Thirty years ago, America was the largest creditor nation on earth. Today, we are the largest debtor nation. Looking to the future, when one calculates up-economics scenarios against down-economic scenarios, down scenarios dominate by a wide margin. Consequently, it is safe to say that America is in economic decline. The question that we should be asking is America’s decline reversible? To answer this question, America needs to be brutally honest. Political cheerleading and false bravado is not useful. False hope is no hope. From a Jobenomics perspective, hope starts in the heart. The heart of America resides in its citizens – rich, middle-class and poor. We can prosper only when our collective hope exceeds our collective fear. There is much to make us afraid and there is equally as much to make us hopeful. America’s hope resides not in our economy, but in our spirit. The spirit of the American dream is bruised but alive. To ensure the America dream stays alive for the financially downtrodden, it is paramount that we nurture and exploit the spirit of innovators and entrepreneurs with emphasis on those at the base of our economic pyramid. Our economic base has to be rock solid – a house built on sand will not stand.
Today’s path to prosperity cannot be achieved through incremental changes to the status quo. Nor can prosperity be achieved by top-down solutions. While reduced bureaucracy, less regulation, and better financing to the base of America’s economic pyramid will help, these measures alone will not lead us to prosperity. The path to prosperity resides mainly in our citizenry and our collective resolve to generate viable opportunities for all to achieve their American dream. A nation divided against itself cannot stand. This was true when Abraham Lincoln said it. It is true today.
Over the last thirty years, America lost its focus on economic fundamentals. $50 trillion of public and private debt caused by lavishing spending is only a symptom of a larger issue. The American economic engine stalled because we turned from producing to speculating at all levels of or society – Main Street, Wall Street and Washington.
There is an old adage that states there are three ways to make money: (1) by your own hands, (2) by someone else’s hands, and (3) by making money-on-money. Over the last three decades, making money-on-money became the first choice of Americans from Wall Street to Main Street to Washington. Wall Street over-leveraged exotic financial instruments. America’s largest corporations now make as much money on financial services as they do manufacturing. Main Street over-extended itself by buying oversized homes, investing in the stock markets and 401Ks, and maxing out credit. Washington not only let this happen, but became the largest trader of toxic financial instruments (mortgage-backed securities) on the global secondary market.
The path to economic security begins by changing America’s negative attitude towards business. At best, Americans have become ambivalent towards business. Business is taken for granted. It is often looked upon as a necessary evil, checkbook, or social service provider, as opposed to the economic solution. Anti-business sentiment causes big businesses to be cautious, limit hiring, close operations, and outsource overseas. It is estimated that 25 million American jobs have been outsourced to China in recent years. When iconic American companies, like Apple, employ more Chinese than Americans, there is a problem. Anti-business sentiment encourages small business to go out of business, layoff employees, and defer expansion. Equally important, anti-business sentiment discourages business investment which is needed to start new businesses and grow existing businesses.
The only meaningful way to fix the American economy involves a comprehensive plan involving economics of business, job, wealth and tax revenue creation—the Jobenomics credo. The Jobenomics Plan for America emphasizes small, emerging and self-employed businesses. Small business is the US economic backbone. Small business (less than 500 employees) employs 84% of the total US civilian labor force. There are 6 million US small businesses and 22 million self employed businesses. Since the beginning of this decade (2010s), small business generated 97% of all new jobs compared to large businesses that have produced only 3%. Small business produces $6 trillion annual revenues, which equates to the second largest economy in the world.
If America wants to reverse its economic decline, small, emerging and self-employed businesses will have to take the lead role. In this regard, the Jobenomics’ Team has instituted a dozen highly-scalable “proof-of-concept” business creation initiatives that can generate tens of thousands of new small, emerging and self-employed US businesses. Current Jobenomics initiatives involve: community-based business generators, women-owned businesses initiative, veterans-owned businesses, a nation-wide system of electronic-waste recycling plants, energy and green job programs, cloud computing projects, direct-care centers, business ministries, real estate owned properties programs, minerals exploration and mining projects, a direct sales initiative, and foreign-owned US businesses and investment projects. While most of these initiatives are in the planning phase, public response has been overwhelmingly enthusiastic. The basis for the public’s enthusiasm resides more in the potential as opposed to the initiatives themselves. If several hundred members of the Jobenomics team can implement businesses that could scale to tens of thousands of jobs, what could America do writ-large with a national level program?
America’s focus has to be on private sector business innovators and entrepreneurs. The Jobenomics 20 by 20 Plan calls for small and emerging business innovators to generate 18 of the 20 million new jobs required for economic recovery by year 2020. On a level playing field, small businesses can operate internationally. In the near term, America needs to focus on business creation in the service-providing industries as opposed to the goods-producing industries (predominantly manufacturing, construction). Why? Because 78% of all American jobs are services-related, and service industry jobs can be implemented much faster than other industries. Rapid implementation is essential to enhancing consumer and investor confidence.
America has faced many historical crossroads and has repeatedly chosen the path to prosperity. Several hundred years ago, the vast majority of Americans worked on the farm. Today, only one percent works in agriculture or ranching. Over the last hundred years, the vast majority of Americans lived in rural areas. Today, eighty percent live in urban areas. Fifty years ago, half of our citizens worked in factories. Today, eight percent of our workforce is employed in manufacturing. America now faces yet another crossroad. One path leads to continued decline. The other path leads to renewed prosperity. Big government, big business and top-down strategies are essential to a strong economy. However, small business has been, and will be, the engine of economic and social transformation. With the decline in manufacturing, construction and government funding, urban areas are struggling to support jobless masses. Empowered by 21st Century technology and public support, small business has the wherewithal to employ tens of millions, create wealth and transform our nation.
Transformation will be lead not only by traditional innovators and entrepreneurs, but by non-traditional Generation X’ers and Generation Y’ers who are the most qualified people to monetize the internet and social networks. Facebook alone has 800 million users. The country that learns how to monetize social networks will be transformed almost overnight. Tens of millions of new businesses (mostly small and self-employed) will be created. Millions could migrate from urban to rural or virtual communities, and create a new American way-of-life to fulfill a different American dream based more on self-sufficiency and economic independence than wealth creation. 70 million Generation Y’ers are now entering the workforce. They are tech-savvy, team-oriented and socially conscious. They have a much different view of corporate culture and how to do business. Most importantly, they own the future.
America’s future depends on sustainable, environmentally-friendly communities that will be more rural/virtual than urban. Self-employed, home-based business could be the norm. Today, there are 22 million self-employed, home-based businesses. Tomorrow, it could be two or three times as many. To empower growth of highly-networked small businesses, a national broadband system is essential. From a Jobenomics perspective, building a national broadband system is the most important thing that government and big business can do for jobs creation. Today, 40% of American households have no broadband or high-speed access and 30% have no internet access at all—mostly in rural areas. While America has the largest total number of broadband subscribers, internationally the US ranks 15th per capita when adjusting for population size. A state-of-the-art national broadband system is tomorrow’s business superhighway. Just as the railroads opened the American West to commerce and Eisenhower’s interstate highway system facilitated explosive economic growth, a national broadband system will enable e-commerce and e-business between billions of people and organizations across the planet.
In conclusion, the highest percentage way to reverse America’s economic decline is to focus on business creation with emphasis on small, emerging and self-employed businesses. Jobenomics Community-Based Business Generator projects, like Jobenomics-Harlem, are designed to create 1,000 new small businesses per year per city. The Jobenomics Women-Owned Business initiative estimates that up to 7,000 new, predominantly home-based self-employed businesses could be created by the end of the decade. And, these are only two of the twelve proof-of-concept initiatives that the Jobenomics team is trying to implement. If America would implement a national small business initiative with initiatives of this nature, we could have an excellent shot at reversing our economic decline. It all starts with an achievable vision. President Kennedy focused American science and technology on getting to the moon in a decade. In comparison, the Jobenomics 20 million new private sector jobs by year 2020 (20 by 20) goal should be very achievable.