Will Dropouts Save America?

Michael Ellsberg,author of “The Education of Millionaires: It’s Not What You Think and It’s Not Too Late," writes in NYT:

I TYPED these words on a computer designed by Apple, co-founded by the college dropout Steve Jobs. The program I used to write it was created by Microsoft, started by the college dropouts Bill Gates and Paul Allen.

And as soon as it is published, I will share it with my friends via Twitter, co-founded by the college dropouts Jack Dorsey and Evan Williams and Biz Stone, and Facebook — invented, among others, by the college dropouts Mark Zuckerberg and Dustin Moskovitz, and nurtured by the degreeless Sean Parker...

In a detailed analysis, the National Bureau of Economic Research found that nearly all net job creation in America comes from start-up businesses, not small businesses per se. (Since most start-ups start small, we tend to conflate two variables — the size of a business and its age — and incorrectly assume the former was the relevant one, when in fact the latter is.

If start-up activity is the true engine of job creation in America, one thing is clear: our current educational system is acting as the brakes. Simply put, from kindergarten through undergraduate and grad school, you learn very few skills or attitudes that would ever help you start a business. Skills like sales, networking, creativity and comfort with failure.

No business in America — and therefore no job creation — happens without someone buying something. But most students learn nothing about sales in college; they are more likely to take a course on why sales (and capitalism) are evil.

Moreover, very few start-ups get off the ground without a wide, vibrant network of advisers and mentors, potential customers and clients, quality vendors and valuable talent to employ. You don’t learn how to network crouched over a desk studying for multiple-choice exams. You learn it outside the classroom, talking to fellow human beings face-to-face.

Start-ups are a creative endeavor by definition. Yet our current classrooms, geared toward tests on narrowly defined academic subjects, stifle creativity. If a young person happens to retain enough creative spirit to start a business upon graduation, she does so in spite of her schooling, not because of it.

Finally, entrepreneurs must embrace failure. I spent the last two years interviewing college dropouts who went on to become millionaires and billionaires. All spoke passionately about the importance of their business failures in leading them to success. Our education system encourages students to play it safe and retreat at the first sign of failure (assuming that any failure will look bad on their college applications and résumés).

Ellsberg is correct in what he writes here, but he fails to understand that the problem is because of government intervention in education. Government doesn't want creative teaching and radical ideas. It rewards teachers who gain advanced degrees within the system, rather than those who might be creative. It's because of this that those attracted to teaching are the non-risk taking. It's no wonder that the great risk takers and entrepreneurs drop out of this system. But again, I must emphasise it is the government influence over education that is the cause, not education itself. If government left the sector, you would have all kinds of creative types moving in and making education a truly vibrant, exciting environment. That's why it is shocking when Ellsberg, after recognizing the problem with current education writes:

Classroom skills may put you at an advantage in the formal market, but in the informal market, street-smart skills and real-world networking are infinitely more important.

Yet our children grow up amid an echo chamber of voices telling them to get good grades, do well on their SATs, and spend an average of $45,000 on tuition — after accounting for scholarships — while taking on $23,000 in debt to get a private four-year college education.

It’s time that we as a nation accepted a basic — and seldom-mentioned — fact. You don’t need a degree (and certainly not an M.B.A.) to start a business and create jobs, nor is it even that helpful, compared with cheaper, faster alternatives.

Parents could turn the system on its head if they weren’t so caught up in outmoded mentalities about education forged in the stable economy of the 1950s (but profoundly misguided in today’s chaotic, entrepreneurial economy).

Employers could alter this landscape if they explicitly offered routes to employment for those who didn’t get a degree because they were out building businesses.

And the government could divert some of the money it now spends encouraging college for all, and instead promote the idea that creating a start-up is a worthy, respectable alternative to academics. This would go a long way to helping our unemployment problem.

Yikes, Ellsberg is strong, until he starts recommending that government divert money to start-ups. The success of start-ups is because the government doesn't interfere. The same bureaucratic, suffocating system will develop for start ups, if government puts money there instead of the education system. The non-risk taking, boring, follow the rules, teachers that lose their jobs in teaching will be the ones who end up approving start ups.

Government should be kept out of start ups AND be removed from any role in education. That's the way to improve an economy, not by moving government to a new sector of influence after they have already screwed up other sectors.