Archive for September, 2011
Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Happynomics, tags: Abraham Lincoln, Andrew J. Oswald, David Cameron, Economic Journal, England, GDP, Joyce Grenfell, Money, Success, University of Warwick
Abraham Lincoln said, “Most people are about as happy as they make up their minds to be.” I think there’s some truth to that. But of one thing I am increasingly convinced: Money and success do not buy happiness in business.
I’ve recently come across an interesting guy named Andrew J. Oswald. Oswald is a professor of economics at the University of Warwick in the U.K. He is on the cutting edge of a new school of economic thinking called “happinomics.” Oswald’s belief is that growth in income is not correlated to happiness either in nations or in individuals. He says:
“The relevance of economic performance is that it may be a means to an end. That end is not consumption of beef burgers, or the accumulation of television sets, nor the vanquishing of some high level of interest rates, but rather the enrichment of mankind’s feeling of well-being. Economic things matter only in so far as they make people happier.” (Happiness and Economic Performance- Economic Journal-1997.)
While I do not wish to bore you with extensive research results, Oswald argues (convincingly to me) that macro-economic thinking needs to shift from the concept of financial prosperity to the idea of emotional prosperity. His extensive years of research in the US and UK reveal that increasing income does not contribute dramatically to the quality of people’s lives. He concludes his paper with this question, “How can it be, one may ask, that money buys little well- being and yet we see individuals around us constantly striving to make more of it?”
This is a case where academic economic research may actually begin to have an effect on public policy. At least in England. British Prime Minister David Cameron is right now creating a national happiness index providing quarterly measures of how people feel. Call it an alternative GDP. While this may all sound a bit airy fairy, the actual case for trying to measure not only growth and prosperity, but also happiness, is increasingly compelling.
I certainly believe that entrepreneurial mindsets need to change over the next decade to emphasize more of the intangible values of entrepreneurship. I believe that a coming and necessary age of austerity will refocus many entrepreneurs from the concept of financial prosperity to the idea of emotional prosperity.
I say this from my personal experience of the entrepreneurial journey as a walk to personal growth and satisfaction at least as much as to financial security. For this reason, if I went bankrupt tomorrow, entrepreneurship would be a huge success for me personally. For me the greatest gifts of entrepreneurship are intangible and spiritual. I hope that latter word doesn’t get everyone squirming in their seats, but I see personal well being as a very practical primary business goal. It’s certainly my main interest in being an entrepreneur.
Or maybe I’m just over-thinking this whole happiness thing. As late British actress Joyce Grenfell once said, “Happiness is the sublime moment when you get out of your corsets at night.”
Thank you, Joyce.
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Posted by Tim Askew in Apres Moi Le Deluge, Blog, Corporate Rain, Entrepreneurship, tags: American Jobs Act, Boomer Generation, Dodd-Frank, Epicurus, Louis XV, ObamaCare, The French Revolution, The Wall Street Journal, White House
Louis XV of France (1710-1774) memorably said, “Après moi, le déluge.” Indeed. The French Revolution soon followed.
As I look with bemusement and attempted objectivity at recent proposed solutions to our ailing entrepreneurial and business climate, one fact increasingly leaps out at me: Almost all political and economic suggestions for remediation of our conundrums are based on short-term, strategically parochial and self-serving base assumptions–many deleterious to the long-term health of business and, particularly, of small business. It is so much easier for to apply quick band aids and feel-good nostrums and say we are doing something. To cite that overused but accurate phrase, we are engaged in “kicking the can down the road.”
Take for instance, the tax incentives offered to us small businessmen in the American Jobs Act. This Act offers $240 billion in new short-term tax incentives to hire new workers. However, these temporary incentives apply for the next 16 months only, after which new employees will become part of large permanent new bureaucratic fiats and taxes, like Obamacare and Dodd-Frank. In what way will this incentivize any entrepreneur to saddle herself or himself with any but the most essential new hires? It feels like a trick to bribe our entrepreneurial community to shut up till after next year’s elections, after which point we get hit with a variety of giant tax bills and more stupid regulation.
The Wall Street Journal (Editorial-9/14/11) sums up White House thinking as hoping “new spending and temporary tax cuts will so fire up investment and hiring in the next 16 months that the economy will be growing much faster in 2013 and could thus absorb a leap off the tax cliff.” To me, this is simply a panglossian myopia unattached to long-term business reality.
I worry that both of our political parties can never think past the next election. Obviously, we should keep our basic welfare safety nets at reasonable levels (and that includes entrepreneurs paying more taxes), but you shouldn’t kill the goose that lays the golden eggs of employment and economic growth through stultifying, excessive regulation and punitive taxation. Our present governmental thinking does exactly that.
I often wonder if my own Boomer Generation has become incapable of the long-term sacrifice and common sense necessary for fundamental reform because of simple selfishness and generational narcissism. Or perhaps that judgement should apply to all of our current society, whether this be the welfare recipient or the millionaire. Where is the commitment to the greater good?
Perhaps we have become an epicurean society, living for only a short-term happiness and never paying the piper. The modern use of the term “epicurean” is associated with the saying, “Eat, drink, and be merry for tomorrow we die.” Though this is a false oversimplification of Epicurus (341-270 BC) philosophy, perhaps this is where we are in our societal and political thinking. Not good for any of us or the the future of our polity, much less our entrepreneurial community.
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Posted by Tim Askew in Blog, Blue Ribbon Panels, Corporate Rain, Entrepreneurship, tags: "New York Open For Business", Blue Velvet, Crain's, Daniel Massey, David Lynch, New York Governor Andrew Cuomo, New York Lt. Gov. Robert Duffey
Is there anything more predictably impotent than a high-profile, elite panel of politically appointed corporate big shots?
Daniel Massey of Crain’s recounts an annecdote told him by New York Lt. Gov. Robert Duffey in August (Crain’s-8/24/11.) It concerns the genesis of a newly appointed panel of corporate leaders who will spearhead a campaign called “New York Open For Business.”
Apparently Lt. Gov. Duffey read a newspaper article last January about an Illinois chief executive who wanted to relocate his company due to Illinois’ infamously hostile-to-business state government. Massey reports Mr. Duffey swinging into action and immediately getting the CEO on the phone. He says, “I mentioned I was calling on behalf of Governor Cuomo in NY State and that we wanted him to consider coming to New York. He actually laughed in my face.”
This annecdote highlights New York’s image problem. Why should the Illinois CEO jump from the frying pan into the fire? Or at least into another frying pan?
The solution New York is offering to this conundrum is a prestigious blue ribbon panel, appointed by Andrew Cuomo, to craft a new, business friendly image for New York. Sounds great, no? The only problem is that New York does not fundamentally face a PR problem. It faces a real problem, a problem of essence. Oh sure, PR can help, but what is needed is a total revamping of public policy, not a superficial papering over and attempt to hide from potential entrepreneurs the uncongenial nature of the New York business trop.
What such a panel could truthfully say is only (perhaps) that it’s better here than in Illinois or California or New Jersey. It can only pretty up the image of an increasingly gangrenous business atmosphere—of out of control unions, high taxes, budget deficits, tort lawyers, and bureaucratic obfuscation. Such a blue ribbon panel is like putting wallpaper over a large hole in the wall. Or like the opening scene in David Lynch‘s movie Blue Velvet, where the camera pans down from an idyllic suburban lawn to a rotting, bug-ridden under layer.
I noticed half of the people on this blue ribbon panel are marketers and the other half are representatives of big business. The people who are most undermined by our governmental reality are small businesses, whether incipient or extant, with no presence at all on this panel.
Entrepreneurs are ultimately not fools. They will logically go to states that consciously structure policy and governmental support to their businesses. This panel will not change that.
When you put lipstick on a pig, it is still a pig.
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In this season of our discontent, I was cheered by a wonderful proposal from the Kauffman Foundation last month that is aptly called the Startup Act.
The proposal, which already has bi-partisan support in Congress, is a simple, elegant, and cost free way of accelerating the growth of startups and young businesses. What’s not to like?
As anyone knows who reads this blog, I’ve been bitching for two years about the Mt. Everests of unnecessary and growing new regulation being foisted on our small business community by the current government. Well, here’s a proactive and specific solution.
Carl Schramm, CEO of the Kauffman Foundation, says, “With a recent Kauffman study indicating that new companies are starting smaller and staying smaller, and with our unemployment crisis, it is more important than ever for policy makers to create an environment that makes it easier for more startups to survive, grow and add jobs.” (Kauffman Foundation press release-July 19, 2011)
The Startup Act emphasizes the central role startups and entrepreneurs must play for the U.S. to escape the current recession. (It is acknowledged, even by the current administration, that any growth in American jobs will have to be driven by the health and new formation of entrepreneurial firms.)
To oversimplify here’s what the Startup Act says:
- Welcoming immigrants capable of building high-growth companies to the U.S. by providing “Entrepreneurs’ Visas” and green cards.
- Reducing the cost of capital through capital gains tax relief.
- Reducing barriers to IPOs by allowing shareholders to opt out of Sarbanes-Oxley.
- Charging higher fees for patent applicants who want quick decisions, thus removing a bottleneck of applications in the Patent Office.
- Having the government publish data ranking the startup friendliness of states and localities.
- And, finally (this is my favorite), regular sunsets for regulations and a policy of only putting new regulations in place if their benefits exceed their costs.
This is simple and practical stuff that should pass Congress with little controversy. And, for once, it shows real concern for a reinvigoration of the beating heart of American business. It is a partial antidote to the poisonous 2,000+ page micromanagement of both Dodd-Frank and Obamacare. Simple.
As the late George Meredith put it in The Ordeal of Richard Feverel (1859), “Perfect simplicity is unconsciously audacious.” Much like entrepreneurship.
Thank you, George.
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