Where are the new small businesses?
Monday, June 18th, 2007A comment by William Morris, president of the Monroe County Industrial Develpment Corp., got me thinking.
Morris was commenting on the fact that the number of businesses in Monroe County is down in the most recent census report. You can read the entire article from The Sunday News here.
“With the layoffs and early retirements and buyouts, it seems you would have a lot of people forming new businesses,” Morris said.
Good point.
Thousands of smart, hard-working poeple have lost their jobs in the auto industry. Morris is right; it seems like that should lead to an increase in new businesses.
When Pittsburgh’s steel industry collapsed in the 1980s, it led to a tidal wave of new small businesses. Pittsburgh’s renaissance was built on the foundation of new entrepreneurs who were forced into mid-career changes when their jobs disappeared.
Is there something about Michigan’s culture that is different than Western Pennsylvania’s?
I’ve lived in both places, and I can tell you that residents of both states are deeply rooted. When they lose their jobs, they don’t want to move away.
Both also are blessed with great universities, an important ingredient when it comes to re-building an economy. And both suffer from low overall education levels - a legacy of the good-paying jobs in the steel and auto industries that didn’t require a college degree.
Pittsburgh has a reputation for toughness. So does Detroit. They’re both blue collar cities with strong work ethics.
So, what’s the difference? Maybe it’s too early to tell. Maybe the surge in new businesses created by laid-off workers in Michigan is still below the radar and will surface soon.
I was in a conversation in the early 1990s with Morris’ counterpart in Allegheny County, where Pittsburgh is located. He told story after story of engineers and accountants and union steelworkers who started businesses from scratch and five years later were employing 15 or 25 or 50 people.
Pittsburgh went from an economy dominated by some of the largest companies in the country - names like U.S. Steel and Pittsburgh Glass - to an economy dominated by small and medium-sized businesses and a much more diverse employment base.
The loss of manufacturing jobs is killing Michigan’s economy. But if those laid-off workers become entrepreneurs, today’s recession can be a building block for tomorrow’s comeback.


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