Importance of Entrepreneurship Now

The world economy faces a massive disruption of labor.  Jobs are going to machines at an alarming rate, and ramifications will alter everything we know  about work. Three forces have been at work since 1990, but will soon go to warp speed.  First is the Gig Economy, which is an environment in which temporary positions are common and organizations contract with independent workers. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.

Second is the automation of anything that is repetitive and can be replaced by robotics; most automobiles are now made by robots.  Third is the combination of Artificial Intelligence and Big Data. Artificial intelligence (AI) makes it possible for machines to learn from experience, adjust to new inputs and perform human-like tasks.  Deep learning is a type of machine learning that trains a computer to perform human-like tasks, such as recognizing speech, identifying images or making predictions.

Because Big Data has been growing expodentially, AI and deep learning have much to work from.  In 2013 SINTEF estimated that 90% of all information in the world had been created in the prior two years.  Lots of data is exactly what machines need in order to learn to learn.  Google’s DeepMind AI has learned how to read and comprehend what it reads through thousands of annotated news articles.

McKinsey research says that up to one-third of U. S. workers and 800 million globally could be displaced by 2030.  They recommend businesses and policymakers act now to keep people employed.  The single most impactful solution is to empower one and all with entrepreneurship whose innovative and creative skills can allow laborers to transit to self-employment (or to thrive as a freelancer in the Gig Economy).

 

The Answer Is Entrepreneurship

Here is a startling fact -jobs are going to machines at an alarming rate.   Consequences are in motion to alter everything we take for granted about our work and the ways in which we humans exist. The world has already gone from linear to parabolic.  By 2011 Watson, IBM’s artificial intelligence, question and answer computer, was capable of beating Jeopardy champions Ken Jennings and Brad Rutter.  But, a new class of machine known as “deep learning” has crossed us over to computers thinking faster and better than humans.  Advances in technology are now so powerful we can expect to see a lot more artificial intelligence (AI) soon.

A Chinese board game Go’s undisputed, five time champion Lee Se-dol, the world’s best living Go player recently dueled a computer.  China’s top players predicted Lee would not lose a single game, but Lee went on to lose all but one of five match games.  Such a feat is incredible.  Go is a super, ultra, mega chess game. AI has surpassed specific tasks, and can now learn collective behavior using algorithms.

Because of “deep learning”, voice recognition is more accurate and powerful now.  Voice interfaces are being added to more apps, which now have smart or cognitive capabilities.  AI learns from consumers consumption and provides real, valuable recommendations about behavior to target markets automatically.  If this change sounds exaggerated, step back and look at what computer technology has been doing to employment so far:

Computer technology is already eating jobs and has been since 1990.  Work can be divided into four types:  routine and nonroutine, cognitive and manual.  Routine work is the same day in and day out, while nonroutine varies.  Within these two varieties, it is the work that requries mostly our brains (cognitive) and the work that requires mostly our bodies (manual).  All four once saw growth, but routine stagnated in 1990.  This happened because routine labor is easiest for technology to replace.  Rules can be written for work that doesn’t change and then turned over to machines.

Unfortunately, it is the same routine work that once formed the American middle class.  Henry Ford transformed routine manual work by paying people middle class wages to perform it. Routine cognitive work that once filled US office spaces.  Many of the latter jobs are increasingly unavailable.  Only two kinds of jobs are left, the ones that require so little thought we pay people little to do them, and jobs that required so much thought we pay people well to do them.  Two engines out of four will keep the plane flying, but what happens when the two remaining engines fail?  The advancing fields of robotics and AI represent those final two engines because, for the first time, we are successfully teaching machines to learn.

At the same time Big Data is growing expodentially.  In 2013 SINTEF estimated that 90% of all information in the world had been created in the prior two years.  By 2015 every minute we were liking 4.2 million things on Facebook, uploading 300 hours of video to YouTube, and sending 350,000 tweets.  Lots of data is exactly what machines need in order to learn to learn.  The combinatioin of deep learning and big data has resulted in astounding accomplishments just in the past year.  Google’s DeepMind AI has learned how to read and comprehend what it reads through thousands of annotated news articles.  DeepMind has also taught itself to play dozens of Atari 2600 video games better than humans.

Anytime now is the answer in the 21st century for any question involving something new machines can do better than human, and wrapping our heads around the transformation of the world’s workforce is very difficult.  One thing certain is droves of workers will be displaced and soon.  If just the truck drives in the US were replaced by driveless trucks, 3.5 million people would be out of work.  We need to recognized what it means for exponentila technological change to enter the labor market for nonroutine jobs for the first time ever. Machines that can learn mean nothing humans do as a job is uniquely safe anymore.  From hamburgers to healthcare, machines can be created to successfully perform tasks with no need or less need for humans, and at lower costs than humans.

One more example, and we’ll address the known solution for the impending displaced workers.  Amelia is one AI being beta-tested by companies.  Created by IPsoft, she has learned how to perform the work of call center employees.  She can learn in seconds what takes us months, and she can do it in 20 languages. By learning more over time, she successfully handled one of every ten calls in the first week, but by the end of the second month, she could resolve six of ten calls.

The hope of workforce labor and economic growth as a counter force to this major transformation is entrepreneurship, the creation of cognitive, innovation designing better companies and countless new startups.  Small business is the backbone of our economy.  Successful entrepreneurs are naturally competitive, think outside the box, and see through easy answers to how an industry can benefit from a fresh take. The SBA said in 2012 small busineses created 64% of the new jobs in the previous decade:

  1. New businesses challenge the existing market.
  2. Market disruption causes new job fields to open.
  3. Small businesses are more flexible to change.
  4. Competition pushes companies to streamline.
  5. Their ideas create new products and services.
  6. Entrepreneurship historically turns bad economies.
  7. Managed economies (China) encourage it as crucial.
  8. Experience has proved that entrepreneurship can be taught.
  9. Entrepreneurship flourishes in US capitalism and freedoms.
  10. Self-employed are passionate, willing to work harder.
  11. Business creation is job creation.
  12. Entrepreneurs also create, improve social change.

Because entrepreneurship is a way of thinking (the entrepreneurial mindset), it is learned over time and by experience. Introducing the power to choose, opportunity recognition, action on ideas, pursuit of knowledge, wealth creation, building a brand, creating community, and the power of persistence should be inserted into early education.  In Georgia there is a program, the International Entrepreneurship Institute’s Real Ledge, that trains K12 teachers of all grades to introduce entrepreneurial thinking and experiential exercises to curriculum.

High school students have been dramatically turned from failure to success in one or two years by”catching the entreprenship bug”.  Two national programs of note, the NFTE, Network for Teaching Entrepreneurship, and YEA, Youth Entrepreneurship Academy, use mentorship and project competitions to reward startup ideas.  Entrepreneurship teaches human success, how to evaluate and identify beliefs and assumptions, problem solving, oral and written communication, teamwork, and community engagement.

Entrepreneur students come out critical thinkers able to validate their business ideas through inquiry and analysis.  Even mature and experienced works, who make changes in the Gig Economy, are far better prepared by entrepreneurship skills.  Due to shifts from an industrial to a knowledge economy, temporary positions are common and organizations contract with independent works for short-term engagements.  These workers need skills to survive self-employed even now ahead of the impending loss of routine labor.  They will need to understand entrepreneurship to  thrive.

It is past time to offer exposure to entrepreneurial thinking in K12 schools from coast-to-coast, make one year of entrepreneurship education mandatory in all community colleges and universities, and fund workforce development centers with state-of-the-art evidenced-based (aka lean) entrepreneurship training.  There is still time to save the giantic freight train headed straight at routine and cognitive labor if we wake-up now and accept entrepreneurship as the answer.

McKinsey research say that up to one-third of U. S. workers -and 800 million globally- could be displaced by 2030.  The researchers found that “60 percent of occupations have at least 30 percent of constituent work activities that could be automated.”  “Income polarization could continue in the United States and other advanced economies,” they added.  McKinsey suggests that governments can help retrain workers or supplement income as people adjust.  “To help transition to a future with increased automation, businesses and policymakers will need to act to keep people employed,” suggests the McKinsey research. We know that action is to embrace  entrepreneurship training as the best solution to massive unemployment.

Clinton E. Day is an entrepreneurship adjunct professor and author, more on website    http://clintoneday.com.
Special thanks to Scott Santens, moderator of BasicIncome on Reddit, a fervent believer in basic income as a solution to the displacement, whose article made the deep learning argument. 

McKinsey research

 

 

 

 

 

 

What Every Entrepreneur Should Learn from Arthur Blank’s New Soccer Team.

Arthur Blank used a startup mentality to build a soccer team in Atlanta. The blueprint contains lessons for every entrepreneur

There’s an organization in Atlanta that hosts employee karaoke nights every few months. New hires always sing first. In late 2016, Gerardo “Tata” Martino, a transplant from Argentina, took his turn at the microphone–thrown into the fire despite having just begun English lessons. His song selection reflected his progress. “Head, shoulders, knees, and toes. Knees and toes,” he sang, a cappella.

If that sounds like startup culture to you, that’s because it is–with one small caveat. The organization isn’t exactly a startup. It’s Atlanta United FC, one of the newest entrants to Major League Soccer. The team burst onto the American soccer scene in 2017, becoming only the fourth expansion team in MLS history to make the playoffs in its inaugural season. This year, Atlanta United is a legitimate contender for the league championship.

The team’s owner knows something about building a successful enterprise: It’s Arthur Blank, the billionaire co-founder of Home Depot. What’s the difference between founding startups and founding soccer franchises? “It’s exactly the same,” Blank says. “In terms of things that are important, there really are no differences.”

It seems an odd marriage, and the parallels aren’t perfect. Blank acknowledges a difference in scale: Home Depot can open as many stores as it wants, while Atlanta United can only put one team on the field. Atlanta United is also bankrolled by Blank, whose net worth is estimated by Forbes at $4.1 billion–a luxury most startups don’t have. And it’s enjoyed the built-in awareness and infrastructure of an already-established league.

But every entrepreneur can–and should–learn from the way Atlanta United was built to compete from day 1. It’s largely based on an element that drives most successful startups: culture.

Mercedes-Benz Stadium in Atlanta.
CREDIT: Courtesy Atlanta United FC

Finding the right people

As Blank secured Atlanta’s MLS franchise in 2014, he started searching for the right person to run the team. He found Darren Eales, an executive from London’s Tottenham Hotspur Football Club, who became Atlanta United’s president later that year. During his interviews, though he didn’t know it at the time, Eales stressed all six core values Blank says he wants in his ventures: put people first, listen and respond, include everyone, innovate continuously, lead by example, and give back to others.

Starting from scratch was exhilarating, Eales says. He spent months researching other teams before filling out the rest of Atlanta United’s organizational chart, and started hiring people who craved the entrepreneurial challenge–for both business operations and the on-field product.

Eales and Carlos Bocanegra, the team’s technical director (the “general manager” in most American sports), spent time with every player they considered signing. While scouting Paraguayan star Miguel Almiró​n, for example, Bocanegra ate meals with him in between his matches in Argentina and talked extensively with his former teammates and competitors to gauge his personality.

The lesson, Blank notes, is that it takes time to define your culture and hire the right people to embody it–most startups fail because they move past that part too quickly. “I don’t really worry about the numbers,” he explains. “We know that if we’re doing the right things for the right reasons, whatever numbers we want will come out.”

Earning the community’s trust

With its org chart full (the team employs 78 full-time staff) and internal culture established, Atlanta United’s focus turned outward to its customers–the fans.

The team’s initial strategic plan emphasized three things: fielding a winning team, providing a positive fan experience, and connecting with the community. Eales made sure his face was familiar in Atlanta before the team even played its first game, spending up to five days a week with soccer fans at sports bars across the city. “The book we write should be called Pub Crawl Our Way to Success,” he jokes.

Earning the community’s goodwill has proved extremely important. Atlanta is often maligned as a “bad sports town,” but Atlanta United has already set MLS attendance records for a single game (72,035) and season average (48,200). On three separate weekends, the team has boasted the fourth-largest soccer attendance in the world.

Still, Eales is hyper-aware that sports fans can be fickle. That’s why, after every match, representatives from every department gather for a postmortem in the bowels of Mercedes-Benz Stadium to break down that day’s customer experience. The fan-first ethos is also baked into the team’s marketing: Atlanta United’s primary tagline is “Unite and Conquer,” and while every graphic displaying the word “Conquer” shows athletes, every graphic with “Unite” features fans.

These initial results remind Blank of how he felt when Home Depot took off–but like any startup, he says, Atlanta United can’t rest on its laurels. “You hear it and see it and feel it in a whole variety of ways, but you know when you have that kind of success,” he says. “Then it’s a matter of just being able to sustain it.”  “These are the sort of things we’ve got to continue doing,” Eales adds. “The moment we start to take our fans for granted is the moment that this is going to disappear.”

From Inc. Magazine by Cameron Albert-Deitch, Inc.com’s assistant editor and a Brooklyn-based freelance writer.

Opportunity: New Frontier for Sports Data.

Supreme Court Decision Means New Frontier for Sports Data  By Ted Leonsis, Cofounder and Partner, Revolution Growth

Stats have always been the lifeblood of sports fandom, and a fan today has more stats available to digest and analyze than was imaginable even a decade ago: player movements, biometrics, hyper-detailed opponent history. Data analytics have become integral to teams’ success — but also to diehard fans’ enjoyment of the game.

So, the Supreme Court’s decision today to repeal the federal ban on sports betting and clear the way for legalized sports betting across the country is in many ways the logical outgrowth of fans’ obsession with data. It brings a multibillion dollar industry out of the shadows and into the sunlight, where its integrity can be guaranteed and consumers can be better protected. I believe today’s decision will change the face of sports fandom for the better.

Sports betting is built on a rock-solid foundation of data, plain and simple. The more data a fan has about a player or a team, the better he or she can predict the outcome of a game, or a possession or a play. And as our data analytics have gotten better, sports betting has only gotten more popular. A 2017 gaming industry study estimated that offshore bookmakers are earning $2.5-$3 billion from people in the U.S who are betting illegally. The same report suggested that about 12–15 million Americans are currently active illegal bettors — and they don’t include “casual” or “social” bettors in that count. The appetite for sports betting is there, and now, instead of offshore bookmakers reaping the benefits, we have a pathway to bring this revenue into the US economy — and to ensure that Americans aren’t getting ripped off when they place their bets.

Think about it this way: Wall Street is another industry that’s all about data. It’s about making informed decisions about what the market will do based on the data you have available to you. And there are tremendous safeguards in place to protect consumers — the SEC, for example — to ensure that trading happens on a level playing field. Sports betting is no different. Today’s decision paves the way for the implementation of safeguards against fraud in sports betting, including things like licensing betting operators to ensure they are legitimate and regulated monitoring of betting lines.

Many ask if this decision will impact the integrity of sports themselves. I think it’s just the opposite. I think that the increased transparency that will accompany more legalized betting around the country will only further protect against potential corruption. They say sunlight is the best disinfectant, and in this case I believe that is certainly true.

Of course, there are a huge number of questions about how today’s decision will play out across different states and throughout the different leagues. I don’t claim to know all of those answers today, but what I do know is that this is a new frontier for professional sports and teams who don’t seize on this opportunity will be left behind. As millennials and Gen Z continue to embrace the second screen, it’s not hard to imagine in the near future fans on their devices analyzing data, placing bets and communicating with each other in real time during games. Legalized sports betting will only bring fans closer to the game, ramping up the action in each minute and creating more intensity. It will bring new revenue into the economy, creating jobs and growing our tax base. Today’s decision is a great one for sports fans and I am eager to embrace it.

World Economic Forum, Need for Experiential Entrepreneurship.

There is a deep mismatch between the skills our education systems nurture and the needs of society

In a typical Western education system, results indicated that “since 1990, even as IQ scores have risen, creative thinking scores have significantly decreased”. Traditional education does not sufficiently value innovative and entrepreneurial thinking – our system even dumbs down the creative genius that we were born with, according to a test developed by NASA.

Yet creative skills and mindsets are indispensable in a workforce that must be responsive to change and capable of finding new solutions to complex problems. The World Economic Forum itself has identified social abilities such as coordinating with others and persuasion, as well as complex problem-solving skills, as essential in the knowledge-based workplace of the near future.

We live in the times of autonomous carsreusable rockets and artificial intelligence, yet we are still teaching in an education system that was set up for factory workers some 200 years ago. What we should be doing instead is to focus on skill-building and setting any learner – be it in compulsory education or in lifelong learning – up for success.

Entrepreneurial education as solution

Entrepreneurial education teaches the important skills of innovative and creative thinking, helping people develop a flexible “growth mindset” that can adapt to new problems. It is not about teaching business skills such as accounting and pitching, but what it means to be entrepreneurial – what mindset does an entrepreneur have, how does she stay motivated, how does she solve problems, and get people to see and follow her vision?

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These kinds of skills are useful beyond the job market. They give people the tools to be active citizens in a complicated and fast-changing world, and should be a priority in European policy.

According to the European Commission’s new Entrepreneurship Competence Framework, entrepreneurial education includes life skills as well as business skills. It means learners can act upon opportunities and ideas and transform them into value for others, whether financial, cultural, or social.

Despite the importance of this mindset, according to a 2016 Eurydice study, no country has made entrepreneurial learning mainstream within education, no country effectively assesses student learner outcomes, and few countries have embedded experiential learning to develop this mindset and skills.

What would it look like to teach creativity as entrepreneurial skill?

Currently, creativity is often limited to one-off activities such as brainstorming or mind-mapping, rather than a continual emphasis on creativity throughout learning.

Research into creative mindset development indicates a minimum of four to six months’ continuous development is required to develop the neural capacity and enhanced plasticity required to be creative.

Ideally, this learning should extend across the whole age range of formal and non-formal education. Short-term “stun and run” creativity activities such as brainstorming or mind-mapping have limited value. Yet established entrepreneurship education programmes prioritize experience of the business start-up process. These programmes are not demonstrating positive impact in terms of the student perception of their own entrepreneurial capacity or their interest in following an entrepreneurial career.

There is a focus on the process of business development rather than a specific focus on the creativity needed to continually innovate; while this is valuable, it may miss a significant opportunity to equip individuals with the innovative and creative-thinking capacity they need. Education neuroscience indicates that without a sustained deep-learning approach, the levels of creativity will continue to fall as children progress through formal schooling. Prevalence of competition-based formats linked to start up or business ideas is detrimental to learner development in terms of self-belief, entrepreneurial skills and ethics. Entrepreneurship education has coalesced around an understanding that winning is a goal, yet research shows that this is patently not the case.

The impact of teaching creativity

The impact that sustained teaching of creative and innovative thinking has can be broken down into various areas:

Creativity as a skill: learning more is ineffective unless you can relate and link it to something else – if we so wish, we can think of the brain’s neurons as inherently “sociable” in that they wish to contact other neurons that they already know and are comfortable with. But creativity is about creating new connections; by teaching divergent thinking, we enable new connections in unexpected ways.

Creating innovative business models: equips young people with the skills to respond to the business opportunities they identify, equipping them with the competencies to adopt and create innovative business models aligned to their particular product or service.

Contributing to higher youth employment: provide opportunities to consider important but incidental aspects such as drop-out rates and difficulties relating to what teachers often describe as “difficult to teach pupils”; specifically, it responds to the skills gap identified, within Europe and beyond between the needs of employers and those of school leavers

Creating new markets and new jobs: new jobs and new markets are heavily reliant on innovation and spotting opportunities. By teaching entrepreneurial skills such as spotting opportunities, ethical and sustainable thinking and vision as laid out in EntreComp, new ideas for communities and start-ups will emerge, increasing employability of young people and developing the entrepreneurial and innovative skills required by employers.

 

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MIT: Most Successful Entrepreneurs Are in Their Forties.

The tech world can sometimes feel like Logan’s Run. If you haven’t made your start by the end of your twenties, you’re officially past it. Daniel Ek founded Spotifywhen he was 23. Steve Jobs launched Apple when he was 21. And Mark Zuckerberg found the time to launch Facebook amidst a busy schedule of breast feeds and playdates.

Where are all the old people? Y’know, the people with spouses and kids and gray hair and bad backs? The ones with cassette collections and landlines, and whatever other ageist stereotypes you can think of.

According to a working paper from MIT Sloan professor Pierre Azoulay and PhD student Daniel Kim, they’re busy starting companies — and are arguably doing a better job of it too.

Azoulay and Kim crunched data from the Census Bureau’s Longitudinal Business Database, and from the Internal Revenue Service. The pair discovered that the average age of a founder that went on to hire at least one other person was 45.

This was especially true for companies in the high-tech “knowledge economy.” Per an article on MIT.edu, from Meredith Somers: The researchers broke out the data into high-tech employment, VC-backed firms, and patenting firms. Across the entire United States, the average founder ages were 43, 42, and 45, respectively for those divisions.

The team looked at ages and startups in areas like California, New York, Massachusetts, and specifically Silicon Valley. The closest any founder age got to “young” was in VC-backed firms, where the average age was 39 in New York.

Similarly, the average founder age for one of the “youngest” technology sectors — in this case wireless telecommunication carriers — was 39 years old. The secret sauce behind the success of these older founders is experience. According to Azoulay and Kim, entrepeneurs are 125 percent more successful if they have previously held employment in the industry they’re operating in.

That makes sense. If you’re going to “disrupt” an industry — or at least exist within it — it helps to actually know what you’re doing. And if you’ve worked in an industry for some time, you’re best placed to see any gaps in the market that could be filled by an innovative new startup.

And I imagine older founders would have some innate advantages over their younger counterparts. For starters, they’d probably have access to more start-up capital, either through savings they’ve built up over time, or through assets they can sell or mortgage.

Age allows you to build connections and social networks. It follows that older founders would have the guanxi needed to find investors and customers, where younger entrepreneurs might struggle.

Azoulay and Kim are both very explicit in that they don’t want to discourage younger founders. In the aforementioned MIT piece, Azoulay pointed out that there are young people who have founded “very robust, very large successful businesses.” The likes of Zuckerberg and Ek are living proof of that.

But it’s worth remembering they are outliers. We know their names because they’re exceptional people, who have created exceptionally world-changing companies.The real picture of success isn’t the cliched hoodie-wearing millenial wunderkind, but is in fact much, much older.

 

Copyright, 2016. Clinton E. Day. All Rights Reserved.