Wednesday, February 09, 2011

Scrum, Innovation, and Jobs

Scrum, Inc. is located at the Cambridge Innovation Center, a site with hundreds of startups in one building, certainly the largest center on innovation in New England, probably in the country. Academics study us in this place.

Here's an example of some research that is making an impact. Striking new research from the Kaufmann Foundation and US Census Bureau found that, between 1980 and 2005 (a quarter century), *all* net new jobs created in the US were created by companies 5 years old and *younger*. On a net basis, all companies 6 years old and older, collectively, lost jobs. This helps explain why countries with limited entrepreneurship are facing high unemployment and the social ills that come with that. This finding is already starting to redirect economic development policy, in the US and around the world.

In Scrum we help a lot of older companies get better, but we need to recognize that on the average they will lose jobs and only the startups produce net new jobs. That is one of the reasons I have been working with OpenView Ventures Partners in recent years and worked in a number of startups before that.

In Japan, Professor Nonaka and I discussed the future of Japan and he felt innovation was the only way out of their current economic crisis. It is all about new companies with great new products. Otherwise aging of companies just raises the unemployment rate.

Scrum itself has been a great incubator of startups. We generated hundreds of new Scrum companies in the last five years. One of my goals when creating Scrum was to enable local employment to compete in the global market. That goal has been been achieved in software development and could spread to other industries.


windchill said...

I work for a company that's much older than 6 years, and we're adding jobs but the jobs are outside of the US.

Timo Mulder said...

Hi Jeff,

Nice quote about scrum spreading to other industries. My personal experience with implementing Scrum in a business Incubator and other non-software organisations showed me that Scrum is a perfect change management tool. People feel more motivated and really value the transparancy and focus it brings. I will publish some whitepapers on that soon.

Thank you for your inspiration!

Best regards,