Small businesses know better than most what kinds of contributions they make to the American economy. And it seems like every four years during election season the spotlight shines again on small business as the candidates debate and discuss what they will do specifically to help small businesses if they’re elected. The question is why do small businesses get so much lip service every four years (if not in between)?
First, a little history: We all know that the United States started out as an agrarian country, but even so, it was not long before the small shop owners of colonial America began to create a lively economy. In fact, that conflict – between manufacturing capitalism in the north and slave-holding plantations in the south – was a subtext that exacerbated tensions leading to the Civil War.
World War I created a great leap forward for the United States economy as we became a major player on the world stage. The Roaring 20s roared in large part because the American economy grew significantly, as did the size of businesses, signaling that our form of dynamic, entrepreneurial capitalism was a force to be reckoned with. Oil became big oil under the auspices of the Gettys and Rockefellers. The country grew, the economy grew, business grew.
And then it all crashed in 1929. But even so, the die had been cast; the United States was a country of big ideas and big business. The Eisenhower years were further proof. The Mad Men era of the 60s was a time when big business in this country may have reached its peak, but as with many things, the 60s also began a shift in thinking insofar as business goes. As E.F. Schumacher famously said at that time: Small is Beautiful. But even so, it took a while for the changes to take hold. The 70s were still an era of the “Big 3” – the Big 3 auto makers, the Big 3 networks and so on. Big was still big, but not for long. Before you knew it, little would be the new big. The real changes began after the deregulation of the Reagan era; the dynamic Clinton economy and Internet revolution solidified these changes.
Entrepreneurship was in. Little was the new big. Amazon started in a garage and is now Amazon. Starbucks started with a single store at Pike Place Market in Seattle. Google was the work of two Stanford grad students analyzing the Internet.
Sure big business here is still big, but the rock star of the economy now is clearly the entrepreneur, and statistics bear this out:
- More than half of all employees work for small business
- Small business makes up 99% of all businesses
- Most innovation results from entrepreneurial small businesses
- Economic growth corresponds with small business growth
So it is understandable that the candidates will court the small business vote. We have the juice, and the numbers, and most households are tied to small business one way or the other.