Why Entrepreneurship is critical on a microeconomic level

For the past fifty years our business schools have been working on a flawed model. We have focused on producing executives for large corporations; only recently have we introduced enthusiasm for entrepreneurship to our MBA programs. However we live in a world economy focused on globalization, revved up by the technological revolution and immersed in a 24/7 mindset. We have created an extremely fast paced environment requiring flexible management led by adaptable and resilient leaders – the essence of entrepreneurship.

The misguided emphasis on turning out high paid executives has led to politically motivated policies like ‘Too Big to Fail’ which can be more properly labelled “Too Big to Succeed” or simply “To Big”. Like their second cousin Big Government these monolithic corporations need the impact of entrepreneurs – people who are disruptors that challenge the status quo in the face of a new global reality. They are too slow and unwieldy and are led by overpaid executives far removed from reality, Increasingly they rely on growth by acquisition and flexibility achieved by contracting out. They are part of our reality but not the part that will have the greatest influence and guide the inherent change built into the global economy. Entrepreneurs will pursue opportunity around the world and find the many niches that will move us to more efficient allocation of resources and lower cost of production across the entire world. At the same time in the west where we have structural issues such as high unemployment levels among unskilled workers, entrepreneurs will invest locally finding opportunity and create jobs that will put these resources to work. Government cannot do this effectively and big business has no interest in doing so.

‘Everyday Entrepreneur’ encourages entrepreneurship at all levels, focused on preparing entrepreneurs for the challenges they will face through a wide range of anecdotes helping them experience the realities of life as an entrepreneur in this ‘New Era of Entrepreneurship’.

Praise for Everyday Entrepreneur

“Fred Dawkins employs a likeable cast of characters and the simple setting of Canadian cottage country in July to convey a complex set of ideas ranging from the nature-versus-nurture debate (are entrepreneurs born or made?) to a variety of essential how-to entrepreneurship skills to specialty topics such as gender, leadership, negotiation, and team formation, as well as the important role of entrepreneurship in the global economy. His casual, easy-to-read writing style belies the critical importance of his subject matter. Not just potential entrepreneurs but also governments, big companies, and business schools in the West must adapt to the new reality of an increasingly educated and ambitious middle class in so-called developing countries and take immediate steps to reinvigorate our large population of underutilized problem-solvers in order to remain competitive and continue to enjoy increasing prosperity. As Sam would say: It is not a question of if, but rather how.”
— Ajay Agrawal, Peter Munk Professor of Entrepreneurship at the University of Toronto’s Rotman School of Management, founder of the Creative Destruction Lab for entrepreneurs, and co-founder of The Next 36 entrepreneurship program.

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.

Did you know that more than 350,000 Canadians live and work in Silicon Valley. That’s right more than one percent of our population and a much higher portion of our intellectual capital have left us for the world’s most prestigious and most productive ecosystem. This is both a problem and an opportunity but not one that government can solve or even try to solve. So how do we stem the tide?

It’s not a quick fix. When we are producing world class talent they are inevitably attracted to the epicentre of success, achievement but most of all opportunity. It is the opportunity that we need to focus on. The Creative Destruction Lab does that. It creates opportunity here in Canada. The leader Professor Ajay Agrawal is a dynamo. He is the living evidence that entrepreneurship can be taught, an academic with the drive and mindset that can match anyone in the business community. The stated goal of the Lab is to generate equity – specifically to create $ 1 billion in equity in the first ten years. After the first two years approximately $ 130 million has been achieved. However the real goal is to keep the best and most brilliant we produce here in Canada, helping to build our own world class ecosystem and offering a valuable example to others that “Canada’s Got Talent” and I don’t mean the variety acts we see on the American TV show.

Ventures receive the very best of mentorship. It is amazing to see how they evolve in less than one year. Watch for results – they have already started but many more will follow in the years to come

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.

One of the premises in the introduction of my new book Everyday Entrepreneur is that I wrote it to encourage entrepreneurs of every stripe across the spectrum. Since the high tech entrepreneurs have been getting the lion’s share of the attention and encouragement from the public and investors alike, they were far from my target market. Tech innovation was the creator of venture capital, setting a precedent for high rates of return that can’t be sustained in other areas. Virtually all other types of entrepreneurs have to struggle for funding because they simply don’t meet the criteria for venture capital. Those that have attracted VC funds often flounder to the detriment of the entrepreneur because the VC gets an agreed upon return which can sap a moderately successful business.

The Creative Destructive Lab at the Rotman School of Management at the University of Toronto (my alma mater) is focused on extreme success with a strong emphasis on taking tech developments from gestation to dynamic success on the international stage. On the surface this seems to be exactly the area that I previously suggested didn’t need my help or encouragement as people are lined up to help in almost every area to develop these type of businesses. So why did I choose to support these high achievers by becoming a partner of the CD Lab? Well here are my reasons:

1. I strongly support that we need to keep our brightest and best talent here in Canada – we are in the midst of a world wide competition to attract talent – success starts with keeping our own
2. Success at this level sets a terrific example for anyone in this country that wants to become an entrepreneur and start a business at any level
3. Both of these factors are critical for us to build a culture of entrepreneurial success to maintain a strong economy and bring in the new talent that every country is striving to attract.
4. If in the process I can influence some of the brilliant MBAs we are graduating to circumvent the conventional and lucrative path to becoming a business executive in favour of applying their abilities to becoming entrepreneurs who solve problems, make things happen, create jobs and provide the drive that leads to success, then my time and effort will have been well spent.
5. The very talented people who apply to the Lab are brilliant in their innovation but still need nurturing on the personal issues involved in becoming an entrepreneur, the fundamental business issues they will encounter and the overall philosophy inherent in being an entrepreneur.

My book will out at the end of November. In the meantime I am enjoying my involvement with the Lab targeting success in a global economy which I firmly believe will centre upon a New Age of Entrepreneurship.

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