The National Press Club, Washington, DC
February 8, 2011
Carl J. Schramm
President and CEO, Ewing Marion Kauffman Foundation
Good afternoon, and thank you all for coming. This is the second year in which
I have had the pleasure and privilege to discuss the "state of entrepreneurship"
in America. We at the Kauffman Foundation initiated this event because our
research has documented the critical linkage between the formation and growth of new
companies to the growth of the American economy, or any economy, for that matter.
So I'll share a few thoughts first, and then we'll be
joined by a distinguished group of panelists, who will discuss
the intersection of regulation, economic policy, and
economic growth.
New companies are formed, of course, by entrepreneurs,
and there are many who have left an indelible imprint on
the American way of life. Many of these names are familiar:
Bloomberg, Bezos, Disney, Dell, Gates, Jobs, and Walton. Others
may not be as well known, but they too played critical roles in
shaping this country—people like Henry Luce, the founder of
Time magazine; Brian Lamb, the founder of C-SPAN; Ray Kroc
who scaled McDonald's; and Willis Carrier, whose invention—
air conditioning—marks its centennial this year.
There is someone else you may not know who has
had a considerable entrepreneurial impact on America. This
individual's first job, following service in World War II, was in
pharmaceutical sales. Before long, he was selling so much
that he was making more than the company president. The
company responded by reducing the size of his commissions,
and then his sales territory. This young man did the only
sensible thing, which was to resign and launch his own
pharmaceutical business.
What he lacked in financial capital he made up for
with self-confidence, enthusiasm, and creativity. He gave the
company his middle name because he thought using his last
name would lead his customers to perceive him as a one-man
operation. And he was, but not for long. In his first year in
business, he had sales of $36,000. Less than ten years later, his
annual sales reached $1 million. When the company was sold
in 1989, annual sales were touching $1 billion.
The company was Marion Laboratories, and the founder
was a man named Ewing Marion Kauffman. Yes, it's the same
"Kauffman."
I tell you that story, in part, to underscore that
entrepreneurship is deeply embedded in the DNA of the
Kauffman Foundation. More important, Mr. Kauffman wanted
to be sure that entrepreneurship was embedded permanently
in the fabric of America.
If he were here today delivering this second report on
entrepreneurship, I think it's a safe bet that Mr. Kauffman
would say entrepreneurship is alive and well in America.
He would say that not just because Time magazine named
a 26-year-old computer wiz as its Person of the Year. Mr.
Kauffman would remind us that successful entrepreneurs
come in all different stripes and provide a range of goods and
services. The fastest-growing company on the 2010 Inc. 5000
list, for example, is one I'll bet most of you have never heard
of: a Dallas-based energy retailer called Ambit Energy. It was
conceived in early 2006—not in a venture capitalist's office
but rather a Potbelly's sandwich shop. And in 2009, it recorded
revenues of $325 million. While entrepreneurship is often
about "the new new thing," as Michael Lewis once put, it can
also be driven by injecting new ideas and practices into old
industries and making them work better.
I have had the good fortune over the past eight years
to lead the talented and motivated people who carry out the
work of Mr. Kauffman's foundation. During
this time, we have devoted time, effort, and
resources to promote entrepreneurship in many
corners of American society, as well as to study
its contribution to the economy. In this second
annual report on entrepreneurship, I would like
to highlight three topics that have emerged from
this work.
First, I want to share with you some facts
we have learned about job creation in the
United States, a subject that surely ranks at the
top of public concerns today.
Second, I will discuss the need for rules
that channel our economic endeavors most
productively. These Rules for Growth are spelled
out in a new Kauffman-funded book by that name that we
have just released and that you each should have at your
place setting. Rules sets out a series of no-cost public-policy
reforms that would create a more supportive environment
for entrepreneurs and, in turn, accelerate the rate of job and
output creation.
Third, I will highlight the need for more mentor networks
that can provide struggling entrepreneurs with valuable advice
and guidance on growing their businesses.
