05 May 2008

Less entrepreneurship, growing economy

Data obtained by the Federal of reserve show that the proportion of Americans that get into entrepreneurship and set up their own business is shrinking. This means that people don't have to start their own company which is a necessity in case they can't find a job.

In other words, the more good jobs are generated in a country, the fewer people decide to go into business for themselves. This is a sign for a healthy and growing economy which is effective enough to offer employment to its citizens.

On the other hand, when companies are growing in size, then they become more efficient. They buy everything they need in large volumes taking advantage of economies of scale. As an example, think of a large store that employees lots departments and can replace many independent entrepreneurs. Therefore, if we can develop high growth companies, the job market will grow too and less people will get forced to start their own business.

America, carry on!

3 comments:

  1. Anonymous10:53 AM

    Interesting you should say that...

    Especially since statistics have shown that the US economy has lost a total of 260,000 jobs since the beginning of 2008.

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  2. I think it would be very difficult to argue with the goal that we should "develop high growth companies". I'm less convinced by the stance in favor of large companies, though.

    I've worked in many large businesses, in the US and the UK, in the role of both a line manager and a consultant. It seems to me that, by the time a company grows "large", the ability of the average manager to handle the more complex problems inherent in such a structure, especially communicating with and motivating the employees, is stretched too far.

    Self-employed people at least have a clear motivation - survival!

    But whether it's large or small, growth is essential.

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  3. The U.S economy is now facing lot of difficulties,it is necessary to take quick action against the situation.

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