I was rummaging through my virtual attic again this weekend and came across a fascinating study published by the National Commission on Entrepreneurship. The study, from August 2001, looks at the origins of the Fortune 200 companies in 1917 and 1997 to see how these leading companies were formed.
?Of the 1997 Fortune 200 companies, 197 of them were traced back to one or more entrepreneurial founders. Many of the 1997 Fortune 200 were also among the largest corporations in 1917.?
This is an amazing statistic. Although almost all of the Fortune 200 companies have entrepreneurial roots, many were already large companies sixty years earlier. That is why the current entrepreneurial economy needs to be encouraged and supported. Our economy has ridden a wave of entrepreneurial activity that has its roots in the late 1800?s! These companies are no longer creating new jobs for America. They are a noble bunch, but their time is passing.
So how do we recreate the era that spawned such an entrepreneurial revolution? First, we need to celebrate, not demonize free enterprise. We are brainwashing our children into thinking that business is bad. Our children are inundated with the message that business pollutes, oppresses the poor, and hoards scarce resources. While businesses do need to be accountable, the vast majority of economic activity is good.
Second, we need to help train and educate today?s entrepreneurs. Study after study is showing that this drastically improves a new venture?s chances for success.
Finally, get government out of the way. Ever increasing governmental intervention in the economy preserves the old, often in spite of markets that tell us these companies have seen there better days, and inhibits the new. ?It has become more difficult for an entrepreneur to lead a new company into the Fortune 200,? reports this study. While some still believe that the government can guide and direct economic development, only three companies, Fannie Mae, Freddie Mac, and Union Pacific trace their roots as being governmentally founded.
I know that I have said much of this before, but this is the only way that we can assure that out of the activity of our entrepreneurial economy today, the new pack of leading companies for our future can be allowed to develop.
We are in a period that has the potential to rival the entrepreneurial economic expansion of the pre-1900?s. Politicians need to remember that entrepreneurial economic activity is like a golf swing. The more you try to force it, the worse the result. Swing easy and freely and the ball will go forever.
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