The magic sauce of entrepreneurship -- another Kauffman Foundation video

The Kauffman Foundation has released another video on entrepreneurship: the Kauffman Sketchbook series. These are are a useful way of getting a clear message across.

This video is based on the Kauffman claim that “the best indicator of a country’s growth is the number of new firms started every year”. However, this is not as simple as it presents. Indeed, as the video itself says, the focus is not on how to increase the number of people starting a business (700,000 p.a. in the USA), but how to increase their success.

While entrepreneurship is a high-risk activity, helping entrepreneurs reduce or manage this risk is important. However, business establishment is only one proxy for entrepreneurship and keeping business alive is not the central challenge here, especially in developing economies where business establishment is often a survival activity of those who have been excluded from formal employment opportunities.

The video neatly states that “if you don’t get the story right, you’ll get the solution wrong”. The story must go beyond a simple counting of business start-up and the rates of success or failure. Kauffman have done good work in this field, but the story should be more focussed on how to get businesswomen and men to behave more entrepreneurially.

Still, it’s a nice clip.