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Study: Entrepreneurship is Contagious

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When you see someone sneeze, you probably worry about getting sick because you know colds are contagious.

So are ideas.

And new research by the Kauffman Foundation shows that entrepreneurship is contagious too.

In particular, the survey of 2,000 Americans the Kauffman team found that knowing an entrepreneur was connected to being one. From their October report:

“The results indicate a significant association between knowing an entrepreneur and being one: 37.8 percent of respondents who knew a growth entrepreneur were entrepreneurs themselves, as were 35.5 percent of respondents who knew entrepreneurs overall.”

And:

"While the results don't show specific causality, the connection between knowing and being an entrepreneur is strong."

According to the Kauffman research by Paul Kedrosky, catching the entrepreneurship “bug” (as he calls it) by knowing an entrepreneur makes someone 20 times more likely to be an entrepreneur themselves. And simply knowing a “growth” entrepreneur, which the study defines as someone in fields such as software, Internet or biotechnology, makes someone 27 times more likely to be an entrepreneur.

Because the ability to recognize opportunity and having the tools to capitalize on those opportunities is behavior that can be observed, replicated and taught. That why NFTE – the Network for Teaching Entrepreneurship – exists.

Our own survey of students who completed the NFTE course work showed similar results to the Kauffman study. NFTE graduates are more than twice as likely to be self-employed as those who did not have exposure to entrepreneurship through NFTE.

Why?

NFTE exposes young people, usually high school age students, to the entrepreneurship virus, infecting them with a belief in themselves and the tools to succeed. "Funding and programs to encourage entrepreneurship and wealth creation,” the Kauffman study reported,  “can have an impact simply by bringing together entrepreneurs and non-entrepreneurs, particularly among those groups who have the least exposure currently…”

That’s right also.

NFTE, for example, focuses on reaching students in under-served and under-resourced environments. Seventy-seven percent of students in schools with NFTE classes qualify for free or reduced meals – an accepted standard for economic disadvantage.

And we’ve invested in programs to bring entrepreneurship lessons to women. According to the recent Kauffman study on the impact of entrepreneurship exposure, women are less than half as likely to know an entrepreneur in the growth fields the study examined.

Lighting the entrepreneurial flame in young people is important not just for them and their communities but for local as well as the global economy.  An earlier Kauffman study in April, 2011 showed that, “that new and young companies and the entrepreneurs that create them are the engines of job creation and eventual economic recovery…”

Specifically, the 2011 research showed:

 “…that young firms account for roughly two-thirds of job creation, averaging nearly four new jobs per firm per year.” And, “… without startups, net job creation for the American economy would be negative in all but a handful of years. If one excludes startups, an analysis of the 2007 Census data shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation…”

All of which makes the startup math very clear. Exposing young people to entrepreneurs plus giving them good models to follow and the tools to succeed equals more jobs and economic growth.

It’s perhaps a bit ironic that with parts of the world economy in a prolonged lethargy and youth unemployment a genuine epidemic that the solution may be spreading an entrepreneurship infection. Considering those side effects, it’s an infection we should want to spread – especially to young people.