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Start-ups and Broad-Based Employee Ownership

on April 07, 2010 Source: Policy Dialogue on Entrepreneurship

Last October, Elinor Ostrom won the Nobel Prize for Economics for her work on the role of the commons in economic governance. Now, more and more scholars are exploring the intersection of start-ups and employee ownership. Some of the research underway is evaluating in particular to what extent employee ownership can support a sustainable pipeline of innovations, according to the Foundation for Enterprise Development (FED).

FED is holding a symposium on the topic of broad-based ownership this June in La Jolla, as well as a national essay contest, titled “Creating Wealth by Sharing Wealth” in which students across U.S campuses can share their views about using broad-based ownership for starting up a company.

At the FED’s first symposium on the topic of broad-based ownership last summer, participants shared the following research highlights:

- Almost half (47%) of workers in the U.S. report they participate in some form of shared capitalism (e.g., employee ownership, profit sharing), according to the General Social Survey.

- High technology leaders of Silicon Valley are challenging the traditional boss-employee mentality with new collaborative models and broad-based ownership.

- Employee ownership in start-ups and corporations harnesses employee motivation at every stage of organizational growth.

- A beta-version simulation model is being developed by Beyster Fellow Joe Hsueh and used at MIT’s Sloan  School of Management to examine the effect of different decisions on the evolution of the start-up company, especially critical for crossing what is commonly referred to as “the valley of death.” It can also be used to study strategic human resource management and explore different hypotheses about how startups evolve.

For more research highlights, access the symposium proceedings.

Category:  General 

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