If you don’t want poverty in your community, your businesses must pay living wages with decent benefits. And if you don’t want polluted air, water, and land, your businesses must behave in environmentally sustainable ways.
BDCs are similar to venture capital (VC) or private equity (PE) funds since they provide investors with a way to invest in small companies and participate in the sale of those investments. However, VC and PE funds are often closed to all but wealthy investors. BDCs, on the other hand, allow anyone who purchases a share to participate in this market.
And that figure is growing rapidly, such that in a few years the average wealth of these employees could easily exceed $1 million. Quite a few individual workers already have account balances above that level…. WinCo has more than 400 front line employees with more than $1 million in their ESOP accounts and hundreds of retirees similarly well set. Each year, it sets aside an amount equal to about 20% of each employee’s pay, in the form of stock, and the value of the underlying shares has risen rapidly, too.
How did America—a country dedicated to the proposition that all men are created equal—become one of the most unequal countries on the planet? Why do the nation’s leaders now spend so much of their time feeding at the trough and getting ever more for themselves? Why has public-mindedness in our leaders given way in so many instances to limitless greed?
These questions are being raised, not in some anti-capitalist rag from the extreme Left, but in the staid pro-business pages of the Harvard Business Review, in a seminal article by Roger Martin, the former dean of the Rotman School of Business and the academic director of the Martin Prosperity Institute: “The Rise and (Likely) Fall of the Talent Economy.”
One key factor, argues Martin, is a fundamental shift in nature of the economy. Fifty years ago, “72% of the top 50 U.S. companies by market capitalization still owed their positions to the control and exploitation of natural resources.” But in the latter part of the 20th century, a new kind of organization began to emerge: an organization that prospered not by natural resources but through “the control and exploitation of human talent.”
“By 2013 more than half of the top 50 companies were talent-based, including three of the four biggest: Apple, Microsoft, and Google. (The other one was ExxonMobil.) Only 10 owed their position on the list to the ownership of resources. Over the past 50 years the U.S. economy has shifted from financing the exploitation of natural resources to making the most of human talent.”
Shift your focus away from what you want (a billion dollars) and get deeply, intensely curious about what the world wants and needs. Ask yourself what you have the potential to offer that is so unique and compelling and helpful that no computer could replace you, no one could outsource you, no one could steal your product and make it better and then club you into oblivion (not literally). Then develop that potential. Choose one thing and become a master of it. Choose a second thing and become a master of that. When you become a master of two worlds (say, engineering and business), you can bring them together in a way that will a) introduce hot ideas to each other, so they can have idea sex and make idea babies that no one has seen before and b) create a competitive advantage because you can move between worlds, speak both languages, connect the tribes, mash the elements to spark fresh creative insight until you wake up with the epiphany that changes your life.
The world doesn’t throw a billion dollars at a person because the person wants it or works so hard they feel they deserve it. (The world does not care what you want or deserve.) The world gives you money in exchange for something it perceives to be of equal or greater value: something that transforms an aspect of the culture, reworks a familiar story or introduces a new one, alters the way people think about the category and make use of it in daily life. There is no roadmap, no blueprint for this; a lot of people will give you a lot of advice, and most of it will be bad, and a lot of it will be good and sound but you’ll have to figure out how it doesn’t apply to you because you’re coming from an unexpected angle. And you’ll be doing it alone, until you develop the charisma and credibility to attract the talent you need to come with you.
Have courage. (You will need it.)
And good luck. (You’ll need that too.)
All of history’s greatest figures achieved success in almost exactly the same way. But rather than celebrating this part of the creative process we ignore it.
This missing chapter in the story of success reveals the secret to doing meaningful work. But in the modern world, full of distraction, do we have what it takes to do great things?
[W]ithout startups, there would be no net job growth in the U.S. economy. This fact is true on average, but also is true for all but seven years for which the United States has data going back to 1977…. Startups create an average of 3 million new jobs annually. All other ages of firms, including companies in their first full years of existence up to firms established two centuries ago, are net job destroyers, losing 1 million jobs net combined per year.
As politicians go through the political drama of producing budgets, the truth of matter is that the only way to reduce the deficit is by reducing unemployment. According to an article written by Business Insider‘s executive editor Joe Weisenthal:
History is pretty clear on how you reduce the deficit: Get growth, and reduce unemployment.
We ran this chart earlier this week to show how nicely deficit/GDP and the unemployment rate correlated with each other. Throughout these decades tax and spending policies have changed a lot, but it clearly hasn’t mattered. When unemployment drops, deficit/GDP drops. When unemployment rises, deficit/GDP rises. Growth is the only deficit reduction policy that matters.
Given these facts, why do governments at all levels (local, state, and federal) continue to subsidize large corporations? As David Cay Johnston writes in an Al Jazeera America article:
State and local governments have awarded at least $110 billion in taxpayer subsidies to business, with 3 of every 4 dollars going to fewer than 1,000 big corporations, the most thorough analysis to date of corporate welfare revealed today.
Federal, state and local governments publish exhaustively detailed statistical reports on welfare to the poor, disabled, sick, elderly and other individuals who cannot support themselves. The cost of subsidized food, housing and medical care are all documented at government expense, with the statistics posted on government websites.
But corporate welfare is not the subject of any comprehensive reporting at the federal level. Disclosures by state and local governments vary greatly, from substantial to nearly nonexistent.
The top hedge manager, David Tepper, earned $1,057,692 an HOUR in 2012 — that’s as much as the average American family makes in 21 years!
Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. ~ Predator Nation by Charles H. Ferguson
The economic disaster was driven, Ferguson writes, by a combination of “very low interest rates, pervasive dishonesty through the financial system, massive lending fraud, speculation, demand for high yield securities, and not insignificantly, a squeezed American consumer desperate to maintain living standards, and told by everyone – including George Bush and Alan Greenspan, the brokers and the banks, that home borrowing was the way to do it.”
Charles H. Ferguson won an Academy Award for Inside Job.
Productivity is one way to measure the wealth of any nation. The top line above shows, we’ve been producing more and more per hour since World War II. The lower line shows average weekly wages (after factoring out inflation) for non-supervisory workers (who comprise about 85 percent of the workforce.)
From World War II to the mid-1970s, those two lines danced together. As productivity rose, so did the standard of living of working people. But something big happened in the mid-1970s — the government adopted a new economic philosophy based on deregulation and tax cuts.
The gap between those two lines represents an enormous amount of money — more than $3 trillion for 2012, for example. Where did it go? In the early 1970s, less than 9 percent of national income flowed to the top 1 percent. By 2007, it was nearly 24 percent.
The bankroll that stakes the high rollers like David Tepper comes from the productivity bonus that we are no longer earning.
[A] critical aspect of improving the U.S. economy is actually improving the small business economy and making it easier to start a business and to grow small businesses.
So what can local, state, and federal governments do to make it easier to start a business and to grow small businesses? We get an answer from Stacy Mitchell, Senior Researcher at the Institute for Local Self-Reliance. In an article she states the six steps that governments must take to support small businesses:
- Restructure the Banking System
- Close Corporate Tax Loopholes
- Extend Sales Taxes to Large Internet Retailers
- Get Corporate Money Out of Politics
- Cap Credit Card Swipe Fees
- Increase the Small Business Share of Government Purchasing
Why aren’t these steps being taken? Despite the talk, we must consider if politicians are really interested in economic development or is it more important for them to maintain the status quo? Aaron Renn addresses this issues in his post “Do Cities Really Want Economic Development?“
Jane Jacobs once said that “Economic development, no matter when or where it occurs, is profoundly subversive of the status quo.” This, in a nutshell, is why policies and programs that might actually move the needle and generate economic development are not implemented. The politicians, power brokers, businessmen, non-profit executives, etc. all at some level benefit from the status quo. Anything that disrupts the status quo is a threat to them.
A recent New York Times special report described the squandered opportunities of economic development in local communities across America as tax incentives tallying more than $80 billion are handed out to oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains — usually with no concrete benefit, no jobs, no improved economic climate.
[Yet, b]uilding local economies from within — investing in the people and local businesses rooted right where they are — offers profound, long-term outcomes.
And the evidence is in: From Economic Development Quarterly to Harvard Business Review, communities with a higher density and diversity of local, independently owned businesses have more wealth, jobs, and resiliency than communities that rely on large corporations and big box retailers as “job creating” employers. Rather than funneling wealth into a few hands, strengthening local business ownership results in more wealth and jobs for more people, and greater personal accountability for the health of the natural and human communities of which we are a part.
NYC DOT found that protected bikeways had a significant positive impact on local business strength. After the construction of a protected bicycle lane on 9th Avenue, local businesses saw a 49% increase in retail sales. In comparison, local businesses throughout Manhattan only saw a 3% increase in retail sales. Better walking infrastructure encourages retail strength, too.
In another example from NYC DOT’s study, retails sales increased a whopping 179% after the city converted an underused parking area in Brooklyn into a pedestrian plaza. Retail sales at businesses in the rest of the neighborhood only increased by 18%.