Unleash The Little Guys
Once the land of the free, America now holds up entrepreneurs and start-ups. Four ways to fix the problem.
Much of the current debate over U.S. economic policy is focused on the alleged threat China and India pose to American leadership in the global economy. Pointing to both countries' strong growth rates, trade surpluses with the United States, expanding capital markets and huge populations, alarmists claim that the United States is poised to fall behind—and that American workers and businesses are already feeling the crunch.
What's more troubling is the pace of research-and-development moving from the United States to India and China, and indications that Chinese and Indian scientists, so vital to U.S. economic growth, are returning home due to extended visa delays. This poses a competitive threat to entrepreneurial activity, America's most important growth engine. The impetus is now on U.S. policymakers, business leaders and universities to turn the tide.
The process by which entrepreneurial activity generates growth was dubbed "creative destruction" by economist Joseph Schumpeter. As companies grow, they are forced to adapt and innovate to stay relevant. This process of weeding out inefficient companies ensures that strong, growth-oriented firms are left in their place.
Since the United States gave up bureaucratic capitalism in favor of entrepreneurial capitalism in the early 1980s, its economy has doubled in size, creating 45 million new jobs and unleashing a technological revolution leading to increased productivity and better living standards. As evidence that Schumpeter was correct, net job creation in the United States occurs almost entirely in firms less than five years old.
Over the same period, America's traditional economic competitors, including most European countries and Japan, have experienced slow growth and high unemployment. Embracing economic stability above all else, Europe and Japan have protected ossifying companies, limiting opportunities for the creation of new, innovative firms.
European countries that have managed to break free of so-called Eurosclerosis—including Ireland, Iceland, Norway, several Eastern European nations and such areas as Scotland—have embraced the entrepreneurial system of low taxes, efficient regulation and flexible labor laws that underpin U.S. economic success. India and, to a lesser extent, China have also made substantial progress toward promoting entrepreneurship by encouraging business formation and expanding property rights.
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View All Comments »Posted By: sc young @ 01/11/2008 8:50:48 AM
Comment: A degree does not a good citizen make
In ???Unleash the Little Guys??? Carl Schramm gets it wrong on immigration. A university degree should not serve as an automatic pathway to citizenship. We need more than scientists and engineers in the building of a great nation. We need immigrants who share our values, demonstrate a respect for the rule of law (vital to a healthy democracy), and who do not seek to exploit our generosity.
Take Chinese immigrants as one example. Today, there are 1.5 million Chinese immigrants living in America and fully one-third (500,000 people) are here illegally. For those of us who have lived and worked on the mainland, however, such flouting of the law is expected. In China, the rule of law is not respected because the government and its institutions are corrupt. Unquestionably, this has had a detrimental effect on society-at-large.
In China, few parents or educators focus on the impact of individual morality on greater society. Hence, it is no surprise that piracy, a rampant disregard for intellectual property, fake or ineffectual ???degree??? holders, and out-right thievery has meant that multinationals must take extreme measures to protect their interests. Even the Chinese government must develop excessive procedures to collect taxes and to prevent the pillaging of state assets. I ask Mr. Schramm- are these the citizens he seeks? I could list a number of endemic social ills that would render China a poor source of supposed talent at the present time.
Further, this culture of corruption migrates, infects our own society and costs us dearly: Studies in the 1990s demonstrated that new Chinese immigrants- more than other group- tended to take advantage of welfare. Many willingly signed Immigration and Naturalization Service affidavits declaring that parents "will not become a public charge." Later, however, these immigrants took advantage of loopholes to gain welfare and subsidized housing. Census data for California stated that 75 percent of the recipients' children were professionals with incomes above the state median. By 1990, 55 percent of Chinese seniors (who immigrated to California from 1980 to 1987) were on welfare.
First and foremost, let us solve the weaknesses in our education systems that have led to a shortfall in a particular professional area. Further still, entrepreneurs are not the great saviors Mr. Schramm suggests. Research has shown that big and small businesses contribute equally to job growth- although not to our society (small businesses are the biggest tax cheats). Regardless, I am certain our young citizens, given the right tools and opportunities, are quite capable of exceeding our expectations in the fields of science and technology.
SC
Posted By: sc young @ 01/11/2008 8:47:42 AM
Comment: A degree does not a good citizen make
In ???Unleash the Little Guys??? Carl Schramm gets it wrong on immigration. A university degree should not serve as an automatic pathway to citizenship. We need more than scientists and engineers in the building of a great nation. We need immigrants who share our values, demonstrate a respect for the rule of law (vital to a healthy democracy), and who do not seek to exploit our generosity.
Take Chinese immigrants as one example. Today, there are 1.5 million Chinese immigrants living in America and fully one-third (500,000 people) are here illegally. For those of us who have lived and worked on the mainland, however, such flouting of the law is expected. In China, the rule of law is not respected because the government and its institutions are corrupt. Unquestionably, this has had a detrimental effect on society-at-large.
In China, few parents or educators focus on the impact of individual morality on greater society. Hence, it is no surprise that piracy, a rampant disregard for intellectual property, fake or ineffectual ???degree??? holders, and out-right thievery has meant that multinationals must take extreme measures to protect their interests. Even the Chinese government must develop excessive procedures to collect taxes and to prevent the pillaging of state assets. I ask Mr. Schramm- are these the citizens he seeks? I could list a number of endemic social ills that would render China a poor source of supposed talent at the present time.
Further, this culture of corruption migrates, infects our own society and costs us dearly: Studies in the 1990s demonstrated that new Chinese immigrants- more than other group- tended to take advantage of welfare. Many willingly signed Immigration and Naturalization Service affidavits declaring that parents "will not become a public charge." Later, however, these immigrants took advantage of loopholes to gain welfare and subsidized housing. Census data for California stated that 75 percent of the recipients' children were professionals with incomes above the state median. By 1990, 55 percent of Chinese seniors (who immigrated to California from 1980 to 1987) were on welfare.
First and foremost, let us solve the weaknesses in our education systems that have led to a shortfall in a particular professional area. Further still, entrepreneurs are not the great saviors Mr. Schramm suggests. Research has shown that big and small businesses contribute equally to job growth- although not to our society (small businesses are the biggest tax cheats). Regardless, I am certain our young citizens, given the right tools and opportunities, are quite capable of exceeding our expectations in the fields of science and technology.
SC
San Francisco
Posted By: phiomalibumalibu @ 01/01/2008 10:14:00 PM
Comment: I work at home now and get paid to take online surveys. Seems the easiest way for me now that my job skills have been off shored to India. If you want to make money from home try surveysforcash.net