From our Nation’s founding, entrepreneurs, small business owners and small farmers have provided dynamic growth and innovation, creating a flourishing middle class. They have supplied cities and small towns with new products, processes and jobs. The Council on Competitiveness in a 2007 report said the United States leads all major industrial economies in the percent of the adult population engaged in entrepreneurial activity.

Small business owners are often not given the proper respect by politicians for their importance to society. Historically, the concept of small business has been given volumes of lip service but, because of its diversity both in product and location, the proprietors have no incentive to coalesce around a single lobbying organization and, hence, employ a scattergun approach to congressional liaison and, essentially, remain without effective means to establish or influence any meaningful political agenda.

Grand openings of large business are many times more advantageous to people standing for election. They are immediate and big news stories. To an elected official looking for votes in the next election, a press conference announcing many new jobs can be highly beneficial; as far as having an impact on the economy, it is fleeting.

Small business ownership is most times not glamorous. It is about working long hours every day, taking punches and getting back on your feet. It is about producing goods and services and creating jobs without large tax breaks, employee training money or fanfare. Entrepreneurs and small business owners are truly Jefferson’s 21st Century yeoman farmers.

Small business generates nearly one-half of the U.S. gross domestic product and employs 53 percent of all private-sector jobs. In fact, small business start-ups produced 100 percent of the net new jobs created between 1980 and 2005, according to the Small Business Administration (SBA).

Young, fast-growing firms create many of these new job opportunities. Massachusetts Institute of Technology (MIT) researcher David Birch calls these firms gazelles. Austrian economist Joseph Schumpeter would have called them wild spirits. Gazelles are companies that grow revenues at a rate of 20 percent for four years in a row. These businesses require hub airports, easy access to universities and colleges to upgrade skills, an attractive environment (good place to live), and a culture open to new ideas and differences in people. They are the job creators.

In The Spotlight

According to the SBA, entrepreneurs and small businesses are responsible for 55 percent of new and innovative products. They pay 44 percent of the private payroll, are located, for the most part, in smaller communities, and 52 percent are home-based. Small businesses are responsible for more than 30 percent of the value of goods and services exported by the United States.

When the Industrial Revolution took hold, small businesses found their advantage in the niches. They were very strong in services and retail. Now that we have entered the third wave economy (a knowledge-based, information-driven economy dominated by centrally managed transnational firms and networks of dispersed entrepreneurs and small business operators), small businesses have gained a foothold in specialized manufacturing. Entrepreneurs are constantly looking for innovative ways to enter the market and exploit an opportunity with value-added products and creative new processes.

In this century, entrepreneurs and small business owners will lead the way for middle class wealth creation and job formation raising all boats by the rising tide of prosperity. However, the competitive pressure placed on small business by larger corporations, coupled with the formation of mega banking institutions, has left many smaller businesses and banks at a severe disadvantage and with a loss of net worth.

The large financial institutions have damaged the fiscal landscape across the United States and around the globe by engaging in creative but risky financial derivative schemes valued today at some $600 trillion traded in a marginally regulated market, as cited in a New York Times article in September 2011.

These schemes have raided the American taxpayers and American and global investors. They have endangered the global economy, entrepreneurs and the communities that rely on the jobs provided by small enterprises. Some might say they have reckless disregard for the future of our Republic itself.

Alvin and Heidi Toffler perceptively pointed the following out in 1993: “Today’s financial system is…extremely vulnerable because it is in the process of restructuring itself to service a fast globalizing…economy. In liberalizing flows of capital across national divisions, myopic politicians and financial leaders have dismantled many of the fail-safe devices and brakes that once might have limited the effects of a serious collapse to a single nation.”

It is time to follow the advice of President Ronald Reagan, who insisted, “We trust but verify.”

When President Reagan said that, he was protecting United States nuclear security interests. Today, however, defending America’s security interests in our financial markets is arguably as critical. America’s reputation as the world’s preeminent economy is a valuable national asset that all Americans have invested in and own.

As investors and citizens, we have a right and a need to evaluate and assess the risk in any potential investment or economic public policy proposal. We have a right to expect that the integrity of the capital markets and their reputations will be respected and protected, not squandered. Our future depends on it.

The international economic system depends on a base of risk-taking small business operators working cooperatively with large business, and this cooperation has been compromised.

The United States system of commerce is a unique creation of our own invention and it has largely become the global economic structure. It is our duty and in our self-interest to see that it is reworked, has integrity and remains the standard for the world.

The 20th Century was an American century—it has our large imprint on it and it gives us an enormous benefit. The global economic and political institutions are of our designs and they are weighted to the advantage of democracies and free market economies.

The security and well-being of our country depends on the leadership, perseverance and ingenuity of small business to set the new economic course. It is they who will protect and preserve our way of life.

The entrepreneurial sector of the American economy is, by its nature, not made up of followers. It is comprised of leaders. As General Douglas McArthur once said, “A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others.”

The entrepreneurial class is made up of people like Steve Jobs, founder of Apple, who followed his passion to create and… “Put a ding in the universe.” Our country needs people to lead now who think it is important to “put a ding in the universe.” Let Washington, D.C. follow.

Market forces—not political forces—drive the American economy 98 percent of the time. It is obvious that many of our elected officials need leadership from us. They do not have a monopoly on the high ground of good ideas that are common in the everyday life in our communities.


James Wilfong
About The Author James Wilfong
James Wilfong is Chairman of Innovative Applied Science. He also is an international business practitioner, educator, Veterans business advocate, public servant, and a member of VET-Force and the President’s Task-force on Veteran’s Business Development.

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