The economy shifted years ago

It’s all about the job, right? That’s why you avoided your passions when you went to university and studied a program that could get you employed. It’s why you threw another $40,000 or so in debt on top of the pile to get that business degree. Perhaps, even, it’s why you’re holding down a cubicle or workstation even now in the bowels of some faceless corporation, eyeing the greasy pole of advancement?

What percentage, do you suppose, of the economy, is organizations smaller than 500 people? If you’re sitting in Toronto, for instance, the downtown skyline is dominated by skyscrapers with the logos of banks, international consulting firms, and the like. Kitchener-Waterloo’s business district have the logos of insurance companies, and global technology firms. Head to Calgary and the city centre advertises — from heights — energy giants, a national railway, and the like. Looks pretty conventionally corporate, right?

I spent several days this past week just asking people, at a workshop I was facilitating, in the line at my favourite local coffee shop, in the queue at the grocery store, what they thought. The “survey said” about half: most figured half of us work for small organizations, while the other half work for companies with over 500 people.

Well, on TV Ontario this week, a business professor, the head of the Canadian Federation of Independent Business, and a business reporter agreed that the real number is much higher. Well into the 90s, in fact.

Think about that. Over nine-tenths of the economy is small. (Half of all the people in Toronto, Canada’s largest city, actually work in organizations of size one: they’re contractors, independent consultants, or owner-operators of a very small enterprise, indeed.)

The economy shifted away from the organizations with the money to pay to have their logos in lights on the tops of tall buildings years ago, and none of us noticed. In fact, when we were being counselled through high school about our higher education and futures, no one pointed out that almost all of us would have to learn how to make something work for ourselves rather than expect to find a job with a nice career ladder attached to it.

One of the reasons most of us haven’t looked at this shift — it is, after all, right before our eyes — is because we confuse small businesses with start ups. They really are very different things.

Take Instagram. Did it even break 20 employees before being sold, for over one billion dollars, to Facebook? Both Instagram, and Facebook, were start ups, but never small businesses. Their eyes were set on global domination of their spaces right from the get go.

Twenty people in a small factory in Bramalea in an industrial park, or twenty people working at a local coffee shop, on the other hand, is a small business. Global domination doesn’t enter into it. Making a really good product at a suitable price and finding buyers for it does. But if you’re Red Rocket Coffee on the Danforth, the existence of Rooster Coffee on Broadview, Seb’s two subway stops east of you, or Bandit on Gerrard don’t hurt you in the slightest. In fact, more great coffee shops “close enough but not too close” actually get more people interested in forgoing chain-store global coffee (be it Starbucks or Tim Horton’s) and having a cup made with care and love in a small business. There’s room, in other words, for more to prosper without “getting big”.

But because we keep pointing to the billions made by start ups that make it — you could be Bill! Gates! — we ignore the entrepreneurial option that most of us will need, at some point in our working lives.

Being an entrepreneur, after all, is just about finding a need, and meeting it. It’s not about taking over the world. Howard Schultz may have had that dream having experienced real coffee culture in Verona, Italy (and he had to displace the owners of local coffee roaster Starbucks to roll out his Dunkin’ Donuts-busting mermaid chain), just as Ray Kroc saw the potential in a hamburger stand in California and, buying out the owners, turned it into the Golden Arches. (See: not all stories of global domination turn on technology companies.)

That, by the way, is why you see so many “social entrepreneurs” these days, building small organizations to meet community needs on a breaking-even basis. Better ways to advocate, to counsel, to serve are just as much entrepreneurial (and job creating for oneself) as is opening a shop, a factory, or a consultancy. Ask Bill, the guy at the Toronto Tool Library (become a member, use the workshop and the tools — everything from lathes few homeowners can find space for, much less apartment dwellers, to 3-D printers). Social enterprise needn’t be just the soft, touchy-feely stuff.

Why we don’t teach all of this in high school: how to run a business, how to set up a venture, how to examine situations and look for opportunities, is beyond me. We also don’t teach money management, how to assess whether to grow with debt (or not), and a host of other life skills that would make people into more than job-seekers. Couple that with “study whatever you want, but pay cash for it” (so you don’t need a job you don’t like or want simply to pay off the loans) and you’d really be preparing teens for the real world.

There’s still too many people in big corporate (and bureaucratic) roles who sniff (daintily) and drop a résumé filled with small company life in the round file as “not one of us”. True, you’re not. But their world is shrinking, and the small business world is growing. It’s just that small business life and honking big piles of debt left over from school don’t go together (you’ll need that for growing a venture).

The Personal Due Diligence project is where you come to be advised on how to deal in the real world — whether you’re 16 and looking at your future, 36, trying to find some happiness your current work isn’t providing, or 56, dumped out in an early retirement package and looking at nothing. Call or email and explore your options. You’ll be the better for it.

2 thoughts on “The economy shifted years ago

  1. enkerli

    “no one pointed out that almost all of us would have to learn how to make something work for ourselves rather than expect to find a job with a nice career ladder attached to it”
    At my high school (Mont-de-La Salle, in the late 1980s), we were told exactly this. Numerous times. And Quebec is supposed to have an even higher percentage of SMBs than other parts of US and Canada.
    I’ve been a freelancer for a few years. Job security is a strange motivator, for people. It might have worked in the Industrial Era, but it doesn’t sound like it really helps, these days. From academic tenure to public service, a number of things can be rethought.

    1. Bruce Stewart Post author

      Hello, enkerli, and thanks for commenting. My children did their secondary schooling in BC and Ontario, and I can tell you that in neither place was anyone telling them what Mont-de-La Salle was telling you. BC has mandatory Career and Personal Planning classes in Grades 8, 9, 10, and 11, and a mandatory course called Self and Society in Grade 12, and nowhere in there do they do anything other than signal it’s all about taking the courses that lead you to a job. No preparation for self-employment, no preparation for a world without security or advancement. Ontario doesn’t have the mandatory course structure, but does constantly talk about “job readiness”.

      I also think you are right on the money when you say we need to rethink the institutional structure, e.g. tenure. Of course, some of that is happening already: up to 70 per cent of post-secondary professors are now on year-to-year contracts, rather than being tenured or on a tenure track with a permanent post. I watched students paying professional graduate studies fees and having 2/3 to 3/4 of their classes with sessional appointees being paid at most $6,900 a course to instruct and guide them. Many were doing the equivalent of thesis supervision for the Masters’ students.

      This wasn’t at a penny-ante college either, but at one of the country’s top three universities.

      So thanks again!


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