Small Business Innovation: The Need Is Critical, The Time Is Now
BY Milton D. Stewart
"In the past 15 years of economic turbulence small business has proved more flexible and adaptable than the giant corporations. Small companies have provided more new jobs and more new ideas over the years than big companies. Preserving and encouraging this dynamic sector of the economy should be part of the foundation of any reindustrialization program."
The quotation above is part of a special report published by Business Week in its issue of June 30, 1980. Titled "The Reindustrialization of America," it was the first of a number of articles published by leading business and popular magazines during the past year, all dealing with the same questions: What went wrong with our economy, and our way of life, during the '60s and '70s? And how can we begin anew?
The long discussion we've been having with each other all over the country on the two questions above is about to come to a head in Washington. Now is an appropriate time for INC. to have its own say on what might be done, or avoided, in addressing the challenges ahead.
In preparing our special report on small business innovation, I spent several hours reading the above-mentioned article from Business Week and a number of others in a similar vein. From Time Incorporated's seven magazines -- Time, Life, Fortune, Money, People, Discover, and Sports Illustrated -- came a series titled "American Renewal," much of which focused on the problems of our economy and the society it supports. Business Week checked in again with "America's Restructured Economy" in its issue of June 1, 1981.
These nine articles add up to more than 200 pages of high-quality journalism. I confess that the descriptions and analyses of the problems they dealt with were more impressive than the solutions they offered. And I wonder, if all of what they suggested came to pass as of 9 a.m. tomorrow, would things change very much? Enough to make the difference we need? I doubt it.
We've made a modest effort in this issue at choosing a place to begin, a place that we think offers taxpayers, applied scientists, government officials, and entrepreneurs, to name a few groups, the most leverage, the biggest chance to make a difference. Generally, that place is the small business sector; specifically, it is support for small business research and development.
Our "Special Report" begins on Page 28 with an essay focusing on the need for support of small business R&D, and on the lessons we've learned, or should have learned, from the past two decades. In particular, this short article advocates (1) continued and added support for the National Science Foundation's Small Business Innovation Research program and (2) making the program government-wide. It's one of the few federal government programs whose measurable benefits exceed its expenses. Naturally, it's constantly in trouble with bureaucrats, politicians, and lobbyists.
On Page 30, you'll find a story about one small business innovator who, with help from the NSF, thinks he's found a substitute for expensive diesel fuel in the seeds of an ancient Chinese tree. Then you'll meet eight other small business people who are representative of the kind of fresh thinking and startling progress of which thousands of entrepreneurs are capable, if given just a little support. Finally, you'll find a brief research report detailing how much of their own money a number of small companies spend on research and development, and how it has paid off for them -- and for us -- in spades.
Our "Special Report" doesn't purport to cover all aspects of what's troubling our economy. But we think it offers some practical and achievable solutions to a large part of the problem. Without innovative research and development of new products, we'll never get back on track. Without a vital small business sector, we'll never have the R&D effort, or results, required.