After some assuming music …

… Gallup CEO Jim Clifton:

During my 40 years at Gallup, I’ve observed that one of the main reasons very talented leaders fail is because their thinking failed them. Not their leadership or management skills, which in many cases are just fine, but their thinking. Specifically, failed leaders in business and politics are usually wrong about a core premise that drives all their strategies. …

Many people in the highest levels of U.S. government think that 1.5 billion Muslims are uncomfortable with the West because they “hate us for our freedom” and that “religion divides us.” So, leaders build policy — war, economic sanctions, and anti-terror campaigns — around these assumptions. But Gallup World Poll data tell another story entirely.

The world’s Muslims don’t hate us because of our freedom or our way of life or because they’re religious fanatics. Gallup finds that their discomfort comes predominantly from a hopelessness rooted in economic despair and joblessness. This is an economic problem, not a religious one. Yet too often, policies are created around these wrong assumptions. …

Correct assumption No. 1: Entrepreneurship trumps innovation

Many thinkers and leaders in the U.S. and around the world have reviewed decades of America’s global economic dominance and concluded that the country has been a colossus because of superior innovation. That is the global conventional wisdom, the core assumption. Thousands of conferences around the world have been organized around this assumption. Some countries are even building “innovation cities.”

In my view, rooted in decades of Gallup research and our company’s work with many multinational corporations and city and national governments, this assumption is dead wrong. And I believe that America has stopped growing because leaders are governing from this faulty premise.

The U.S. cannot innovate its way out of its stagnant growth. It must enterprise its way to prosperity. Simply put, when it comes to fostering long-term economic growth, entrepreneurship trumps innovation. Put another way: An innovative product or service has no commercial value until a talented businessperson finds a customer for it. ,,,

The U.S. has no peer at high-level intellectual development. The country has many of the best universities in the world. And the best of America’s private and public K-12 schools do a marvelous job at intellectual development, which is nurtured systematically and intentionally. But entrepreneurial development is completely left to chance. Right now, if you’re a 12th–grader blessed with an unusually high IQ — perhaps even in an inner-city neighborhood like California’s Compton or Watts — testing will find you. And if you’re really brilliant, you’ll get extra special treatment and possibly scholarships to the best schools in the country. You may even get financial help all the way to a Ph.D. at MIT, then go off to NASA, the National Institutes of Health, or the like. If you’re blessed with real talent to think and learn, the system likely will find you. …

However, if you were born with rare entrepreneurial talent — unusual determination, optimism, and problem-solving skills — the system has no way of finding you, certainly not in Compton or Watts. Nothing finds you. There is no formal identification system. There are no formal special classes, no colleges bidding for you, no evening classes with the best teachers, and nothing sent to your parents that identifies you as gifted. Colleges and universities place tremendous weight on SAT or ACT scores. But nobody asks about the applicant’s ability to start a company, build an organization, or create millions of customers. America leaves that to chance. …

The U.S. Department of Education should lead the creation and passing of a bill that requires all high schools and middle schools to test every student for entrepreneurial aptitude. Gallup is working with some of the best test makers in the world now, and we are confident that the intellectual attributes of entrepreneurship are as testable as IQ, athletic “40 speed,” or vertical jump height. …

Correct assumption No. 2: Small businesses are the key to America’s economic revival

When small businesses boom, jobs boom, GDP booms, and exports boom.

There are approximately 6 million small businesses in the United States, and they are the very backbone of the country’s democracy. Those businesses fund significantly more American jobs and GDP than big business does. Here is something you likely don’t know: Of the 6 million small businesses out there, 75% of the owners or proprietors aren’t in business to build something big. They aren’t trying to build the next Intel or Waste Management. They’re not even in it for the money. Most small-businesspeople are in it for one reason: freedom. Almost no leader in the world knows that.

Three out of four entrepreneurs get up each morning with the simple yearning for total, complete, unimpeded independence. They must be their own boss or they can’t cope with the day. They cannot be employed at IBM or even at a local car dealership because they are like the coyote — they can never be domesticated. So let’s not try. Instead, let’s say, “God bless you for all the jobs and economic energy you create. It’s great to have you here.”

The remaining 25% of these small businesses do want to build something big. They do get up every day dreaming of creating an empire of customers and services. They are the most important people on the planet because when they win, America wins — and when America wins, so does the global economy.

When these 1.5 million businesses boom, jobs boom, GDP booms, and exports boom. In my view, nothing is more heroic in America right now than creating a customer abroad. The White House should give medals every Monday morning to small-business owners who are booming because they have found foreign customers to export to, and those exports are crucial to creating American jobs. It’s not too hard to believe that whether the U.S. goes broke or is prospering in 10 years lies predominantly in the American cultural phenomenon of small business — the 1.5 million empire builders.

Correct assumption No. 3: Entrepreneurship must be fostered at the city level

Let me narrow that 1.5 million number down to 1 million, because that’s probably a more accurate estimate of high-potential small-business boomers and empire builders. And I’d rather use a more conservative figure.

Here is an intervention that would help those 1 million small-businesspeople prosper and thrive and thus drive a resurgence of the U.S. economy: Cities should dedicate one great coach — a local star senior adviser, an executive or entrepreneur with a proven track record of success — for every 10 high-potential small businesses. This is not an activity for Washington or for the states. This must happen city by city.

What we need at the national level is a campaign that asks every single mayor and city councilperson in the country this question: What is your plan to boom high-potential small businesses? Although, in my opinion, many mayors and city council members likely will have little grasp of the subject of entrepreneurship. Still, they’re the place to start because the future of their cities depends on the degree to which they make their cities attractive to entrepreneurs. Those city leaders may think their job is negotiating union contracts and government-employee benefits, but they won’t be able to pay their employees, much less help their cities prosper and thrive, without a growing and thriving entrepreneurial sector. …

To jump-start a stagnant U.S. economy and put the country on a path toward long-term economic growth and prosperity — even global dominance once again — leaders must get their assumptions right. They must understand that entrepreneurship trumps innovation and that finding the next generation of great entrepreneurs means cultivating them in middle schools, high schools, and colleges and universities, just as surely and intentionally as the country cultivates innovators.

The college role in cultivating entrepreneurs is explained by Syracuse University Prof. Carl Schramm:

If one manages, using Facebook and other social media, to establish celebrity status, however restricted the province in which it is achieved, pre-college adolescents come to believe the world has deemed them somehow accomplished.  Narcissism is the result of a theorem of social engagement that sees successfully establishing a unique identity as the goal of life.  The achievement of objectively important things that are judged important because they advance the welfare of others – seems a terribly old fashioned, outdated and irrelevant way to order one’s life.  Beyoncé bests Ben Carson!

Thus, aspiring entrants are asked to write about, among other things, how something they have done has changed the world!  Anticipating such questions, and either affirming the values that are presumed to underlie them or knowing that their students have to play this game to successfully apply to college, something on the order of 80 percent of school districts require students to do “community service” projects as a condition for graduation. …

Given that getting into college no longer brings with it the expectation of a good job in an economy that is starting to appear as if it discriminates against too much education in entry-level positions, maybe an alternative question should be substituted.  Why not ask aspiring students if they ever started a business, worked in a new business, know an entrepreneur, or might themselves want to create a new business?  This simple change or addition to the required essays could be the first great lesson colleges might teach.

For one, it might cause students to think that their role in the economy is more up to them to make than for their college education to preordain.  Increasingly, in an economy that is changing in profound ways not the least of which is that productivity in all industries is reducing the demand for even highly trained labor, everyone will be more and more responsible for the opportunities they can make.  Perhaps the most successful applicants will write that their goal is to “make a job, not take a job.”  Come to think about it, the phrase has a faint community service ring to it.  Maybe existing jobs should go to those who can’t make their own.

Second, it would force high school students to consider that perhaps business is not such a bad career choice.  In fact 90 percent of graduates work in the private sector.  Surely they are creative people who have dreams of changing the world for the better.  And, can anyone say that working at Apple or Genentech, or Johnson and Johnson is not changing the world for the better?

Speaking of making jobs, a third benefit comes to mind.  Most of the new jobs made in America are in new firms.  About eighty percent of all new jobs are found in firms less than five years old.  So could it just be that entrepreneurs are doing the very best community service?  What does a phi beta kappa graduate starting an all night basketball league accomplish that is somehow more beneficial to society than the “B-“ graduate who undertakes the risk of starting a company that brings a needed new product to the world, and in the course of doing so gives ten unemployed people jobs that never before existed?  With employment these people can go on to earn dignity and support families and help break the cycle of poverty.

Finally, if colleges required students to write about their entrepreneurial aspirations, maybe high schools and universities might learn something about how to structure education in ways that really improve what students learn and need to learn.  The college that sets its sights on helping more of its graduates start businesses that can help the society become more robust economically might think twice about developing courses in any number of fields where students will never find meaningful work; teaching high school seniors how to write their community service essays being one.