Reviving the Small Business Miracle:




Letter to the Editor:

Bob Herbert’s recent assessment of the job market and whether Obama gets it is right on target in my estimation. I have been a fan of Herbert’s views for a long, long time even though I disagreed with his argument that the service sector and manufacturing were almost interchangeable (93 editorial).

Part of the problem is that there have been no magic bullets, no grand ideas proffered by our expert leaders; in my mind, that may be because they are drawn from companies who practice the status quo which is totally opposed to the kind of bold thinking that we need now if we are to return to the innovative path we had pursued so successfully for so long. Instead, there is too often a play it safe and assume no unnecessary risk attitude that inveighs against creative thinking and the kind of breakthroughs we need. It is unfortunate that the prevalent thinking and the better minds have drifted into service sector rather than areas that make things happen, that spark ingenuity that translates into new products that can lead us back on a path of product manufacturing where our ingenuity and creativity has made us successful in the past.

And I believe that I understand that Obama’s views are shaped by those who have a very unique view of business and industry and the service sector. He has proven the mediator, the play it safe guy who rebels at anything that let’s say goes beyond the status quo. Therefore, it is impossible for him to do the kinds of things we need to do to kick start business and industry. We need a maverick, a Steve Jobs type appointed to the task who is not scared of taking risks or innovation. Today, our government gurus are by products of companies that dominate their particular industries or service sectors; they do not represent where the majority of jobs are located, the small business sector. In truth, I have heard very little in the way of imaginative solutions to regenerate this vital and essential segment of business. We have, in a sense, overlooked small business’s contribution to the economy along with our failure as emblematic of our lack of vision.

Although I am not an economist by training, I have been a consultant to some of the leading international companies over forty years, a writer, educator and activist. I sent to Obama some tracts from two recent book where I lay out the reasons for our current malaise, which I believe occur through decisions made over some forty or fifty years and our failure to recognize that our future’s has always been closely related to our acceptance of individuality and creativity in manufacturing and technology and our willingness to assume risk.

While we are committed to two trillion dollars indebtedness to fight an unproven war in a part of the world that only remotely affects us, we have not had the courage to invest in our small business.

In one of my recommendations to president Obama, I established the idea that we should invest merely eight billion dollars as seed money in new businesses that must meet the ordinary tests of acquiring capital from venture capitalists. Believe me, this would not be throwing money away because the entrepreneurs would have to show that their ideas have merit and lay out plans explaining how their companies would move forward through the early stages and beyond.

Moreover, the amount they would need would be petty cash to most big companies especially if you consider what we have already handed out with no contingencies to banks and insurance companies with no expectations of getting our investments back.

Consider that the average outlay by a venture capitalist is under 50,000 dollars which they typically consider sufficient to reach the first milestones.

Those who might be charged with reviewing the quality of the small business ideas could be the forcibly retired, those who were making too much money and replaced or simply saw their jobs evanesce when we made it so easy for American companies to move off-shore to avoid high labor costs and taxes. (The Greening of America syndrome.)

I venture to say that such a process would provide millions of new sources of employment and create as many as ten million new jobs at the very least during the first years, with rapid expansion afterwards for those who reach their first milestones.

We need to see a rebirth in entrepreneurial spirit, risk taking and creativity and nothing on the drawing boards of today reflects. We also need to deal with the fundamental problems that we have inherited: A negative predisposition to risk taking, the problems of “off shoring,” our economic indebtedness to China, the fact that we have allowed ourselves to become servants of China and a retail nation.

We need several Crusades across the board to promulgate the tons of new opportunities that abound ranging from gene research to miniaturization to the varying demands of “green” industries to reawaken the great giant that is America. . And if it requires a little seed money to reawaken our taste for innovation and creative solutions, what is taking us so long. My book, entitled “Democracy, Debacles, and the American Dream” delves into all of this and offers solutions that our current class of managers and gurus seems to not recognize as being essential and valid.

Thank you.

Les Aaron-Friedlieb
Author and resident futurist