by Amy Halliday
Newswise — CHARLOTTESVILLE, Virginia - The University of Virginia Darden School of Business’ Batten Institute for Entrepreneurship and Innovation has partnered with the University of Virginia Miller Center to form a nonpartisan commission to determine how entrepreneurship can create jobs for the middle class.
The commission, part of the Miller Center's Milstein Symposium, “Ideas for a New American Century”, is chaired by Steve Case, the founder and former CEO of AOL and the chair of the Startup America Partnership, and Carly Fiorina, the former chair and CEO of Hewlett-Packard and an advocate for education and entrepreneurship. The group, which includes distinguished policymakers, business leaders, scholars and other stakeholders, gathered in Washington, D.C., on 12 and 13 May. In the coming months, the commission will develop the ideas that emerged into policy proposals. The group's findings and recommendations will be released in the fall.
The Milstein Symposium — funded by business leader and philanthropist Howard Milstein — is a multiyear initiative devoted to advancing innovative yet practical ideas for rebuilding the American Dream. The commission devoted to the issue of middle class job creation is the second of the symposium.
A 2013 poll conducted by the U.Va.Miller Center and The Washington Post showed that people are concerned about paying for basic needs and hanging on to their jobs. Their worries reflect a troubling trend: For the past 30 years, as new technologies have transformed the U.S. manufacturing sector and a global labor market has shifted work overseas, job and wage growth for middle-skill occupations has been much weaker than it has been for high- and low-skill occupations — a pattern that was evident during the recent recession and has persisted in the current recovery.
“Policymakers regularly speak of the promise of entrepreneurial activity for the middle class, but it's not clear if startups are the jobs engine that many want them to be,” said Sean Carr, executive director of Darden’s Batten Institute.
Research has shown that from 1977 to 2005, young companies created around 3 million net new jobs annually, while all other firms accounted for the loss of 1 million jobs. But more recent data paint a disturbing picture. For example, the National Bureau of Economic Research found that job creation from startups was lower in 2009 than at any time since 1980. And the Kauffman Foundation predicted that firms established in 2009 would generate 1 million fewer jobs, compared with historical averages, during their first five to 10 years.
Even if startups are creating jobs, what kinds of employees fill them? “If new businesses are mainly hiring engineers, then they might not be helping the middle class,” Carr noted. “If our goal is to generate middle-wage jobs, we need to think about what kind of ventures can do that.”
“The focus of this Milstein Symposium commission on the role of entrepreneurship in middle class job creation complements our research at the Batten Institute on how to foster entrepreneurial ecosystems that help create thriving communities. From our Jefferson Innovation Summits to our forthcoming report on the impact of entrepreneurial university alumni on regional job creation, we have a deep interest in advancing our understanding of how to create a robust entrepreneurial society,” said Michael Lenox, Samuel L. Slover Research Professor of Business, Batten academic director and associate dean for innovation.
Carr and Lenox served as the lead scholars for the commission, offering an overview of research on the topic to help frame the discussion.
The commission discussed what type of entrepreneurial activity can best generate stable employment for the middle class, how to reduce the barriers to entry for entrepreneurs, how best to educate individuals for employment in or founding new ventures, and what public and private policy levers can increase entrepreneurship among the middle class. Four areas of particular focus were financial capital, human capital, regulation and ecosystems.
“Our goal for the commission is to come up with ideas that have a viable path to implementation,” said Jeff Chidester, director of policy programs at the Miller Center.
“We're not interested in a lofty grand-bargain-type of plan. We're realistic about the political climate right now, so we're encouraging the group to generate attainable ideas, things that can actually become policy.”
“As entrepreneurs often say, ‘Let's do the doable,’” Carr noted. “Let's focus on what is achievable.”
The third and final commission for 2013-14 will explore how to develop the national infrastructure necessary to complete in the global economy. Over the next several years, the Milstein Symposium will address the topics of workforce development, education, retirement and the changing demographics of the middle class in the United States.
The model for the Milstein Symposium was inspired by the Jefferson Innovation Summit, organized by the Batten Institute in 2011 and 2012 to explore how best to encourage an entrepreneurial ecosystem in the nation at large and in Virginia. The two summits convened a diverse group of policymakers, academics, government officials, business leaders and representatives from the arts and media for two days of guided discussion and brainstorming. Participants worked over the subsequent months to shape the output into practical ideas, several of which were embraced by the Office of the Governor of Virginia and presented to the Virginia legislature.
“As we were looking for a model for the Milstein Symposium, we saw in the Jefferson Innovation Summit a forward-looking approach,” Chidester said. “We were impressed by the quality of the conversation and the ability to get such a diverse group of participants to find a way forward on complex issues. Actionability is baked into the process.”
Chidester and his colleagues used this model for the first Milstein Symposium, held in September 2013. The commission for that event — chaired by Haley Barbour, a former governor of Mississippi, and Evan Bayh, a former U.S. Senator and former governor of Indiana — considered the challenge of spurring job creation in a manufacturing environment that has been reshaped by technology and shifting global demand.
That commission will release its report on 13 June at the National Press Club, in Washington, D.C.
Milstein Symposium: Entrepreneurship and the Middle Class provides a research overview of the topic and a list of the commissioners for this symposium.
About the Darden School of Business
The University of Virginia Darden School of Business is one of the world's leading business schools, offering MBA, Ph.D. and Executive Education programs. The unique Darden experience combines the case study method, top-ranked faculty whose research advances global managerial practice and business education, and a tight-knit learning environment to develop responsible and complete leaders who are ready to make an impact.
About the Batten Institute for Entrepreneurship and Innovation
The Batten Institute at the Darden School of Business improves the world through entrepreneurship and innovation. The Institute’s academic research center advances knowledge that addresses real-world challenges and shapes Darden’s curriculum, and the Center for Entrepreneurial Leadership offers one of the world’s top entrepreneurship programs. The Batten Institute was established with gifts now totaling more than $100 million from U.Va. alumnus Frank Batten Sr., a media pioneer, visionary and founder of The Weather Channel.
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