Entrepreneurship: Upward Mobility, Equity, and the High Value of Original Labor
Pam Sornson, JD
Some might consider that America’s unique beginning was also the launch of its ongoing entrepreneurial spirit. After all, rather than recreate their political structure to mirror that of their forbearers, the Founding Fathers apparently decided that they should just build a new one from scratch. That entrepreneurial spirit continues to thrive in the 21st Century, as is highlighted by the country’s growing population of self-employed business owners. As one of four alternative paths to ‘Upward Mobility,’ the opportunity presents its own unique method for enterprising workers to overcome inequitable situations and find the future of their choice.
Valuing Original Labor – The Entrepreneur
With its mild climate and forward-thinking attitude, California is attracting significant entrepreneurial investments, ranking 12th in the nation for its welcoming ‘business-building’ infrastructure. The State’s community colleges are part of that foundation. As the Covid-19 pandemic recedes, investments in programs aimed at building and supporting the entrepreneurial community are proving to be more valuable than ever. Not only do they help each emerging little company grow and prosper, but they also address the social and equity gaps that have held back so many ‘business-owner-wanna-be’s’ for so long.
Ultimately, the value of the new-business launcher is measured by how well their product or service responds to a current need. During the recent health crisis, for example, highly skilled technology workers experienced unprecedented popularity (and pay raises) as their abilities, in some cases, saved the business that had hired them. Not surprisingly, after the urgency waned, many elected to go into business for themselves and bypass the ’employee’ role altogether. In fact, more than half of respondents to a recent survey (58%) indicated that they were happier in their new station as CEO and were enjoying the increased job security that came with being their own boss. (Interestingly, almost all of the entrepreneurial respondents (93%) also reported being current competitors with their former employers.)
The reasons these new business leaders gave for launching a new company (rather than looking for another job) are numerous:
They wanted better pay. Essentially, these trained and (now) invaluable workers realized their effort and know-how provided the company with more value than their compensation indicated. The survey revealed that the average ‘new boss’ took home approximately $13,000 more each year after leaping into entrepreneurship.
They wanted more control. In their new role, the business moguls now run the show on their own terms and answer to no one but themselves (or their investors. Or their customers). They can manage the direction of the enterprise while also exploring their personal sense of leadership.
They could see the value to their community of something new; they had a different perspective or approach to a concern that their former employer didn’t like or couldn’t see.
Fundamentally, all the survey respondents had enough confidence in their skills and themselves to step away from their employer’s corporate vision and into their own.
Skills of the Entrepreneur
Other researchers have evaluated the skill sets and practices of successful business owners and have determined that they – as a group – share a number of similar attributes:
They have a passion for their focus, whether it’s the result of their education or simply their love of a life-long hobby. What they are putting their minds to is all-consuming for them.
They also have a vision for what they want to create. Often, not only are they invested in the creation of their ‘thing,’ but they are also invested in the public having access to it, whether it’s a product, a service, or even a piece of original art made simply to be enjoyed. When they connect this vision to a future expression of corporate growth, then they have the bones of a solid business plan.
They can plan. Ideas are good but need execution to become great. These technology entrepreneurs learned how the plan for the software/hardware/networks they work with creates the underpinning architecture of those final iterations. That linear thinking process helps them both envision and execute their personal company trajectory
They can also make decisions. What sets a great leader apart from other leaders is their capacity to analyze a situation and then execute a response as needed, whether that’s immediately or sometime later.
Perhaps the most notable assets shared by most (or all) business visionaries: their sense of self-belief and their capacity to persevere through obstacles to the goal they’ve set on the other side. It takes courage to forego the security of a regular paycheck and steady benefits and, instead, take charge of steering one’s own boat. Not all the businesses launched by entrepreneurs are successful, but certainly, the people who step out into that uncertain future to find their own way forward can’t be considered less than successful even if their enterprise doesn’t fully materialize.
The Entrepreneurial Future is Bright
If data is any indication, the road to entrepreneurialism is busy and getting busier. In 2022, more than five million new business applications were filed across the country, the most since 2005. And, of course, not all were for tech companies. In California, small and medium-sized companies make up a significant portion of the business community – there are over four million of them – and, in 2019, they accounted for 99.8% of all organizations in the state. Together, these smallish, locally owned businesses are responsible for employing over seven million workers.
The current uptick in entrepreneurialism is also addressing the equity concerns that have been so prevalent in the news in recent years. The pandemic adversely impacted businesses owned by women and People of Color (POC) significantly more than those held by white men. In 2020:
more than 40% of all California businesses owned by African Americans closed;
Over 30% of Latinx-affiliated companies also disappeared, as did
25% of those owned by Asians, and 36% of those held by immigrants.
Tax incentives have lured many of those back to the marketplace, while the Governor reestablished the 2022 Entrepreneurship & Economic Mobility Task Force for the specific purpose of connecting state-based assets to the underserved potential entrepreneurs that need them.
Each of the four alternate pathways to Upward Mobility provides its own challenges and benefits. Of them, only entrepreneurship puts control over both in the hands of the ambitious new business owner.