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How America can create jobs

The nation's entrepreneurial prowess may be the best hope to stem 9.7 percent unemployment. Companies from a laser-tech firm to a baby-sitting network are harnessing new ideas – and helping reinvent the economy.

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With that gaping jobs deficit, Mr. Obama's proposed incentives for bootstrap businesses are at best a partial fix. Many economists worry that the normal growth cycle may be too tepid to bring down the nation's 9.7 percent unemployment rate this year. So the president is pursuing more government aid to households and state governments, to give the economy a demand-side boost. He's also seeking to promote exports and to expand infrastructure spending.

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Economists generally support this kind of multiprong strategy, but the basic goal is to get the economy's natural job-creation forces working again. The hiring will need to come from all quarters, including giant corporations and the hair salon down the street. Yet year in, year out, a healthy share of it comes from entrepreneurs, an American resource that dates back to Robert Fulton's steamboat.

So the questions loom: Where are the new

Valentin Gapontsevs? How can America regain its entrepreneurial edge? Even more fundamentally, does the nation still have an innovative culture?

The encouraging news is that it does: America's tradition of garage-to-riches start-ups, extending from Alexander Graham Bell to Jeff Bezos, remains relatively vibrant. Successful entrepreneurs exist everywhere from the mountains of Montana to the glass-and-steel canyons of Chicago. Today they are more globally connected than start-up firms have ever been. They span every industry, not just high-tech fields like lasers. Many of the founders are immigrants, and their ranks are being expanded increasingly by women, minorities, and people over age 50.

Nor have the innovative ideas stopped flowing just because of a deep recession:

•In Kokomo, Ind., a city hit by the travails of the US auto industry, a new company called Zuna Infotech is hiring more than 100 people with computer skills. The firm is serving clients who want to outsource their information-technology work, but in this case the jobs will be "onshore" in the US rather than in cubicles in India.

•Across the Southwestern US, Sprouts Farmers Market is turning home-grown cauliflower and navel oranges into big profits. Its concept – grocery stores that buy as much produce as possible from local farmers – has landed the Phoenix firm on Inc. magazine's list of fast-growing privately owned firms, yielding 2,500 jobs in just eight years.

•In the Boston area, a start-up called Pixily is growing jobs by helping small businesses ditch their file cabinets and store their documents digitally. Founder Prasad Thammineni, a serial entrepreneur from India, says he expects to double his payroll this year to about 20 employees.

"Being able to find information efficiently is the reason [businesses] find the service useful," says Mr. Thammineni.

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