May 2, 2013 in Event Streaming

Summary from Dr. Carl Schramm Speech at Metro Atlanta Chamber on “Growing the Economy Through Entrepreneurship”

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This morning I had the opportunity to attend a presentation and panel discussion hosted by the Metro Atlanta Chamber on the topic of “Growing The Economy Through Entrepreneurship”. The main speaker, Dr. Carl Schramm, is an entrepreneur, economist and defender of entrepreneurship as the driving force behind healthy economies (Carl Schramm Bio).

Here are some points I took away from Dr. Schramm’s speech:

  • The nexus of economic growth is entrepreneurship. Eighty percent (80%) of net jobs are created by companies that have been in business for less than 5 years. Both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, new firms add an average of 3 million jobs.
  • Schramm’s Law: The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue by the time they reach their 20th year. When the economy is operating well, the US economy puts 30 companies a year over the billion-dollar revenue mark. This is compared to other economies like Israel (9 last year) and Europe (only had 4 last year).
  • Washington is in the throws of big business, while entrepreneurs are in the business of “creative destruction”. As an economy we cannot rely on big businesses to put us on the path to economic recovery because it fundamentally goes against their business goals. The stock market is rising because of productivity gains created mostly through innovation coming out of startups.
  • Students are misguided into thinking they have to start their own business straight out of college. Dr. Schramm’s advice to graduates is to find a job where you learn business in a business setting and not in business school, and then start your business when you find a business problem that needs to be solved (back to “creative destruction”). Interestingly, of the 500 fastest growing firms in the US, the average age of the company founder is 40 years old.
  • Each city is different from all the other cities. The one vector that is critical is the concentration of well-educated people. The number of engineers is the most important measurement. Make the universities stronger and everything else will follow. Smart people like to be around other smart people. Atlanta has an asset in its university system and needs to market that asset and continue to invest in the university system. The second key asset Atlanta has is its airport. And the third asset is the weather.

Overall a very insightful presentation from Dr. Schramm and panel discussion after his presentation. The attendance was great. Thanks to Metro Atlanta Chamber for hosting the event.

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