March 14, 2009

Downturn making ‘forced entrepreneurs’

The U.S. economic downturn is producing a wave of forced entrepreneurship, or start-up companies necessitated by job layoffs, experts say.

Many laid-off job seekers have been out of work long enough now to realize that traditional job searches aren't going to result in new employment for them, and so they are turning to start-up businesses despite their daunting failure rates, The New York Times reported.

If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas -- scientists, engineers, business folks now looking to do other things, Mark Cannice, executive director of the entrepreneurship program at the University of San Francisco, told the Times. It's a Darwinian unleashing of talent into the entrepreneurial ecosystem.

Unlike downturns of the past, the Internet this time is giving forced entrepreneurs an invaluable tool that can be used to find business partners and perform many functions on the cheap, such as keeping the books, customers relations and turning a small idea into a big idea, the newspaper said.