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Can Entrepreneurs Save the Economy?

Americans see entrepreneurship as the answer to the country's financial crisis. But worries about the economy are deterring people from becoming entrepreneurs themselves, according to a survey by the Ewing Marion Kauffman Foundation.

"Americans in big numbers are looking to entrepreneurs to rally the economy," according to Carl Schramm, president and CEO of the Kauffman Foundation. More than 70 percent of voters surveyed say the health of the economy depends on the success of entrepreneurs, he says. "And a full 80 percent want to see the government use its resources to actively encourage entrepreneurship in America."

Despite this confidence in entrepreneurship, Americans are reluctant to take the first step on the path to entrepreneurship and start their own companies. Seventy-one percent of the 816 Americans interviewed in late September said they believed the economic crisis has made it more difficult to become an entrepreneur.

The Kauffman study shows a gulf between those who see opportunities and those willing to seize them; 49 percent of respondents see opportunities for entrepreneurial ideas in the current economy but only 26 percent said they would actually consider starting a business within the next five years.

The Kauffman Foundation works to promote entrepreneurship and innovation and to assist in the commercialization of new knowledge and technologies. It distributes grants to innovators and shares groundbreaking economic research and survey data on topics such as technology transfer and the relationship between education levels and entrepreneurial success.

The New York Times cited the foundation in an article 11 November for its commitment to innovation and entrepreneurship.

"Its support and focus in recent years are helping push "innovation" from being a vague admonition in policy speeches to the basis for a growing discipline of serious research," the Times said about the Kauffman Foundation.

The newspaper noted that Kauffman and the National Science Foundation, are building a database that tracks government-sponsored research for science and engineering and links it with company startups, patents and other data. It already has a database, the iBridge Network, where scientists and engineers have posted 3,000 inventions.

"It's an eBay for ideas," Schramm says.

Kauffman has also begun a Law, Innovation and Growth program that will make $10 million in grants over the next five years to research the relationship between copyright, patent, and other laws affecting innovation.

Last spring, Kauffman released a study that raised important policy questions about how to foster greater tech entrepreneurship. It found that a critical factor in the success of a startup is advanced education. That study analyzed U.S. engineering and tech companies from 1995 to 2005 and found that most U.S.-born technology and engineering company founders are middle-aged and well-educated.

The importance of improving education and advancing entrepreneurship is also recognized by many organizations and leaders outside the United States, of course. The European Commission's Community Integrated Programme on Lifelong Learning and Mexico's national Council of Science and Technology, CONACYT, among others, have many initiatives to increase opportunities in math, science and technology.

For more on education and entrepreneurial success and the earlier study, see "Education and Experience Underpin Entrepreneurial Success" in SPIE Professional.

Have a question or comment about this article? Write to us.

DOI: 10.1117/2.4200810.49

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