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CHAPTER 1

CHAPTER 1. The Entrepreneurial Revolution. The Backbone of American Economy. Research findings by David Birch of MIT New firms created 81.5 percent of the net new jobs from 1969 to 1976 Small businesses and entrepreneurs created more than 34 million new jobs since1980.

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CHAPTER 1

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  1. CHAPTER1 The Entrepreneurial Revolution

  2. The Backbone of American Economy • Research findings by David Birch of MIT • New firms created 81.5 percent of the net new jobs from 1969 to 1976 • Small businesses and entrepreneurs created more than 34 million new jobs since1980

  3. The Backbone of American Economy • Research findings by U.S. Small Business Administration’s Office of Advocacy • Small businesses represent 99 percent of all employers • Small businesses provide about 75 percent of all new net jobs

  4. Mega-Entrepreneurs Who Started in Their 20s • Microsoft—Bill Gates and Paul Allen • Dell Computers—Michael Dell • Apple Computers—Steve Jobs and Steve Wozniak • Federal Express—Fred Smith • Polaroid—Edward Land • Nike—Phil Knight

  5. New Industries Launched by the E-Generation • Personal computers • Biotechnology • Wireless cable TV • Fast oil changes • PC software • Desktop information • Wireless communications/handheld devices

  6. New Industries Launched by the E-Generation • Healthy living products • Electronic paging • Voice mail information technology services • Cellular phone services • CD-ROM • Internet publishing and shopping • Desktop computing • Virtual imaging

  7. Innovation Since World War II • Small entrepreneurial firms • Responsible for half of all innovation • Credited with 95 percent of all radical innovation

  8. The Global Economic Weapon • Global Entrepreneurship Monitor 2000 Report • High levels of entrepreneurial activity equals above average economic growth • Top three of twenty-one countries surveyed • Brazil • Korea at • United States

  9. America’s Self-Made Millionaires • The Millionaire Next Door by Thomas J. Stanley and William D. Danko • Millionaire—a person with a net worth of $1 million or more • Traits of these millionaires • Two-thirds are self-employed • Over 80 percent accumulated their wealth in one generation

  10. Entrepreneurship as an Equalizer and Mobilizer • Indifferent to race, religion, sex, or geography • Rewards performance and punishes shabbiness and ineptness • Greatest chance for self-sufficiency, self-determination, and economic improvement

  11. U.S. Venture Capital Investment by Year Number of Average per Sum Investment Time Period Companies Company ($millions) • 1990 1143 2.55 $ 2,914.34 • 1991 970 2.41 $ 2,333.40 • 1992 1054 3.63 $ 3,827.56 • 1993 945 4.83 $ 4,565.53 • 1994 954 3.98 $ 3,792.89 • 1995 1265 4.5 $ 5,693.46 • 1996 1809 6.29 $ 11,386.77 • 1997 2385 6.22 $ 14,823.33 • 1998 2821 7.03 $ 19,843.17 • 1999 4202 12.97 $ 54,499.93 • 2000 5608 18.24 $ 102,308.33 • 2001 3224 11.69 $ 37,672.20 Source: PricewaterhouseCoopers/Venture Economics/National Venture Capital Association/Money Tree Survey of 2/20/2002. Source: The Carlyle Group, Economic and Investment Environment, January 1997.

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