EZones Encourage Entrepreneurship In Order To Address The Decline In Economic Mobility.

/0 Comments/in /by

There is increasing evidence of a decline in economic mobility in the US. Economic mobility is the American dream: wherever an individual or a family starts on the economic ladder, the opportunity is open to ascend, and for each generation to do better than the previous one.

Economic Mobility Has Halved in 40 Years.

According to the World Economic Forum (WEF), upward mobility of the sort we associate with the American Dream is declining quite rapidly. Fewer people in the lower- and middle-classes are climbing the economic ladder, according to the WEF analysis. Whereas, at the 50th income percentile, 93% of those born in the decade of the 1940’s would out-earn their parents, the equivalent number for those born in the 1980’s decade was 45%. On this reading, the expectation of upward income mobility has declined by more than half in four decades.

Analysts at Foreign Affairs and the American Academy of Political and Social Science have made similar observations about declining economic mobility.

Why? Declining Entrepreneurship.

Why is this the case? There’s are many theories, one of which is related to parallel declines in the incidence of entrepreneurship as the engine of mobility. A study published by Northwestern Law showed that, of the wealthiest households, almost 60 percent of the top 1% are involved in entrepreneurship – defined as either self-employment or business ownership. Does wealth cause entrepreneurship or vice versa? The study’s results show that, “across the board, entrepreneurship – and in particular incorporated business ownership – is associated with the greatest upward social mobility”.

However, the problem that’s emerging today is that “the already wealthy are much more likely to avail of this mode of wealth-building than the poor”, and so entrepreneurship is powering less bottom-to-top mobility than in the past. Mobility requires both income and the access to entrepreneurial capital to generate it, and lower-income families are finding themselves separated from the capital needed to start and sustain businesses.

The case for entrepreneurship as the pathway to upward mobility for low-income families is complicated. There are high fixed entry costs, time lags, and the volatility in financial returns that are inherent to entrepreneurship, and so its relationship to wealth accumulation is intricate. The intricacies are well worth parsing out, especially given the disproportionate rate at which we observe business owners among the wealthiest Americans. 

The Northwestern Law study points to a definite conclusion.

We find that entrepreneurship, and in particular incorporated business ownership, does indeed facilitate social mobility. The magnitude of this effect is sizable: spending a third of one’s career as a business owner is associated with a one-decile gain in wealth standing as compared to an otherwise similar household…….business owning households which started off poor (i.e. bottom wealth quintile) are much more likely to become wealthy than those relying solely on wage work.

https://wwws.law.northwestern.edu/research-faculty/clbe/events/innovation/documents/sarada_tocoian_entrepreneurship.pdf

We Need A Resurgence In Entrepreneurship For Poor Communities And Families.

The Northwestern Law study comes to clear conclusions:

  • Business ownership predicts higher wealth, and is also associated with higher wealth mobility for disadvantaged groups such as high school drop-outs
  • Entrepreneurship …..is indeed a vehicle for wealth building, and perhaps the most effective one for the least affluent of households.
  • In addition, the legal form of the business itself is strongly associated with outcomes. Gains from incorporated business ownership outweigh that from wage work across the board. However, unincorporated business ownership is a vehicle for upward mobility for the lower half of the wealth distribution.

A challenge to be resolved is that the positive impact of entrepreneurship and business ownership is unevenly distributed by race.

In the period covered by the Northwestern Law study, 57% of White family units owned a business at some point, whereas only 28% of African American families did. For Blacks, business ownership rates increase more dramatically with education, however they remain below those of the ethnic majority even for college graduates. 

But we are making some progress, indicated by the entrepreneurship gap closing over time. The study looked at the same statistics for the parents’ generation. It appears that racial differences were even more pronounced, with only 15% of black parents having owned a business at any point. For both races, business ownership rates have increased slightly over time, mainly driven by the less educated.

EZones Are The Emerging Answer.

Dr. Dale G. Caldwell, who combines the two perspectives of an active pastor in black churches with that of his role as Executive Director of the Rothman Institute Of Innovation And Entrepreneurship at Fairleigh Dickinson University, has an answer to the dilemma of poorer families lacking access to the very institution that will help them rise, entrepreneurship. He has conceived of EZones  – Entrepreneur Zones that are physically located in distressed inner cities and other economically deprived locations, and which provide an entrepreneurial ecosystem for these economically challenged communities. An ecosystem, by definition, interconnects and stimulates many people, institutions, resources, and capabilities. EZones begin by convening a group of economic actors with shared interests in creating new value in their community: existing entrepreneurial businesses, entrepreneurs eyeing start-ups, representatives of big businesses like banks who want to contribute, universities and schools in the vicinity, and influencers who can help and support. Once the shared interest in value creation is established, the next phases include business training, network building, and continuous workshopping to highlight and extend successful initiatives and add knowledge and resources. There are processes to inject and attract capital on a “pay-it-forward” principle that has the potential to establish a permanent fund. While the EZone is physically located in an identifiable geography, it is connected to the city, region, nation, and the world via technology, internet marketing, and communications, and the principles of entrepreneurial business building. 

EZones have the potential to solve the problem of declining mobility and declining entrepreneurship. EZones provide access to entrepreneurship and to its key tools for success to precisely those individuals, families, and communities that can most benefit from it.

Group Of Nations Embraces Inclusive Entrepreneurship To Reduce Global Poverty.

/0 Comments/in /by

In The Ethics Of Capitalism, leading economist Jesus Huerta de Soto argues that the most just society will be the society that most forcefully promotes the entrepreneurial creativity of all the human beings who compose it. When we think of a global society, we can then understand that entrepreneurship is the path away from injustice, and from poverty, for all the world.

At the G7-G20 Solutions Through Inclusivity Virtual Summit on Nov 17, 2021, I’ll be making this case along with my colleagues Dr. Dale Caldwell from Fairleigh Dickinson University and Professor Scott Livengood from Arizona State University.

Entrepreneurship is a philosophy of universal individual creativity and capability. Everyone has a sense of how the world can be made better, and entrepreneurship is the universal method of achieving that betterment. It starts with an attitude that all people share: a continual eagerness to seek out, discover, create or identify new benefits, and better conditions. Economists use the term value – a feeling that the new circumstances suit people better than the status quo. People aim at experiencing value.

Entrepreneurial creativity is a shared activity of consumers and producers. It’s hard to say where it begins, and the co-creation never ends. We might say that consumers or customers initiate the process by expressing dissatisfaction – the feeling that things could be better, and they’re not better yet. They don’t know the solution to their dissatisfaction, and they may not be able to articulate it very well, but they have the feeling. Every human being feels it in some way, every day, everywhere in the world. Dissatisfaction is a universal resource for entrepreneurial initiative.

The role of the entrepreneurial producer is to sense this dissatisfaction. The entrepreneur’s antennae are always up and quivering, scanning the environment for dissatisfaction they can utilize as the source of an idea. There’s a skill for doing this well: we call it empathy. Empathy is the ability to think as if you were inside the customer’s mind, feeling what they are feeling, experiencing their emotions. Empathy can be refined as a business skill, but it’s inherent in everyone. It’s how the human race gets along. It’s the principle behind every trade and every exchange. The entrepreneur understands how to make the customer feel less dissatisfaction, and more satisfaction through trade. The closer the entrepreneur and customer are connected – the deeper the empathy – the better the producer becomes at satisfying the need, and the happier the customer becomes in the confidence that their needs can and will be met.

All of these feelings, this empathy, and this creativity come naturally to people all over the globe. Entrepreneurship is the human condition. It’s the social coordination function of matching people’s most important wants with the available resources and goods and services that fulfill those wants.

Where people might need some help is in implementation of this coordination function. That’s where the concept of Entrepreneur Zones or EZones comes in – the idea that Dr. Caldwell and Professor Livengood and I are presenting to the Group Of Nations. The word “Zones” implies a physical location – and that’s exactly what we envision. An EZone can be located anywhere in the world, and it’s particularly appropriate for the energetic uplifting of a place that is currently in need – a developing nation, for example, or an underdeveloped inner-city in any of the developed countries, or a community anywhere.

One of the steps in EZone development is training – encouraging the entrepreneurial mindset and communicating the steps of the entrepreneurial process. It’s a knowledge process and the requisite knowledge is available to all: it’s subjective (we all have individual knowledge); practical (how to help people); it’s exclusive because it’s individual and that has immense economic value; tacit, meaning it’s not well articulated, but we can draw it out of people through encouragement; and it’s creative, i.e. doesn’t require any resources, it’s developed out of nothing. When people understand the economic worth of their own knowledge, then we can teach them how to apply that knowledge in helping others to improve their lives. There are many pathways available to them. The formal technique is the value proposition, which includes a precise identification of the customer and their wants, and a precise description of what offer the entrepreneur will develop to assuage their wants. This proposition is easily testable – we can teach that, too.

A tested value proposition requires a business model and a development process to bring it to market. The process is also teachable and demonstrable. Part of the process is assembly of resources, including capital, but also supportive services and supply chains. We can teach the assembly methods, and make connections to all the resources, including how to negotiate, contract and collaborate in win-win arrangements.

Professor Livengood teaches entrepreneurship at the university level in the USA, and he has also gained first-hand experience with transferring and recalibrating that training for the poorest displaced refugees in camps in Africa. He discovered that the principles, processes, and practices remain the same, and that language and communication must be fine-tuned to the specific audience, in order to give them the confidence that successful entrepreneurship is in their reach. Dr. Caldwell is an active pastor as well as a university professor, and he has intimate first-hand knowledge of the entrepreneurial potential of people in deprived communities. Both Professor Livengood and Dr. Caldwell exemplify the multi-level applicability of the entrepreneurial method to the pursuit and achievement of prosperity for everyone.

Entrepreneurship is the best path upwards for every community. It’s moral, ethical, and economically sound. Entrepreneurship is the engine of prosperity and growth. It’s exciting and energizing for everyone in the community. The economic gains are broad and deep. Families are strengthened through both shared purpose and reliable income. The kids are better nourished and perform better at school. Violence and anti-social behavior are reduced because people are concentrating on economic opportunity. Jobs are created so that everyone in the community feels their own part of the opportunity. New services are drawn to the EZone, improving the quality of life. Larger companies come to town, attracted by the high-energy workforce and the quality of life in the community. The entrepreneurial community connects to the world and serves markets all over the globe while receiving new inbound services. Improved technology comes to town. Churches enjoy more attendance and their pastors feel renewed. The uplift is general and universal. There’ll be more communities looking over, liking what they see, and jumping on the bandwagon.

You can see the agenda for the Group Of Nations Summit here, register to attend here, and read more about the Solutions Through Inclusivity Summit here.

For Greater Business Success, Turn Your Thinking Upside Down In These 6 Ways.

/0 Comments/in /by

There are sometimes revolutions in business thinking and business approaches that some of us miss because they originate in academia. There’s no pipeline for these ideas from their origin to their application in business firms. Academia is isolated, and businesses are too busy to search for the information and make the adaptations necessary for effective application in the real world. But there’s value to be uncovered and released, if businesses put in the effort.

One such revolution began with an article in the January 2004 issue of the Journal Of Marketing by Stephen L. Vargo & Robert F. Lusch, titled Evolving to a New Dominant Logic for Marketing. The underlying logic was simple:

Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output. The dominant logic focused on tangible resources, embedded value, and transactions. Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships. The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange.

Stephen L. Vargo & Robert F. Lusch, Evolving to a New Dominant Logic for Marketing, Journal of Marketing January 2004

The authors called their new logic “Service-Dominant Logic”. The source article has generated a still-ongoing torrent of further development and discussion. The idea of a revolution in business thinking – a new dominant logic – has been very compelling. The authors referred to the new ways of thinking as “inversions” – turning traditional thinking upside down. Here, for example, is a summary of a 2015 article of theirs in Marketing Theory: Inversions Of Service-Dominant Logic. Inversion #1 is the one that particularly caught my attention.

1. Entrepreneurship over Management

Much of management thought has its roots in the Industrial Revolution, focused on control of large, bureaucratic organizations. The hallmark is efficiency, with bureaucratic central planning and top down management command and control, extended to sub disciplines such as marketing management, human resource management, customer management, financial management, supply chain management and information systems management. Entrepreneurial approaches to business are seen as the exceptions, such as start-ups, small business.

Entrepreneurship should be viewed as the rule, rather than the exception. Systems generate value through resource integration and service exchange in a continuous flow of emergence. There is no end state to optimize or to manage towards. Business is the ongoing discovery of new solutions to evolving human problems – market making. Entrepreneurial activities are fundamental to value creation in ecosystems. Management of bureaucratic firms is a special, limited case, temporarily required in institutionalized forms in institutionalized markets.

2. Effectual over Predictive Processes

The theory and practice of management is anti-entrepreneurial. Writing and building detailed plans about highly institutionalized markets, supported with detailed financial predictions that become the guiding framework for management action, resource allocation, marketing strategy and control. It’s a Newtonian view: maximizing economic value to shareholders via pulling levers of product attributes, price, promotion and channels to produce the result. A bureaucratic structure is established and management is a rules-based activity to be “played” correctly.

Effectual processes assume the future is unpredictable. Human action can shape outcomes through the exercise of choice; goals are emergent, changing and negotiable. Planning is counter-productive, and uncertainty and unpredictability are embraced as opportunities for market making or reshaping and new approaches to value generation. Learning comes from trying and imagining. It’s the natural practice of human actors.

3. Marketing over manufacturing.

In management, there is a focus on being “productive”, with a primacy of “product”, which can be traced back to Adam Smith and the beginnings of the Industrial Revolution. National wealth could be advanced through the application of labor (applied specialized knowledge and skills) to create tangible, exportable goods. A preoccupation with manufacturing and productivity led to affordable supply exceeding market development and hence to the systematic study of marketing – in a supporting role to manufacturing: taking units of output to market to be sold. Marketing has been trying to dig itself out of this stepchild role. 

Service-Dominant Logic sees marketing as primary: the creation, increasing and recreating of markets (through innovative approaches to resource integration and service provision) as the essential purpose of the firm. Marketing and innovation are the same. 

The firm is removed from a primary, central role in value creation to the role of participant in the value creation process for others in the context of service ecosystems. Marketing is a transcending function. It can’t be outsourced.

4. Innovation over invention

invention is an isolated device or process. To become innovations, they must be connected to actors in service ecosystems to become institutionalized solutions to human problems through co-ordinated development of a supportive, contextual environment. Value is created through innovation, not invention.

5. Effectiveness over efficiency

The Industrial Revolution pursued efficiency: productivity, doing more and more with fewer and fewer resources, and the elimination of “waste”. It’s producer-centric. Effectiveness is a user-centric concept, captured in value-in-experience. Without effectiveness, efficiency is a moot issue. Understanding this relationship is critical to innovation and value generation. 

6. Heuristics over rationality

The rational decision-making of homo economicus persists in neo-classical economics, even in the form of bounded rationality. Heuristics can be more robust for human decision-making than calculation, and play an important role in decision making. Heuristics work for people because they are adapted to their environmental structure, including institutions that provide short cuts to value-related decisions. Rationality is a subcategory of heuristic thought. 

Turn Your Thinking Upside Down

These inversions are thought provoking. They seem entirely appropriate for our time. Ask yourself what other aspects of your business thinking merit this kind of re-examination and inversion. Nothing is sacred.

Six Superior Characteristics Of The Entrepreneurial Society.

/0 Comments/in /by

We live in a political society. Politicians and the bureaucrats whom they enable hold all the power. Most people despise them.

Why? Because of their role. They exist to argue over the division of the economic pie that others produce. Politicians despise production and elevate themselves over producers. The fact that they behave badly in the performance of their role merely exacerbates the disdain in which they are held; it is not the primary cause.

The producer role is played by entrepreneurs. That’s the economic term for those who monitor what politicians call (but never truly examine) the will of the people: what people want, what they need, what they prefer, how they feel, what pleases them, and what disappoints them. Entrepreneurs gather this information by listening. They process it through their empathy – the skill of imagining what it’s like to feel what others feel – and decide whether there is a business’s opportunity there. That depends on many variables – the intensity of the need, its durability (how long will it last if unfulfilled), the viability of assembling resources and a business plan to produce a good or a service to meet the need, the likelihood of people buying the solution from one entrepreneur versus another.

Collaboration.

There are important human values at work here. There’s collaboration. People need entrepreneurs to find new ways to solve their problems or meet their needs. Entrepreneurs need customers to channel the market rewards they seek to keep their production going. This symbiosis is the essence of the market system, raising everyone’s boat through the collaboration of buying and selling.

Shared emotion.

There’s the animating emotion of wanting. Human beings act in a conscious way to improve their circumstances. They want something better than what they experience in the present. This is the energy that drives civilization all progress. Consumers want need fulfillment. Entrepreneurs want to feel the fulfillment of acting as the solution source. This is how mutual wants come into alignment in society. 

Listening.

There is listening. There is none of that in politics of course. Yet it’s the core informational input into the entrepreneurial process. The first question in that process is, “What do I know?” Entrepreneurs need continuously updated information about the market, about trends, about preferences, about available options, about pricing, about competitors, and about a thousand other things. They get it through listening. It’s a humble mindset – not dictating or declaring or asserting, not jumping to conclusions, not arguing or contradicting, not wishful thinking, just listening. 

Empathy.

And there is the core entrepreneurial skill of empathy. How can we understand what others feel they need to make their lives better? We all have consciousness but we are not gifted with experiencing the consciousness of others. To be an entrepreneur, it’s necessary to overcome that cognitive barrier. How? It’s a mental modeling process. Entrepreneurs build a mental model of how others – customers – think and feel. It’s not their own mental model, so humility again comes into play – the humility of trying to understand and appreciate another’s point of view. It’s a kind of self-sacrifice – sacrificing one’s own ego in order to feel the way another person feels. 

Sacrifice.

In fact, sacrifice is fundamental to successful entrepreneurship. It takes mental sacrifice to understand others’ needs. Then it requires the sacrifice of time and resources in production to design, assemble and produce the goods and services which will become the value proposition to the customer. To serve others with economic offers and innovation is an ethic of devoting one’s present to the future satisfaction of customers. It’s for this sacrifice, when successful in the eyes of the customer, that the entrepreneur is rewarded. 

Value.

The result is an ever-increasing pool of value. In entrepreneurial economics, value is the customer experience that transpires when the offer made by the entrepreneur is successful in making the customer feel better. Value is a feeling, a good feeling. Entrepreneurs aim to generate value – only the customer can actually create it via their own experience. The more value the entrepreneur generates, the better the customer experience and the greater the ultimate reward to the entrepreneur. The mutuality is self-reinforcing. The whole society is raised up.

A Better Society.

Imagine what society would be like if it were entrepreneurial and not political. It would be characterized by the values of collaboration, emotional sharing, listening, empathy and sacrifice. It would be productive, because entrepreneurs always figure out how to generate more value with less input and fewer resources. It would be about a growing pie for all rather than a political fight over the division and redistribution of the pie. The entrepreneurial society would be much superior to the political society. Let’s work to create it.

Entrepreneurship Is The Most Open System In The World – No Artificial Barriers, Everyone Can Play And Win.

/0 Comments/in /by

Critics, protesters, and activists often complain that the capitalist system is closed to non-elites, that the system is “rigged” so that those who already have capital are uniquely able to accumulate more capital, and those without are condemned to always being on the outside looking in.

The opposite is the true case. Markets are the most open system for anyone and everyone to raise their own standard of living by enhancing the quality of life of others, and getting paid for doing so. The name for this mechanism is entrepreneurship. Everybody can be an entrepreneur, and everyone can succeed at it. How so? Because the two essential skills of entrepreneurship are innate in every one of us.

The first is empathy. That means being able to sense when someone else is dissatisfied or disappointed. They wish things were better in some way. They might not be able to articulate precisely how, but they can communicate dissatisfaction to someone who is actually listening to them and paying attention. Dissatisfaction is everywhere; everyone wants things to be better. Dissatisfaction is the universal resource available to everyone who cares to tap into it. Where are there business opportunities? Just listen, you’ll find dissatisfaction – and therefore opportunities – everywhere. 

The second skill is creativity. How can entrepreneurs solve a customer’s dissatisfaction in a new, better, and compelling way? They think of something that no-one has thought of before. They imagine putting together components in a combination that no-one else has tried. They make a suggestion, and see what kind of a response they get. They run some experiments to gain some more information about what might work commercially. Creativity is innate in all people. We’re all unique, we all think differently, we all have ideas that no-one else has. 

So far, so good, you might say. But aren’t a lot of people barred from implementing their business ideas by a lack of – and lack of access to – resources? That’s the wrong way to think. The right way is to assess the resources you do have. Professor Saras Sarasvathy calls this the “bird in the hand” approach. Don’t focus on resources you wish you had. Focus on the resources you do have. In a paper called “What Makes Entrepreneurs Entrepreneurial?”, she tells the story of the start-up of U-Haul, a company that today generates over $US4 billion in revenues. Founder Leonard Shoen didn’t have enough resources for a down payment on a house for him and his new wife – and, in fact, he realized that it would have trapped him if he did so. He started a life as a nomad, moving around between in-laws, hauling the family’s goods around in a trailer he made himself. Realizing this might be a market, he found a farm outhouse where he could live and assemble trailers from available materials. With a lot of scrambling and experimenting and partnering and hard work, the U-Haul business was eventually established and stabilized.

Shoen had no business plan. He was never “in control” in any way. He epitomizes an entrepreneurial type that believes that it is impossible to predict or control future outcomes, but it is possible to shape those outcomes. The most productive approach is to take action – whatever action is possible – to shape the yet-to-be-made future.

Who can do this? Anyone. One of the tropes we are required to deal with today is that access to opportunity is restricted – by class, or race, or income level or wealth level or education level or gender or some other individual attribute that is viewed as restricting entry. This is simply not the case. Take, for example, Mauricio Miller, who runs the Community Independence Initiative. This initiative works to unleash entrepreneurship in individuals, families, and groups in some of the poorest parts of the world. Is it a charity? No. Does it help people? Not in the way you might think. In fact, Mauricio believes that trying to help people with charity or training or contributions is exactly the wrong thing to do. Empowering them to think like entrepreneurs is the right thing to do.

stories, data, and research shows that the paternalism of charity slows progress and promotes racial stereotypes.  It is actually a barrier to its own mission.  A focus on weaknesses hides indigenous talent and potential.  There are embedded solutions and leaders in the very communities these experts seek to help.  If, instead, outsider efforts focused on the strengths of low-income families we would all see they are important contributors to society

https://www.ciialternative.org

Mauricio emphasizes indigenous talent and potential. Dale Caldwell, who runs the Entrepreneur Zones program for deprived families in distressed inner cities in the US, likes to cite the historical example of the so-called Black Wall Street in Tulsa, OK. In the pre-World War II era, in the Tulsa neighborhood of Greenwood, segregated African-Americans co-operated with each other to develop a thriving economic community, providing transportation services, hospitality, professional services, construction services, retailing, and manufacturing in the context of the burgeoning oil industry of the times. 

There is no shortage of examples of individuals, families and communities who have carved their own path to prosperity through entrepreneurship. Today’s entrepreneurship is an open method, one based on action rather than resources, and defined by possibilities rather than by existing markets or industries.  Adaptiveness and fluidity provide the dynamics. 

Nothing is closed to aspiring entrepreneurs. Entrepreneurship is the fairest system there is. It’s open to everyone in every family, community, town, city and country. It requires ideas and action more than resources. This ideas and actions attractresources, because people want to support – and invest in – the dynamics of entrepreneurship and the who apply them. 

Entrepreneurship is collaborative, characterized by mutual support among fellow-entrepreneurs, supply chain partners, and customers. Entrepreneurs operate in a value generation network that’s open to anyone in the systemic drive to serve everyone.

Entrepreneurship Is The Opposite Of Politics: No Hate, All Love.

/0 Comments/in /by

Increasingly, it seems, we are surrounded by and immersed in hate. It is inherent in our political system. Electoral democracy results in parties, those parties are invested in polarization, in winning versus losing, in domination, and in humiliation of the other side. Those who rise to the top in parties are those who can articulate hate most persuasively and most effectively. Angelo Codevilla called the 2-party system a “logic of mutual hate”.

It’s going to get worse, not better. Political parties don’t become more polite, more accommodating, more friendly, less rabid, more rational. They prefer to drive their supporters further apart from those of the other side, rather than bring people together. Now that both the corporate media outlets and the vast majority of the independent media are nakedly partisan, they can’t play any role of amelioration. They cheer on the hatred and throw gasoline on fires.

Happily, there is a different world, with different players, different attitudes, and different motivations. It’s the world of entrepreneurship – a unifying, elevating energy that’s the opposite of the mutual degradation of politics.

Entrepreneurship is ethical and open.

There’s an ethic of entrepreneurship. It’s not just the hard work and dedication and long-term focused effort – important though those undoubtedly are. It’s the service ethic. The entrepreneurial task and commitment is to serve others. To understand their needs and wants and desires and preferences and dreams, and to respond to them by delivering goods and services that deliver them. 

Empathy is the skill that makes this possible. To quote Adam Smith, entrepreneurs want to be loved – that’s what triggers sales and revenue – and to be lovely, i.e. clearly and obviously being deserving of the customer’s love. Empathy is the emotional interchange for this beautiful reciprocity. Empathy enables the entrepreneur to feel what the customer feels, share their dreams and aspirations, and imagine what’s in their imagination for the future.

To enable empathy, communication must be clear and open. There can be no lies or deception or dissembling, otherwise the entrepreneurial ethic could not operate. Misinterpretation is in neither party’s interest – quite the opposite, as understanding exactly what customers want and communicating exactly what the entrepreneur is offering are the essence of free-market exchange. Political communication is too often the opposite: deliberately dissembling and obfuscating.

Entrepreneurship is promises made and promised kept.

Entrepreneurs make promises. Having discovered and carefully and precisely defined the nature of the customer’s need and their preferences about the way it should be fulfilled, the entrepreneurial business designs the right solution and, when the fit is perfect, seeks out the customer to let them know their need can be met. The way of communicating is to make a promise – a promise that the customer’s life will be better through the experience the entrepreneur can deliver. This is a weighty promise, and it must be kept, otherwise there’ be no second chance, and no repeat business. The entrepreneur goes to great trouble to monitor the understanding of the promise, and whether the customer experience matches the expectation that was created by the promise. A failure to keep a promise is a major business setback. If expectations aren’t met – if a delivery or a service call is late, or an item is mis-shipped or a repair is imperfect or software does not run as it should – the business leans over backwards and deploys extra resources to make things better. not only is a reputation with the customer at risk, but also with others that the customer might talk to or with whom they share experiences. Word-of-mouth is a powerful force the entrepreneur wants to keep positive, and keeping promises is the best way to do that.

Politicians make promises too. However, they’re usually meaningless or, worse, deliberately deceptive. Politicians don’t make promises in order to keep them. They make promises in order to get elected. Once they are, they feel released. They could never keep the promise in any case, because they don’t have that much power. They’re just one cog in the party machine. Promises made at the party level are similarly ditched – they can blame changed circumstances, or the opposition or conjure up a thousand other reasons why the promise can’t be kept. Or they just forget their promise, or claim they never made one.

The culture of entrepreneurship is collaborative, helpful, and civilizing.

Entrepreneurs have a heart – a lot of heart. Not only are they devoted to helping people as customers, but they are also collaborative with suppliers, fellow entrepreneurs, and everyone who works with them directly or indirectly. Entrepreneurs realize the value of interconnectivity and sharing. They sense that all entrepreneurs and customers and suppliers are in the system together – the technosphere, the economy, the industry, the local community. They participate in nested networks and systems within systems. It’s collaboration, exchange, and sharing that make systems work. 

Competition has been turned into an ugly word by the dog-eat-dog crowd. It’s part of the hate. Competition is made to seem win-lose, destruction rather than creation. But that’s absolutely the wrong interpretation. Entrepreneurs’ goals are for there to be no competition: to be so unique that the customer will consider no alternative for the very specialized, very personalized service the entrepreneur delivers. Maybe it’s the best quality, maybe it’s the lowest price, maybe it’s the best integration with the customer’s processes – maybe it’s some combination of these that adds up to uniqueness. Maybe it’s exhibiting the deepest understanding of the customer’s business or daily life. In all cases, becoming uniquely qualified in the eyes of the customer is the objective entrepreneurs pursue. Whatever rivalry occurs all accrues to the benefit of the customer – better experiences and better outcomes as a result of the entrepreneurial system.

This entrepreneurial effort and entrepreneurial striving create and build market institutions. The internet is open so that all entrepreneurs can use it. Would political parties have built it that way? Amazon builds a third-party seller platform that any digital retailer can use. Apple builds an app store that any software developer can qualify to join. Google builds a search bar that we all use and we all make more useful the more we use it. True there’s some hate creeping in around the edges of some of these institutions, but it’s not entrepreneurs who are causing it.

The institutions of entrepreneurship are the bedrock of civilization. In Gallup polls of national confidence, small business (a proxy for entrepreneurs) is rated at 70% (i.e. people say they have a great deal or a lot of confidence in small business as an institution), compared to Congress at 12%. The average US institution stands at 33%. Entrepreneurs must earn people’s trust every day, and they clearly do a better job of it than politicians. 

Entrepreneurship is positive and inspiring. It’s problem-solving. It’s generous and giving. It’s also busy and industrious with no time for politics and the hatred that comes with politics. Let’s promote a culture of entrepreneurship. Let’s teach our kids in school from the earliest age. Let’s teach them creativity and empathy and risk acceptance. Let’s teach them to be entrepreneurs. Let’s encourage everyone to be entrepreneurial. We’ll enjoy a better world.