GEC Employment News Digest No. 4
HEADLINES
Study: Internet economy has created 1.2M jobs
Job boost comes with 10% of sales now being made online
By Patrick Thibodeau
Published: June 10, 2009, computerworld.com
Computerworld - As the automobile industry sheds jobs, it comes as good news that over the last decade or so the Internet has created 1.2 million jobs, many paying higher salaries than average, a new study finds.
Internet business contributes 2.1%, or $300 billion, to the total GDP (gross domestic product) of the U.S. And IT and related online business may be faring better in this recession than they did in the dotcom bubble of 2000-2002, still growing revenue but at slower pace.
Consumers are now making 10% of their retail purchases online, with the exception of groceries, on the Internet, and Internet-based advertising has increased four-fold since 2002 to more than $20 billion, said John Deighton, a professor of business administration at Harvard Business School, and one of the authors of the study along with Hamilton Consultants Inc.
The study, considered independent, attempts to measure the so-called Internet economy. It was prepared for the Internet Advertising Bureau (IAB) in New York, which represents a variety of Internet and media companies.
It does not raise policy implications, but IAB officials said the data will help them make the case for self-regulation on issues such as privacy. Randall Rothenberg, president and CEO of IAB, said the report is the "first rigorous, comprehensive look at the size scope and impact of the interactive advertising ecosystem."
Deighton said the finding could help make the case for a move away from employer-based health care, which he called something out of the Middle Ages, to a system that makes it easier for people to start new businesses without having to provide health coverage.
The study's job estimate is based on people who work directly in building or maintaining the Internet's infrastructure, conduct advertising and commerce over it, and other direct uses. The number of indirect jobs supported by Internet-related activities may raise the total number of jobs by 1.54 million, or to slightly more than 3 million supported jobs.
E-commerce companies, as well as those that deliver the physical goods, were the major employers, with more than 500,000 of the 1.2 million jobs. Internet service providers followed at 181,000. Content-related employment was estimated at nearly 60,000, and software as a service, 31,500.
John Yaglenski, who runs the independent Walt Disney World travel information site Intercot.com, along with 35 volunteers, was at the announcement today and said that that regulation that imposes new requirements and restricts information collection could have a serious impact.
Yaglenski said he has privacy policies clearly outlined on his site and believes the industry is capable of regulating itself. "If the government steps in and regulates the industry to the degree that it has done in some other areas it could really affect our livelihood," he said.
Read more about internet in Computerworld's Internet Knowledge Center.
Source: http://www.computerworld.com
Where Will the Jobs Come From?
Young companies and entrepreneurs are the engines of job creation
This report issued by the Kauffman Foundation (USA) in November 2009 examines net new job creation in the USA in terms of firm age rather than firm size. From 1980-2005, nearly all net job creation in the United States occurred in firms less than five years old. This data set also shows that without startups, net job creation for the American economy would be negative in all but a handful of years. If one excludes startups, an analysis of the 2007 Census data shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation, averaging nearly four new jobs per firm per year. Of the overall 12 million new jobs added in 2007, young firms were responsible for the creation of nearly 8 million of those jobs. It is clear that new and young companies and the entrepreneurs that create them are the engines of job creation and eventual economic recovery. The distinction of firm age, not necessarily size, as the driver of job creation has many implications, particularly for policymakers who are focusing on small business as the answer to a dire employment situation.
For the full report, see http://www.kauffman.org/uploadedFiles/where_will_the_jobs_come_from.pdf
Nature vs Nurture and Entrepreneurship
By Fred Wilson,
Published: Feb 19, 2010, The Industry Standard
I went down to Philly yesterday and spent the afternoon with students and faculty at Wharton Entrepreneurial Programs, the entity that administers the entrepreneurship major/courses at Wharton and runs a bunch of fantastic "outreach" programs like the Venture Initiation Program.
WEP is run by Professor Raffi Amit and as we were making our way from one meeting to another, I said to Raffi that "you can't teach people to be entrepreneurs but you can teach entrepreneurs business." He replied to me that his research into the topic suggests that "there are no unique and defining characteristics of entrepreneurs" which leads him to believe that you can in fact teach people to be entrepreneurs.
That threw me and I've been ruminating on his conclusion ever since. I've been working with entrepreneurs for almost 25 years now and it is ingrained in my mind that someone is either born an entrepreneur or is not.
And I also believe that there are "unique and defining characteristics of entrepreneurs." Here are some of the ones I observe most frequently:
1) A stubborn belief in one's self
2) A confidence bordering on arrogance
3) A desire to accept risk and ambiguity, and the ability to live with them
4) An ability to construct a vision and sell it to many others
5) A magnet for talent
I accept that Raffi may be right. I will get my hands on his research and read it. And maybe it will change my mind on this topic.
Venture Capital is a lot about pattern recognition. You learn to make quick judgements based on things you've observed in the past. And judgements about people are among the most important decisions we make. So this is a very important topic to me.
Source: The Industry Standard
Entrepreneur-warriors key to economic growth
by Butch Fernandez
Published: Feb 19, 2010, Business Mirror
NACIONALISTA Party (NP) standard-bearer Manny Villar said the country’s hopes for high sustainable economic growth in the next decade or two will rest on the ability of the next administration to develop and nurture a “legion of entrepreneur- warriors.”
“Our country will need a legion of entrepreneur-warriors, men and women who will be willing to take the future in their own hands and create economic growth and, subsequently, economic wealth,” Villar said.
“And the task at hand for the next administration is to make sure that all available resources, assistance, expertise and support are made available to them— through microfinancing and other funding programs, through infrastructure support, and most of all through proper guidance and governance,” he said.
Villar said he is ready to put in place an entrepreneur-friendly and entrepreneur-ready environment.
“Putting an economic model in place will spur entrepreneurial growth, create more jobs, and teach Filipinos the advantage of self-reliance,” he said.
The NP standard-bearer said the biggest challenge for the next president of the Republic is how to eliminate poverty.
“We have to promote entrepreneurship in all aspects of society as a way out of poverty. We need to educate the youth in the high-school and college levels about the values and technical intricacies of entrepreneurial ventures,” Villar said.
At the Foreign Correspondents’ Association of the Philippines presidential debate on Monday, World Bank country director Bert Hofman said the Philippines should muster high savings and investments if it wants to achieve growth of 7 percent or more in the next quarter-century.
Hofman said the Philippine economy needs to grow faster if it wants to see its income levels become comparable with developed countries within a generation.
Villar said this kind of growth can only be achieved if the economic base is made more productive, from the production as well as consumption ends.
“Wealth generation is a direct result of more income opportunities which, in turn, is created by an entrepreneurial revolution. This model should be made the rule rather than the exception, where we will have millions of Filipino entrepreneurs creating wealth for themselves and for others through jobs and other income-generating opportunities,” he said.
He said this model should be replicated in far-flung areas through training and mentoring, backed by assistance programs from local and national governments, and supported and sustained by the private sector through initiatives like public-private partnerships.
Source: Business Mirror
Entrepreneurship enters all faculties, hoping to generate resilient graduate
By Novia D. Rulistia
Published: Feb 21 2010, The Jakarta Post
What will you do as soon as you graduate from college?
Some may continue studying, some may opt to pursue their dream jobs while others choose to set up their own business or provide jobs for others.
For the latter case, being an entrepreneur is not a task that can be accomplished overnight.
During the recent award ceremony for young entrepreneurs, Vice President Boediono urged the need for an entrepreneurship program in all education faculties, not just to the schools of economics.
There are six state universities that are ready to implement entrepreneurship subjects into their curriculum. They are the University of Indonesia (UI), Gadjah Mada University in Yogyakarta, the Sepuluh November Institute of Technology (ITS) in Surabaya, the Bandung Institute of Technology's School of Business and Management and Padjadjaran University (Unpad) in Bandung and Bogor Institute of Agriculture (IPB).
Director general for higher education at the National Education Ministry, Fasli Jalal, said that although the government gave full autonomy to universities to make the subject compulsory, he believed it would later generate better graduates.
"By taking the subject, students can takes the values of entrepreneurship, such as risk-taking and independence, to their chosen fields in the workforce," he said.
He added that the values could be applied to bureaucratic, social or academic entrepreneurships.
Wiku Adisasmito, director of partnership and business incubator at the UI, said that the entrepreneurship curriculum would begin later this year.
"We're in the progress now, drafting a detailed scheme for the new curriculum. It is going to be a compulsory subject," he said.
Apart from that, he said, the UI also had an independent entrepreneurship program that trained and guided students interested in starting businesses.
Under the one-and-a-half year-old program, students from any discipline are prepared with theoretical and practical skills for entrepreneurship. They are trained on how to make a business plan, make applications and develop marketing strategies.
"We invite prominent professionals to share their experience with students, sharing their tips and tricks on how to become an entrepreneur," he said.
"Some students have shown good progress with their business," Wiku said.
He also noticed that in starting their business, some also asked friends to help or join an existing micro business.
Currently, there are 230 students in the program. They are undergoing tests before they are granted between Rp 1 million (US$100) and Rp 8 million, as capital.
Wiku added that the amount of the grant was based on the students' business suitability.
Also, Fasli said, entrepreneurship programs offered by the universities would also be valuable to expand their businesses.
"This will make it easier for students to acquire a bank loan, usually requiring a minimum of two years' experience and a promising business plan," he said.
To support the micro, small and medium enterprises (MSMEs), the government has relaxed some lending rules, including the cutting of lending rates and extending loan restructuring periods.
The Central Statistics Agency (BPS) records that MSMEs contribute 55.6 percent of the country's gross domestic products (GDP) and employ 90 million workers of 104.87 million. It has also been said that they were resilient during the recent financial crisis.
Sandiaga Uno, vice chairman of Indonesia Chamber of Commerce (Kadin) for SMEs, said that to increase the number of SMEs in the country, some changes needed tackling, such as conventional thought on entrepreneurs.
He said that many people were scared of failure regarding starting a business.
"This attitude must change. Failure is also part of being an entrepreneur."
Sandiaga hopes that with many entrepreneurship programs on campuses, the number of entrepreneurs who see businesses as opportunities will increase.
"The younger generation is now exposed to advanced technology and have solid access to knowledge on how to run a business. Their chance at surviving in business is also bigger and better," he said.
He said for starters, businesses in the creative industry sector would be ideal along with business in mass-consumption products.
"What's also promising is business in the tourism sector, such as laundry services for hotels for example," he said.
Meanwhile, the importance of studying an entrepreneurship at school is not only acknowledged here, but in other countries.
Robert Lawton, the President of Loyola Marymount University in Los Angeles, US, said during his visit to Jakarta recently that those interested in setting up a business would gain a lot from learning about it at school.
"It combines learning about skills or challenges that you may face, how to take advantage of opportunities and undertaking practical work," he said.
"That's what makes our entrepreneurship program one of the strongest in the country."
In addition, he said that LA was a great place to have a strong entrepreneur program because it had lots of smaller industries students could undertake work experience in.
Source: The Jakarta Post
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