I Am An American Businessman Steve Manz CEO, retired Optinfo and Chairman, Board of Advisors, Business Innovation & Growth Council
Themes for This Presentation Understanding Entrepreneurs & Entrepreneurship The State of Entrepreneurship in the US WFD Programs that have Worked What You Can Do to Support Job Growth? 2
What is an Entrepreneur? 3
Four Types of Entrepreneurs Personal Risk Financial Risk Small Business High Feed the Family Scalable Startup High Get Rich/ Implement Vision Large Company Low Feed the Family/ Get Promoted Social Moderate Save the World Source: Steve Blank - head of entrepreneurship studies at UCLA 4
Entrepreneurs Vs. Innovators Entrepreneur A person who is willing to launch a new venture, usually with much initiative and risk, accepting responsibility for the outcome Innovator A person or an organization who introduces something new for the first time; makes changes in anything established
The Optinfo Story Founded 1989 software and support Late 1990 s software emerged as valuable Moved emphasis of company to product supported by service 9/11 Lost their largest customer Market stopped buying ; cash flow evaporated Doug & his business partner mortgaged their homes to finance the business Employees salaries reduced 10% Founders reduced their own salaries to ZERO
The Optinfo Story Happy Ending Revenue Doubled Twice; Company Sold
Some (but not all) of the Things You Need to Know to Start & Grow a Business How to: Create and Manage a Sales Pipeline Recruit, Select & Hire Manage Cash Flow Survey Customers for Needs Analyze the Competition Set Pricing Identify and Sell to Decision Makers Design Contracts for Customers, Vendors, Employees Design and Implement a Disaster Recovery Plan Design Company Bookkeeping System Set up Office Technology Infrastructure Establish Human Resource Management Program The Biggest Issue What You Don t Know You Don t Know
Entrepreneurs & Innovators
Entrepreneurs & Innovators The American Dream A national ethos of the U.S. in which freedom includes a promise of the possibility of prosperity and success.
Entrepreneurs & Innovators Life should be better and richer and fuller for all, with opportunity for each according to ability or achievement" regardless of social class or circumstances of birth. The American Dream James Truslow Adams I931
How Not to Create Wealth ARRA is creating jobs, but it is not creating wealth. 12
BIG COUNCIL Companies That Faltered In the Past Year 13
Innovation Creative Destruction 14
Jobholders Take Note CEOs globally want to improve productivity Labor is the largest cost of business Technology replaces people Disruptive innovation changes everything (A CEO s greatest fear & should be a job holder s also) Examples: personal computer, digital printing 15
Jobs Dilemma The Mismatch Between Available Work and the People Qualified to Do It. 14 Million Unemployed Workers 3 Million Unfilled Jobs 16
Jobs Dilemma 17
Nobody Gets Paid Until the Entrepreneur Makes Money
What s Going on with Entrepreneurship in the US? 19
One of the most common misperceptions about America is that we are becoming more entrepreneurial over time.
Decline in U.S. Business Formation Business Closures Formation of Employer Businesses 2009 vs. 2007 % Change +68,490 + 11.6-115,795-17.3 Source: Scott Shane, The Great Recession s Effect on Entrepreneurship, Data from The Small Business Economy: A Report to the President 2010, The SBA, Office of Advocacy.
Barriers to Business Growth Skills Shortage Taxes, Fees Over-regulation & Compliance 22
How Many Days Per Year Do You Work to Pay the Government? Before You Pay Yourself? 23
Migration of Workers to Low Tax Areas Source: 2010 census
Effective Corporate Tax Rates on New Investment, 2010 50 45 US 40 35 30 25 20 15 10 5 Argentina US UK Germany Canada Denmark Mexico China Hong Kong 0 Countries
Regulation & Compliance $ 1.7 trillion annually Regulatory compliance costs business more than all corporate profits combined each year
The Decline of Entrepreneurship in America The U.S. is no longer tops in the world when measuring attitudes about entrepreneurship Large companies account for a growing proportion of business activity, making it harder for new businesses to get started and for existing ones to prosper. Source: Global Entrepreneurship and the United States, Small Business Administration, September 2010 27
"Losing these skilled immigrants is an economic catastrophe that will hurt U.S. competitiveness for decades to come. Vivek Wadwha, Duke University, Author of America s New Immigrant Entrepreneurs US Losing Immigrants Who Spur Innovation and Growth 25% of US venture backed high growth companies are founded by immigrants 2009 study predicted over 100,000 western educated Chinese and Indians would return home in the next few years Of the returnees who were surveyed, most believed they had better career opportunities at home than they could find in the US 90% had master s and PhD degrees in management, technology or science 1 million H-1B holders and their families anxiously await longer-term work visas and grow frustrated with the US immigration process 28
Global Entrepreneurship and the United States Major Conclusions You Can Find These Studies Here: Global Entrepreneurship and the United States http://archive.sba.gov/advo/research/rs370tot.pdf America s New Immigrant Entrepreneurs http://www.soc.duke.edu/globalengineering/papers_ newimmigrant.html 29
Entrepreneurship & Current Status in the US Starting a business is hard and demanding More than of half startups fail Companies < $200 million of revenue create > 70% of sustainable new jobs Government isn t helping Private sector pays for everything Final note the Fortune 500
Time for a New Emphasis Government Supporting the Needs of Business NOT Business Supporting the Needs of Government
Work Force Development Programs That Have Worked 32
ICAPP Private public partnership created in 1994 connecting business, education, WFD and labor Program developed by credit card processor TSYS, to develop IT pros needed for growth Created 1500 positions within three years. State created a UGA campus at TSYS for proprietary training/education Employee/student participants received B.S. degrees In the second year multiple companies participated in the program providing an ROI of 15- to-1
Perry County, TN Rural town of 3000 lost 750 jobs when two factories closed City leaders determined to use the Internet/telephone infrastructure to target new job growth and trained workforce to match capabilities needed: Digital Piecework Factory Call Center Staffing Programming
Perry County, TN Learn About Vision Perry and Digital Factory Here: http://www.visionperry.com/techn ology/technology.html http://www.digitalfactoryusa.com/ aboutus.php
What Can You Do?
When the Recession Ends, Most Job Creation Will Come From Young Companies Reach Out to Entrepreneurial Business 37
Reach Out to Entrepreneurial Business Get Organized for the Mission Define Your Customer Focus on Companies <=$500 Million in Revenue Get Program Leaders from the Business Community
Look Beyond The Impoverished For Displaced Workers 39
Evangelize Education
We Need to Reverse the Trend in GDP The trouble with our times is that the future isn t what it used to be. Paul Valery Support Policies that Support the Entrepreneur Long-Term GDP Growth Posted by RXH in Investing Basics Investment Cycles The Economy on Jun 03, 2010 http://www.bearseatbulls.com/long-term-gdp-growth/
Support Policies that Support the Entrepreneur Don t Kill the Goose