Entrepreneurs and the Economy
Date Published: 24 February 2009
ScottW pointed me to Entrepreneurs Can Lead Us Out of the Crisis, which has some very interesting ideas. As an entrepreneur and small business(es) owner myself, I have to say that I agree with the ideas presented in the article pretty strongly. I’m not an expert on the stimulus plan that was recently passed but I can say with some confidence that thus far it hasn’t turned around the economy (though of course it’s a bit early to have expected it to do so). However, I do believe that the way to fix things is to stimulate growth and innovation, not to try and protect industries that have proven themselves to be noncompetitive in the marketplace.
Hiring employees is expensive. Starting companies is expensive – more so than it need be, anyway. I was speaking to some sharp developers who were recently laid off, and suggested perhaps they should simply band together and launch a new consulting company rather than going their separate ways seeking new jobs. By far the largest concern I heard in response was lack of startup capital to make this a success. Admittedly, starting a software development consultancy should be low overhead – you get one or two paying clients and the billing should cover the payroll for a handful of people, and you grow from there. But even something with as little barrier to entry as this is still quite daunting when it comes to all of the overhead that running a business and paying employees incurs.
The article suggests some things that would make small entrepreneurial ventures easier, such as reducing payroll taxes or introducing tiered capital gains taxes to promote more venture capital startups, or eliminating SOX so more private businesses choose to go public. These and similar ideas deserve consideration, as I truly believe that new enterprises are where growth will come from (and there is significant historical precedent to support this).
Steve is an experienced software architect and trainer, focusing on code quality and Domain-Driven Design with .NET.