Sigalon's IT Soup

Not long ago, serial entrepreneur and founder of the Young Entrepreneur Council Scott Gerber offered his prescription to Fix Young America. In short, Gerber believes entrepreneurship can cure a lot of what’s wrong with the American economy.

Yesterday on Salon.com, those ideas came under attack as an Occupy imposter - instead of representing American’s youth, the post contended, they’re shills for “the most noxious aspects of the bipartisan status quo.” Gerber can defend himself, but in criticizing him, the authors seem to be condemning entrepreneurship. And that needs defending.

To give them their due, Salon authors Daniel Denvir and Adam Goldstein acknowledge, “There is certainly a place for entrepreneurialism,” and that “Research shows that start-up cultures are important for spurring innovation in technological industries.” But they have three problems with focusing on technology startups:

1. “To think that making cheap capital available to a young entrepreneurial elite will solve youth joblessness is dead wrong.”
2. “The idea that the jobs crisis in this country can be solved by turning everyone into an entrepreneur is just as wrongheaded as the notion that sending everyone to college will result in widespread gainful employment.”
3. “It is a big mistake to think that the tech sector is a panacea for the jobs crisis.”

Startups aren’t just tech

I too have a problem with usurping the word “startup” to refer only to new tech businesses. I debated this point last fall with someone from the Startup Weekend organization. The ability to code does not equal the ability to start, run and scale a business.

That said, I don’t think the authors fully understand the promise of entrepreneurship. I don’t believe any rational entrepreneurial advocate believes that everyone should be, or even can be, an entrepreneur. That would call for a vision of millions of solo businesses run by entrepreneurs and staffed by no one. That's not a sustainable business model by anyone’s measure.

But let’s not dismiss the fact that without startups (of all types), economies stagnate. The authors mention the oft-cited stat that “the majority” of startups fail within five years. This may or may not be true; we do a pretty lousy job of actually tracking business creation and failure in this country. But we do know (this became clear in the 1990s, the decade that many recall as the golden age of entrepreneurship) that new businesses create the vast majority of new American jobs and spark a lot of innovation.

If we all agree there’s a problem with young people finding jobs, wouldn’t it make sense to encourage startups that create jobs as they grow? The authors seems to think that startups are the province of what they term the “young entrepreneurial elite,” as if they believe that only the privileged can start businesses.

Startups do create opportunity

But what’s wrong with showing American’s young people that entrepreneurship can indeed be a way out of poverty? Isn’t it true that more than a few entrepreneurial empires were built by folks armed with nothing but an idea, a goal and a healthy dose of determination?

“Historically,” Gerber says, “startups create opportunities, jobs, innovation and wealth.” Indeed, entrepreneurship has long been the refuge of the disenfranchised. Immigrants, women and minorities have often turned to entrepreneurship because “Main Street” was more welcoming than big business.

Embracing entrepreneurship is not about supporting or rejecting Tea Party or Occupy Wall Street principles. It’s not an inherently political act, nor is it meant to be.

Instead, it’s about encouraging self-determination. It’s about building a path to the American Dream. I can’t quibble with that.

Disclosure: Scott Gerber has written a post for ReadWriteWeb’s Start Channel featuring insights from the Young Entrepreneurs Council: 8 Hard-Earned Insights Into Raising Startup Capital

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