The dream of “startup”
There is a misleading use of the term “Startup”. Many people consider themselves as “Entrepreneurs” because they own a “startup” so it is important to distinguish between the types of “startup”.
The first type of “Startup” is the traditional “small company” that also provides products and services and creates jobs. For example, a person decides to open a small restaurant or a bakery and it can be considered a startup according to the definition. A restaurant provides jobs for some people and it has its own products and service. However its impact is limited to local market and economy.
The second type of “startup” is an innovation-driven company focused on global markets based on technological, process or business model innovation. This type has potential to create hundreds or even thousands of high-skill jobs. If they succeed they could has significant impact to the economy. Most of this type of “startup” began in university, especially in the technology areas such as computer science or engineering. The founder is often someone who has both passion and skills in technology such as Steve Jobs, Bill Gates, or Mark Zuckerberg etc.
I have seen people use the term “startup” without clearly distinguish which types. Of course both types have similar challenges such as getting money, dealing with risks, and planning for growth etc. However, each type requires different trainings, education and support. Both types can help support the economy but at different levels and have different impacts. The traditional startup can help stabilize an economy by providing jobs for limited numbers of people. However the innovation type is particularly important because it can provide higher paying jobs for more people and helps accelerate economic growth.
The foundation of innovation startup is education, especially in areas such as Science, Technology, Engineering and Math (STEM). For this reason, to promote more “startup” everything should start with the education system. Without a strong education that focuses on STEM, it is difficult to develop innovation startup. Most innovation startups are founded by people with special technology skills and often have college levels of education. Innovation startup often can be expanding quickly into global markets and could create more jobs for the economy. That is why every government is promoting “innovation startup” as the driver for the economy but few succeed because they do not understand that in order to do that, they must start with the education system. Every country wants to have a “Silicon valley” with thousand of startups and million high paying jobs but despite government programs to help entrepreneurs with easy loan money, better tax incentives, faster permits etc. but the benefits is still the traditional startup type. You see more restaurants, coffee shops, ice cream parlors, bakeries, clothing stores, and mobile phone retailers but not many innovation startups. Unless the education system changes, unless more students are studying STEM, the chance of create more innovation startup would still be a dream.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
