April 16, 2012
Observations of a retired hi-tech entrepreneur and a 30-year SCORE counselor:
Small businesses do NOT need additional capital or better access to it -- lenders and venture investors are doing a perfectly adequate job of supplying capital (where it can it can be used productively). The focus on capital and the government's (and media's) continued emphasis on the need for capital are actually detrimental to the startup and operation of small businesses.
This does not apply to emerging growth businesses, but the number of such businsses is severely limited (by skills and luck) and will do little to solve the nation's emerging jobs crisis. (The "growth" of these businesses can be expected to be more in revenue than in jobs.)
Government has yet to recognize that the jobs we saw in the last century aren't coming back. Manufacturing jobs were lost to low-cost off-shore labor (and rising off-shore technology guarantees their continued dispersion). Wholesale and retail jobs are being lost to the web -- the presence of the web virtually guarantees the eventual loss of all "middleman" jobs -- whether products or services, no one needs middlemen when they can deal with the suppliers directly (via the web).
This loss of jobs coupled with a rising population creates a major problem for government. Government needs to support the unemployed (if not directly, then in prison) -- and where will that money come from with a declining number of taxpayers?
One solution is government getting out of the way of new startups (as was the case early in the last century) -- encourage the formation of micro-businesses, doing business locally and on the web without the interference of rules and regulations, not just at the national level, but at the state and local. That's been by far the largest deterrent (and reason for early failure) among the thousands of budding entrepreneurs I've counseled the past 30 years.