President Obama should stop chatting and start doing. We need jobs, and we know who creates them - small-business entrepreneurs. If we look at history, we learn an economic lesson worth repeating. Yet Treasury Secretary Timothy F. Geithner and Small Business Administrator Karen G. Mills are still wondering what to do.
On Wednesday, the Treasury Department and Small Business Administration convened the Small Business Financing Forum to gather together "policymakers, lenders and small business owners to explore new ideas." Why not learn the lessons of history? We are a unique nation, yes, but we can learn from other examples what to do.
Around the globe, entrepreneurs have a historical track record of jump-starting economic progress when it's most needed. Consider Rwanda after the genocide of 1994. Belief in the power of an idea enabled sisters Janet Nkubana and Joy Ndungutse to make a profound difference for thousands of survivors. Today their basket-weaving business, Gahaya Links, employs thousands of people - including members of the once-warring Hutu and Tutsi tribes.
In Ireland, which was one of Europe's poorest countries just a few decades ago, entrepreneurs Andrew Casey and Olaf O'Moore are helping the planet while boosting the local economy. Their Ecocabs venture, launched in 2006, brings free pedal-powered taxi service to Dublin, along with dozens of new jobs.
About 2,500 miles away in Israel - once a poor country with virtually no natural resources - an entire generation of ambitious young innovators aspires to follow in the footsteps of Gil Shwed, who started his multibillion-dollar Check Point Software firewall company while in his 20s.
What's the common link among these success stories - and countless others like them? The seeds that entrepreneurs plant need a favorable environment in which to grow.
After the Rwandan genocide, officials understood that economic recovery would require vastly restructured policies. They shortened the administrative procedures required to start a business, reduced corporate tax rates and launched new organizations to support private-sector development, among other reforms. These changes to encourage entrepreneurship have helped raise Rwanda's gross domestic product by almost 59 percent.
Ireland in the 1980s had a per capita income about half of the Continent's average. Seeking a turnaround, policymakers initiated reforms to create favorable conditions for entrepreneurs, including the privatization of state-owned companies, freer product and labor markets, lower corporate taxes and inducements for foreign direct investment. The result: Ireland's economy grew much faster than any Continental counterpart over the next quarter-century.
Similar changes brought positive outcomes to Israel. The country began in the 1960s to move steadily away from a structure of state guidance and focused instead on spurring entrepreneurial innovation. Favorable policies and tax structures, along with a strong focus on education, served as catalysts that turned Israel into a hot spot for information technology development from the 1990s onward. More than 100 Israeli businesses now trade on the New York Stock Exchange, Nasdaq and AMEX equity markets - more than businesses from any other country outside North America.
Even in the United States, which has long welcomed entrepreneurship, stagflation hampered growth of the gross domestic product, employment and productivity three decades ago. Then came pension and tax reform, industry deregulation and productivity enhancements sparked by the personal computer, among other factors. Within 10 years, Steve Jobs, Bill Gates and Michael Dell emerged as icons of a new information age, and a host of other start-ups became major lift-ups to the American economy.
Look at the most thriving U.S. regions, and you'll find above-average levels of entrepreneurship - where one or more young firms have realized rapid growth, employing thousands or even tens of thousands. Each year, most of the new jobs in the United States are created by firms less than five years old.
History shows that daunting economic challenges can be addressed by empowering people to transform an idea into a product, process or service that creates value.Given the right conditions, entrepreneurs can become the primary drivers of economic growth - offering stability amidst chaos.
Policymakers need to reduce the regulatory burden placed on our greatest job creators and free up credit to support their entrepreneurial endeavors. More summits and forums brainstorming options are slowing progress on getting Americans back to work.
In light of the recent economic turmoil, the smart money is once again on entrepreneurs to lay a foundation for economic rebuilding. History teaches, if we learn its lessons, that entrepreneurs can bail us out.
Amy M. Wilkinson, a senior fellow in business and government at Harvard University and a public-policy scholar at the Woodrow Wilson Center, is writing a book on global entrepreneurs.