Solo, micro and the smallest of small businesses are the leading responsible enterprises of our time. Social enterprises at heart, they uphold the American business institution as a maker. They also represent our society’s economic self-renewal and pursuit of freedom from the growth delusion.
Social enterprise in the private sector is commonly misunderstood as a social purpose organization. It is not. A social enterprise pursues profit, just like any other business. But it does so by seeking to balance profit with purpose. This effects positive transformational impact with a bottom-up social dimension intended to generate shared value and benefit for all concerned stakeholders: the company, its owners or shareholders, its investors, its employees, the community, and the government, and even other businesses.
Once upon a time, in the land of enterprise, business existed to make a profit while contributing to the Common Good by providing solutions to problems in free markets. Today, the distorted love for bigness has put profit over people, shareholder value over community value, the corporate bottom line over the good bottom line.
Social entrepreneurship, as it is practiced today, emanates from the perversion of business as a maker into a taker, from a community builder that serves the real economy into a community dismantler that stifles Main Street businesses and destroys them through financialization. Solo, micro and small businesses are makers on our Main Street economy; corporate America is a rapacious taker.
Makers understand the real needs and desires of their clients and consumers; they are attuned to the hearts and minds that too many of America’s corporations have become detached from, because they focus primarily on shareholders while forgetting the purpose of business: to serve the Common Good profitably (for everyone).
Financial Times columnist Rana Foroohar, points out in Makers and Takers (2016): “It used to be that as fortunes of American companies improved, the fortunes of the average American rose too”. That is no longer true. The “shareholder revolution” and the accompanying leveraged buyouts that started in the 1990s were so focused on maximizing shareholder value that corporate profits and cash hoards have increasingly translated into economic devolution, consistently failing to generate economic development.
Instead of translating into jobs, wage growth and innovation, the marriage between corporate America and Wall Street has translated into stock buybacks and dividend payments that look good on the balance sheet but are bad for people. Instead of driving long-term economic growth, big business has focused on incestuously extracting wealth through private equity at the expense of everyone else. Complex metrics and the financial value of work now dominate corporate business over common sense.
Small in business is beautiful. It is also the soul of work. Purpose trumps selfish profit. The statistics speak for themselves. Solo, micro and small businesses constitute 92% of all businesses in America (Source: SBA) and account for 62% of all net new private-sector jobs created (Source: Bureau of Labor Statistics) since the end of the Great Recession (2007-2009).
By realigning value and innovation with meaning and self-realization, solo, micro and the smaller small businesses help others access work that engages their human capacities as fully as possible. By doing so, it helps all stakeholders realize their full potential for wealth creation. They are the real boosters of tomorrow’s America. They are the leaders that are putting the American business model back in the service of Main Street. They are the businesses re-balancing the economy and getting America. back to the basics: business for good.