What aspiring entrepreneurs can learn from the Alberta election

I am a serial entrepreneur who believes that the free enterprise system is the best alternative for creating upward mobility, a growing middle class, the most efficient allocation of resources and the least costly production of goods and services to the benefit of society as a whole. But free enterprise is based on the principal of a free and open market. Theoretically the ease of communication today should create more opportunity and much greater competition. Free enterprise does not thrive in a monopoly or oligopoly both of which limit competition but in many cases that is what we now have. As a result the middle class in the west is in serious danger of backsliding into the poor class from which it came over the past hundred plus years.

Branding and Brand power are the main tools that are limiting competion, allowing capital to seize a much larger portion of the pie at the expense of labour creating the status of superrich and the growing disparity in the distribution of wealth. These are serious dangers because market control interferes with free enterprise and skews the results. Yes it is still possible to create a new brand but increasingly large organizations block the market and take advantage by acquiring up and coming companies and only then allowing them full market penetration.

On an individual basis it is now critical to become an entrepreneur allowing for self-determination and upward mobility that is in decline for employees. The most important skill anyone can learn today is the ability to create and manage your career. The problem is much bigger for society. We have created a society in the west with very high expectations and a philosophy of entitlement. A large percentage of the population will not put forward the effort and level of determination required to succeed as an entrepreneur – not without first experiencing serious pain and a major economic correction. We are vulnerable but collectively we remain in a state of denial.

The capitalist system which allowed the middle class to flourish in the west is broken. Rather than continuing to create opportunity it has begun to limit it. Rather than spreading the success to the developing world we are in danger of returning to a more rigid class system with the superrich having a disproportionate amount of economic power. Solutions are impossible as long as we remain in a state of denial compounded by governments which have become dysfunctional. A good start could come from consumers by becoming better informed and breaking the power of the brands. This should be happening through social media but it isn’t. Instead brand control of the market is being re-enforced by social media marketing.

I am very concerned that I have lived and worked in an era that has been optimum for the individual but is no longer sustainable. I am very concerned that my grandchildren will be denied the opportunity that my generation has enjoyed. One of the great challenges of capitalism is to moderate the influence of greed. If we don’t find a way to level the playing field it’s difficult to predict how social unrest will manifest itself in a society where expectations cannot be achieved.

Generally anything that makes government facilitate as opposed to over regulate is a positive step. The government of Ontario has just announced initiatives that could reduce red tape for businesses and create cluster developments to help drive regional economic growth and create jobs. Will these reforms ever see the light of day in a minority legislature flirting with an election or are they just pre-election temptations to attract votes away from the conservatives?

Regardless both of these ideas focus on critical areas in the face of a fast paced global economy where all countries are fighting for talent and for markets. Governments at all levels need to become more efficient and more effective. Over regulation serves no purpose other than to increase the cost of government and limit the competitiveness of the private sector, discouraging investment in the province in the process. There is a place for regulation and there are important roles for government but the former needs to be reeled in while the latter needs to be more selective. One preferred area should be to co-operate with the private sector and academia to create ecosystems that foster business opportunities in a variety of areas where we can build comparative advantages. This is now a stated goal for Ontario.

The most startling evidence of cluster development is Silicon Valley where 350,000 Canadians live and work. That’s right 1% of our population and a much higher percentage of our intellectual capital are resident in northern California. The Valley offers the most dominant ecosystem for an industry that exists, nurturing tech startups and venture capital investment at a phenomenal rate. It is not one that can easily be replicated and it’s been underway for over sixty years.

In other words this project requires genuine commitment from all concerned. We can only hope that the Ontario government follows through and that the Feds add a level of support. We are in a new era dominated by change. The culture of government and business alike has to change. Government must move away from a culture of bureaucracy that has become an unbearable burden. Big business must move away from a culture of control to a culture of empowerment as change dictates that the status quo is short lived.

These new initiatives serve as a reality check that we must become more competitive. Government can not be the agent of change that makes this happen but it can facilitate a co-ordinated approach by reducing the costs of doing business and helping to create ecosystems that support the efforts of the private sector. Let’s hope that all parties rally in support of these programs that will create jobs and point us toward a better future.

Every New Year is a time for reflection – a time to review the past and a time to predict the future – a time  for assessment and a gateway to change. For many career change is the most important possibility to consider. Job stability is evaporating before our eyes. Inequity in the distribution of wealth in the western world  is returning to historical norms after a century of a growing and healthy middle class. So maybe this really is the time to consider becoming an entrepreneur.

Entrepreneurship has become a hot topic and it should be. Why? Well here are a few reasons to consider. Globalization is great for consumption, not so wonderful for non-competitive labour in developed countries especially North America. Technology has accelerated the rate of change inherent in globalization making change itself the one constant we can expect in our economic future. Rigidity, structure and the status quo are the antithesis of change. We must constantly engage in a process of creative destruction, tearing down the old to renew with new and different products and approaches. The lifespan of the status quo is already much shorter as the rate of change accelerates. Stability in one’s life will depend on resilience and adaptability.

The ability to create and manage your own career will be the most important skill you can learn.

We are well into a New Era of Entrepreneurship. Governments have recognized this and the battle for talent is underway. Universities and Colleges around the world are introducing programs searching for the best ways to define and teach entrepreneurship. Is it economics? Is it business? Is it philosophy? Can it be taught? Must it be experienced? Everyone is searching for the formula to produce disruptors. Why? We need them to help bring about change at every level: To dig into the corners and find all the advantages that exist by opening up the global economy; To dig in the corners and create jobs in the face of comparative disadvantages because they are problem solvers and will invest locally when Big Business will run away; To challenge the status quo to bring about changes in the behemoths we call international corporations and Government. Society needs disruptors so that creates opportunity.

But that’s not the reason to become one. Here are some personal reasons to take a long hard look at entrepreneurship: Independence; Upward mobility; Redefined security; Joie de vivre; Control and Satisfaction. Let’s face it in a 24/7 global world we are all taking risks and working long hours. Technology has us by the scrotum and is already squeezing. Why not take control of your career?

Maybe our business schools have been working from a flawed model, focused on turning out executives rather than entrepreneurs. That is changing. Too Big to Fail is really to Big to Succeed. Big Companies rely increasingly on acquisition and outsourcing for their flexibility. Will that be enough?

So as we approach 2014 there is much to consider. Entrepreneurship does not hold all the answers but it is moving into the forefront. Entrepreneurs are problem solvers at a time when we are generating new problems faster than ever before. Entrepreneurs act as a catalyst to stimulate the economy creating jobs out of chaos at a time when leadership is wallowing in a political quagmire.

A New Year and a New Era – Definitely much to consider – Happy 2014 to all

The more I write and speak about entrepreneurship the more I realize how mainstream the topic has become. Whether you know it or not you and everyone else has to become more entrepreneurial in their thinking. We live in a fast paced global society that requires all of us to be resilient and adaptable. Those are the critical attributes that make us entrepreneurial. Entrepreneurship applies to far more than business and business issues. We are talking about a mindset not a skillset. A mindset focused on solving problems. A mindset grounded in determination to make things happen. It’s about being proactive not reactive. Most important it is about self-determination!

In an extremely competitive global world, in the era of Big Data, we can never know enough and we will never understand much of what we know. We cannot have the answers but the answers will always be there for us to find. There is no time for prison thinking. If you think like an entrepreneur you will find the way and that’s just as true about your personal life as it is about your career. As for that part of your life, in the face of declining job stability and the entrenchment of wealth disparity, the most important skill you can learn today is the ability to create and manage your career. There is a very good reason that every college, every university and now even secondary schools are offering courses in entrepreneurship.

When I wrote my first book Everyday Entrepreneur I had the ambitious goal of doing for entrepreneurship what David Chilton did for financial planning with The Wealthy Barber – to write a book that applied to all of us in a form that everyone could read understand and enjoy. The jury is still out but the endorsements received are encouraging that I have come close. The second book in my entrepreneurial series Family Entrepreneur comes out later this month. Dealing with the dichotomy of family and business brings entrepreneurial thinking into both settings. Remember family was the first “crowd” and still offers funding and nurturing for many entrepreneurs in a startup situation.

I am extremely grateful for the opportunity to mentor and encourage would be entrepreneurs both in their business and private lives. It is really all about taking charge of your life in the midst of a roller coaster world. You have to learn to capitalize and enjoy the highs while defending against the lows. Entrepreneurial thinking is the tool to do it.

Fred Dawkins is a serial entrepreneur who is best known as one of the co-founders of the olde Hide House in Acton Ontario to which “it’s worth the drive”. He is a partner in The Creative Destruction Lab at the Rotman School of Management at the University of Toronto and is currently writing a series of books entitled The Entrepreneurial Edge published by Dundurn Press, which focuses on encouraging and preparing would be entrepreneurs for challenges in their careers and in their private lives.

We have been in uncharted economic territory since well before we hit the wall in 2008. While we’re treading water reasonably well we are not finding the corrections that must follow every major downturn. Maybe it would help if we moved passed the Keynes vs. Friedman debate that still dominates economic theory.

Keynes died in 1946. We are starving for new economic thought to act as the driving force for new and appropriate economic policy. What other discipline has produced such a lack of innovation in the past seventy years? The question begs asking: with the onset of econometrics in the 60s and 70s did we confine our economists to conduct statistical analysis and prepare projections? Even In those areas, economics is a behavioural science so negative projections are almost always softened so as not to become self fulfilling.

Regardless in today’s fast paced global economy we need new theory and very different action plans. We need to revamp our organizational structures to incorporate greater resilience and adaptability. There is a pressing need to redefine capitalism or at least to reel it in so that the strong trend to increase the rewards for capital while reducing the rewards to labour don’t wreak social disaster . Frankly too Big to Fail is simply Too Big! Large corporations are truly multinational and chase profits above all else. Just look at the reward systems of the largest corporations. These same corporations are hoarding cash because they cannot move fast enough to build from the bottom up. The have to grow through acquisition buying up successful startups. In that sense entrepreneurs offer a lifeline for Big Business which also gains much needed flexibility by contracting out to independents. We have abandoned fundamental microeconomic theories like the Law of Diminishing Returns and the Optimum Size of the Firm, lost in a culture of control enhanced by market dominance founded upon effective branding.

All of this points to a much greater emphasis on entrepreneurial thinking and entrepreneurs as our economic saviours. It will be entrepreneurs who invest locally who will solve many structural issues. Entrepreneurship has become the economic wonder drug of the 21st century. For individuals this is the key to their economic well being and any hope of upward mobility. In our modern world dominated by globalization, technology and inherent rapid change enhanced by Big Data, we do need to establish new sound economic principles rather than continuing to make it up as we go.

Quite a number of my friends are professionals. Often they let me know how lucky I’ve been to own and operate companies with employees who keep churning out results even when I am at the cottage or on the golf course. For them time is money-they generate the revenue. They have to be there or nothing happens. I don’t even have to show up.

The traditional idea is that once you get to be the boss, you coast while others do your bidding. Maybe that idea’s grounded in the reality that most people get promoted to their level of incompetence where performance falls off. Of course it’s delusional to think that you start your own business and find a gravy train of financial success, freedom and success, all with little effort. This rarely happens but we do revere examples when it does like some the instant successes that have materialized in the tech world. Frankly that type of success is equivalent to winning the lottery which isn’t going to happen for many. Unfortunately this is the romantic side of entrepreneurship- rare but appealing.

If your goal is to get to be the boss and then take it easy , perhaps you should look to the public sector where that is at least a possibility. Being a true entrepreneur means living in a revolving door with each turn bringing a new problem to solve. If this lifestyle is meant for you , it’s like getting the business equivalent of a runner’s high, every day, all day. If not welcome to chaos. The faster the problems come the more you must thrive on the process. The last thing entrepreneurs want to do is sit idle while others do the work and get all the fun of problem solving.

That’s why they succeed in startups but struggle in managing established businesses even though they may have built those same businesses. No matter how great your innovation, converting that project to a successful business requires entrepreneurship. Success takes determination, adaptability, resilience, commitment and the certainty that you will take the project to completion and make that project happen. It is not the project that makes an entrepreneur. It is definitely the process! Very few are content to level their business and enjoy the fruits of success. So if you are all about power, money or prestige maybe entrepreneurship isn’t for you. Being the boss is just a necessary evil.