U.S. businesses are aging, I wrote last week, and a sharp decline in start-up companies is a big reason. As the share of young firms shrinks, the surviving companies are naturally older — and this may have huge ramifications for the economy. Established companies may create fewer jobs and innovations than do young businesses. So, what has happened to the United States’ vaunted entrepreneurs? The experts I contacted last week had a uniform answer: No one knows.
Per a new white paper by The Financial Services Forum’s John Dearie and McGraw Hill Financial’s Courtney Geduldig, based on their recent book ‘Where the Jobs Are: Entrepreneurship and the Soul of the American Economy:’ America’s entrepreneurs need help. Given the critical role they play in our nation’s economy as the principal source of innovation, dynamism, growth, and job creation, America’s young businesses need and deserve a comprehensive and preferential policy framework.”
Dr. Moria Gunn speaks with John Dearie about who creates the really, really new jobs that didn’t exist before, and what we can do to encourage their creation. Scroll to the 6:40 mark to hear the beginning of the interview
When most lobbyists exit a meeting on Capitol Hill, they leave behind a one-pager, or, if they’re really ambitious, maybe a 30-page report. John Dearie and Courtney Geduldig can offer something a lot bigger. The K Street duo wrote a 200-plus-page book, “Where the Jobs Are: Entrepreneurship and the Soul of the American Economy,” an accessible read — based largely on a 2011 summer road trip — that delves into some serious economic policy matters.
As Steve Case, Michael Bloomberg and others have pointed out, the rest of the world—from Canada to New Zealand, from China to Chile—has revamped immigration policies to recruit the world’s best talent. Initial indications are that such efforts are working. Since its inception in 2010, the Start-Up Chile program, through which the Chilean government provides direct financing to entrepreneurs, has funded 663 startups, many founded by foreign-born entrepreneurs.
Will the U.S. prosper in the 21st-century economy? Only if our immigration policies are designed to compete.
The most prominent and influential authors in the technology industry will be featured at the 2014 International CES® as part of a new CES attraction entitled Gary’s Book Club. Featured authors include:
- Gary Beach, The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America’s Future
- Nolan Bushnell, Finding the Next Steve Jobs: How to Find, Hire, Keep, and Nurture Talent
- John Dearie and Courtney Geduldig, Where the Jobs Are: Entrepreneurship and the Soul of the American Economy
- Larry Downes and Paul Nunes, Big Bang Disruption: Strategy in the Age of Devastating Innovation
- Robert Scoble and Shel Israel, Age of Context: Mobile, Sensors, Data and the Future of Privacy
- Gary Shapiro, Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses
- Eric Taub, Does This Plug into That?: Simplify Your Electronic Life
- Randi Zuckerberg, Dot Complicated: Untangling Our Wired Lives
Having tried an $800 billion fiscal stimulus and nearly five years of near-zero interest rates thanks to the Federal Reserve, policymakers in Washington need to consider a new approach. Dearie and Geduldig’s research provides ideas on how to get that started, just in time for the new year.
Brett Coffee, general counsel at Springfield-based Computer Systems Center Inc. and a former chairman of the Fairfax County Small Business Commission, expounded in the book about the negative effects of over-regulation.
Dearie and Geduldig made their book interesting both to laymen and policy wonks, Coffee said. If implemented, many of the authors’ suggestions would help create jobs and boost the overall economy, he said.
“What most struck me after reading the book was how politicians of either party first look to a very government-centric approach to solving the problems,” Coffee said. “What’s very much needed is for American individualism to take center stage again. Everybody’s scared and hesitant to act.”
“New businesses create an average of 3 million jobs annually, while existing firms of any age, type or size, in aggregate, shed a net average of about 1 million jobs each year, as some businesses fail and others incorporate technology and become more efficient. Were it not for new businesses, there would be no net job creation in most years. But, alarmingly, after remaining remarkably consistent for decades, the number of new businesses launched each year — and the average number of jobs created by each new firm — have declined significantly in recent years. In the year ending in March 2012, new businesses created 2.7 million jobs, down 43 percent from the 4.7 million jobs created by new businesses in 1999.
[P]olicy help for America’s job creators is urgently needed. More than four and a half years after the end of the Great Recession, economic growth remains subpar and twenty-three million Americans remain either out of work, underemployed, or have left the workforce discouraged. Given the critical role they play in our nation’s economy as the principal source of innovation, growth, and job creation, America’s fragile new businesses need and deserve a comprehensive policy framework designed to cultivate and nurture new business formation, survival, and growth.
Three years ago John Dearie and Courtney Geduldig, who both worked for the Financial Services Forum, which represents America’s biggest financial institutions, came up with an inspired idea. Why not ask entrepreneurs themselves what is going wrong? Both big multinationals and established small firms have lots of representatives in Washington, DC. Entrepreneurs are too busy inventing their companies to spend time lobbying. The pair organised meetings and conducted lots of polls. Across a vast and diverse country they heard the same message from everyone they asked: entrepreneurship is in a parlous state. And everyone pointed to the same problems. The result is a new book, “Where the Jobs Are”, which should be dropped onto the heads of America’s squabbling politicians.
Last month’s employment report from the Bureau of Labor Statistics is a grim reminder of the severity of America’s continuing jobs emergency. Only 169,000 jobs were created in August, and, for the 40th month in a row, more unemployed workers left the workforce discouraged than found jobs. More than four years after the end of the Great Recession, nearly 24 million Americans remain either unemployed, underemployed, or have left the workforce discouraged.
Clearly, Washington policymakers are in desperate need of new ideas to combat this historic jobs crisis
They present the findings of this unique survey in a new book, Where the Jobs Are: Entrepreneurship and the Soul of the American Economy. It’s based on the authors’ intensive conversations with over 200 entrepreneurs who attended roundtables in 12 cities. What results is a concrete and practical blueprint for policy changes that can help entrepreneurs launch new businesses, expand existing ones and create the good “breadwinner” jobs that can support middle class families.
There are no blinding revelations here; most of their prescriptions are familiar to Washington policy hounds like me. But this only underscores that job creation isn’t some arcane branch of economics that only Nobel laureates can fathom. U.S. policymakers mostly know what to do – which makes their failure to act all the more tragic.
Hitting shelves and Amazon etc. today: “‘Where the Jobs Are: Entrepreneurship and the Soul of the American Economy,’ by John Dearie, Executive Vice President at the Financial Services Forum, and Courtney Geduldig, Vice President of Global Regulatory Affairs at Standard & Poor’s Ratings Services. Recent research has shown that new business — start-ups — account for virtually all net new job creation, and yet new business formation has declined significantly in recent years.
“To find out why, Dearie and Geduldig conducted roundtables with entrepreneurs in 12 cities across the United States. What they heard provides ground-level insights into the ongoing jobs crisis and offers new ideas for restoring America’s great job-creation machine. In their book, they recount what they heard and offer a 30-point jobs agenda based on what entrepreneurs said they need from policymakers. … All proceeds of the book will be donated to various entrepreneurship incubators and accelerators. Visit www.endthejobscrisis.com. Book link: http://amzn.to/1egLwV1