Wednesday, May 3, 2017

Is Encouraging Entrepreneurship the Solution to Unemployment?

The man in the middle is my dad. He started a Western Auto franchise in a tiny little town in central Florida and won one top sales award after another. He loved his employees and they loved him!



Did you know this is Small Business Week? Sponsored by the U.S. Small Business Administration since 1963, this annual celebration of the foundation of the American economy is a great time to consider a few facts you might not know:
  • More than half of Americans either own or work for a small business.
  • Small businesses create 2 out of every 3 new jobs in the U.S. each year. From the end of the recession (mid-2009) through mid-2013, small businesses were responsible for 63% of the net new jobs.*
  • From 2002 to 2012, self-employment among young people age 25 and under decreased by 23%. In that same time period, self-employment among senior adults 65 and over increased by 66%.
I'll come back to that last bullet point in a moment but, in the meantime, if you think big business is where big ideas come from, think again: a 2008 study** from the SBA’s Office of Advocacy found that small companies are much more likely to develop emerging technologies than are large ones. Plus, small business owners have a strong interest—and an active voice—in economic and political affairs: a whopping 95% are registered voters and 84% vote on a regular basis. Small business owners put their money where their mouth is, too: 91% of them routinely volunteer for, and donate to, nonprofit and community organizations.

So why, when small business is the proven backbone of this country, have we made it so ridiculously hard to start one? Even if they can figure out what licenses have to be obtained, what forms need to be filed, what regulations must be adhered to, and what taxes need to be paid, what small business owner has time to DO all that when he or she is likely working 70-80 hours a week to get that new business off the ground? And how’s he supposed to pay for all those licenses and taxes when he’s barely generating enough to stay afloat in those early days?
Let’s go back to that last bullet point. We know why seniors are starting their own businesses—they can’t afford to retire and just sit on the porch—but why the decline in entrepreneurial efforts among young people? I’m thinking it’s because there’s so much red tape and so many roadblocks, which is a crying shame because it seems to me that starting their own business would be an ideal way to get unemployed young men in our urban areas off the streets and into a productive lifestyle. Seems to me big cities with big crime problems, big drug problems, big gang problems and other issues that seem to center around big numbers of idle young males would do well to offer free classes in entrepreneurship then do whatever they can to help these fellas take a shot at running their own business. Seems as good a strategy as anything else and, who knows? Instead of getting swept up into illicit activities due to boredom or desperation, those streetwise, calculating young brains might instead spawn some amazing contributions to society.
If you’re the owner of a small business, take a moment right now to pat yourself on the back for your role in helping to sustain the U.S. economy, because starting and running a business has never been more challenging. If you’re one of the 25% that has hung in there for 15 or more years, you really deserve some applause. Meanwhile, if you work in the corporate world, as you go about your routine for the next few days, think about the many ways small businesses make your life better—from your local grocer and your hair salon to your day care and your vet. It would be a sad world without them, so how about a tip of the hat and a word of appreciation? They’ve earned it.

*SBA’s Office of Advocacy
**“An Analysis of Small Business Patents by Industry and Firm Size,” by Anthony Breitzman and Diana Hicks