Wednesday, November 5, 2008

Obama and Entrepreneurship

Last night while watching the election coverage, a good friend of mine sent me a text questioning how I expected Obama would accommodate my entrepreneurial lifestyle.

I've had various thoughts on this, but his inquiry was the first time I've written any statement.

Here is the response I gave to him -


Obama will certainly change the US entrepreneurial climate drastically, both in an economic sense and a social sense.

Economic Shifts
  • The traditional model of of entrepreneurship will face a downsizing in the overall industry, limiting the amount of entrepreneurial activity our economy can sustain. A rise in capital gains taxes will limit the incentive Venture Capitalists have to invest in startups.
  • Obama certainly recognizes the economic value of small business and start-up acitivity. He has suggested various measures such as an employment tax credit ($500 per employee to small business owners) to apply towards health care and other benefits. Also, he has pledge to develop job creation incentives, as well as small business lending aid initiatives.
  • Ultimately, I believe Obama will shift the enormous entrepreneurial energy towards something that is more constructive for our economy as a whole. There may be less financial capital available, but it will still be there.
Social Shifts
  • I believe Obama will help facilitate an environment where all various types of entrepreneurship carry elements of social entrepreneurship. This means that entrepreneurial activities will be incentivised by more than the prospect of personal financial gain. New business endeavors will carry elements of creating a social well-being, along with economic prosperity.
  • I do not think it is a coincidence that the regions of the US which are the hotbeds of innovative and entrepreneurial activity are also the most socially progressive in their political thought (San Francisco/Bay Area, Colorado Front Range, Boston Area). An overwhelming majority of the technological achievements which make our everyday lives better come from the regions most concerned with social welfare and wealth distribution. Obama will shift the overall entreprenuerial climate to be more like those with the most innovative success.
  • Socially conscious entrepreneurial efforts, such as green entrepreneurship, small business in impoverished regions, and non-profit development will become far more prevalent under an Obama presidency through various economic incentives.
Ultimately under Obama, entrepreneurship will be less financially rewarding. However, I doubt most entrepreneurs and small business owners will take issue with that. It is doubtful that the next Rockefeller will emerge anytime soon, or ever (even Warren Buffet and Bill Gates combined don't come close to Rockefeller's fortune).

Entrepreneurs generally have a command of wealth which many other people lack. Money is simply a tool to make one's self effective, it does not offer self-worth or validation.

I believe Obama will help harness the entrepreneurial spirit and derive world-changes which are far more valuable than any dollar figure can quantify.

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