Wednesday, September 4, 2013

Needed: Greater Support For Entrepreneurial Potential

Whatever happened to entrepreneurial dreams? Lately they have been getting pummeled more than ever, by ongoing monetary and social realities. At the very least, entrepreneurs weren't completely forgotten on Labor Day. Some bloggers suggested celebrating capital, to which Lars Christensen basically replied: wait a minute, it's not just about capital. His post about the value of entrepreneurs also prompted a response on my part, in that economic access (participation) is about all of us. Some of those thoughts continue in this post today.

Capital, for all it's seeming certainty and supposed "stability", doesn't really have much of a life without the entrepreneur or small business owner. Even as people once again embraced the idea of entrepreneurship prior to the Great Recession, some didn't really know how many entrepreneurs (especially individuals and small businesses) needlessly lost their ability to remain in business, in recent decades. Not only did that mean less available employment for everyone from the remaining businesses, it meant far more people than otherwise would have been the case - pounding the streets and looking for the remaining jobs.

Often we hear that businesspeople lose the ability to remain viable because they mistakenly offer the "wrong product", but it's not at all that simple. Many are the times when businesses offer product plenty of people want, and yet circumstances for remaining in business aren't right for reasons largely hidden to the public. Indeed, one doesn't generally encounter these specific roadblocks from municipalities and other institutions unless they try to start a business. As a result, others fear taking the chance on self employment or starting a business, because of what has already happened to friends and family.

The lack of understandable context amongst all economic actors, and a consequent dearth of social backing for economic activity, makes a needless travesty of inventories, capital, investments and commitments on the part of too many people we know. What about government "protection" for business interest? Yes this certainly exists, but mostly in forms which limit economic access for all but a select few, especially at local levels. The most notorious protection which limits access today, exists in the form of knowledge definitions and specific rights to knowledge use for services.

At national levels we may think of governments protecting businesses in terms of risks, but this is not really the right approach. Generally when governments protect highly specific forms of businesses, someone loses out - whether other potential business entrants or consumers. Protection of business should be more about protecting the rights we all have to economic access, and less about the cash cows who want to contribute at election time. Anytime a regulation is considered in terms of its desirability, that should be the primary consideration. Does the existing regulation make economic access more difficult for everyone in some way...or easier?

In other words,  the risks we take on just by attempting to start a business are much more extreme at local levels than should be necessary. Whether or not conducive social settings actually exist for entrepreneurialism to thrive, depends on the degree to which existing profits and non profits are able to lock up the definitions of economic access in the future. That's true at both local and national levels. If governments continue to protect only those who already exist, it will only become harder for everyone to revitalize wealth creation when it is needed most.

When existing institutional settings become too limited or otherwise place the bar of entry too high, many entrepreneurial dreams are lost, along with their investments and inventories which have little recourse afterward. In spite of one's best efforts, a tremendous amount of commitment and work sometimes goes to waste just the same. That is especially true for entrepreneurs and business owners in lower income brackets, for whom the results are often irreversible and life changing.

One reason it is so difficult for people to take risks in the present is the fact that no one has begun the process of making risks more manageable and incremental, as they were for a long time. Making risks manageable is not something that anyone can reasonably expect banks or finance to do, for them. Rather, it is something that people have to actually do for themselves in terms of living and working arrangements. When people are willing to face up to the problem where it actually exists, banks eventually have a chance to fall in line with the greater responsibility all citizens are able to assume.

There is nothing unusual about the idea of organizing for additional entrepreneurial potential. Otherwise, without well thought out plans of action, it's just not possible to create active spaces for entrepreneurial possibilities that won't get shot down by present sets of circumstances. If anyone wonders why such public backing of entrepreneurial effort is so important, consider Lars Christensen's words: "First, the entrepreneur roots out misallocation of the systems - the entrepreneur is the equilibrating force in the economy."

Today, for instance, one sees misallocations such as extra ambulances which carry rural patients away from rural hospitals to city hospitals, instead of working with knowledge locally to keep patients close to home and family. Present day limits on knowledge use have created the most significant misallocation of resources in our times, and this is especially what service entrepreneurs need to be able to address. It's important to stress that much of what needs to be done is not linear in nature, in fact it runs counter to the limitations that have already been imposed for centuries. Just to look at the idea of services entrepreneurship "straight on", is daunting indeed.

Even small change requests are regularly met with negative responses, as this list of 50 reasons why nothing can be changed attests. Added to the list of 50 reasons one would likely find this this question: Entrepreneurship of what, exactly? Aren't these things already being provided by society's institutions, inferior though they may seem in meeting their responsibilities? Yes, to varying degrees. Just the same, there are three immediate questions which come to mind, which would also be excellent topics for domestic summits:

What services do we feel are being reasonably met, and how? Which ones are being "met" but not exactly by results or costs that warrant the economic, social and financial burden they have imposed? And third, what provisions of societal needs or desires have we already basically written off as unachievable...and continue to give up on? Indeed there are volumes which could be written just from answers to these questions and they are really society's questions. Plus, there is also a fourth consideration in these. Say budgets falter even further. What could still be realistically met by private interests? Yes it matters if only a small segment of society gains the results of today's version of private provision potential, and present government limitations would make that far more likely.

Budgets realities mean that the portion of society which still expects services can be compromised nevertheless, because of extreme organizational inefficiencies in the present. This is the circumstance that anyone would agree, needs to be remedied at all costs. Organizing for entrepreneurial potential is also a way to make sure we avoid services apocalypse in the U.S. What's more, all of us can do a better job of providing societal cushions for one another, whenever we fall. We have to stop convincing ourselves that we're not up to the job, because if we don't one day everyone will wake up and the jobs will indeed be gone. How do we provide value in use systems which don't tax away our best energies and good intentions? Therein lies the challenge.

2 comments:

  1. Sometimes I think the problem is that society has begun to turn against achievement. In many circumstances, excellence is derided rather than praised. The politician is more likely to succeed in the corporate world than the innovator. Kids are taught to participate rather than to win. Musical virtuosity is deemed "pretentious." Big thinkers are disparaged as aloof. And of course, great logical or mathematical thinkers are dismissed as nerds, as they have been for decades.

    Any one example of any of this isn't very significant, of course, but taken altogether, it starts to look to me like society is growing progressively more and more anti-intellectual, anti-achievement, anti-individual, etc. It's a worrying trend.

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  2. Ryan,
    The divisions between production and consumption run strong in dialogues of all kinds, and services have hardly have had a chance to imagine better production possibilities at all! Add to that the fact that services are so subjective anyway. Sometimes I think, small wonder people are afraid to commit to anything which looks like a dead end, in terms of participation potential. Of course, here I'm thinking about what destroys expectations for success in the artificial separation of our educations, but macroeconomic dialogue often tries to separate production and consumption as well: I'm putting together a follow up post on that now. In the meantime, a WSJ link suggests that none of this is just a figment of anyone's imagination.
    http://blogs.wsj.com/economics/2013/09/05/small-businesses-not-adding-workers-like-they-used-to/?mod=WSJBlog

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