How Entrepreneurs Are Fueling The Future Of Job Creation

March 17, 2014  |  6 comments

This blog is cross-posted from Forbes.

By Amy Rosen,
President & CEO, NFTE

During my trip to Japan earlier this month, I spoke to audiences about why the jobs outlook for young people is unlike anything we’ve seen before. And how learning to think and act like an entrepreneur was the key to future job creation both in terms of making your own job and employing others.

In my most recent Forbes article, I wrote specifically about where jobs in Japan come from and why a 10 year-old in Japan is most likely to work for a company which doesn’t exist yet.

Spoiler alert: startups.

Japanese companies founded in the past 20 years created a net 3.1 million jobs whereas Japanese companies which are 20 years old and older shed a net 1.2 million jobs in that time.

And that’s not a Japan thing.

According to a 2011 report from the Kauffman Foundation, in the U.S. , since 1980, “without startups, net job creation for the American economy would be negative in all but a handful of years.” As their data shows, nearly all net job creation in the states occurred in firms less than five years old.

For those of us who think about future employment prospects, the data in Japan in the Kauffman study make it clear that it’s not the size of a business – i.e., small businesses – which fuel job creation. It’s the age of the business that links to job creation.

This suggests that the best way to create new jobs is to create new companies. Invest in the ingredients that create startups: entrepreneurs and entrepreneurship.

That’s not a leap of logic – the research is unambiguous. From the Kauffman study:

“Given this information, it is clear that new and young companies and the entrepreneurs that  create them are the engines of job creation and eventual economic recovery .”

And:

“The key implication for policymakers concerned about restarting America’s job engine, therefore, is to begin paying more attention to removing roadblocks to entrepreneurs who will lead us out of our current (well-founded) pessimism about jobs and sustain economic expansion over the longer run. This much-needed shift in focus cannot come soon enough.”

Removing roadblocks to entrepreneurs may sound like a no-brainer. As should teaching entrepreneurship – instilling an entrepreneurship mindset – in young people.

While our entrepreneurship education programs are growing, the global, government and business commitment to teaching entrepreneurship and nurturing startups is just now taking root.

The ideas are earning notice with leaders at the World Economic Forum which had a panel this January titled, “Reshaping the World through Entrepreneurship, Education and Employment.” And later this week I’ll deliver a presentation on the power of teaching entrepreneurs to the Global Education and Skills Forum in Dubai.

So word is getting out.

For me, the message is as simple as the numbers. There won’t be enough jobs for all who need them. But the jobs – the new jobs – come from startups. And startups come from entrepreneurs. And we can teach entrepreneurs.

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