The New Economy Needs Small Business in the Driver's Seat

At the end of the twentieth century, economists and sociologists were predicting the entrance of a “new economy”—one that shifted from the old focus on industrial manufacturing to a hyper-connected globalized economy of information.

You might think that the arrival of the internet, search engines, and social media would have made that transition certain. And in many ways, they did. 

But the idea of the new economy also promised that people in economies of connectedness would be happier. They would have more free time, and their work weeks would shrink. Developments in technology would reduce risk of injury and disease, leading to healthier populations. Leisure time, creativity, and interest in the arts would abound as robots took over the dull hum of the factory.

Needless to say, that hasn’t quite happened.

Instead, many are more anxious and stressed than ever. The world feels disconnected and polarized, and one wonders if technology is being used to heal or accelerate those problems. More and more Americans report feeling burnt out in their professional lives, and the after-effects of that weariness carry over into our personal wellness. 

One might blame the technology for this—the social media algorithms, the constant chatter. But it’s worth asking if the culprit isn’t so much the technology itself as our lack of creativity in how to use that technology to build a better world.

It’s not too late to change the story. We still have a clear path to the new economy we dreamed about before. The world could be different if we did a few things.

What if we measured success differently?

Part of our problem is that our measurements of success didn’t change with the arrival of new technologies like the internet.

Society still pursues “productivity” as a good in and of itself and continues to worship at the fickle altar of GDP. Instead of pursuing a society where people are satisfied with and find meaning in their lives, we’ve continued to use their lives as means to an end.

What if we switched out “happiness” or “contentment” for GDP in our mental picture of a healthy economy?

If we made that substitution, we’d see a lot more entrepreneurs. 

People find meaning, purpose, and responsibility in their lives through starting new things. They start families, start businesses—they even start countries! What if having a family makes people so happy partly because it feeds the human hunger to create?

For many people, the opportunity and space to create feels restricted and out of reach—and it definitely isn’t a critical part of their professional lives.

People find meaning, purpose, and responsibility in their lives through starting new things.

This is why we are in desperate need of communities that view the “Right to Start” as an essential impulse in the human condition. Communities that connect their entrepreneurs (and future entrepreneurs!) to as wide a wealth of resources as they can gather. Communities that view entrepreneurs as the lifeforce behind their thriving ecosystem.

What if we rethought economic development?

This vision of prioritizing small businesses is at odds with the prevailing ideologies of economic development, which can over-rely on corporate recruitment in the name of job creation. If you can just get the right manufacturer, or perfect tech startup to set up shop in town, they say, then you can sit back and watch the local economy boom.

While corporate recruitment is often necessary and appropriate, it often occupies so much space in the minds of local leaders that it overshadows the focus on small business support and reinforces old, failed expectations about what constitutes “success.”

While on the surface it might seem simpler to recruit big-business, investing in entrepreneurs creates lasting local jobs. A big company may be a win for a time. But when that company decides to leave—taking the jobs with it—it can devastate a community. When you invest in building local businesses, the jobs created by these businesses last. They stay. Over time these jobs add up to something significant for the local economy and bring lasting change. 

Pitch competitions, placemaking, microloans, and entrepreneurial education feed the human need to start and form the entrepreneurial backbone of a community—the life-force that will sustain a city if Amazon closes the local warehouse.

What if we saw grassroots entrepreneurs as the key to better communities?

Hundreds of communities across the country have recognized the role of small business support in building the economy of the future. One way communities can follow through on that recognition is by providing clear, simple programs like CO.STARTERS that bring local creatives and entrepreneurs together to learn business basics.

Not only is entrepreneurship itself a path forward to personal happiness and fulfillment, but collective support of entrepreneurship can actually change the community for the better. 

Because entrepreneurs often start businesses to solve local problems, they can address real community needs and fill gaps. When you invest in local grassroots entrepreneurs, you’re investing in services and solutions custom-tailored to the wants and needs of the surrounding community.

Not only is entrepreneurship itself a path forward to personal happiness and fulfillment, but collective support of entrepreneurship can actually change the community for the better.

And because of the innovation local business can provide to the local context, communities with strong webs of entrepreneurial support often have a distinct sense of place and high standards of living. 

People want to live in cities and towns with microbreweries, ethnic restaurants, boutique shops, unique event spaces, and beautiful artwork. Small businesses solve tangible challenges and problems, but in doing so they add to a community’s intangible draw and appeal.

Ninety-seven percent of CO.STARTERS graduates feel that their business positively impacts their local community. 

Imagine a world where access to that feeling is open to everyone. Where small businesses are given the tools and resources they need to thrive, and communities are able to benefit from the success of those businesses.

That’s the power of the real new economy.