#37 – ENVISIONING NEW ECONOMIC OPPORTUNITY – SETTING THE STAGE (PART 2) - SMALL BUSINESSES ARE THE FOUNDATION OF FREE MARKET CAPITALISM?!

IDEAS TO MAKE THE WORLD MORE BEAUTIFUL

Reporting live, it is your favorite forward-thinking researcher!?I am so excited to share part 2 with you after almost a month! Quick recap - So, at the beginning I raised the topic of free-market capitalism within the context of the immigrant perspective. I want to build on this topic; based on the assumption that this economic system is the best for our context, we have to understand how the current system is being challenged. Free market capitalism depends on free markets, duh! And the basis of that, at a high level, is ample competition and the ability for a new competitor to enter the market EASILY and challenge the status quo to compete and add value, where there is opportunity for better prices or better customer service. Our current economic system is being challenged in the following ways:?

·????? Barriers to entry in a lot of sectors are increasing – meaning it is more expensive and complicated to start a business with some exceptions, of course.

·????? Additionally, there is consolidation going on in several sectors which is increasing the amount of monopolization and decreasing competition which is the basis of free-market capitalism.

·????? Case and point – Most of us accept that small businesses are the engine of economic growth. However, since the early 2000’s the percentage of all US employees that work for small businesses has been declining. See figure below.

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·????? Case and point – additionally, small businesses account for less than 45% of GDP where they were at above 50% in the late 90’s. See figure below; that is an over 10% reduction over about 12 years. We have similar evidence from data compiled by J.P. Morgan Chase here.

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·????? Case and Point – Diving deeper into a specific sector that is relevant to our bigger idea, let’s look at banking. Most people would agree that compared to Wells Fargo and regional banking conglomerates like SunTrust bank, credit unions are the small business equivalent within the banking industry. And the evidence shows that the number of credit unions are in decline. Over the last 10 years, the number of independent credit unions has declined by almost 30%! See figure below (source; STATISTA).

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·????? The evidence above shows the increase in consolidation and monopolies which corresponds to an overall decrease in competition across sectors. We see this in the decline of small businesses. We especially see this in the banking sector with the decline of credit unions.

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Now, the advocacy and dialogue on the decline of small business in our country is not new news. I truly believe that small businesses cannot ultimately compete with the might of a larger corporation. This is especially true because of a survey conducted by the US chamber of commerce which measured that, “over the long term, small businesses’ perceived access to capital to fund and grow their business has declined.” See link to that article here.

In the current environment, small businesses face an uphill battle. Despite all the efforts of our government and consumers, given the current approach, I believe small businesses are going to continue to decline as it relates to higher level economic trends for several reasons that we do not need to get into for this article. I DEFINITELY NOT GIVING UP, I AM STILL VERY HOPEFUL; ultimately what we need is to re-imagine the current landscape and look for an opportunity to EXPAND the context to create new opportunities for growth of small businesses. An opportunity to shift the paradigm which creates or radically expands a whole new dimension of opportunities that was not as accessible to small business entrepreneurs. Ok, time to put a pin in this topic and explore another topic before we weave all the topics together ??

Thank you so much for being part of this blog. Till part 3, I wish you Love and Light!

P.S. If you are looking for inspiration on how to step out of your comfort zone, feel free to check out the show that I am the host of on YouTube here! I interview guests who have made the difficult choice to follow their desires and face their fears; and live life with more courageous intention.

Natalia Pollard Ucha Emmanuel Shukriya Nazridod Nicholas Bellinger Rashi Gupta, AIA Maj Anuradha Monga Twinkle Agarwal Cindy Ochoa