In a recent New York Times opinion piece, Thomas Friedman argued that “Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge.”
Friedman doesn’t say how the President would do this, but instead writes “Obama should bring together the country’s leading innovators and ask them: “’What legislation, what tax incentives, do we need right now to replicate you all a million times over’ — and make that his No. 1 priority. Inspiring, reviving and empowering Start-up America is his moon shot.”
…To generate one million start-up companies that are around five years from now, we need to start 2.22 million companies today because only 45 percent of new businesses live five years.
… Every year about 14 million Americans get involved in the firm start-up process. So Friedman, Obama, or America’s leading innovators (or policy makers) could almost achieve Friedman’s goal if they could figure out how triple the number of Americans starting businesses every year for the remainder of the President’s first term.
While Friedman’s idea of creating one million start-up companies that create lasting good jobs is a noble goal, it’s a lot easier to say than to achieve. As anyone who has started a company knows, it is not easy to create businesses that have employees and pay them more than the average wage in this country five years after being founded.
Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool’s Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.