Growing Business-Builders Essential to Growing Economy

While the president painted a deceptively rosy picture of our economy in his State of the Union address, a more reality-based assessment was delivered recently by Gallup CEO Jim Clifton in Business Journal. He argues that American leaders, having misdiagnosed the cause and effect of economic growth and job creation, are making our economic problems worse.

"This economy is never truly coming back unless we reverse the birth and death trends of American businesses," asserts Clifton. "When small and medium-sized businesses are dying faster than they're being born, so is free enterprise. And when free enterprise dies, America dies with it."

• Approximately 6 million businesses with one or more employees in the U.S.—the real engines of economic growth—provide jobs for more than 100 million Americans and much of the tax base for everything, from military to social safety net spending.

• Since 2008, U.S. business "deaths" (shut-downs) have outnumbered new business "births" (start-ups), and we have fallen to 12th among developed nations in terms of business start ups behind countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy.

• Fewer businesses mean declining revenues and smaller salaries to tax, followed by declining aid for the elderly and poor and declining funding for the military, for education, for infrastructure — in short, for everything.  

Citing Gallup polling data showing Americans believe the economy (59%) and federal spending and budget deficit (58%) are cause for a "great deal" of worry, Clifton argues that ordinary people seem to intuitively understand what America's leaders do not:  that businesses and entrepreneurs are the critical drivers of a strong economy.

Our leadership keeps thinking that the answer to economic growth and ultimately job creation is more innovation, and we continue to invest billions in it. But an innovation is worthless until an entrepreneur creates a business model for it and turns that innovative idea in something customers will buy. Yet current thinking tells us we're on the right track and don't need different strategies, so we continue marching down the path of national decline, believing innovation will save us.

Because we have misdiagnosed the cause and effect of economic growth, we have misdiagnosed the cause and effect of job creation. To get back on track, we need to quit pinning everything on innovation, and we need to start focusing on the almighty entrepreneurs and business builders.

Source: American Entrepreneurship: Dead or Alive?, Jim Clifton, Business Journal, January 13, 2015

He DID Build that Road!

Remember President Obama's you didn't build that attack on entrepreneurs, or Elizabeth Warren's assertion that businesses moved their goods to market on the roads the rest of us paid for? A grandfather in Somerset, England has news for both of them.

A grandfather sick of roadworks near his home defied his council and built his own toll road allowing people to circumvent the disrupted section.

Opened on Friday, it’s the first private toll road built since cars became a familiar sight on British roads 100 years ago. Motorists pay £2 to travel each way and bypass the 14 miles diversion.

Mike Watts, 62, hired a crew of workmen and ploughed £150,000 of his own cash [about $253,000 US] into building a 365m long bypass road [less than one-quarter of a mile] in a field next to the closed A431. He reckons it will cost another £150,000 in upkeep costs and to pay for two 24 hour a day toll booth operators.

The A431 between Bristol and Bath was closed in February after a landslip caused huge cracks to appear in the road.

Quickly businesses in the area began to suffer - including the cafe and party supplies shop Mike runs with wife Wendy Rice, 52, in Bath.

"It used to just be a very quick drive for us to Bath, but we were having to do a 14 mile detour which was taking up to an hour down tiny lanes just not designed to take the traffic," Mike said.

Father of four Mike asked his friend John Dinham if he would mind renting him the field until Christmas and hired three workmen to help build the road in just 10 days.