Guest commentary: Entrepreneurs are not a good fit for the U.S. government
By Gerhard Apfelthaler
In 1988, my former colleague at California Lutheran University, renowned entrepreneurship scholar Bill Gartner published a seminal article in the American Journal of Small Business titled “Who is an entrepreneur is the wrong question.”
In the article, he argued that the focus on identifying the personality traits of entrepreneurs is misguided and limits the understanding of entrepreneurship as a process.
Or, in other words, entrepreneurship is a practice, not an individual quality.
It’s not about who entrepreneurs are, but what they do.
I hope that Bill will forgive me for taking some liberties when using his work as the scaffolding for an argument against the assumption that successful entrepreneurs are needed to have good, effective, and efficient government.
I admire the ingenuity and tenacity of entrepreneurs and I am fascinated by the practice of innovation and entrepreneurship, but let’s take a closer look at what entrepreneurs do and why the practice of entrepreneurship might conflict with the goals, ideals, and realities of government.
ENTREPRENEURS HAVE SELF-INTEREST
They are highly driven towards a singular vision, they are proactive, and work independently without needing external consent or oversight. They are accountable only to themselves and their investors. Government, on the other hand, deals with a complexity of sometimes conflicting goals and must consider the broader common good, prioritize equity and inclusiveness so that no one is left behind.
ENTREPRENEURS SEIZE OPPORTUNITES
They go where no one has gone before, identify gaps in the market and exploit unmet needs and demands. While some areas of government might be better off finding novel solutions to problems, for the most part, they are not free to focus their attention on the blue oceans in the market, but they have to provide basic, boring public goods and services. Think post office, utilities, security. These areas that no entrepreneur in their right mind would touch with a 10-foot pole.
ENTREPRENEURS AQUIRE NECESSARY RESOURCES
Raising funding for a startup can be a long and arduous journey. Still, many founders succeed in securing funding from investors, mostly linked to expectations of a future liquidity event or, in other words, return on investment. Governments, on the other hand, rely on income from taxes and borrowing, without rewarding initial public offerings or acquisitions in their future that could attract venture capital.
ENTREPRENEURS MAKE DECISIONS
Although, the old adage that it takes a village certainly holds true for startups as well, the journey towards success of early stage, high-growth startups often hinges on the strong vision and the autonomous decisions by their founders. Effective government leadership, on the other hand, requires collaboration, coalition-building, and consensus across diverse stakeholders, which clashes with the entrepreneurial tendency to rely on individual authority.
ENTREPRENEURS LIVE FAST
Entrepreneurs often focus on achieving short-term milestones and immediate impact, reflecting the fast-paced nature of startups and the need to go to market, leveraging first-mover advantage. They are comfortable with taking risks, they experiment, and prioritize speed to achieve their goals. If they fail, they pivot and move on fast. Government leaders, on the other hand, must be cautious and minimize risk, avoid unintended consequences, and prioritize public welfare and policies with long-term implications, often requiring incremental progress and compromise.
ENTREPRENEURS MAKE THE RULES
Eventually, all entrepreneurs must establish structure and processes, but they truly thrive in environments with minimal bureaucracy, where they can operate flexibly and innovate without rigid constraints. Government, on the other hand, functions within established systems and procedures that ensure accountability and transparency, often resulting in slower pace and only incremental progress.
All of the above is not to say that the government we have is perfect and doesn’t need reform. Quite to the contrary.
Do we need more efficiency? Of course. More innovative thinking? No doubt about it.
A lot can be done and must be done, but let’s not fall prey to the tempting myth of the entrepreneur-administrator in government.
Entrepreneurs are great.
They are the driving force behind economic growth, technological innovation, and social change.
However, the very principles that make them successful and admirable might conflict with what it takes to lead effectively in the public sector and create the outcomes that governments should aspire to.
Gerhard Apfelthaler is a professor and dean at the School of Management at California Lutheran University.
