Tag Archives: davos09

The real problem with Davos: not enough focus on small business

It’s interesting the tweets I’m getting.

@semipro writes: “@Scobleizer have we not come to expect way too much out of those meetings? They never produce anything and are a waste of time and money!”

@spotcher writes: “@Scobleizer davos is for the good times. there are no solutions to this mess. it has to play itself out.”

I disagree with both viewpoints. Davos has many excesses (at least last year. This year things are much more somber) but when you bring many of the world’s politicians and rich people together you can get lots of changes. On the bus ride here I met a few non-profits who say that Davos is invaluable for them to make new contacts and convince the world’s rich to support their efforts. Bill Gates’ foundation got mentioned several times on the bus ride in.

But, to me, I still haven’t heard much about how we’ll really get out of this mess: create tons of new small businesses. Big companies will NOT pull us out of this mess. They won’t hire people in big numbers until AFTER the economy starts turning around.

For me this all came to a head after reading Andrew Field’s pleas for help. Who is he? He runs Printing for Less. I interviewed him three years ago for PodTech. Back then his business was a growing one and was the darling of Montana’s rebuilding economy. Today? His business is under severe strain and might not survive the next few months, he wrote in Forbes.

Everyone should read his letter asking for a new kind of bailout
.

His pleas should be heard. It’s small businesses like Printing for Less that will pull the economy out of its problems. The problem is that small businesses are getting slammed. Here’s why:

1. Rich people have had their assets decimated by both the stock market and by Bernie Maddoff’s ponzi scheme. That makes them far less likely to invest in new, small, unproven businesses. Venture capital was down quite sharply last quarter, which proves this trend too.
2. Housing prices are way down in many communities. That means entrepreneurs can’t pull equity out of their homes to keep businesses running short term. My mom, to buy a bookstore, took a loan on her home. That would be impossible if she were alive today.
3. Customers have disappeared — maybe even permanently — as we all slow down our spending, start saving for the future. That means that many small businesses are struggling to make ends meet.

So, as I walk around the World Economic Forum I’m asking people “how will you help out Andrew Field?”

So far I’m not hearing a lot of answers and THAT is the real problem with Davos.

I’ll report if I hear any good ideas. Do you have any?

By the way, I’m tracking all Davos news over on the friendfeed Davos room.