I have frequently read and heard over the last few years that small businesses are the backbone of our hiring economy. An individual company’s hiring may be small in number – and sometimes part-time people – but if they are right about their expectations, their hiring can increase multi-fold. And with many small businesses doing the same thing, this can have a huge impact nationwide.
Now, of course, many start-ups fail. Some owners will go without a salary themselves to keep their business afloat. So what is needed to make this whole thing work is more start-ups – strength in numbers. According to government statistics, though, the number of new start-ups have been steadily declining. In the wake of constant technical improvements, the question is why?
New York Times journalist Ben Casselman believes big business may be playing a role with this phenomena. In his September 20 article entitled A Start-Up Slump Is a Drag on the Economy, he argues that market power makes it difficult for start-ups to compete. They may get up and running, but at some point get stalled due to the tactics of the larger competition.
He also argues that it is not just a vertical scenario within one industry, but is horizontal – cutting across many industries. And what started a few decades ago in the retail sector as small players got pushed out by big box, has now moved over into the technology sector, which over the last twenty years has been the heart and soul of the start-up success.
The statistics over the lack of new start-ups has contributed to the existence of a new organization, the Center for American Entrepreneurship. If you are or work for a start-up, you may want to check them out as to how they may help you navigate with these unseen forces lurking below the surface.