Friday, Chief Economist Chad Moutray was in Springfield, Massachusetts, to attend the Western New England College Law and Business Center for Advancing Entrepreneurship’s conference, “Entrepreneurship in a Global Economy.” Dr. Moutray participated in a panel discussion on politics and entrepreneurship. He cited five challenges and five opportunities facing small business:
Challenges
· Small businesses continue to struggle in the economic downturn, and it will be important for policy leaders to get the economy moving again.
· Business conditions have a fundamental impact on entrepreneurial activity, and moving forward, it will be important for policymakers to consider the impact of taxes and regulations on small business owners and would-be entrepreneurs.
· Finding ways to control the cost of providing health insurance to employees, which has risen substantially in the past decade, and increasing coverage will remain a priority for our national and state leaders.
· Small firms continue to struggle in their ability to attract and retain a quality workforce. This is more difficult in light of the disparity in total compensation and from demographic trends that exacerbate these challenges.
· American businesses face competitors on a number of fronts, both at home and abroad. When selling overseas, there are some structural disadvantages that make our products less competitive, and many businesses have reduced their costs by outsourcing some processes and tasks abroad.
Opportunities
· Small businesses are leading the way toward new inventions, processes, and products. This is something that should continue to be encouraged, especially since there are such strong linkages between innovation, entrepreneurship, and regional economic growth.
· Local communities should work to promote and nurture existing small businesses in their communities. Proponents of “economic gardening” argue that grooming these firms can ultimately lead to huge payoffs in terms of employment and growth.
· One of the strengths in our current economic climate is the export sector, and international trade represents an opportunity for small businesses.
· Policymakers should find ways to promote greater business ownership among women, minorities, immigrants, and veterans (especially those veterans and service-disabled veterans returning from Iraq and Afghanistan).
· Small business owners should look at education not just as a means of retraining their workers, but also as methods of building new skills, developing new human talent, and preserving employee morale.