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Invigorating the Economy through Entrepreneurship

Dennis Anderson, PhD

Back in April 2008, I gave a small talk at a CIO conference to a group of 100 CIOs about the future of the IT industry and the ripple effects the global financial meltdown will have.  Unfortunately, most of what I predicted happened including the problems related to subprime, credit, housing, oil price, insurance, depression of dollars, weak Consumer Confidence Index (CCI), unemployment, Sovereign Wealth Fund (SWF), and the national debt, and we are still feeling the pain of all these problems.   The official recession ended some time ago, but it does not feel that way.  In fact, we may be entering into a double recession.   We are going through a recovery without new jobs.  There are many plausible reasons for this jobless recovery including the following:

  • We have become largely more efficient in what we do by automating many of things that we used to do manually.   As an IT community, we have been driving this efficiency for decades and finally, it is more profound and noticeable.
  • We have shifted low-level skill jobs to outsourcing. 
  • We are moving from a service-oriented to a knowledge-oriented society, which demands a more analytical workforce.   In this environment, more can be done with less people. 
  • We simply have not kept up with innovation, so that there is no next big industry to move the excess in the labor pool.  In addition, many displaced workers may not have the high-level skills to move into the new high-tech industry and it will take too much resources and time to equip these people with the appropriate skillset.
  • Finally, there is a lack of emphasis on STEM education, a vital element for success. From Steve Ballmer, Microsoft CEO’s perspective, ‘Public and private partnerships to promote STEM are critically important. We all have a vested interest in advancing our country’s proficiency in the disciplines of science, technology, engineering, and math as a means to driving innovation and jobs – which are key to fueling our economic growth and global competitiveness.’[1] This has to be realized by the policy makers and should be seen as an investment.

There is no question that we need to create jobs to stimulate our economy, and the world economy depends on it as well.   As we know from the past two years, it is not so easy to create jobs particularly for the reasons we outlined above.   So the question is: what can we do to create jobs?  There are many following questions such as what kind of jobs, what skills will people need, how soon can we create jobs, and where do we start, etc.   It is a daunting question to consider.   We have to start from somewhere. 

We think the starting point is the small businesses with innovative ideas.  Even though Fortune 500 companies generate a huge economy, the engine of the economy is with small businesses.  Many of today’s successful Fortune 500 companies started from humble small businesses.   The largest corporation in the world, Wal-Mart, is a prime example of this.

How can we plant a seed for a small business that can grow and create hundred thousands jobs?   As we know, many small businesses fail, so how we can we create small businesses that can thrive and sustain?   Most often, small businesses are created by entrepreneurs.  Where do we find these entrepreneurs?  How can we cultivate them to get to places where they want to go and let them innovate?   If we find them, cultivate them, provide them with resources, then that could be the base for the job creation.   We are talking about a long-term sustainable job creation not putting people on the infrastructure projects like building a highway. 

One corporation with a unique approach to promoting entrepreneurship is Microsoft. Offering a series of programs designed to nurture young technologists from students with entrepreneurial aspirations to established startups, Microsoft has created a path to engage and support entrepreneurs in creating new products and services benefiting communities. Equipping students with technology to catalyze their ideas, Microsoft created the DreamSpark program, which provides high school and college students worldwide with free Microsoft software development and design tools.  Providing a platform for thousands of young people to apply their imagination, passion and creativity to technology innovation that makes a difference in the world, Microsoft created the annual Imagine Cup global technology competition to encourage students to create solutions that address real-world problems.

In 2008, Microsoft launched a global program, called BizSpark, which offers software, support and visibility to early-stage startups developing software or software-as-a-service. Nearly three years later, over 40,000 companies from over 100 countries around the world have joined the program. The program connects these startups to a global community of over 2,000 Network Partners – organizations with a common goal of supporting entrepreneurship, who can help entrepreneurs navigate the challenges of growing a new business. This spectrum of partners includes organizations such as TechStars, the National Venture Capital Association (NVCA), European Business Angel Network (EBAN) and The Indus Entrepreneurs (TiE). In addition, Microsoft supports the Startup America Partnership, making the benefits of the BizSpark program easily accessible to Startup America Partnership’s qualified software startups.

Based in Paris, France, Lokad is an illustrative example of an emerging ISV succeeding with the resources provided by BizSpark. Lokad is a software company delivering forecasts as a service, utilizing Microsoft’s cloud computing platform, Windows Azure. With the advantages of scalability and reduced time and cost that cloud computing offers, Lokad delivers sales, demand, and call volume forecasts for a range of customers – from one-person ecommerce companies to multinational retailers. Lokad was also selected to join the BizSpark One program, identifying a small number of the best companies in the BizSpark program.

Additionally, in certain markets, Microsoft partners with local governments, academic institutions, and industry organizations to establish Microsoft Innovation Centers with the ultimate goal of fueling long-term economic growth in regions where the centers are located. The centers provide facilities, training, employment programs, and mentoring resources for software developers, IT professionals, students and entrepreneurs. Today, there are 100 Microsoft Innovation Centers in over 40 countries. Since every community has unique characteristics and conditions that can have a significant influence on its economic progress, each center operates through working closely with local governments and educational institutions, forging relationships that address local economic challenges. 

Dan’l Lewin, Corporate Vice President of Strategic and Emerging Business Development for Microsoft and executive sponsor for the BizSpark and Microsoft Innovation Center programs, summarizes three cornerstones to maximizing entrepreneurship in the digital age: “First, the recognition that information and communication technology is an essential enabler to everything that will have a material impact on our collective future. Second, public private partnerships are the convention through which the most important advances will be made – from education, to healthcare, to energy. Finally, lowering barriers – both social and structural – for entrepreneurs to try, and to fail, is critical to the evolution of our interconnected global society.”

This type of public-private partnership (PPP) can be the next economic engine that we need to create jobs that will enhance our future.   One of the key elements in this partnership is working closely with the local community.  Once that bond is made, it can be easy to help young entrepreneurs with tools, skills, and know-how to get them on the path to experiment and build their businesses.   This local investment will create the sustainable economy as the local talents will stay in the community.   As Lewin said, we have to connect all these things in order to lend a hand to young people with aspirations to build today’s and tomorrow’s businesses.  It took two young entrepreneurs to start Microsoft, which “today employs nearly 90,000 people and has an ecosystem of 700,000 partners that employ nearly 15 million people. [2]  Promoting entrepreneurship is one investment we can’t afford not to make.  

References:

[1] Microsoft. 2009. STEM: A Foundation for the Future.

http://download.microsoft.com/download/6/7/C/67C082EE-291C-4099-A8BF-F720A905E4E8/ msft_stem_lores_112209.pdf (accessed July 22, 2010).

[2] http://www.microsoft.com/about/corporatecitizenship/en-us/our-actions/economic-impact.aspx

About the writers:

Dennis Anderson, Ph.D. is Chairman and Professor of Management and Information Technology at St. Francis College, New York City. Prior to this appointment, he was a professor of information systems and associate dean at Pace University. He has also taught at NYU Courant Institute. He received his Ph.D. and M.Phil. from Columbia University and completed Harvard University's Institute for Management and Leadership in Education Program. He has served as an adviser to various organizations including CIO Magazine, Microsoft and United Nations.  He manages the CIO Circle (linkined group).  More information can be found at http://www.drdennisanderson.com.

Dan’l Lewin is Corporate Vice President of Strategic and Emerging Business Development at Microsoft Corporation, leading the company’s engagement with startups and venture capitalists and business relationships with strategic industry partners. His team focuses on supporting the software startup ecosystem developing on the Microsoft platform while fostering local software economies worldwide through the Microsoft BizSpark and Microsoft Innovation Center programs. In addition, Lewin has executive responsibility for the company’s operations based in Mountain View, CA. Previously, Lewin has led sales and marketing divisions for companies including Apple Computer Inc., NeXT Inc. and Go Corp, and consulted for emerging companies, venture capital firms and corporate joint ventures. Before joining Microsoft in 2001, he was CEO of Aurigin Systems Inc., a startup that pioneered intellectual property asset management. He holds an AB in politics from Princeton University.

Sharon Koshy is a Marketing Manager in Microsoft’s Strategic and Emerging Business Team, leading marketing for the Microsoft BizSpark One program. The program identifies a small number of the best companies in the BizSpark program, now comprised of over 40,000 startups, and provides access to technology, marketing and business resources to advance their success on the Microsoft platform. In addition, Sharon focuses on executive communications for the Corporate Vice President of Strategic and Emerging Business Development. Previously, Sharon covered event marketing for the team, leading engagement at industry events and managing Microsoft’s annual Venture Capital Summit. Sharon is based in the Silicon Valley and holds a Bachelor’s degree from University of California, Berkeley.

Rogerio Panigassi is a Program Manager at Microsoft Server and Tools Division, working as the TechNet site manager responsible for the website’s learning content dedicated to develop IT professionals’ capabilities with Microsoft products. Having worked for ten years at the company, he experienced many different positions in services, marketing, evangelism, and engineering. He obtained his Masters in Electric Engineering title from the Polytechnic School of the University of Sao Paulo, Brazil in the field of Digital Systems, after getting an Electrical Engineering degree from Maua Engineering School. A university where he returned later and taught computer sciences for four years.