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  • The small start-ups are as vital as the stars

    Financial Times - 08/27/2013

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    Scott Shane, a prolific writer on entrepreneurship, postulates that genetic factors are powerful determinants of whether someone will develop a successful business. His book Born Entrepreneurs, Born Leaders suggests innate, inheritable predispositions really matter.

    A survey of entrepreneurs at Northeastern University supports his view: 61 per cent of respondents said innate drive was the main reason they started a business: only 1 per cent said their higher education was a significant factor.

    Not everyone buys the idea that a small number of extraordinary risk-takers are the ones who make a difference, however. Mass Flourishing , an important new book by Nobel prizewinner Edmund Phelps, suggests individuals matter much less than overall culture and social values. The subtitle of his text is “How grassroots innovation created jobs, challenge, and change”. His thesis is that most industrial discoveries were not pioneered by a few isolated visionaries, such as Henry Ford. Instead, he argues that progress was driven by huge numbers of citizens empowered to create and sell thousands of incremental improvements, from craftsmen and farmers to traders and factory workers. Together they generated an extraordinary period of prosperity, starting in the 1820s in Britain and petering out in the 1970s in the US.