Frank Ray

Monday, 22 July 2002 09:56

A millennium of opportunity

Small businesses have been around, not in the form we now recognize, but perhaps on the very ground we now occupy, since before recorded history. Why? Maybe because there has always been a need or desire for an exchange of goods and services and the energy to do so wherever people lived and worked together.

We still trade for beads and food and furs, but now that is done using credit cards in specialty shops, department stores, restaurants, malls and on the Internet. The more we change, the more we remain the same.

In Ohio, small business has a long history of success. There are more than 226,000 businesses with employees here and 361,000 self-employed individuals. These small businesses created all of the net new jobs in 1997 and appear to be continuing that trend. In fact, the income of sole proprietors and partners alone rose to $16.2 billion in 1997.

As we approach National Small Business Week, which begins May 23, it is time to recognize some of the local heroes of small businesses — a Marion woman who turned a natural disaster into a major personal success, a Dayton entrepreneur who took under his business “roof” an infant minority firm, a Cincinnati woman who has assisted other women in business, a Columbus creator of innovative restaurants and a banker and banks who have championed the cause of smaller firms and approved their loans.

As we approach the millennium, we pay appropriate homage to the history of successful small businesses. These entrepreneurs have risked their futures and those of their families to make us what we are today. We also worry that they may be so busy building even better mousetraps to market on the Internet that they may have neglected to do a thorough Y2K debugging. Incidentally, those with questions about Year 2000 issues can find information through the Y2K Help Center for Small Business at (800) 925-7557 or y2khelp@nist.gov. The SBA’s Web page, www.sba.gov, is a good source of assistance as well.

Congratulations to all the SBA Award winners you’ll read about in the pages that follow who will receive much-deserved recognition in the 1999 Small Business Winners Circle May 19. They, and their peers, will lead the way to abundant opportunity in the millennium. And a round of applause, too, for Small Business News which chronicles these champions monthly and partnered with the SBA, once again, for this year’s event.

Frank D. Ray is the Columbus district office administrator for the U. S. Small Business Administration. He can be reached at (614) 469-7310 or frank.ray@sba.gov.

Monday, 22 July 2002 09:41

Defining roles

As I read a study by SBA’s Office of Advocacy entitled “The New American Evolution: The Role and Impact of Small Firms,” I was startled by the repetition of the word “change” in the text.

Perhaps I reacted because of a course my senior staff had attended, “Leadership in a Time of Change,” designed to give them the tools to bring our employees through a period of rapid program changes and into the future unscathed. More likely, it was because I’d recently read the bestseller by Spencer Johnson, M.D., “Who Moved My Cheese?”

While employment has remained virtually unchanged in the European Union recently, it has increased by at least 14 million in the United States, Jere Glover, SBA’s chief counsel for advocacy, writes in regard to the study.

What accounts for this? Differences in competition, entrepreneurship and start-ups are major factors, he says.

Glover adds that “the American economy is not a still photograph — it’s a dynamic organism that changes while you’re looking at it. Looked at from the perspective of process, change and evolution, small firms make at least two indispensable contributions to the American economy:

  • As sources of constant experimentation and innovation, they are an integral part of the renewal process that defines market economies. They have a crucial role as leaders of technological change and productivity growth. In short, they change market structure.

  • By creating opportunities for women, minorities and immigrants, they are an essential mechanism by which millions enter the economic and social mainstream.”

    The study explores Dynamic Theory, asking why firms start up in industries in which existing firms are experiencing losses and losing market share to foreign companies. The study suggests that “new firms [entering] the industry were not simply to increase output by being smaller replicas of large incumbent enterprises, but by serving as agents of change.”

    “Dynamic Theory favors small firms because it shines the light on change. In the new information economy, continued innovation and change is the rule,” the study states. “More than half of the sales of high technology firms comes from products less than 18 months old. Seen through the dynamic lens of evolutionary theory, the economic welfare implications of the recent shift in economic activity away from large firms and toward small enterprises is welfare-enhancing because start-ups introduce change into the economy.”

    On a different level, “Who Moved My Cheese?” explores the maze of today and suggests that one’s view of change and reaction to its implications greatly affect personal outcomes — and those in business.

    SBA’s programs and employees are changing to move in sync with small businesses. We wish our award winners — and all of your small business friends and relatives — well during their Small Business Week 2000.

    Frank D. Ray is the Columbus district director for the U.S. Small Business Administration. He can be reached at 469-7310 or frank.ray@sba.gov.