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America Needs To Reclaim Our Entrepreneurial Spirit – Forbes

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Starting new businesses is crucial to building a prosperous future for our country and everyone in it.

If we fail to come up with good answers for America’s workforce, the American Dream and all that flows from it will not survive. To rebuild America’s vital middle class, create tens of millions of new jobs, and reclaim our entrepreneurial spirit, we need to invest urgently in a stalwart, but unheralded sector of our economy: new small and medium-sized enterprises (SMEs).  I believe in technology and all it can do. However, whether or not automation is destroying more jobs than it creates; the process is moving faster than we can retrain those who are left behind. The ultimate outsourcing is robot-sourcing; no complaints, no healthcare, and fewer costs. Such productivity gains represent an achievement—unless of course all the benefits flow to a tiny percentage of the population, and eventually leave everyone else unemployed.

One sustainable and scalable answer for America’s workforce is to nurture a new generation of SMEs. I’m talking about local bars, boutique firms, craft manufacturers—an ecosystem of small companies that enrich a neighborhood. According to the SBA, we have added 8 million small business jobs in recent decades, while large companies have slashed 4 million jobs. Today, some 28 million small businesses together account for over half of American jobs and 66% of net new jobs since the 1970s.  

Unfortunately, entrepreneurship rates have been falling for the past 30 years. Yes, you read that right: in the age of Facebook, we are actually less entrepreneurial. The start-ups we seem most driven to launch are moonshots trying to be the next Snapchat. Each year, that recipe leaves us with a couple massive tech IPOs, hundreds of bankruptcies, and far fewer long-lasting good jobs (even the big successes employ only a few thousand people). In contrast, SMEs tend to stay small, but they last. Out of a thousand new SMEs, maybe one will grow massively (like the five-and-dime store that became Walmart), but many will continue to employ a few people or even a few dozen. New SMEs promise the greatest job growth.

For example, in Detroit, a flurry of new SMEs has enlivened the city’s economic scene. Detroit Bikes’ fifty employees will turn out 10,000 bicycles this year. Detroit Denim’s seven-person team produces high-end jeans, bags, and leather goods. The Social Club Grooming Company focuses on community-building projects while doing people’s hair. SMEs care about their local area and being part of a thriving ecosystem. These are small but innovative businesses (and many are tech-enabled, by the way); I’m not saying these are the best in class, but they make the point. They won’t become the next Google or Facebook—and they don’t have to and they aren’t trying to.

America Needs To Reclaim Our Entrepreneurial Spirit – Forbes

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