In our opinion: In an entrepreneurial economy, reward job-seekers willing to start businesses

Published: Saturday, April 19 2014 9:11 a.m. MDT

Rates of unemployment have remained relatively high in the United States. A number of states are offering mentoring services and unemployment benefits to workers struggling to find traditional employment but willing to start businesses of their own.

Tony Dejak, Associated Press

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Rates of unemployment have remained relatively high in the United States, even as other economic indicators have improved since the most recent recession. The recent jobs report shows unemployment at 6.7 percent. That seems celebratory compared to a 10 percent high in October 2009 — but maddening compared to 4.7 in pre-recession November 2007. The changing nature of the economy is increasingly reliant on technology and automation.

That’s why it is encouraging to see signs of policy initiatives in various parts of the country that encourage new employment by empowering individuals to find means of productive self-employment by starting new businesses, which in turn will create additional jobs. While Utah has one of the nation’s lowest unemployment rates at 3.9 percent, it would still serve the state — and the nation — to explore the value of implementing such initiatives.

One example is the creation of what are known as Self Employment Assistance Programs, or SEAPS, which are now in place in five states, as profiled in a recent story in the Deseret News National Edition. State governments in Delaware, Maine, New Jersey, New York and Oregon are offering mentoring services and, in some cases, extending unemployment benefits to qualified workers struggling to find traditional employment but who have the desire and ability to become self-employed, perhaps by starting a small business.

The programs aim at tackling the unemployment problem from a new perspective, one that recognizes the prevailing trend among large businesses to focus on innovations that improve operating efficiencies instead of those that lead to expanding their employee base.

The trend was explained by renowned Harvard business scholar Clayton Christensen during a keynote speech earlier this month at the Governor’s Utah Economic Summit. “Something has fundamentally gone wrong with our economy, that it’s just harder and harder and harder to bring employment back,” said Christensen, a leading theorist on business innovation who serves on the Deseret News Editorial Advisory Board. He explains the prevalent business philosophy among large employers is to seek lower costs by creating internal efficiencies, which often means a reduced or stagnant employee base.

"These measures of success are causing us to invest in innovations that eliminate jobs and not invest in the things that create jobs," Christensen said. "The things we’ve measured historically are not the way we need to measure success in the future."

That means future job growth will depend more on entrepreneurism, yet another area, besides low unemployment, in which Utah is uniquely ahead of the curve. Entrepreneur Magazine last year cited Utah as the top performing state in fostering job creation and business growth. There are more than 7,000 technology companies in Utah. That’s significant because job growth in that sector is at least twice as high as in other areas.

Utah leaders deserve credit for various initiatives that have encouraged the expansion and location of tech-related businesses here, just as other states deserve credit for using initiatives like the SEAP program to bringing workers back to the labor force — either through jobs in the traditional workforce or through the entrepreneurial economy.

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