Carl Schramm

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Reshaping the Way Big Business Does Business: Surviving (and Thriving) in Entrepreneurial Capitalism

As CEO of the Kauffman Foundation, the foundation of entrepreneurship, Carl Schramm is the most respected entrepreneurial thinker in the nation. Dubbed "the evangelist of entrepreneurship" by The Economist, Schramm writes and speaks frequently on the subject of entrepreneurial firms and larger-scale, established businesses. His two most recent books, Good Capitalism, Bad Capitalism (and the Economics of Growth and Porsperity) (Yale University Press, 2007) and The Entrepreneurial Imperative (HarperCollins, 2006) have been widely regarded as emerging classics. In this speech, Schramm describes the coming of America's new economic model, entrepreneurial capitalism, which is displacing our country's old model of industrial capitalism. The implications of this transformation for big firms are startling and far-reaching, just as they are for individuals working in the economy.

Schramm proposes that the very nature of Corporate America is changing. Big firms have already done much to respond to our entrepreneurial economy: They have led the nation in developing its productivity gains in the last decade, restructured their approach to innovation through a shift from owning industrial laboratories to outsourcing a great deal of research, and develped venture funding capacity and new acqusition strategies to include large numbers of startups that offer innovative technologies and entrepreneurial cultures.

But, Schramm says, this is far from enough for big companies to survive in an increasingly competitive, entrepreneurial economy. Too many companies still think in terms of "intrapreneuring" (having some entrepreneurs around but not really propelling their company's culture). He argues that the firms that will survive in the long-term will be the ones that embrace a real entrepreneurial culture. To make such a culture work, the firm has to establish what he calls a "4th conversation" regarding strategy -- a widely distributed, ongoing discussion. The company must become a "messy" entity to compete in the messy world of entrepreneurial capitalism. In addition, many more managers have to be encouraged and trained to develop entrepreneurial strategies in everything they do. Cultured through example and formal teaching, these emerging managers -- "hybrids" -- possess both the skill of visionaries and the discipline of managers.

Schramm has long been an advisor and speaker to venture funds, startups, and many of the nation's largest entrepreneurial firms, including Johnson and Johnson, as well as numerous insurance companies. In February 2007, he was appointed by Secretary of Commerce Carlos Gutierrez to chair the Department of Commerce's Measuring Innovation in the 21st Century Economy Advisory Committee.