What is shared capitalism?  When I first came across the term last year, I just stared at the words for a while.  Shared capitalism...was this something akin to social entrepreneurship? intrapreneurship? or something totally different? 

Well, if you follow the lead of the Foundation for Enterprise Development, then shared capitalism is most equivalent to capitalism where employees have some share of ownership in a company.  If you are still a bit confused, then I suggest you take a look at the Shared Capitalism and Employee Ownership: The Scholarly Agenda Proceedings of the 2009 Beyster Fellowship Symposium.  In particular, there is an extensive list of new and existing data sources for research in this area starting on page 12 of the document. 

The Bureau of Labor Statistics has a new statistical brief out on the recessionary job impact on firms of different sizes.  It's a really thoughtful piece looking at trends over the last two recessions and certainly appears to show the differential impact of this current recession on small businesses as compared to the previous recession which impacted large businesses much more.  What I found most interesting was the following paragraph:


So as much as layoffs have been at all-time highs, its really the lack of hiring which appears to make the current recession standout in the BLS data. 

One of the top five topics which comes up in correspondence for me deals with surveys to study the effectiveness of entrepreneurial support programs at the regional level.  It's an incredibly important question but not one, from my experience, where there is a lot of sharing among organizations or an advanced level of survey design.  So, at the request of some colleagues in the FastTrac program, I have been working with some colleagues at the Foundation, our grantees in Detroit, and other contractors, to develop an alumni survey for the Detroit FastTrac to the Future program, one of our FastTrac LaunchPad initiatives.  This is still a pilot survey project that will begin collecting data in the next few days but it's reached a stage where we'd welcome critiques of the survey instrument.  One of the great things about Survey Monkey as a tool  is that anyone can test out of the survey using this link and no real data is collected.  So, I throw things open here to see what sort of survey we have designed for an annual collection of data with the Detroit FastTrac to the Future programs.  If you have an instrument that you've used for collection with a similar population, please let us know by adding a comment to this post. 

Changes to the questionnaire for the fifth follow-up of the Kauffman Firm Survey (KFS) have been finalized following an open solicitation for suggestions, as well as expert feedback and vetting.  The KFS, our eight-year panel survey on new businesses started in 2004, will gather data in 2010 (on the 2009 activities of the businesses), and will be available to the research community in the spring 2011.

Most of the changes this year are attempts to gather additional details on innovation activities of the businesses in the panel.  Suggestions in this arena came from colleagues in Germany at ZEW who are collecting data on German start-ups as part of the KfW/ZEW Start-up Panel, scholars looking at user innovation, and also scholars studying competitive advantage.  Also in the area of innovation, we are expanding the question we asked last year on investments in intangible assets to disaggregate firm-level investments by type.

Besides innovation, we have added several questions in the finance area.  Given the recent financial crisis and subsequent changing terms of credit for many small businesses, we are trying to get information on collateral required for loans as well as attempts to seek equity investments.  We already have data on attempts to seek debt investments.  These are questions I wish we'd been asking before the current crisis but hindsight is always more clear. 

This will likely be the last time we make changes to the Kauffman Firm Survey questionnaire since there are only two additional years of collection left.  We were very pleased to receive so many quality suggestions from scholars this year.

The National Science Foundation (NSF) has released a report highlighting the role of small businesses in R&D activities in the United States.  It shows increasing R&D activity by small businesses but also something I found troubling:


Here, microfirms are defined as firms with 5-24 employees.  It'd seem for this particular group, many of which are likely younger firms, sales were being negatively effected well before the current recession.  NSF is in the process of developing a new microbusiness R&D survey (under 5 employees) to be implemented in the next year or two.  It's one of the most exciting projects I see going on at the U.S. statistical agencies currently as it will really be breaking new ground in survey work on small businesses and innovation.  I'll be posting more on that work as it becomes available. 

While on the topic of NSF, an information webinar in April should be of interest.

A WSJ article from Tuesday got me thinking about career satisfaction.  I am intentionally leaving off the term "job" here as I think it biases the concept to people who work for others, although that is purely speculative and not based on cognitive interviewing.  The article was referencing a Conference Board survey that has been done historically and was fielded again in 2009 asking 5,000 U.S. households about their job satisfaction.  The trends are clearly headed in the wrong direction:



Since we know that the proportion of people in the U.S. that are working for themselves as small business owners or in some form of self-employment hasn't changed that much over this period, I find it puzzling that decreasing levels of job satisfaction aren't leading to more business starts.  In my mind, and I think in many conceptualizations of entrepreneurship, the entrepreneur is the dissatisfied employee who also sees an opportunity and eventually decides to strike out on their own. 

It is interesting to put the Conference Board research next to a similar question asked of population of small business owners courtesy of the NFIB:



It is amazing to me that the NFIB had only twelve percent of their sample reporting a satisfaction level of 5 or below.  This particular survey was completed in 2001 so there might be macroeconomic effects here but doubtful they'd be of a magnitude large enough to make a difference. 

So, this is a post without much of a conclusion.  Job satisfaction is down...new business starts are steady...small business owners overwhelmingly satisfied...what's keeping this system so out of equilibrium?  I would conjecture that perhaps there is a possible measure of job lock somewhere in all of this but I don't know exactly what it would be.

Related post: Gallup Finds Business Owners Happiest

The WSJ has a new listing out of "promising" young firms that might be of interest to readers.  This list is a classic example of why people default to using venture capital data frames: 1) venture capital is perceived as a good proxy for "innovativeness" and "high-potential" and 2) the data can be disclosed with actual business names.  But I'd caution readers to remember that venture capital funding is historically coast-centric and that while venture capital data is often a helpful starting point for considering innovation young firms, it is not often an ending point.  The majority of young, high-potential firms in the country will exist for years before receiving venture capital backing (if that ever occurs). 

States are in bad fiscal shape.  Horrible, actually.  And as such, entrepreneurship and innovation support programs are likely to be facing tough fiscal environments for years to come.  While a recent Wall Street Journal article highlights many of the things that states are doing to avoid scaring off businesses, I fear that law makers will focus most of their efforts on existing or small business (rather than new or growing businesses). 

While going from state budgets to the U.S. Census Bureau's decennial census might seem like a big leap, a new paper out of the Brookings Institution on the geographic distribution of funds resulting from the decennial census should call the attention of all organizations concerned with state funding environments to the need to support the decennial census.  This is crunch time for the decennial with surveys being mailed out this month.  I got a pre-survey mailing next week and can't wait to see the actual document! 

Intrapreneurship, or the process of an individual (or team) starting a business (or business line) for an existing employer, is a concept not often measured within existing entrepreneurship metrics.  This makes sense since it is more difficult for government statisticians to capture intra-firm dynamics in a meaningful way, industrial organization scholars are more focused on the behavior of the firm (not the entrepreneurs running them or employees of), and entrepreneurship scholars, for the large part, are focused on owner-operator firms with little systematic tracking of other key employee actions.

All of this makes noteworthy a recent report out from the Global Entrepreneurship Monitor team of scholars looking at the topic of intrapreneurship.  Intrapreneurship is a concept that GEM has measured for some time in their screener at the national level but this new effort to conceptualize and inquire at the household level in Brazil, Chile, Ecuador, Iran, Republic of Korea, Latvia, the Netherlands, Norway, Peru, Spain, and Uruguay stands out for going into greater depth than previous work.  Specifically, the scholars have screened for intrapreneurship using the following logic process.



If each implementing national team has implemented these concepts with strict adherence to protocol and is working with a quality survey vendor, then I think this was a really helpful exercise.  First, the questions and logic are simple and straight forward.  Second, capturing intrapreneurship should be a strength of household survey frames, which GEM uses.  And, lastly, the scholars attempt to differentiate across different levels of intrapreneurship, although there are still broader conceptions of intrapreneurship that have been employed by others.

The authors come to the conclusion that "on average, less than 5 percent of employees are intrapreneurs, and that in most countries its incidence in the adult population is significantly lower than that of early-stage entrepreneurial activity," but probably more importantly to me is their finding that "the prevalence of intrapreneurship is about twice as high in high income countries as in low income countries."  This makes a lot of sense since higher-income countries tend to have larger business organizations and thus the likelihood that a working age individual is employed at large business organization increases as countries develop.  But on a related topic, I am puzzled by their finding that the prevalence of intrapreneurs increases with the size of the business.



If this is an unweighted measure, as I think is the case, then I worry this will lead to the conclusion that employees at smaller companies are less "intrapreneurial" but in fact, I suspect that if you weighted this so that it was on a per employee basis then the resulting outcome would be much more balanced. 

Additionally, I wanted to point out the similarities of some concepts being measured here and those which are measured in other survey frameworks looking at innovation.  Specifically, this survey protocol and the Oslo Manual, which the Organisation for Economic Co-operation and Development (OECD) uses to measure innovation at the firm level, both appear to look at whether the new business activity involves a new product or service.  There is a lot of potential overlap in concepts between entrepreneurship and innovation so this isn't surprising but should be noted.

Read the full report, Intrapreneurship - an international study.

This year the Census Bureau finally received full funding of their plan to expand coverage of the service sector.  On Friday, March 12, the Brookings Institution will host a workshop that will examine this expanded service sector work.  I won't be there but this is without a doubt among the most important improvements underway to our timely measurement of the economy.