Entrepreneurship is not only critical to the economy, but it's one of the biggest drivers of innovation. Yet, despite the hype surrounding start-ups, new business creation in the U.S. is actually near a 40-year low. That's unacceptable, and we should be doing all that we can to boost entrepreneurship back up.
Entrepreneurship is, at its essence, about problem-solving. And real-world problems are complex, even messy. The solutions may change how we deal with health issues, transportation, business, the environment, and just about every facet of our lives.
Solving these problems often takes working in a diverse environment, with different kinds of thinkers bringing their own strengths. During the past century, America excelled at uniting people from different backgrounds and points of view, fostering a spirit of open collaboration and an exchange of ideas.
We need to once again encourage that collaborative spirit, and with it boost the type of innovation we need in the 21st Century. By focusing on a few key areas, we all can aid in the effort to stimulate entrepreneurs and innovation.
1. Increase STEM research and interest.
Schools have made a positive impact on efforts to increase interest in STEM (Science, Technology, Engineering, and Math), which can give future entrepreneurs the skills they need. But, federal investments in research has been dropping since the 1970s. We need to do all we can to encourage a new generation of STEM learners. And it's not just teachers that need to increase interest in the scientific and technical -- it's something we all need to encourage in our culture.
For example, after-school programs, such as the After-School All-Stars, which is able to connect with more than 70,000 kids nationwide, are a great way to get kids interested in STEM. Programs outside of school hours are particularly helpful to broaden the "branding" for STEM, because those concepts can be applied almost everywhere in our world, so it's good to make associations outside of a traditional academic environment. Business leaders can make a big difference here by partnering with a school or after-school program to ensure these programs have the resources they need to thrive. Plus, a partnership could help introduce students to entrepreneurship and business careers.
2. Turn researchers into entrepreneurs.
Researchers are constantly making discoveries that could improve our lives and the world we live in. But often their passion for research is disconnected from the practical implementation of their ideas. Instead, they may publish a paper and only hope an entrepreneur will be inspired to act. That means the people who understand a concept best are too rarely the ones that will lead the effort to create a practical solution -- let alone form a company around the idea. To help counter that pattern, the country's top universities have increased their push for researchers to take their ideas from the lab to the marketplace.
One fruit of this effort is SentiAR, which uses a mixed reality headset and the Microsoft HoloLens to arm physicians with a less invasive tool for treating patients with heart rhythm abnormalities. The researcher team, a married couple who teach at Washington University in St. Louis, created the tech then started the company and sought funding, including a NIH SBIR fast-track award of $2.2M. And both have remained actively involved in the business. That kind of expert oversight of a concept and product idea is the kind of deeply connected leadership we need more of in the business world.
3. Offer support to entrepreneurs who are buried in student loan debt.
The total amount of money that Americans owe in student loans has reached an incredible level -- it's now at $1.5 trillion. High student loan debt severely limits the life choices of many post-college Americans, including would-be entrepreneurs. This may drive some of them to go for sure bets over riskier innovation, and that can stifle entrepreneurial creativity. Need proof? Just look to the Federal Reserve Bank of Philadelphia's study, which found that counties with high student debt fall behind other counties when it comes to establishing new businesses.
Although the government offers incentives toward aspiring entrepreneurs in the forms of special student loan repayment options, merely temporarily lowering the minimum required payment on interest-earning loans isn't doing enough. For potential startup founders, having student loan debt is enough to make investors and lenders think twice before helping to fund their venture. Our aspiring innovators need better options and more support. Business leaders can take action by starting scholarship programs and advocating for policies that help aspiring entrepreneurs take the risk, even if they have student loan debt.
The spirit of entrepreneurship isn't dead in America, but it might be dozing. By making some simple but effective changes, we can revive it, and enter a new chapter in the history of innovation. Wedded to the digital revolution underway, the U.S. can help make the 21st century our most innovative yet.