How to end the recession: small businesses on-campus

Small businesses have led the US out of every recession of the past decades, so why not harness the time and energy of undergraduate entrepreneurs?

Rebecca Swiller / The Christian Science Monitor / File
As an undergraduate at Babson College, Missy Fine (l.) received $500 from her parents to start a jewelry business. She and her mother (r) posed after seeing 'Lemonade Stories', a documentary about entrepreneurs, in April 2004. Who better than young people to take on the risks of becoming a small business owner?

While wise Princeton men such as Bernanke and Krugman are looking for "macro" solutions for what ails our economy. But, at the mighty University of Chicago I see a different approach being taken. We know we need to create new jobs so what has Megan Frestedt done? She has started a record label called Tandemshop Records . What type of music do they make? I have no idea -- if the music isn't Elvis -- I don't want to hear it.

College kids starting up small businesses is a new idea for me. When I went to college, there were pot dealers but I never viewed that as an engine of growth. While we celebrate Bill Gates and the Zuck, there must be many other small businesses trying to get off the ground.

Young people have the time and the energy to try to make these efforts happen. Has the Obama Administration or their Republican friends actually contacted these small business people to see what they need from their government in terms of "stimulus" and incentives to help them grow?

I would presume that small businesses need the ability to sign nimble contracts that do not lock them into real estate or a labor force that they cannot afford if bad shocks take place. What does Megan have to say?

"Balancing work and academics has not been easy, Frestedt said with a sly smile. “It definitely distracted me a bit from school, but it also taught me to be better at balancing my time,” she said.

What lessons can economists take from this one case study? The research I remember has mixed feelings about small business as a key "engine of growth" but small businesses, because they don't have a history, are more likely to experiment and tinker. We need some experimentation right now. If mature companies become risk averse and stuck in their old ways of doing things, then we need to encourage more experimentation. Creativity may be the only thing that the U.S has to export anymore. We know we can't sell short stories to the rest of the world --- so we are going to have to think hard about harnessing our last export.


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