Thursday, January 10, 2008

Reading List: The Illusions of Entrepreneurship

I've been reading the book "The Illusions of Entrepreneurship" by Scott A. Shane. He is a professor at Case Western who academically studies the process and occurrence of Entrepreneurship and wrote the book because he was tired of hearing about all the popular misconceptions that abound in the echo chamber of the pop-business bookshelf and on the web and in the media.

Each chapter centers on a couple unrelated facts about what is the fact about entrepreneurship, and what is the fiction. Examples of facts that are true but go against popular conceptions:
  1. Americans are becoming less entrepreneurial. Rates of business ownership were higher in both 1983 and 1910 than they are today. While the last 5 years have shown a slight uptick, the general trend is less businesses, not more.
  2. The United States is no where near the most entrepreneurial country in the world. Mexico and Turkey have 4 times the self-employment rate as the US
  3. Poorer and more agricultural places are more likely to correlate with high levels of business creation.
  4. The causal relationship between the presence of capital appears to be opposite what is assumed. The presence of entrepreneurs appears to attract capital to an area, not the opposite, as is commonly assumed.
  5. The typical business man is a white married man in his forties who started his business to not work for someone else and is just trying to make a living.
  6. More education makes you more likely to start a business (exception: PhDs)
  7. Immigrants are no more likely than native born to start a business
  8. Self Employed people are usually less well networked than peers in their demographic situations
  9. Less than 2% of startups think they're doing something innovative.
  10. Very very few businesses are started by more than 1 person. Of those that are, most are started by related people, usually spouses.
Some interesting stuff for now. I'll keep you updated on poigiant parts of the book, as well as summarize some other important facts from it.

--Michael

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