A guide to more information on subjects covered in the Inc. magazine special issue: The State of Small Business 1997.
Resources is the Inc. guide to more information on subjects in this issue. This information is intended to help our readers; Inc. does not profit from the sale of any of the resources listed.
Opening Argument: Churn, Baby, Churn
Any inquiry into evolutionary theories of economics must inevitably begin with the famous chapter 7 of Joseph Schumpeter's Capitalism, Socialism and Democracy, which was first published in the United States in 1942--now available from HarperCollins (800-331-3761, 1962, $16). Also worth reading is Schumpeter's earlier work (1911), Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest and the Business Cycle (Transaction Publishers, 908-445-2280, 1983, $19.95), which deals more explicitly with new firms and entrepreneurship.
On a more contemporary note, Schumpeter's modern-day disciple Paul Romer has attracted considerable attention with his controversial new growth theory, which holds that new ideas are the ultimate source of economic growth. (To download Romer's papers, visit his Web site). Then there's Bruce Kirchhoff's Entrepreneurship and Dynamic Capitalism: The Economics of Business Firm Foundation and Growth (Praeger, 800-225-5800, 1994, $59.95), which takes the empirical approach of measuring company formation and growth.
As for works by noneconomists, there's Michael Rothschild's Bionomics: Economy as Ecosystem (College Board, 1995, $17.95). Rothschild gets bogged down in his analogy of economies as rain forests, but his central point is on the mark: that economies develop, test, and select innovations in much the same way that biological evolution selects species. See especially chapter 4, "The Mythical Machine," an attack on Newtonian physics--and mechanical metaphors--as the basis for economics. Or visit Inc. Online to read senior writer Edward Welles's interview with Rothschild.
For those willing to wade through dense academic prose, the most illuminating read of all may be chapters 2 and 3 of The Sources of Economic Growth (Harvard University Press, 800-448-2242, 1996, $39.95), by Richard R. Nelson, the first post-Schumpeterian economist to revive the evolutionary perspective. A self-described quasi inductivist, Nelson advocates the intellectually unfashionable route of taking observable phenomena and trying to explain them. He rails against the tendency of economists to glorify abstract mathematical virtuosity for its own sake.
Nelson notes that the steady march of economic growth can be misleading because it obscures the tremendous turmoil underneath. "Thus the regularity and the order that the analyst sees in economic growth," he hypothesizes, "may be analogous to the 'spontaneous order' highlighted by the new work on dynamic systems...." If this sort of stuff turns you on, pick up Nelson's book.
The Next Generation: Creators of the New Economy
If you're serious about sharpening your business skills, you could do worse than begin your course of study with Peter F. Drucker's venerable (1954) Practice of Management (HarperCollins, 800-207-7000, 1993, $16). A more recent addition to business libraries, Michael E. Porter's Competitive Strategy (Simon & Schuster, 800-223-2336, 1984, $37.50; a reprint is due out this year), recommends ways to evaluate the strategic viability of individual industries. W. Edwards Deming made a name for himself in the emerging industries of post-war Japan, and the success of his systematic approach to quality improvement eventually registered in the United States. Out of the Crisis (Massachusetts Institute of Technology, 617-253-6128, 1986, $29.50) is a practical professional-management tool.
Should you care to register for formal instruction, consult Peterson's Guide to M.B.A. Programs (Peterson's Guides, 800-338-3282, 1996, $21.95). Some 900 institutions offer courses of study in business administration; Peterson's gives you the specifics you need to narrow the field to a more manageable selection. And check your local library for Bricker's International Directory, 1997: University-Based Executive Development Programs (Peterson's Guides, 800-338-3282, 1997, $325), arranged by management discipline. Experience always counts, though, so you may want to consult your library's copy of the student assessments that Albert & Co. publishes in its Executive Development Programs Guide (Albert & Co., 561-697-3430, 1997, $450).
Hot Spots: The Four Best Small-Business Neighborhoods in America
Are you thinking about relocating? These books will help pave the way. AnnaLee Saxenian's Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Harvard University Press, 800-448-2242, 1994, $24.95) assesses the forces that power two of the most economically dynamic regions on earth. Looking for action? Joel Garreau's Edge City: Life on the New Frontier (Anchor, 800-323-9872, 1992, $14.95) shows that the fringes of large cities nourish new business growth. And finally, consider with a jaundiced eye the materials that economic-development offices prepare to attract people just like you. For more information on areas mentioned in Joel Kotkin's article, consult the following sources:
While costs should not rule your choice of location, nobody can ignore dollars and cents. Regional Financial Associates (610-696-8700), in West Chester, Pa., compares typical business costs around the United States.
