Endorsing, Promoting Entrepreneurship is Crucial for Effective U.S. Foreign Aid
Entrepreneurship is embroidered into the American dream; it is one of the greatest selling points when advertising the vitality of the nation; its ability and its purpose.
For this reason, education around entrepreneurship, and training that enables business readiness should be a larger part of U.S. foreign aid, as it fosters autonomy and self-sufficiency. While most members of the U.S. population believe that 25 percent of the U.S. federal budget is directed toward foreign aid, just 1 percent of the federal budget (approximately $31 billion for all non-military assistance). Only 1 percent of that 1 percent is allocated for the promotion of entrepreneurship.
That small percentage of monies going toward the creation entrepreneurship is unfortunate because any economist will tell you that entrepreneurship reliably helps to generate jobs. For many young people and aging individuals, joblessness in the U.S. and abroad is one of the root cause of unrest. Failure to overwhelmingly endorse entrepreneurship threatens American security. Entrepreneurship can absolutely solve important issues, but this isn’t a tool that’s been utilized when it comes to foreign policy.
According to reports, firms less than five years old can be credited for producing nearly all net job creation in the U.S. Two-thirds of the nation’s 12 million new jobs were created by young firms in 2007. There’s evidence that it’s a company’s age that matters when it comes to job creation, rather that its size. To a large extent, job creation happens to be driven by new startups with high growth rates. Functionally, entrepreneurs are critical to occupational development, livelihood, and economic growth, this is true whether discussing fragile regions or mature economies. The economic fate of numerous resource-poor nations has been altered by policies that boost entrepreneurship, correlating with a nation’s overall success.
Entrepreneurship lightens dark economic circumstances, effectively doing so through job creation. Research suggest that young with jobs are less likely to join rebel movements, particularly because many revolutions are instigated due to a lack of economic opportunity, poverty, and unemployment. The promotion of enterprises of all sizes develops skills that are fundamental for growth, whether that concerns numeracy and literacy, or technology and medicine. If government agencies threw their support behind job stimulation, scalability and business creation, it would directly impact economic hopelessness, poverty-stimulated crime, and mass unemployment. All firms, no matter if they’re low-tech, high-tech, or no-tech, can conceivably be leveraged for the sake of economic restoration. Conversations and debates around whether entrepreneurship can or cannot turbocharge an ecosystem should be laid to rest, afterall entrepreneurship has historically sparked financial growth.
However, Steven R. Koltai, who is an author, a Harvard Business Review contributor, and an expert on international entrepreneurship ecosystem development, asserts that the American aid apparatus spends just 1 percent on funds that promote entrepreneurship, or likely less. Government agencies should mark and recognize the value in the types of companies that drive employment, such as Uber or Starbucks in the U.S.
Koltai created the State Department’s Global Entrepreneurship Program, which enables the creation of startup and business plan competitions in many Muslim-majority nations. Numbers demonstrate that jobs were established following equity investments into Middle Eastern startups. It isn’t an exact science but nurturing an entrepreneurship ecosystem is important for networking, accounting, organizational structure, and communication skills. The promotion of entrepreneurial enterprises ought to be innovative and nimble, and promotion programs should be accessible by experts in entrepreneurship, not just those who are well-versed in the art of acquiring government contracts.
Read Koltai’s feature in the Harvard Business Review to learn more about the important ties between entrepreneurship and effective foreign aid.