Assessing Skill Building Programs for Entrepreneurs
With nearly all net job growth in our country coming from companies less than five years old, Congress has debated this year what the role of government should be in developing programs and interventions that support entrepreneurship. While the World Bank’s Doing Business project reported a record number of new pro-entrepreneurship legal and regulatory reforms around the world in 2009, governments and multi-national institutions continue to be tempted to develop entrepreneurship development programs.
Legal and regulatory reforms clearly provide impetus for new business creation. For example, after accounting for differences in per capita income across nations, countries with easier and less expensive procedures for registering new businesses have higher rates of new business creation, according to an analysis of the World Bank Group Entrepreneurship Survey. However, there is less clear evidence as to which interventions or “programs” to equip potential entrepreneurs with the skills they need to start and grow successful companies work. At a time when it seems daily we report on this blog about new “SME programs”, there should rightfully be concern about whether government programs for “small business” or SME development help much. Too few entrepreneurship programs are developed from robust research and frequently conceived and run by people who have never been entrepreneurs. And, as the adage goes, sometimes more is less.
Don’t get me wrong, relevant and effective programs for today’s startups combined with smart policy can create a powerful recipe for an entrepreneurial and innovative economy. However, a critical review of the recent explosion of publicly funded entrepreneurship programs might be in order. As credible experts like the Kauffman Foundation continue to apply rigor to the evaluation and effectiveness of such programs, policymakers anxious to help might take note before re-funding existing support programs or commissioning new ones.
I would like to encourage readers to share their views on what is effective. One that in my view has passed the effectiveness test is FastTrac. Since 1993, FastTrac has been provided to over 300,000 existing and aspiring entrepreneurs helping with business skills, leadership experiences, and valuable networking and mentoring opportunities. Individuals are pursuing business ownership in record numbers in the past few months. The latest Kauffman Index of Entrepreneurial Activity shows that in 2009 startups reached their highest level in 14 years. Entrepreneurship training is important to leverage the potential this trend holds. Recognizing this need, FastTrac recently teamed up Kaplan University to offer two new online graduate certificates specifically designed to equip even more entrepreneurs with the skills they need to start and grow firms.
Entrepreneurs do need help and the tools to develop their entrepreneurial skills, minimizing the barriers standing between them and the realization of their ideas. However, while in the end, most of the growth in entrepreneurship (and the resulting jobs, innovation and wealth) will come not from state guidance, but from skillful, driven entrepreneurs, it would be wise to be selective about which programs and other interventions will actually have impact.
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Jonathan Ortmans is president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues. In this capacity, he leads the Policy Dialogue on Entrepreneurship, focused on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as a senior fellow at the Kauffman Foundation.