Entrepreneurship creates jobs

I enjoyed Carl Schramm’s first Forbes column, The Messy Path to Creating Jobs.

He wonders why policy makers haven’t learned until recently that new companies create jobs (though I’m not sure all policy makers have learned this).

My answer is that policy making and government planning are usually done with a view to controlling events, and the “controller” mindset doesn’t take easily to the world of start-ups. With myriad new firms always emerging, failing, or changing directions as they grow, this world appears highly unpredictable and, well, messy. But though it is unpredictable in its details — it’s very hard to pick the winners from any batch of new firms — overall, the messiness works.

That is why my column, which debuts with this entry, is titled “Messy Capitalism.” We should keep reminding ourselves that throughout American history, messy capitalism has always propelled economic growth, while periods of heavy-handed state intervention, such as the 1970s, have suppressed it.

It is hard for some people to grasp how unpredictable it is and it’s even tougher for them to be okay with it being unpredictable.   They don’t like a mess and they fail to recognize the progress that comes out of it.

I also like what Scrhamm recognition that business planning.

…returning to the universities, the teaching of entrepreneurship has to change. The current approach has multiple shortcomings. For instance, a great deal of course content consists of learning “about” entrepreneurship rather than how to do it: Activities such as reading case studies or listening to guest entrepreneurs tell their war stories don’t give students practical skills they can apply. Much of the how-to work is then focused on how to write a business plan and raise venture capital, which is bizarre given that (a) many successful entrepreneurs do neither, and (b) the business plan, despite its totemic status in academe, is far from the end of the entrepreneurial process and will probably change utterly during that process.