Small Companies- The Key to New Ideas and Innovation

My father ran a small business for the last 30 years and just recently retired. I have learned much from him when it comes to business. I've also learned a lot in the few small business that I have started and stopped at various times in my life. I also work for a large retail company; it has been my main source of income for my entire adult life. Having one foot in each area has given me a very unique perspective to the pros and cons of having an economy which is based on both large and small businesses.

One of the greatest things in this country is that you can actually start your own business. Americans take this for granted and, in fact, many of them never make the attempt. On the other hand, people from other countries immigrate here for the specific purpose of starting and running their own business. The beauty of our system is that we all have a choice.

With that being said, we have a major flaw in our economic system. I call it, 'The Human Element'. The Human Element is why theory goes out the window when you put something into practice. It's the reason why small businesses in this country cannot expect a level playing-field to compete with the 'big boys'. Large companies get tax breaks, subsidies, and grants from the government that small companies don't qualify for. This puts the small companies at a disadvantage. Large companies take advantage of The Human Element by offering money, gifts, and political support in exchange for favors from government officials.

The strength of small business in a capitalistic society is important to all of us because it helps to bring new ideas and innovation to a given industry. Historically, major changes to industries including technology, quality, reliability, service, and format have all been spearheaded by the small businesses. This is where the new ideas take shape. These companies need to have equal ground to work with so that they can become competitive - competition makes us all better. I will use the following examples to illustrate:

1. Did you know that 70% of cars in Pakistan now run on compressed natural gas? It took that country less than 10 years to put in an infrastructure for a new fuel that was integrated into the gasoline infrastructure that they already had. We've been told that in our country, it just isn't possible, it's too expensive, the cost to the consumer would be herendous (it's the oil companies that own all of our fuel stations that tell us this). The average person in Pakistan makes $20 a week. We call it a 3rd world country. All the fuel stations are privately owned and operated - there are no stations with the names Mobile, Shell, Exxon, or BP. It's the privately owned stations whose owners say, "I want to be more competitive, I'm going to invest in my business so that I can offer something that others don't." Before you know it, CNG is available at all the gas stations in the country - it's cheap enough that those people making $20 a week can actually afford to drive to work...and it was made possible by the fact that the gas station industry in Pakistan is dominated by small business.
2. Did you know that North Korea is 4 generations ahead of us in cell phone technology? Their cell phones aren't run by AT&T or Verizon, they're run by small companies who lease bandwidth from government owned transmission towers. North Korea is so far ahead of us, that their television broadcasts are carried via broadband wireless internet. We're just switching to digital broadcasts in the US this coming February and North Korea already been there, done that, and moved onto the next step up the ladder. The United States was one of the first countries that had a land-line telephone infrastructure, but it was run by large, monopolistic companies. These companies were already getting a monthly payment from all of the homeowners in the US who had land-line phones, they had no need to invest in cell phones because they weren't competing with anyone. The result - as a nation we are now 20 years behind North Korea in technology. National Security anyone? Oh and, by the way, Pakistan is 2 generations ahead of us in cell phone technology.
   

Small business is the key to driving competition. Competition is the key to new ideas, new technology, better service, and all the other good things that people would like to expect as consumers. At the birth of our nation, 90% of the people in this country were business-owners. Today, 90% of people in this country are employees in a business that they do not own. Why the change? The answer is simple - it's just to hard to run a small business in this country and make a living doing it - the playing field isn't level. The Human Element gives tax breaks, free money, and 'bail outs' to the large companies who are padding the pockets of those making the decision. We are no longer a capitalistic society; we are now a 'selective capitalistic' society. A return to unbridled capitalism would push the US back to it's former glory and economic growth; unfortunately for us, The greedy Human Element will fight it every step of the way.