mobile communications company created by Mo Ibrahim in 1998 and sold to Kuwait's MTC in 2005 for $3.5 billion. Real profits, real change. Ubiquitous cellphone usage then creates on infrastructure on which to build a new generation of applications to advance development.

Licensing

Fascinating post from Readwriteweb:

Flickr now holds the world's largest repository of Creative Commons-licensed images, but according to a new study, most Flickr users opt to license their images under the most restrictive CC license. Also, only a relatively small number of users (24%) allow commercial use of their images, and only about 12% of users choose the BY license, which allows for free sharing and remixing, as long as the author is attributed.

Forces Against Job Mobility

Snarky and whiny gen X-er Daniel Drezner (also a Political Scientist at Fletcher) has a Marketplace story about the financial crisis and its impact on office politics.

In 2008, U.S. workers aged 55 to 64 who had 401(k)'s for at least 20 years saw their retirement balances drop an average of 20 percent. A recent YouGov poll showed two-thirds of this generation have not made the necessary adjustments in their financial planning. This is not a recipe for leaving the workforce anytime soon.

Younger workers who expected promotions when the boomers cleared out are going to have to stew in their own juices. With this job market, looking for a better opportunity elsewhere is not in the cards. Which means that Gen X-ers are going to have to listen to baby boomers doing what they do best -- talk about themselves.

There are lots of stories about the current economy creating "forced entrepreneurship," and perhaps with less ability to climb the corporate ladder, this may be another force pushing people into starting an entrepreneurial venture. The quicker the better, I say.

Philanthropy 2.0

Mashable blogger Geoff Livingston and two guests discuss a new project, dubbed "Philanthropy 2.0" to improve the relationship between donors and non-profits.

While the social web has been a fantastic place for nonprofits to harness the long tail of giving with movements like Twestival and the Case Foundation’s Giving Challenge, high dollar donor cultivation has not been prevalent. The goal of our Community Philanthropy 2.0 survey one month ago was to determine whether there is potential for nonprofits to cultivate significant donors online (defined as someone who gives $1,000 or more), and how that can be accomplished.

What we found was a tremendous opportunity for nonprofits to participate as trusted providers of credible information and ultimately cultivate the next generation of major donors through the social web.

Management Matters

Richard Florida on the inspiration for his concept of the Creative Class:

I have long said that the inspiration for my theory of the creative economy isn’t hip cities, or gay neighborhoods, or even Apple or Google. It comes from my early, ground-level studies of Toyota where top management essentially told me more than 25 years ago: “We will win and the Big Three will lose. The problem is in your heads and the way you manage. You think the key to success is having a big-shot CEO, lots of engineers, and scads of high-priced MBAs. We know better. The key to our success lies in mobilizing the collective knowledge, intelligence, and creativity of our factory workers.”

From an excellent post.

A Special Report on Entrepreneurship

By the Economist:

FOR all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 it created an average of 550,000 small businesses every month. Many of those small businesses rapidly grow big. The world’s largest company, Wal-Mart, was founded in 1962 and did not go public until a decade later; multi-million dollar companies such as Google and Facebook barely existed a decade ago.

America was the first country, in the late 1970s, to ditch managerial capitalism for the entrepreneurial variety. After the second world war J.K. Galbraith was still convinced that the modern corporation had replaced “the entrepreneur as the directing force of the enterprise with management”. Big business and big labour worked with big government to deliver predictable economic growth. But as that growth turned into stagflation, an army of innovators, particularly in the computer and finance industries, exposed the shortcomings of the old industrial corporation and launched a wave of entrepreneurship.

From "The United States of Entrepreneurs." The other articles in the series are online and all are free.

Questions for South African Entrepreneurs

Richard Branson posted some video responses by entrepreneurs supported by his self-titled School of Entrepreneurship. The questions were submitted by Mr. Branson's blog readers. Check out the responses. A bit about the Branson School of Entrepreneurship:

The School, based in Johannesburg, provides training, mentoring and seed funding to young entrepreneurs, helping them launch successful businesses which will in turn create jobs and help boost the local economy.

Thoughts on Capitalism

In the New York Review of Books, Amartya Sen offers up a primer on Adam Smith, John Maynard Keynes, and Alfred Cecil Pigou. Sen writes:

Ideas about changing the organization of society in the long run are clearly needed, quite apart from strategies for dealing with an immediate crisis. I would separate out three questions from the many that can be raised. First, do we really need some kind of "new capitalism" rather than an economic system that is not monolithic, draws on a variety of institutions chosen pragmatically, and is based on social values that we can defend ethically?

The second question concerns the kind of economics that is needed today, especially in light of the present economic crisis. How do we assess what is taught and championed among academic economists as a guide to economic policy—including the revival of Keynesian thought in recent months as the crisis has grown fierce? More particularly, what does the present economic crisis tell us about the institutions and priorities to look for? Third, in addition to working our way toward a better assessment of what long-term changes are needed, we have to think—and think fast—about how to get out of the present crisis with as little damage as possible.

This sentence is particularly good: "The most immediate failure of the market mechanism lies in the things that the market leaves undone."

A Quick Observation

Since the Amazon Kindle came out in late 2007 I think I've seen two people with the device. And that's in DC, which by any measure is more wonky than your town. But last week I saw two people with the new Kindle 2. Clearly this means it is selling much more briskly. At least that is the inference I'm going to draw from my unscientific analysis. Both people I saw last week were older, but judging by James Fallows and Alex Tabarrok, the Kindle 2 seems to be a hit with the youth as well.

The Kindle is a fine device as far as it goes, but it does present some problems for academics. Suppose you wish to quote a line or paragraph from a text. Normally you would include the quote along with the author and page number. But what page do you cite? With a Kindle you do not know where you are in a book. Amazon tells you the location where you are, so you can find your place irrespective of font size, but that's not really the same. Will this end up becoming common practice anyway? You could try using a direct quote and not citing the specific page, but that's generally frowned upon. Several online magazines and journals print a number in the text that conforms to the printed page, like so: [p. 34]. Doing something similar would make the device much more useful.

This may seem like a minor complaint, but there are lots of people who see the Kindle replacing school textbooks and many were disappointed when Amazon did not release an 8.5 x 11 inch Kindle specifically for that purpose. But, until they fix this problem, writing papers will be tough and the Kindle will remain a device for casual, linear, reading.

Social Innovation in a Post-Crisis World

The special edition of Innovations Journal prepared for the World Economic Forum in Davos is now available on The Schwab Foundation website. The entire issue is available for free in one pdf file. It includes many great articles, including one piece on resilience by my co-blogger Phil Auerswald. Check it out.

More Tax Trouble

Ron Kirk is the fourth nominee to the Obama administration to have "tax issues." Mr. Kirk owes $10,000 in back taxes. His case seems like an innocent mistake, but Taxgirl is not too sympathetic:

I truly believe that people make mistakes. Sometimes, people make those “mistakes” on purpose. The key to good character isn’t not making mistakes but fixing them once you’re aware of them. It seems that in government, you don’t fix them until the country is aware of them.

Obama’s team should be scrambling to make folks understand that this is not acceptable. A $10,000 tax liability from years ago doesn’t qualify as “a few minor issues.” It’s a big deal. You fix that kind of stuff as quickly as you can - not just when the press comes calling.

Need I say that Democrats and liberal bloggers are the ones who keep reminding us that taxes are the price we must pay to live in a civilized society? In The Road to Serfdom Hayek argued that only the devious and immoral are capable of centralized economic planning. Many entrepreneurship bloggers have wondered in recent weeks if the recent changes in policy and politics mean that the last 30 years of entrepreneurially driven growth are over. Will the growth in government control erode our entrepreneurial spirit?

N.B. I do not mean this as a snide partisan attack. President Nixon instituted all kinds of disastrous price controls and was constantly meddling in economic policy. Clearly he was nothing if not devious.