Poll: Is SA government doing enough to stimulate SME's and job growth?

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Thread: Why Entrepreneurs Are Real Life, Modern Day Action Heroes

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    Why Entrepreneurs Are Real Life, Modern Day Action Heroes

    Written by Jay Turo on Monday, November 30, 2009
    www.growthink.com

    A very, important study of U.S. Economic Census Data conducted by the Ewing Marion Kauffman Foundation, was published last week that statistically demonstrates who really creates jobs in the American economy.

    Now let me be clear - the jobs issue is NOT a political football, as much as those in Washington would like to make it one. It is THE critical issue for us to solve here in America, and in fact all over the world, if our thriving, modern, global economy is to continue.

    The 2008-2009 recession has cost the U.S. over 8 million jobs.

    The entire fabric of the American "way of life" - from tax receipts to pay for government social programs, schools, and national defense, to the sense that the lives of our children will be better than ours is dependent on a society that creates LOTS of good jobs for those that want to work and are willing to work hard.

    Let me be more stark. Let's look at two places in the world that are simply not creating jobs of any type for their people - sub-Saharan Africa and the Muslim world.

    Even a cursory look at the deep and tragic social problems in these regions lead to two conclusions - 1) the incredibly wasted potential of literally hundreds of millions of people because there is literally "nothing to do" and 2) the source of the attractiveness of extremist, violent ideologies to young people (especially young men) where there is NO HOPE for them "earn their bread" and care for their families.

    Now, thank God the problems in the U.S. economy are nowhere even near the magnitude of those in these fortune-starved places, but the connection between how we live and our society’s ability to create is one that too often gets lost in our entertainment and distraction - driven culture.

    And more to the point, we here in America have VERY high standards for our lives. We don't just want any job. We want GOOD JOBS. I define a good job as follows:

    1. A job that allows for a reasonably “worry-free” meeting of the base, human needs - food, water, shelter, and clothing.

    2. A job that provides security from threats to health (yes, health insurance) and violence (making enough money to live in a safe neighborhood).

    3. A job that is part and parcel of one’s overall life mission, whereby the successful performance of it creates the "self-actualization" stuff that appeals to the best in all of us - self-respect, a sense of belonging and community, and inherent satisfaction of the work itself, and the satisfaction of contribution to a cause larger than our own needs.

    So Where Do These Good Jobs Come From?

    Well believe it or not, folks, they don't come from government stimulus spending. Not from the "new" General Motors. Or from Goldman Sachs. Or from Fannie Mae or Freddie Mac or Citicorp.

    No, nearly all net job creation in the U.S. economy comes from firms less than 5 years old, or brand new (startups) and young (one to five years old) companies. In the last pre-recession year of 2007, the U.S economy created 12 million new jobs. Of these, startups and young companies created 8 million of them, or almost the exact number of jobs that have been lost in the current recession. A few further points to illustrate:

    • Since 1977, without startup companies, net job creation for the American economy would be negative (i.e. we would have LOST more jobs than we created) in all but a handful of years.

    • Young firms - companies between 1 and 5 years old - over the past 30 years have accounted for the lion's share (more than 2/3) of all net job creation.

    This is because while startups create a lot of jobs, the high failure rate of new businesses (less than 50% of them make it to age five) causes them to shed a lot of jobs too. In fact, companies between one and five years old create on average 4 jobs per year each.

    Doing Well While Doing Good

    Now as both a very patriotic American and someone that wants to see my children grow up in a peaceful, prosperous, opportunity-filled world, I want to see a whole lot more jobs being created worldwide because it is just a good thing.

    And because my experience of over 20 years in business has taught me that the likelihood of a good job, as defined above, being at a startup or a dynamic young company versus being at a larger bureaucratic organization is somewhat self-evident, I want to see more startups and young companies thrive.

    But I am also an investor and I want to make myself and my associates a lot of money.

    And again, it may be self-evident but companies that are creating jobs are companies that are growing. And companies that are growing are companies that are creating more value this year than they did last year. And most importantly, have a better likelihood of creating more value next year than they did this year.

    And yes folks, it is these kinds of companies that regularly earn investors a lot of money.

    So, let's back them with government support (no bailouts needed - just get out of their darn way).

    Let's back them as a society - by holding up the entrepreneur for what he or she is - a modern day, real-life action hero.

    And let's back them as investors, because while we like to see the good guys win, it is even sweeter when we win with them.
    Jay Turo
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

  2. Thank given for this post:

    Dave A (02-Dec-09), sterne.law@gmail.com (02-Dec-09), wynn (02-Dec-09)

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    Kinda shocking that our neck of the woods got a mention - for the wrong reasons!

    I seem to recall the local stats also suggested job growth came from SME's.

    And who supports this statement?
    Quote Originally Posted by sgafc View Post
    So, let's back them with government support (no bailouts needed - just get out of their darn way).
    I think we need a poll.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member sterne.law@gmail.com's Avatar
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    SGAFC is right on the money - no bailouts, just get out the way. SME might not have lareg representation in rands but by numbers it must be huge. Article above proves it SME created 66% of the jobs. While it does not say where the jobs were lost I think we can infer that most were lost in SME. Why, well all the different costs arising from regulations and such are miniscule to the large company's ,they are a large expense to the SME, so where do they save money when in trouble, staff. Forced to pay the various fees and incur costs for forced tasks and memberships the one easy place to cut is staffing. Less workers less money spent, more recession. Seems rather easy maths if you ask me.

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    SME's account for 2/3rds of businesses around the globe, create nearly 80% of employment. That is power, true POWER!
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

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    Just for the figures. The last time I checked with StatsSA the number of practicing family owned businesses (SMEs) topped 1.44 million. Compare their practices with medium to large businesses. No comparison. Your SMEs rule the roost.

    Just for the record, BBBEE has a rule that up to 15 and 25% of all business done, in medium and large companies, must be with SMEs

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