Where Will the Jobs Come From?
Sargeant, Winslow, The Small Business Advocate
According to the Office of Advocacy's newly updated Frequently Asked Questions (FAQ), 65 percent of the all the net new jobs since the early 1990s were created by small businesses. In the late 1990s, Advocacy funded research and a conference on the topic "Are Small Firms Important? Their Role and Impact."
I mention these two facts because it wasn't so long ago that the role of small business in our economy was heavily debated - and whether it even had a significant role was not universally accepted. In certain circles, small businesses were viewed mainly as a fallback when a career in corporate America fizzled out.
As a former small business owner, and now as chief counsel for advocacy, I am pleased that small businesses are finally being given their rightful due. Not only do they create the lion's share of net new jobs, they generate about half of GDP and employ about half of the workforce. Above all, they are a catalyst of economic and social progress. Small firms introduce new ideas and new technologies into our daily lives, and in so doing economic transformations take root.
It goes without saying that the term "small business" extends to startups as well. I haven't come across many startups that have more than 500 employees on day one.
Unemployment is today's Public Enemy Number One. Job creation is a universal concern - and goal. In October, Advocacy brought together academics, public policymakers, and small business owners to explore job creation in our economy. The event was called "High-Impact Entrepreneurship Outlook: Finance and Innovation Create Jobs."
How do we get there from here? The recent recession has been the longest and deepest since the 1930s. Reducing the stubbornly high unemployment rate has been a top priority for the Obama Administration and representatives on Capitol Hill. To frame our work at the Jobs Symposium, I asked two questions: Does government really create jobs? How does the Small Business Jobs Act help small business?
Does government really create jobs? The overall view of the Jobs Symposium participants is that the private-public partnership is required for small businesses to succeed and hence create jobs. During the question period, Dr. Jeremy Wiesen pointed out that it was the U.S. government that funded the Internet (known as Arpanet) in the 1960s and provided research grants that led to key breakthroughs in semiconductor technology.
From my own experience as an early user of the Internet and a semiconductor chip designer, I can attest that Dr. Wiesen's point is spot on. Many of the technology breakthroughs of previous decades were funded by U.S. government agencies (the National Science Foundation, DARPA - the Defense Advanced Research Projects Agency, the National Institutes of Health, and others). …