This morning I read an interesting piece on SmallBizTrends.com titled “Will 2010 be the year of Start-Up America?” Melinda Emerson discusses how Obama should make start-ups the focus of his economic recovery plan in 2010, citing that small businesses have been responsible for 60-80% of annual job creation since the 1990s. She details 8 specific ways the government could assist in this effort, from wage subsidies to tax credits to plain old increased funding.
Small Businesses As Economic Saviors
While statistics can tell a lot of stories, I agree with Melinda’s point that small businesses are where most new jobs will come from as we come out of the recession and try to chip away at the 10% unemployment rate. Large corporations are under pressure to maintain profits and a lot of their gains are coming from cost-reduction efforts (aka layoffs, stretching employees, delaying new hiring). So how should we be going about it?
Government Intervention is NOT the Answer
The ideas that Melinda gives are great ideas and I believe they would be successful in helping a lot of start-ups. However, I couldn’t ignore the feeling that all of them centered on one key idea; the government’s increased interference in small businesses. Some of the ideas were intended to temporarily reduce government interference (payroll tax exemption, tax credits, etc.) while the others increased government involvement (whenever the government give you money they have to monitor how it’s used, so more regulation and red tape.)
Perhaps Melinda’s suggestions are more feasible, but I believe that small business creation will continue to lag in this country until the government reduces it’s role in the process. What do you think?