More workers are becoming entrepreneurs

An interview with Dr. Lakshmi Balachandra, a professor of entrepreneurship and a fellow in the National Science Foundation’s Technology Innovation and Partnerships Directorate program.

The pandemic unleashed a flurry of new entrepreneurs. If the economy goes into a recession, do you think that trend will continue?

Yes. In fact, history has taught us that it’s typical for economic downturns to

coincide with rising rates of entrepreneurship. Necessity is the mother of invention. If people can’t find work or are dissatisfied with their jobs, they’re much more likely to want to start their own business and do something on their own.

Why did the pandemic lead to an increase in individuals going into business for themselves?

One of the biggest drivers for entrepreneurship is lifestyle. The pandemic led to the recognition that your time has incredible economic value that you don’t have to sacrifice when you work on your own. People who become entrepreneurs certainly see an economic opportunity, but the

bigger motivation is that they want to be their own boss and set their own hours. You can structure your work in such a way that you gain your own internal rate of return, with the

benefit of adding value to your lifestyle.

Women founders secured only 2.3% of venture capital funding in 2020. What barriers do women and minority entrepreneurs face?

This is the question that I’ve been working on and dealing with for over 20 years. Women and minorities aren’t typically seen as leaders or managers or entrepreneurs, so they’re already at a disadvantage, and if anything, COVID made it worse. With networking canceled or limited to Zoom, networking opportunities for people other than those already in the funding network receded.