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The Kauffman Foundation CEO Carl Schramm on why boosting new business creation will lead to greater job growth.
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While today's drop in initial jobless claims may be a hopeful sign because it's been strung together -- a couple weeks of that now the jobs picture in the US is still very much in dire shape.
With 40%.
Of gross domestic product coming from firms that did not even exist in 1980.
Our next guest says if you want to tackle the heart of the joblessness problem look no further than entrepreneurs and new businesses.
Slash Graham is an old friend and he is president CEO of the company foundation was an expert on job creation of president Obama's jobs summit back in 2009.
Right.
To okay.
Let's talk about settle the problem -- There are I just talked to one of our previous guess about how I think there is a lot of energy in the start -- market it's it's been.
Very frustrated by new regulations in new policies and some new local state taxes that are that are going -- but once those impediments are removed this energy could lead to a boom in my too optimistic -- David I don't think you are we have brand new -- there's a new poll from the Kauffman Foundation.
And we've -- -- and hold young kids.
And the numbers are as steady as they were three and four years ago for example in colleges 70% of the kids and American colleges today.
Want to be their own -- wanna start their own business -- -- -- comparing it to France.
Eighty plus percent wanna work in the government I don't see the difference a lot that's a reason we should be optimistic.
Now the pessimistic side however -- other data that we collected shows that since 2009.
The number of people actually starting firms has been going down.
Not only going down the number of people they employee in the first year.
Has gone from five point three full time equivalents in the first here.
To four point seven.
What could parts about it and you could part of that be that in the olden days and I'm talking just about ten years ago people weeks.
Revealed quote Max out their credit card to start a business people have Tripoli can get a credit that couldn't get a credit card nobody would've let them.
Increase their their ability to charge but now -- you look at the atmosphere at the moment.
Tell us Carl why entrepreneurs matter because we often say -- small businesses are big job creators give us some hard numbers of why we should really be fostering the generation of new business.
So well -- here's the first thing I want to do that say.
You know we gotta get away from the phrase small business you know when things I was in Washington this week its global entrepreneurship week.
And -- things I found myself saying in Washington is why don't we change the agency from small business to new business.
Entrepreneurs and that goes right to the question of that you ask and that is.
Why are they so important.
You know by this time -- statistic is now well -- people know it.
Young firms fewer than five years old are the source of all new net job creation.
-- that's the critical issue that's why we need more new firms.
And until we get more new -- and signals from the government and other parts of society that people should take this risk and start these innovative companies.
We're going to be stuck at 9% unemployment the single most difficult or or biggest impediment to starting a new.
Company in America today what is it.
But David it's a complex answer in -- either capital.
Or the regulatory environment and scaring people I think the same thing to do it again and again from big companies the uncertainty of the future.
He's visited on small companies and one of the things I'd say -- you know we want to get a signal.
My view is the government should pay any attention to companies -- for three or four years no taxes no regulation while just plow that field out.
And that as many -- come up is possible.
And have the government can really powerful certain guys are really important.
The starting the economy get those companies go well.
The U.
-- the presidency -- the administration at least being got included in some of these jobs discussions do you have now could you say that what's the response.
Well you know we have startup America there's a conversation going about this but I worry about a sense that.
You know we do focus much too much on how it comes to talk it's all about how we help the big companies make jobs and create jobs.
There's new conversation going about how we get to become -- again their own pledge to.
Make new jobs if we let all that capital comeback from the from the big panel.
In my view is even -- -- -- capital comes back that CEOs of big companies go to work every day to improve productivity and it means getting rid of of employees new companies have to have employees.
To make a goal of the way to solve the problem is put Bob -- in charge good to see you thank you very much for being here for the captain Carter -- -- -- thanks a lot at.
