Off the road, again

I have participated in four panel/round table discussions in the past few weeks.  I like getting out there and meeting folks and discussing economic development.  We don’t always agree – in fact there can be sharp disagreement – but for me it is good to take it outside the theoretical realm and into the trenches.

I will say that there continues to be an over-romanticization of small business in this region and an overly sharp distrust and suspicion of large business or multinationals.  I continue to find this attitude not only among the populace but also among business leaders and government bureaucrats.

I find this disturbing and a hard nut to crack.   

The truth is that small biz, large biz, multinational investment  all play a role in a successful economy.  It is also true that there are ‘bad’ large corporation and ‘bad’ small, local businesses (defined however you want).  I still remember visiting a relatively small, local manufacturing firm in the 1990s in August.  It was, by definition, a sweatshop – the huge fans were blowing and the male workers had all but stripped down to their shorts.  I found out later that the owner paid his workers – for this gruelling work – between $8-$10/hour and laid them off between contracts (forcing usage of the EI system).  Now this guy was romanticized by a lot of folks as a great and successful entrepreneur but you do the math.

Now, of course, there are similar stories with large firms as well.

You can’t replace a lost mill or huge industrial operation by encouraging a bunch of small businesses.  I have never witnesses this approach achieve success.

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4 Responses to Off the road, again

  1. mikel says:

    Actually, you HAVE. NBTel. It was a large business, and as you mentioned, most of the people at the top of that pyramid then went on to set up successful consulting/networking companies.

    I wonder though how much of that ‘romanticizing’ is just talk-especially from politicians. If you saw the report on the solar company taking over UPM’s mill, there weren’t too many angry voices. IF it provides jobs, thats all most people care about.

    It’s also a class thing. I worked for a number of the ‘well heeled’ when I had a small biz in NB, and you quickly find out that these guys have a VERY different reputation outside the local media and Chamber of Commerce. Unfortunately, in a province like NB where Irving owns the media, people get their ‘entrepreneurship’ training from the Irving narrative. Meaning that you have to be a cheap miserly brute in order to succeed. Of course in some cases small businesses HAVE to be cheap with employees because its the only way to succeed, but as you say, big or small, some business owners are )&(**^^!’s! And much of the skills needed to succeed in a dog eat dog world unfortunately foster unpleasant moral compasses. I remember lots of guys who were ‘so nice you knew they’d never succeed’. Much of that narration comes from that cursed Capra-It’s a Wonderful Life! Truth is, that old guy is Irving, and James Stewart wouldn’t have lasted half that long before he ended up as ‘Harvey’.

  2. Anonymous says:

    Stunning how many people passionately promote myopic economic development by focusing solely on small business development. It as if the strategy over the last 20 years has worked!

    As you have posted many times, there is probably no more effective action to grow small business than to bring in a stable and prosperous large business. We see this in economies accross the country and around the world.

    We need a balanced strategy that supports both the development of small business and the attraction of quality large businesses.

  3. mikel says:

    Just for an update, if you missed the financial news today, small and medium companies have fared far better than their larger counterparts during the recession. The reason given is that they focus on direct customers, rather than american businesses who have now turned out illiquid. Just a fact.

  4. Anonymous says:

    Yes. Guess it depends if we are satisfied with our currént standard of living and can sustain that by selling stuff to each other or if we want to improve our standard of living by bringing in external wealth through exports.

    Personally I prefer the later.
    Oh, and since we are running up massive debt at all levels of goverment, our sustainable standard of living would be substanially less than what we presently enjoy.

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