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Entrepreneurship and Small Business

Created by Sour Piseth January 2, 2013 - Category: Business
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It is truly the innovation, resilience, and determination
of small-business owners that centers them at the heart
of the American economy. Small businesses broaden the
base of participation in society, create jobs, decentralize
economic power, and give people a stake in the future.
Owning a small business is hard work, but it is not
without its rewards. Small-business ownership encourages
personal freedom and individual empowerment. It builds
and perpetuates social and political stability. And it spurs
the kind of innovation that creates gains in productivity,
thereby increasing local, and even national, prosperity.
But small businesses cannot do it alone. The U.S.
government plays a crucial role in creating an environment
in which entrepreneurs can flourish. We implement policies
to reduce burdensome regulations and remove red tape
so as to create a small-business-friendly environment that
supports the perpetuation of neighborhood grocery stores
and local tailors. Without careful attention, government
policies could crush the small-business sector of any
economy.
In order to create an environment in which U.S. small
businesses can prosper, President George W. Bush has
joined with private-sector, nonprofit, and community
and faith-based organizations to focus talent, expertise,
and other resources on facilitating economic growth and
enterprise all across America, and particularly in otherwise
neglected areas. Together these groups are educating
interested Americans about entrepreneurship. They are
offering classes on how to hire employees, negotiate
contracts, and market products.
Government investment in small businesses benefits
not only the businesses themselves but also our national
economy and our society at large. A healthy small business
creates jobs in the community and gives both employer
and employees a stake in the success of the neighborhood.
When times are tough, it is the corner store that sees
us through to the brighter days. It is the government’s
responsibility to ensure that its policies are helping—not
hurting—enterprises, creating the conditions for small
business to flourish, and encouraging citizens to give smallbusiness
ownership a try.
Hector V. Barreto
Administrator
U.S. Small Business Administration
eJOURNAL USA 3 Economic Perspectives / January 2006
Small businesses contribute much more to the U.S.
economy and society as a whole than can be calculated
just from the spending and profit that they generate.
These businesses tend to be more economically innovative
than larger companies, more able to respond to changing
consumer demand, and more receptive to creating
opportunities for women and minorities, and activities in
distressed areas. “Building, running, and growing small
business is a part of a virtuous cycle of creativity and
increasing prosperity that can be applied by dedicated and
thoughtful people anywhere,” the author says. “There are
no secrets, and frequently money is less important than a
considered combination of imagination and effort.”
Derek Leebaert is an adjunct professor of government at
Georgetown University. He is co-author of The MIT Press
trilogy on the information technology revolution, and
serves as an adviser to Management Assessment Partners
(MAP), a global consulting firm.
A visitor to the United States will encounter many
newspapers and magazines devoted to business:
The Wall Street Journal, Fortune, Forbes, Business
Week, Barron’s. On television and radio, he or she will
hear about the Dow Jones Industrials and the S&P
1000—statistics that reflect the stock market’s highs
and lows, as shown by the value of the largest U.S.
companies. The very term Fortune 500, coined 50 years
ago by Fortune magazine, ranks the leading companies in
the nation: General Motors, General Electric, DuPont,
and, more recently, Microsoft and Oracle. Moreover,
brand names such as Ford, Coca Cola, and IBM likely
have been commonplace in his or her own country for
decades. Against this background, our visitor might get
the impression that America’s economy, employment,
innovation, and exports are propelled solely by such
behemoths.
Many Americans share that impression, and it is
wrong. To be sure, the largest 500 or 1,000 corporations
offer exciting material for journalists, as shown by
the chronicling of boardroom scandals and corporate
takeovers. These enterprises are visible, politically
influential, and—because of their size and relative
stability—the repositories of pension fund and other
long-term investment for many Americans. They make
up much of the nation’s total output of goods and
services. But to understand the full scope of national
output, as well as of job creation and innovation in the
U.S. economy, let alone where those huge corporations
originated, we have to look beyond the headlines.
FUELING AMERICA’S GROWTH
Small and large businesses are not distinct segments of
the U.S. economy: They buy each other’s products and
build on each other’s innovations to generate economic
growth. The smaller businesses are frequently younger
ones created by self-employed entrepreneurs. Such activity
contributes further to economic growth by challenging
traditional technologies and practices. In turn, economic
growth promotes entrepreneurial activity by providing
markets and financing for men and women bold enough
to venture alone into the stormy seas of a consistently
expanding economy.
Derek Leebaert
HOW

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