Following up from our post “How Millennials Would Be Less Interested by Start-Ups“, this interesting post ‘Fewer, Bigger Entrepreneurs Explains Rising Inequality‘ refers to a published economical study that would show that the rise in inequality results from the fact that successful start-ups need to be well funded, and thus that start-up innovation basically favors the already (relatively) wealthy.
This idea is interesting and important. It makes two assumptions: that it is easier to start a new venture when one is already well-to-do (which is probably right, as poorer entrepreneurs will have part of their mind focused in getting enough revenue to live); and that overall, people that start entrepreneurial ventures increase their net-worth. This is probably less easy to prove and only works in average, as most start-ups rather end up losing money and diminishing entrepreneurs’ net-worth; however some are wildly successful, but the notion of average may not be relevant.
Would the rise in entrepreneurship explain the rise in inequality in our societies? It may certainly contribute (a large portion of the super-wealthy have been entrepreneurs), but is certainly not the entire explanation either. There are other factors at work, from tax policies to evolution in compensation policies. Still it is an interesting viewpoint and reminds us that to be able to start a new venture, one must have the peace of mind that comes with sufficient wealth.
