Economic Gardening: What’s in it for you?
January 11, 2011
By Rob Fowler, President and CEO of the Small Business Association of Michigan (from the association’s member-only Focus on Small Business magazine.)
I’d like to expand on a thought expressed in our previous Communiqué by 2010-2011 SBAM Chair Cynthia Kay. In the Nov/Dec issue of Focus, she wrote: “Whether you are a small company that wants to stay small, a potentially high growth firm or somewhere in between, successful economic gardening will positively impact our state and ultimately your business.”
In other words, although the implementation of economic gardening will have its greatest impact on fast growing second-stage companies, it’s important to remember that economic gardening policies will help all small business owners.
There are three reasons for this:
● Economic gardening is the quickest way to a turnaround of Michigan’s economy
● Economic gardening will create a “rising tide” that lifts the fortunes of all small businesses
● Economic gardening charts a pathway toward a genuine culture change in the state
Quickest Way to a Turnaround
The data is pretty clear. When jobs are created, they come from existing companies rather than the relocation of companies into the state. But when you peel back the data, most of those new jobs are created by a few very fast growing “second-stage” firms. If we concentrate on helping those firms, they will grow even faster and lead the way to an economic turnaround.
A “Rising Tide”
Fostering the growth of these second-stage companies creates jobs, which puts money in people’s pockets, which makes them better customers of small businesses and which makes them more productive taxpayers! A growing economy solves a lot of problems. I’ve long maintained that Michigan’s state and local government budget issues are not due to a lack of taxes – it’s due to a lack of taxpayers (i.e. economic activity.) A “rising tide” of economic growth will mean a better bottom line for all kinds of small business owners – regardless of size – and, in combination with spending reforms, help stabilize government finances.
You can’t have a strategy that focuses on growing second-stage companies without also having a strategy for getting people into the first-stage: small business startups. The seeds of our economic garden have to come from someplace. We have to help men and women follow their dreams of starting a small business, and then nurture those who have the capacity and desire to move to fast growing second-stage status. That won’t include every small business owner. But we need a continuum of dynamic business activity – from startups to second-stage to graduation to big business – if we want sustainable economic growth.
That’s where culture change comes in. At our annual meeting last summer, SBAM Chair Cynthia Kay shared her dream of “a future society where a young person gets a job at a big company and everyone asks them: ‘What’s wrong with you? Why haven’t you started your small business yet?’” In other parts of the country, entrepreneurs are celebrated as folk heroes. In Michigan over the past 50 years…not so much. Economic gardening is about changing the conversation, changing the image of small business and changing the expectations of what Michigan citizens consider economic success.
Your involvement and engagement support our ongoing efforts to speak for and champion Michigan’s entrepreneurs – the men and women, in all stages of the business cycle, who are creating economic activity and jobs. Economic gardening benefits you, and all Michigan citizens, in so many different ways. Thank you for your ongoing support as we continue to pursue our campaign to propel a new economic direction for Michigan.