2009-02-19T19:37:00.000-08:00

1 Million Jobs for $10 Billion
A Proposal for an Entrepreneur Corps to develop profitable, self-sustaining Micro-Businesses

I Jobs that create jobs!
By facilitating the creation of thousands of micro businesses employing one to 5 or more people.

Doesn’t that sound like a faster, more enduring way to bring back prosperity, especially since both the expenditures and the job creation are in 2009 and 2010, not stretched out till 2014.

Jonathan Alter noted in Newsweek that “with 15 years of scandal-free AmeriCorps apparatus in place, service jobs can be established with Rooseveltian speed, an important criteria for inclusion in the stimulus. At about $20,000 each, AmeriCorps jobs are also much less expensive than those in construction.” And if those AmeriCorps jobs stimulate entrepreneurialism, they can generate many times more jobs.

Any new job, construction, whatever adds money into the economy, and through a multiplier effect generates several other local jobs, but that impact wears off when the funding stops. Entrepreneur Corps would have that same effect, PLUS would hopefully generate profitable, self sustaining jobs that would persist even after the initial funding stops. And each of those self sustaining jobs creates several multiplier jobs.

And if the Entrepreneur Corps job persists, it hopefully would create a second wave of new profitable jobs, perhaps getting even more efficient at business creation, business facilitation and job creation. With a good communication network, the most successful job creation strategies in Topeka and Detroit could be replicated in New Orleans and Los Angeles.

Yes, we can pour a trillion dollars into huge corporations and hope it generates a significant number of enduring jobs. But I propose that $10 Billion or so focused on creating, facilitating, and fostering a positive environment for the independent evolution of Micro Businesses is a much better mousetrap of job creation and economic recovery.

60,000 Youth Entrepreneur Corps jobs at $20K each for one year would cost about $1 1/2 billion
40,000 Experienced (successful-entrepreneur) Entrepreneur Corps jobs at $40K each would cost about $2 billion

If they averge just four jobs each in a whole year of effort, that’s 400,000 jobs, at a cost of about $10,000 per permanent, self sustaining job. Add in the initial 100,000 one year temporary jobs, and you’ve created 500,000 jobs.

3 million jobs for $800 billion is about $300,000 per each job, with most of them probably disappearing when the funding stops!

What kind of entrepreneurial projects would these energetic, optimistic young people and more experienced, successful entrepreneurs create in a year of effort? Why not ask them –and record them?
Some nationwide internet network is needed (CraigsList, want to support a grassroots approach to rebuilding the economy?) to communicate a call for ideas, gather the emailed proposal forms, and make them available to entrepreneurial proposal evaluators, who make suggestions and vote to see which get funded. Maybe the evaluators morph into implementation mentors / success coaches.

The grassroots aspect of this is that, if Washington remains focussed on monstrous funding for big corporations and big policies, hopefully thousands and thousands of quality proposals in search of a trickle of money will get noticed by the media, and the scope and quality of the proposals, through the sheer force of public opinion, may stimulate White House interest in this and the entire Entrepreneur Corps Proposal.

The tiny entrepreneurial loans from the Grameen Bank are well known, as is the approximately 96% repayment success rate. Why not adapt the model to the US? A similar internet networking process could gather and record the proposals. An army of business school professors and grad students, local chambers of commerce, high school principals, rural clergy etc etc could evaluate them online or in person and select the best or at least the serious for micro finding. 1,600,000 loans averaging $1000 each would cost about $2 billion. That’s a lot of kilns, paint sprayers, floor sanders, and lawn mowers – and nearly all the money spent in 2009 and 2010, unlike the stimulus plan that spends a small fraction in 2009 and 2010. (If each of the 40,000 Experienced Entrepreneur Corps staff, on their lunch hour, selects two loan proposals per week for funding, they alone can select 320,000 micro loans per month.)

If only 10% of the loans generate a self-sustaining business, that’s still 160,000 new continuing jobs, at a cost of only $13,000 per SELF SUSTAINING job. And some will pay back their loans.

Obviously, the ideas above represent only $5.5 Billion of the $10 Billion proposal, but could generate 660,000 jobs, 85% of them self sustaining.

Plus legislative ideas that could generate jobs without any taxpayer cost.

II. E-Maes: Entrepreneur Maes and Mini Maes $1.5 Billion
Governments are too bureacratic, too legislation and regulation bound, too slow acting, too risk averse to effectively stimulate the creation and oversight of a very large quantity of small entrepreneurial enterprises. A Fannie Mae type structure is much better suited. Admittedly Fannie Mae is now discredited, but for its policies, not for its goal and corporate structure, both of which proved successful for many years. ,
However, to foster micro businesses, multiple SMALL Entrepreneur Maes likely are necessary, each focussing on local areas. This also provides alternate Maes for initially-rejected entrepreneurs to apply to for reconsideration of entrepreneurial ideas. Again, it was Fannie Mae’s banking policies and inadequate regulatory oversight that caused the problems; its structure was effective for many years, with sufficient maneuverability to be a significant, positive force in the economy.

E-Maes should be staffed by MBAs, engineers, scientists and entrepreneurs to evaluate, stimulate and oversee investments in new enterprises and half-nationalized (to be explained later) enterprises.

Goal 1 : to make the slightly risky entrepreneurial loans that banks won’t or can’t. Perhaps even taking an ownership interest, or making a claim on a percentage of gross sales etc, so the taxpayer gets occasional bonus returns from successful loans to compensate for some of the poorly performing ones.

Note: 3% of Gross returned to taxpayers
If its taxpayer money that’s invested and results in creation of a profitable new business or new job, then there’s no reason the taxpayers as investors shouldn’t receive a return on their money. Therefore 3% of gross sales or gross income should be reimbursed to the benefit of all taxpayers. Perhaps recycled into future entrepreneurial facilitation, which would itself generate 3% returns.

Goal 2: to provide a large number of mini-grants to MBAs, engineers, scientists and entrepreneurs for two kinds of entrepreneurial ideas, patentable or simply good domestic entrepreneurial ideas (some of which might target their production for “Demestic Dollar” stores.)
Patentable ideas would be considered for streamlined, low cost patent submission, etc. etc.
Good domestic entrepreneurial ideas would be nurtured, perhaps facilitating the marketing of the products through 1000 or more “Demestic Dollar” stores.

Goal 3: Stimulate “Domestic Dollar” stores
It’s not good policy to put money into the hands of low income people, much of which goes to Wal Mart and dollar stores, financing Chinese and Korean rather than US jobs. A small amount of seed money should go towards developing “Domestic Dollar ”stores that sell only domestic products, perhaps with $1, $2 and $3 aisles. Given such an outlet, both local low volume and more widely dispersed high volume American producers could quickly evolve to serve the need.

How to start up, test, evaluate then stimulate creation of enough stores to have nationwide economic impact is a daunting task requiring brilliant marketing strategy. But the potential numbers are optimistic. $5,000 grants to stimulate 5000 stores would cost only $25 million plus administrative overhead. 2000 successful stores doing $500,000 annually represents $1 billion of demestic economic activity. Not a lot of money, but a good return on $50 million, and it’s one more strategy for creating a more fertile environment for entrepreneurs! It’s great motivation if an army of new entrepreneurs knows there are thousands of Domestic Dollar stores seeking low cost domestic products, and willing to accept them from local producers. Aha! Might be wise to setup occasional shipments so one dollar store can send its locally acquired products to other stores.

Amateur local sculptors, potters and jewelers could be cranking out little ceramic elephants, soap holders and earrings. Thousands of basement scientists could, with oversight, whip up low cost laundry detergent just as good as found in current dollar stores.

Are Domestic Dollar stores protectionist? What about world trade agreements? Although the stores wouldn’t PURCHASE foreign mass-produced products, they should accept locally produced products from other countries on a barter basis. Then a dollar spent on a Swiss-made product generates the sale of a US product in Switzerland. If Switzerland adopts a similar model and also initiates Domestic Dollar stores, then they can stimulate their local entrepreneurs also!

Stay tuned for more on E-Maes.

III. Still $3 Billion more to spend

We still have an optimistic faith that sometimes if you create a better mousetrap the world will beat a path to your door. This better mousetrap is entrepreneurial-facilitation ideas that should generate a large amount of long lasting micro-businesses - and jobs!We invite others to join us in supporting and refining this proposal.Jim and Dianne©JLP2009

PS Please excuse the mistakes, policy and otherwise. This was rushed to publication. And we have day jobs.
Wouldn’t it be great to have an Entrepreneur Think Tank wih some full-time staff cranking out ideas and projects: to helpful business and public policy grad schools, to a receptive President and Congress, and to nimble, already-funded EMaes?

Policy Innovations for American Renewal