Why We Need Entrepreneurs More Than Ever
Industrial jobs are fragile.
Fifteen years ago, this was my city. The three industries marked with A, B and C employed a big percentage of the local workforce. Secondary jobs were produced at service companies, suppliers and postproduction facilities. Schools and banks and dental offices were filled with industry workers’ kids, money and health insurance plans.
Now they’re all gone.
Two out of three are bankrupt. One is operating a skeleton crew on heavy government subsidy. The trickle-down effects are becoming obvious: less disposable income, empty buildings, fewer kids. And the pool of skilled labor is gone, so there’s no new industrial replacement coming to save us.
The industrial economy lasted a long time. But it’s fragile: when steel tariffs went up, or the cost of labor increased, or supplies dwindled, or energy costs rose, the industry lost a bit more of its protective margin. And when enough of these occurred over time, the industry moved elsewhere. And it’s not coming back.
What will save our small towns? Entrepreneurship.
It’s safer to make dozens of small bets than to make one big bet.
Entrepreneurs aren’t as susceptible to international economic conditions. They don’t rely on non-renewable resources that will eventually run out. They use a specialized labor pool instead of a replaceable one.
When one entrepreneurs small business fails, it doesn’t affect the city in a measurable way. And the entrepreneur usually opens a different business, because that’s their career. They’re not specialists; they’re generalists. And that makes them less fragile.
When a steel mill closes down, does the CEO start a new business in the same plant? Never. The buildings and infrastructure are usually left to rot.
If a city attracts a new car plant, its government celebrates. But what happens when that car plant inevitably moves to Mexico or China? Usually, the town is left in a worse state than before the plant arrived:
- Bureaucracy is larger, because of the increased tax revenues
- Infrastructure load is far larger, and must be maintained with fewer resources
- Expanded development and territory makes the town square undesirable, and “downtown” implodes
- Emergency services are downsized
- Property values drop, and pull tax revenues with them
- Youth perceive a lack of opportunity, and leave.
It’s a downward spiral for any small town. But entrepreneurship can turn it around.
Young entrepreneurs bring money into the city from outside. They use the internet; they use niche specialization; they sell ideas. Sometimes they fail, and start from scratch.
Thirty years ago, opening a business in Sault Ste. Marie meant selling a product to steelworkers or paper mill employees. That market is gone. But the old town line is no longer the limit to making a living.
Sure: the big employers might provide 3000 jobs. That means we need 300 small businesses to take the place of one steel mill. But our schools were built to train these 3000 employees. Why can’t they train 300 entrepreneurs?
My mission is to make 1,000,000 entrepreneurs wealthy. That means mentoring them to Tinker stage and beyond. The beating heart of our mentorship practice is in our suffering steel town for a reason: we want to bring it back. And I believe the way to do that is to create entrepreneurs. So we teach entrepreneurship to kids; we speak about it at book clubs; we show up at high schools. We encourage future entrepreneurs and mentor those who want to start their first business.
Tomorrow, I’ll tell you why–and how–entrepreneurs should build their businesses in small communities.