How do we create more entrepreneurs?
From a very young age, the system we live in does a great job at forcing you down the road of selling your labor and time for money. It starts with compulsory school which creates a dependency in which you get used to being told what to do. It creates people who will struggle to exist in more entrepreneurial environments where no one tells you the rules or exactly what you need to be working on.
This then continues with higher education and obtaining a college degree. The three things you don’t talk about at the dinner table are religion, politics, and dropping out of college. Our current system has created a religion around the college degree. Making matters worse is the fact that it costs $60,000 a year in student loans to be accepted into the church.
Many people decide to continue down this expensive priesthood after they are finished with their undergraduate studies by pursuing equally if not more expensive graduate degrees like an MBA. So, once these people exit the ivory tower of academia, they are already $200,000 in debt, and what is the great light at the end of the tunnel that our current system offers? A stable job that forces you to sell a significant part of your time in exchange for money to pay off your student loans and increasingly rising rents in urban areas (I’d be beating a dead horse if I talked about housing in San Francisco). After paying off your rent and loans, good luck financing any side-project you have with the little money you have left over.
However, say you are a bold risk-taker and decide that even with the 200k in loans you want to quit your job to start a small business or a high-growth startup. Our system has baked in more barriers for you to second-guess that decision. Starting with the fact that health insurance is mainly tied to your employment. After talking to many people who could see themselves as entrepreneurs this seems like a bigger barrier than the stable salary that a job provides.
After running through this quick analysis, there are a few obvious points that stick out: First, making college free for all might liberate people in the traditional sense but I don’t think it would spur a ton of innovation. Since compulsory schooling teaches young people to avoid uncertain and entrepreneurial environments, people would still cling on to their stable jobs. The same problem persists with something like a Medicare for all, sure it might make it easier to start a business, but the cultural barriers still exist.
So, this leads to an interesting observation: the problems we need to solve to spur more entrepreneurship and innovation within our current system are as much cultural as they are economic. We need to stop worshipping the religion of college and re-thinking K-12 education along with bringing down the costs of rents and healthcare. It could even be the case that solving these cultural problems first might spur more innovation than any economic solutions.