The Entrepreneurial Equation - Pearson

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accounting for nearly all net new job ... Other master's degree holders started companies faster than those with bachelo
The Entrepreneurial Equation We believe in the transformative power of education. Education = jobs = stronger economies = a better quality of life. So how does entrepreneurship factor in? Read on to learn how entrepreneurship adds up to big economic growth and educational demand.

Entrepreneurship is an engine of economic growth

Small business is big business Companies with fewer than 50 employees make up more than 95% of all U.S. businesses.1

Age trumps size Young businesses, not small ones, contribute most to job growth, accounting for nearly all net new job creation and nearly 20% of gross job creation.2

20%

The myth of the young, American millionaire dropout

Most entrepreneurs are older than you think Despite the youthful image that the term “entrepreneur” may evoke, “peak age” for entrepreneurs is mid- to late-30s to early 40s.3

LATE 30s

EARLY 40s

Success may be American-made, but isn’t always American-born Well-educated immigrants make big contributions to the American economy. Between 2006 and 2012, immigrants started 33% of U.S. venture-backed companies that became publicly traded.4

33%

Education pays

16.7

14.7

YEARS

YEARS

BACHELOR’S

MASTER’S

13

YEARS

MBA

92% of U.S.-born tech founders surveyed held at least a bachelor’s degree, nearly half in STEM disciplines. Those with MBA degrees established companies faster (13 years) than others. Other master’s degree holders started companies faster than those with bachelor’s degrees (14.7 years to 16.7 years).5

Cultivating human capital

Education is the best catalyst for driving entrepreneurship locally Increased high school and college graduation rates lead to an increase in local startup rates and economy-driving entrepreneurial activity.6

Education’s impact on earnings is even bigger for entrepreneurs Every year of schooling can increase average income, moreso for entrepreneurs than for general employees, even after taking into account disparities between the groups.7

What’s the solution? Education = jobs = stronger economies = a better quality of life. But we have to prepare learners for jobs that don’t exist yet—jobs that they’ll create to solve problems and meet changing global needs. To do that, we can’t simply educate “workers.” We have to educate thinkers, innovators, and entrepreneurs.

Learn more about the importance of building entrepreneurial skills

1

Source: Chiara Criscuolo, et al.,”The Dynamics of Employment Growth: New Evidence from 18 Countries,” Centre for Economic Performance, London School of Economics and Political Science, Discussion Paper 1274, 2014

2

Source: John Haltiwanger, et al., “Who Creates Jobs? Small versus Large versus Young,” The Review of Economics and Statistics, 2013

3

Source: Dane Stangler, “The Age of the Entrepreneur: Demographics and Entrepreneurship,” The International Summit on Innovation for Jobs, i4j Menlo Park White Paper, 2013

4

Sources: American Made 2.0: How Immigrant Entrepreneurs Continue to Contribute to the U.S. Economy, National Venture Capital Association, 2013

5

Source: Education and Tech Entrepreneurship, Ewing Marion Kauffman Foundation, 2008

6

Source: Beyond Metropolitan Startup Rates: Regional Factors Associated with Startup Growth, Ewing Marion Kauffman Foundation, 2014

7

Source: Mirjam van Praag, et al., “Returns for Entrepreneurs vs. Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vs. Wage Employees,” Institute for the Study of Labor, Discussion Paper 4628, 2009