Here’s my fun fact for the day, provided courtesy of Robert Litan, who directs research at the Kauffman Foundation, which specializes in promoting innovation in America: “Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less,” said Litan. “That is about 40 million jobs. That means the established firms created no new net jobs during that period.”
Message: If we want to bring down unemployment in a sustainable way, neither rescuing General Motors nor funding more road construction will do it. We need to create a big bushel of new companies — fast. We’ve got to get more Americans working again for their own dignity.
What’s the fix? My mentor and friend, Peter Drucker, decided in mid-career that a big part of the solution for his dream of a Functioning Society would come from the social sector. About the same time, the mid 1980’s, though thirty years younger, I came to the same conclusion. It is what bonded our relationship and drew us together in a unique pairing of an intellectual and an entrepreneur. We were magnetized by a common cause.
My general interest in the social sector was nonprofits of all sorts. Together, Peter, Frances Hesselbein, former head of the Girl Scouts of the USA, Dick Schubert, former head of the American Red Cross, and I formed The Peter F. Drucker Foundation for Nonprofit Management (now Leader to Leader Institute).
Twenty years later, it is still headed by Frances Hesselbein. Our customer was mainly the small and midsize nonprofits. The term Social Entrepreneur was barely beginning to be used.
Peter wrote the seminal Harvard Business Review article, “The Entrepreneurial Economy,” in 1984, and as well the early definitive book on the topic, Innovation and Entrepreneurship, in 1985. I looked in the index of the book to find there was still no reference to the term “social entrepreneur,” [but the] latest trend is a significant increase in volunteerism led by independent Social Entrepreneurs. Great leaders with big ideas. They are working in all the domains of society.
Two great examples are TOMS Shoes, led by Blake Mycoskie, and Teach for America, led by Wendy Kopp. Teach for America has studied the motivation that drives thousands of graduates of elite colleges to spend their first two years teaching in inner city schools. Their findings: half of these teachers cite faith as a major motive for Main Street instead of Wall Street.
I will close with Bill Drayton’s definition of a Social Entrepreneur drawn from McKinsey Quarterly. Bill founded Ashoka which connects 2,700 Social Entrepreneurs around the world. “After all, what defines the true social entrepreneur is that he or she simply cannot come to rest in life until his or her vision has become the new pattern societywide. Scholars and artists are satisfied when they express an idea. Professionals are when they serve a client well, and managers are when their organization succeeds. None of this much interests the entrepreneur. The life purpose of the true social entrepreneur is to change the world.”