Small business entrepreneurship is on the decline

Small business entrepreneurship is on the decline

Florence Morning News
October 25, 2016

By Frank Knapp Jr. Guest Columnist

A new report from the Center for American Progress has a dire warning for our nation’s future.

Small-business ownership rates have been trending down since the early 2000s.

“Looking at all households who are earning income, business ownership steadily declined from 14.6 percent in the period from 1998 to 2000 to 13.5 percent in the mid-2000s to 12.8 percent by 2010 to 2012,” the report notes.

Also according to the report, “African-Americans are 5 percent less likely to have a business in their household compared with white households – even at the same levels of income, wealth, and education – and Hispanic households are 6.7 percent less likely. Single women are 3.9 percent less likely to have a business compared with single men.”

Our nation of small businesses is slowly disappearing. As Main Street small businesses go, so go our local economies. A majority of American jobs are created by small businesses.

Small-business ownership is the gateway for our lower- and middle-class citizens to generate family financial security, wealth and upward mobility. Locally owned small businesses keep us from truly having only two classes of American: the very wealthy and everyone else.

Politicians have always recognized the important role small-business ownership plays in our country. But unfortunately, their actions for the past 16 years have been to heap local, state and national economic incentives on big-business development.

Oh, government officials will tell us that they also do what they can to promote small businesses. But that attention is almost exclusively on high-tech small-business development. You know, the ones that might become the next Microsoft, Apple or Google.

The Center for American Progress report makes the problem clear.

“Entrepreneurship is a key driver of U.S. economic dynamism and leadership in the world economy. While many of the academic and policy discussions around promoting entrepreneurship have focused on technology startups and other innovative small businesses, the vast majority of small businesses do not fit that stereotype. The overwhelming majority of small businesses are local shops, restaurants and services that play a significant role in building a strong foundation for local communities and national economic growth and development. A sound economic policy is not just about finding the next Steve Jobs; it’s also about creating Main Street jobs.”

In this highly partisan election season, both major political parties recognize the public unrest regarding an economic recovery that mostly favors the wealthy and big businesses. The shrinking of the ability to start and own a small business, due to a lack of access to capital and other factors not under the entrepreneur’s control, is contributing to this voter angst.

But don’t listen to the tired political rhetoric of those who say the solution is simply cutting regulations and taxes. Those two items are never a consideration in the entrepreneur’s decision to start a small business. And those politicians who offer this simple, knee-jerk response to the problem are only looking for votes, not a real solution.

Making the American dream of owning a small business an achievable goal once again must be a priority of the next administration and Congress. It’s going to take a thorough understanding of the problem, leadership and new economic policies to make it happen.

Frank Knapp is the president and CEO of the South Carolina Small Business Chamber of Commerce and co-chairman of the American Sustainable Business Council.

http://www.scnow.com/opinion/columns/article_d3b74562-9b0d-11e6-8929-db652145baaa.html