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These are just a few to name:Che Guevara(June 14 1928 - October 9 1967)Arguably the greatest guerrilla leader in historyHe strove to help overturn capitalist exploitation, and human rights violations, of Central and South America by the USA prompted his involvement in Guatemala’s social reformsGuevara later met Raúl and Fidel Castro, in Mexico City and joined their 26th of July movementHe joined them and later sailed to Cuba to help overthrow US backed Cuban dictator, Fulgencio BatistaGuevara soon rose to prominence amongst insurgents, was promoted to second in command and played a pivotal role in the victorious two-year guerrilla campaign that deposed the Batista regime.After the Cuban revolution, Guevara performed a number of roles in the Cuban government.Including reviewing the appeals for those convicted as war criminals during the revolutionInstituting agrarian land reforms, increased the countries literacy rateAs instructional director for Cuba’s military, he advocated for socialism as a diplomat and trained the forces who repelled the Bay of Pigs Invasion, conducted by the CIAHe also played an instrumental role in the importation of Soviet nuclear-armed ballistic missiles to Cuba in retaliation for the short and intermediate range missiles the United States installed in Italy and Turkey pointing towards the USSRThese events eventually lead to the Cuban Missile Crisis, 1962As a detailed and prolific writer, Guevara wrote a manual on guerrilla warfare, along with a best-selling memoir. His experiences and studying of Marxism led him to assume that the 1/3 world’s under-development and dependancy was a result of imperialism, neo-colonialism and monopoly capitalism and the answer to solve this would be through an armed revolutionLeadershipCuba(1953–1959)As previously mentioned, Guevara met Raúl and Fidel Castro, in Mexico City and joined their 26th of July movementHe joined them and later sailed to Cuba to help overthrow US backed Cuban dictator, Fulgencio BatistaGuevara soon rose to prominence amongst insurgents, was promoted to second in command and played a pivotal role in the victorious two-year guerrilla campaign that deposed the Batista regimeCongo(1965)In early 1965, Guevara went to Africa to offer his knowledge and experience as a guerrilla to the ongoing conflict in CongoGuevara's aim was to “export the revolution by instructing local anti-Mobutu Simba fighters in Marxist ideology and foco theory strategies of guerrilla warfare”Despite the warning from Algerian President Ahmed Ben Bella, Guevara traveled to Congo using the alias Ramón Benítez.He led the Cuban operation in support of the Marxist Simba movement, which had emerged from the ongoing Congo crisisThe revolution, however, had failed and he states in his Congo diary book tha “the incompetence, intransigence and infighting among the Congolese rebels as key reasons for the revolt's failure”Bolivia(1966–1967)Before he departed for Bolivia, Guevara altered his appearance by shaving off his beard and much of his hair, also dying it grey so that he was unrecognizable as Che Guevara.Three days after his arrival in Bolivia, Guevara left La Paz for the rural south east region of the country to form his guerrilla army.His force numbered about 50 menGuevara had expected assistance and cooperation from the local dissidents that he did not receive, nor did he receive support from Bolivia's Communist Party under the leadership of Mario Monje, which was oriented toward Moscow rather than Havana. In Guevara's own diary captured after his death, he wrote about the Communist party of Bolivia, which he characterized as "distrustful, disloyal and stupid".However, the end result was that Guevara was unable to attract inhabitants of the local area to join his militia during the eleven months he attempted recruitment. Many of the inhabitants willingly informed the Bolivian authorities and military about the guerrillas and their movements in the area, which eventually lead to his capture and death on October 9, 1967Legacy*Che Guevara Mausoleum in CubaThe discovery of Che's remains metonymically activated a series of interlinked associations—rebel, martyr, rogue figure from a picaresque adventure, savior, renegade, extremist—in which there was no fixed divide among them. The current court of opinion places Che on a continuum that teeters between viewing him as a misguided rebel, a coruscatingly brilliant guerrilla philosopher, a poet-warrior jousting at windmills, a brazen warrior who threw down the gauntlet to the bourgeoisie, the object of fervent paeans to his sainthood, or a mass murderer clothed in the guise of an avenging angel whose every action is imbricated in violence—the archetypal Fanatical Terrorist.Dr. Peter McLaren, author of Che Guevara, Paulo Freire, and the Pedagogy of RevolutionChe Guevara is considered a hero in Cuba and has been praised by millions, including Nelson Mandela, and has inspired other revolutions after his deathHo Chi Minh(May 19 1890 - September 2 1969)Also known as "Uncle Ho", served as Prime minister of North Vietnam from 1945 to 1955 and then its President from 1955 to 1969He was, ideologically, a Marxist-Lenist, and he served as Chairman of the Worker’s party of VietnamHe established Viet Minh independence movement, beginning in 1941, establishing the Communist-ruled Democratic Republic of Vietnam in 1945 and defeating the French Union in 1954 at the battle of Dien Bien Phu. He officially stepped down from power in 1965 due to health problems. After the war, Saigon, the former capital of the Republic of Vietnam, was renamed Ho Chi Minh city. He was a key figure in the foundation of the People’s army of Vietnam and the Viet Cong during the Vietnam warLeadershipIndependence movement(1946–1954)In 1941, Hồ Chí Minh returned to Vietnam to lead the Viet Minh independence movement. The Japanese occupation of Indochina that year, the first step toward invasion of the rest of Southeast Asia, created an opportunity for patriotic VietnameseHe conducted many successful military actions against the Vichy France and Japanese occupation of Vietnam during WW2,He was later jailed in China by Chiang Kai-shek’s local authorities before being rescued by Chinese Communist and released in 1943Following the August Revolution, 1945, Hồ Chí Minh became Chairman of the Provisional GovernmentDuring a power struggle in 1945 the Việt Minh killed members of rival groups, such as the leader of the Constitutional Party, Bui Quang Chiew, the head of the Party for Independence and Ngo Dinh Diem's brother, Ngo Dinh KhoiOn 19 December 1946, after the Haiphong incident, Ho Chi Minh declared war against the French Union, marking the beginning of the Indochina warThe Vietnam National Army(VNA), mostly armed with machetes and musketes attacked. They assaulted the French positions, smoking them out with straw bundled with chilli pepper, destroying armoured vehicles with “lunge mines” and Molotov cocktails holding off attackers by using landmines and gravel. After two months of fighting, the exhausted Việt Minh forces withdrew after an initial successIn February 1950, after the successful removal of the French border blockade, he met with Jospeh and Mao Zedong in Moscow after the Soviet Union recognized his government. They all agreed that China would be responsible for backing the Việt Minh.In 1954, after the crushing defeat of French forces at Battle of Dien bien PhuResulting in the deaths of 2300 French soldiers and the surrender of 1000 French soldiersThe French Union were responsible for the deaths 60,000–250,000 Vietnamese civiliansVietnam war(1955–1975)Although he had stepped down from “day to day” leadership in North Vietnam, he continued to remain as a symbolic figure for reunification of VietnamAfter the US took control of the City of Hue in 1968, Ho Chi Minh gave a message that become a rally for the North Vietnamese stating: “Nothing is as dear to the Vietnamese as independence and liberation”Legacy*Ho Chi Minh statue in Ho Chi Minh city, VietnamAfter the Vietnam war, the city of “Saigon”, former capital of South Vietnam, was renamed “Ho Chi Minh City”Ho Chi Minh is widely regarded as a hero and, evidently, the main figure of contribution to Vietnam’s independence and liberationVelupillai Prabhakaran(Nov 26 1954 - May 18 2009)Prabhakaran was the founder and leader of the Liberation Tigers of Tamil Eelam(LTTE), a Tamil separatist organization that sought to create an independent Tamil state in the North and East of Sri Lanka as the answer for the decades of violent discrimination against the Tamil minority by the Sri Lankan governmentDuring his youth, Prabhakaran was an avid reader and grew up idolizing Bhagat Singh, Subhas Chandra Bose and Che GuevaraPrabhakaran grew up during Sri Lanka’s ethnic turmoil in the 50’s and 60’s and witnessed the violent suppression of peaceful demonstrators and would often listen to the stories of victims of anti-Tamil violenceHe stated in an 1984 interview: “When I heard such stories of cruelty I felt a deep sense of sympathy and love for my people. A great passion overwhelmed me to redeem my people from this racist system. I strongly felt that armed struggle was the only way to confront a system which employs armed might against unarmed, innocent people”Prabhakaran dropped out of school at the age of 14, 1968, and went on to found the LTTE at the of age 18, 1972.He had undergone extensive military training in India and had begun perfecting his knowledge on guerrilla warfareIn 1975, he assassinated the mayor of Jaffna, Alfred Duraippah, in retaliation for Duraippah’s complicit role in the 1974 Tamil conference massacreIn 1983, Prabhakaran lead a team to ambush a Sri Lankan army convoy and killed 13 soldiers, the soldiers in the convoy were accused of molesting Tamil school girls in the areaIn retaliation, the government financed and armed state-sponsored mobs to reach havoc on the innocent Tamil population4000 Tamils were murdered, and the massacre, called the Black July Riots, spiked the LTTE’s armed recruits from 30 to over 2000 over night and commenced the 26 year long Sri Lankan civil warUnder Prabhakaran, the LTTE invented the Suicide Vest/ Belt and became the first guerrilla organization in history to have its own Navy and Air ForceThe LTTE is considered to be the most technologically advanced guerrilla organization in modern military historyThe LTTE, at its peak in 2001, controlled 67% of Sri Lanka’s coast and a population of 1,700,000They had installed their own education system in schools, police force, banks, courts, law schools, border crossings, housing system and hotelsLeadershipWar with the Sri Lankan Army(1983–2009)Despite the Sri Lankan army outnumbering the LTTE in a 25:1 ratio, Prabhakaran’s extensive military knowledge and expertise in guerrilla warfare allowed him to over power the Sri Lankan Army numerous times, most notably during his victorious campaigns during Eelam war 3(1995–2001)Despite having 0 international allies, Prabhakaran’s extensive underground network of weapons and black market dealership allowed the LTTE to attain heavy weaponryIn fact, the LTTE had obtained RPG’s before the Sri Lankan armyThe LTTE’s Navy played an instrumental role in patrolling the coastline and procuring weaponsNotable victories includeCountering the Sri Lankan Army’s Operation Yarl Devi(1993)Operation Ithayabhoomi 1 (1993)Operation Frog(1993)Operation Unceasing Waves 1 (1996)Countering the Sri Lankan Army’s Operation Jayasikurui (1997–1999)Operation unceasing Waves 3 (1999–2000)Despite having a force of only 15,000–20,000 fighters, the LTTE were able to kill 30,000+ Sri Lankan soldiers and severely wound 40,000+War with the Indian Army(1987–1990)In July 1987, after a fallout and political betrayal by India’s PM, Rajiv Gandhi, the LTTE had declared war on IndiaThe Indian Peace Keeping Force(IPKF), compromised of 100,000 troops, including Special Forces operators, were deployed to neutralize the LTTE, compromised of 2000 guerrilla fighters at the timeThe Indian Army outnumbered the LTTE in a 50:1 ratioDespite being outnumbered severely, the support of the Tamil population and extensive knowledge of the terrain allowed the LTTE to outmaneuver Indian soldiers repeatedlyThe LTTE’s used of “hit and run attacks”, “ambushing convoys” and use of Jony Landmines were instrumental in their victoriesNotable Operations include:Countering the Indian Army’s Operation Checkmate(1988)After 3 years of fighting, the Indian army was forced to pull out of Sri Lanka in defeatThe LTTE had killed 1,264 Indian soldiers and severely wound 2,762+Legacy*Prabhakaran staue in Nagapattinam, Tamil Nadu, IndiaDespite his death in 2009, which officially ended Sri Lanka’s civil war, Prabhakaran remains a prominent figure of Tamil nationalism and has driven the creation of severel political parties in Tamil Nadu, IndiaPrabhakaran’s byname, “Thalaivar” meaning “Leader” in Tamil comes from his perception as as a “modern day leader for the Tamil people”Anita Pratap, former Indian South Asia Bureau Chief of CNN, expressed: “Prabhakaran, I have no doubts that he is the most important guerrilla leader of our times after Che Guevara”Spartacus(111BC - 73 BC)Spartacus was a Thracian gladiator who, lead a slave revolt against the Roman Republic. All sources agree that he was a former gladiator and an accomplished military leaderHe was previously part of the Roman army, but was imprisoned for desertionThe Greek essayist Plutarch describes Spartacus as "a Thracian of Nomadic stock",in a possible reference to the Maedi tribe.Appian says he was "a Thracian by birth, who had once served as a soldier with the Romans, but had since been a prisoner and sold for a gladiator".Florus described him as one "who, from a Thracian mercenary, had become a Roman soldier, that had deserted and became enslaved, and afterward, from consideration of his strength, a gladiator"Spartacus was trained at the gladiatorial school,ludus. He was a heavyweight gladiator called a murmillo. These fighters carried a scutum(large shiled), and used a sword with a broad, gladius( 8 inches long), about 18 inches longIn 73 BC, Spartacus was among a group of gladiators plotting an escape.About 70 slaves were part of the plot. Though few in number, they seized kitchen utensils, fought their way free from the school, and seized several wagons of gladiatorial weapons and armour.The escaped slaves defeated soldiers sent after them, plundered the region surrounding Capua, recruited many other slaves into their ranks, and eventually retired to a more defensible position on Mount VesuviusLeadership(Third Servile War)As mentioned previously, Spartacus lead 73 slaves, who attained knives and skewers, to overthrow the guards and fight their way to freedomThey later hijacked a wagon full of gladiator equipment along their pathPrateor Cladius Glaber, took 3000 Roman soldiers to Spartacus’ refuge on Mount VesuviusGlaber blocked off the entrances, hoping that he would force the rebels to either surrender of starve to deathHowever, during night fall, Spartacus and his men lowered themselves down the cliffside with vines and flanked Glaber’s menSpartacus’ army grew to 120,000 men, compromising of former slaves, deserters, and peasantsSpartacus turned these men into an effective guerrilla forceIn the spring of 72 BC, the rebels left their winter encampments and began to move northward. At the same time, the Roman Senate, alarmed by the defeat of the praetorian forces, dispatched a pair of consular legionsThe two legions were initially successful—defeating a group of 30,000 rebels commanded by Crixus near Mount GarganusHowever, they were then defeated by SpartacusThe final battle that saw the assumed defeat of Spartacus in 71. Marcus Licinius Crassus had lead 8 Roman legions to crush the revoltCrassus trapped the rebels in the “toe of Italy”, and after failed attempts to build rafts and the betrayal by local piratesIn 71 BC, Spartacus and his men made their last standSpartacus nearly reached Crassus, but he was killed by centurions before he could engage with the “richest man in Rome”His army was defeated and 6000 surviving rebels were later crucified along the Appian WayLegacy*Spartacus statue in the Louvre MuseumSpartacus’ name is synonymous with freedom and liberationToussaint Louverture, a leader of the slave revolt that led Haiti’s independance, has been named the "Black Spartacus".Adam Weishaupt , founder of the Bavarian Illuminati, often referred to himself as Spartacus in his writingsAhmad Shah Massoud (September 2 1953 - September 9 2001)He was a successful guerrilla commander of the Mujahideen during the resistance campaign against the Soviet Invasion of Afghanistan(1979 - 1989)In the 1990s he led the Afghan government's military wing against rival militiasWhen the Taliban took control in 1995, Massoud was the leading opposition commander against their regimeHe fought against them until he was assassinated by 2 Al-Qaeda suicide bombers, posing as journalist, 2 days before the 9/11 attacksMassoud, a Sunni muslim, came from Panjshir valley of northern Afghanistan.He began studying engineering at Polytechnical University of Kabul in the 1970s, where he became involved with religious anti-communist movementsDuring the Soviet–Afghan War, his role as a powerful Mujahideen insurgent leader earned him the nickname of "Lion of Panjshir" among his followers as he successfully resisted the Soviets from taking Panjshir Valley.In 1992 he signed the Peshawar Accord, a peace and power-sharing agreement, in the post-communist Islamic State of Afghanistan and was so appointed as the Minister of Defense as well as the government's main military commanderMassoud has been described as one of the greatest guerilla leaders of the 20th century and has been compared to Ho Chi Minh, and Che GuevaraOne of the reasons was because he successfully managed to repeatedly defend his local Panjshir Valley from being taken by the Soviets and thereafter by the TalibanLeadershipResistance against the Soviet Union (1979–1989)Following the Soviet Invasion and occupation of Afghanistan, Massoud devised a strategic plan for expelling the invaders and overthrowing the communist regimeHe established a popularly based resistance force that had the loyalty of the people. The second phase was "active defense" of the Panjshir stronghold, while carrying out asymmetric warfare. In the third phase, the "strategic offensive", Massoud's forces would gain control of large parts of Northern Afghanistan. The fourth phase was the "general application" of Massoud's principles to the whole country, and the defeat of the Afghan communist government.From the start of the war, the Mujahideen attacked the occupying Soviet forces, ambushing Soviet and Afghan communist convoys travelling through the Salang Pass, and causing fuel shortages in Kabul.To organize support for the mujahideen, Massoud established an administrative system that enforced law and order (nazm) in areas under his control. The Panjshir was divided into 22 bases (qarargah) governed by a military commander and a civilian administrator, and each had a judge, a prosecutor and a public defender.With the defeat of the Soviet-Afghan attacks, Massoud carried out the next phase of his strategic plan, expanding the resistance movement and liberating the northern provinces of AfghanistanThis expansion was also carried out through diplomatic means, as more mujahideen commanders were persuaded to adopt the Panjshir military system.Despite almost constant attacks by the Red Army and the Afghan army, Massoud increased his military strength. Starting in 1980 with a force of less than 1,000 ill-equipped guerrillas, the Panjshir valley mujahideen grew to a 5,000-strong force by 1984.After expanding his influence outside the valley, Massoud increased his resistance forces to 13,000 fighters by 1989.The Soviet army and the Afghan communist army were mainly defeated by Massoud and his mujahideen in numerous small engagements between 1984 and 1988. In 1989, after describing the Soviet Union's military engagement in Afghanistan "a bleeding wound", Soviet General Secretary Mikhail Gorbachev began a withdrawal of Soviet troops from the nation. On February 15, 1989, in what was depicted as an improbable victory for the mujahideen, the last Soviet soldier left the nationThe Mujahideen had killed 14,000+ Soviet Forces and severely wounded 50,000+Resistance against the Taliban (1996–2001)Ahmad Shah Massoud lead the United Front, Northern Alliance, against the Taliban advance. The United Front included forces and leaders from different political backgrounds as well as from all ethnicities of Afghanistan. From the Taliban conquest in 1996 until November 2001, the United Front controlled territory compromising of roughly 30% of Afghanistan's populationMassoud's soldiers held some 1,200 Taliban prisoners in the Panjshir Valley, 122 of them foreign Muslims who had come to Afghanistan to fight a jihad.In 1998, after the defeat of Abdul Rashid Dostum's faction in Mazar-i-Sharif, Ahmad Shah Massoud remained the only main leader of the United Front in Afghanistan and the only leader who was able to defend vast parts of his area against the Taliban. Most major leaders were living in exile. During this time, commentators remarked that: "The only thing standing in the way of future Taliban massacres is Ahmad Shah Massoud"Massoud stated that the Taliban repeatedly offered him a position of power to make him stop his resistance. He declined, declaring the differences between their ideology and his own pro-democratic outlook on society to be insurmountable.In early 2001, the United Front employed a new strategy of local military pressure and global political appealsLegacy*Ahmad Shad Massoud Memorial ceremonyMassoud is considered to be a “National Hero of Afghanistan”The Massoud Foundation was established in 2003, to provide humanitarian assistance to Afghans, especially in the fields of health care and education. It also runs programs in the fields of culture, construction, agriculture and welfareMassoud's earned the byname "Lion of Panjshir" for his role during the Soviet occupation

The Future of Small Business Entrepreneurship: Jobs Generator for the U.S. EconomyMartin Neil Baily, Karen Dynan, and Douglas J. ElliottFriday, June 4, 2010FacebookClick to share on FacebookTwitterClick to share on TwitterLinkedInClick to share on LinkedInEmailClick to email this to a friendMoreDOWNLOADDownload Policy BriefPolicy Brief #175As the nation strives to recover from the “Great Recession,” job creation remains one of the biggest challenges to renewed prosperity. Small businesses have been among the most powerful generators of new jobs historically, suggesting the value of a stronger focus on supporting small businesses—especially high-growth firms—and encouraging entrepreneurship. Choosing the right policies will require public and private decision-makers to establish clear goals, such as increasing employment, raising the overall return on investment, and generating innovations with broader benefits for society. Good mechanisms will also be needed for gauging their progress and ultimate success. This brief examines policy recommendations to strengthen the small business sector and provide a platform for effective programs. These recommendations draw heavily from ideas discussed at a conference held at the Brookings Institution with academic experts, successful private-sector entrepreneurs, and government policymakers, including leaders from the Small Business Administration. The gathering was intended to spur the development of creative solutions in the private and public sectors to foster lasting economic growth.RECOMMENDATIONSWhat incentives and assistance could be made available to “gazelles” and to small business more generally? What policies are likely to work most effectively? In the near term, government policies aimed at bolstering the recovery and further strengthening the financial system will help small businesses that have been hard hit by the economic downturn. Spurred by the interchange of ideas at a Brookings forum on small businesses, we have identified the following more targeted ideas for fostering the health and growth of small businesses (and, in many cases, larger businesses) over the longer run:Improve access to public and private capital.Reexamine corporate tax policy with an eye toward whether provisions of our tax code are discouraging small business development.Promote education to help businesses struggling with shortages of workers with particular skills, and promote research to spur innovation.Rethink immigration policy, as current policy may be contributing to shortages of key workers and deterring entrepreneurs who wish to start promising businesses in our country.Explore ways to foster “innovation-friendly” environments, such as regional cluster initiatives.Strengthen government counseling programs.The term “small business” applies to many different types of firms. To begin, the small business community encompasses an enormous range of “Main Street” stores and services we use every day, such as restaurants, dry cleaners, card shops and lawn care providers. When such a business fails, it is often replaced by a similar firm. The small business community also includes somewhat bigger firms—in industries such as manufacturing, consulting, advertising and auto sales—that may have more staying power than Main Street businesses, but still tend to stay relatively small, with under 250 employees. While these two kinds of small businesses contribute relatively little to overall employment growth, they are a steady source of mainstream employment. If economic conditions do not support the formation of new businesses to replace the ones that fail, there would be a significant net destruction of jobs and harm to local communities.Yet another type of small business has an explicit ambition for rapid growth. These high-growth companies are sometimes known as “gazelles.” According to the Small Business Administration, small businesses account for two-thirds of new jobs, and the gazelles account for much of this job creation. The most striking examples—such as Google and eBay—have tended to be in high-tech industries and were gazelles for a significant time before they graduated to be very large businesses. However, gazelles exist in all industry types and in all regions of the country, and the large majority are not grazing in the nation’s technology-dominated Silicon Valleys. According to one expert, the three largest industry categories for high-growth companies are restaurant chains, administrative services and health care companies. One non-high-tech example is Potbelly Sandwiches, a restaurant chain that began in Chicago. Another is the San Francisco-based Gymboree Corporation, a provider of child development programs and children’s clothing.FOSTERING THE DEVELOPMENT OF HIGH-GROWTH COMPANIESHigh-growth small businesses represent only about 5 percent of total startups, making it important to determine how to spot and foster them. A key common characteristic is that growth is critically dependent on the entrepreneurs who start these companies; they are people on a mission, charismatic leaders who can inspire creativity and commitment from their staffs.The age of these firms is highly correlated with when their growth is highest. Generally, the most dramatic growth occurs after at least four years of existence—and coincidentally lasts about four years—before it slows again to a more typical pace for small businesses. Of course, some firms such as Google defy this pattern and continue to experience high growth for many years.RelatedTechnology and the Innovation EconomyThe Role of Finance in the Economy: Implications for Structural Reform of the Financial SectorRegulating Systemically Important Financial Institutions That Are Not BanksAlthough dynamic small businesses can be found nearly everywhere and in many industries, some regions spawn more of them than others. These regions may have especially supportive features, such as a critical mass of potential workers with relevant skills, a social climate and network that encourage idea generation, locally available venture capital, or some combination of these factors.Unfortunately, attempts to anticipate which companies or even industries are likely to produce gazelles are prone to error. Thus, excessive emphasis on national industrial policies that favor specific industries are likely misplaced. Without knowing how to target assistance precisely, broad strategies, such as assistance with funding, knowledge, contacts and other essential resources, may be the best approach to fostering high-growth businesses. Such support has the added value of also aiding Main Street businesses.Many of the most promising policies focus on removing obstacles that hinder entrepreneurs with solid business plans from launching and expanding their businesses.Related BooksBrookings Papers on Economic Activity: Spring 2017Edited by Janice C. Eberly and James H. Stock 2017The Imperative of DevelopmentEdited by Geoffrey Gertz, Homi Kharas, and Johannes F. Linn 2017Results Not ReceiptsBy Charles Kenny 2017FundingAs a result of the burst of the http://dot.com bubble in early 2000 and the recent financial crisis, small businesses have found the availability of venture capital funds drastically diminished. The crisis has also made it more difficult to obtain funding from banks and other conventional means. These trends particularly affect the “missing middle” of small businesses—roughly, those with between 10 and 100 employees.The venture capital market. Historically, venture capital has financed only a relatively small portion of small businesses, but those financed have tended to be the ones with the greatest growth potential. In recent years, firms that eventually grew to where they could issue initial public stock offerings generally relied more heavily on venture capital financing than the average small business.The dollar value of venture capital deals funded today is only about one-fifth the size it reached at its peak. While the peak amount may have been too large, today’s value is probably too small. With their capital heavily invested in a small range of industries and locales, it seems likely that venture capital firms have missed a high proportion of potential investment opportunities. Further, “once burned, twice shy” funders have increasingly focused on larger, later-stage ventures. Consequently, mezzanine financing, which new companies need to survive and thrive in the critical early stages, is scarce.The funding problems partly stem from venture capital firms today having less money to invest. Some investors who formerly contributed to such firms have become more risk-averse, and worse performance figures have discouraged new investors. Lack of venture capital affects some industries more than others, and even some green energy companies—viewed by some as one of the nation’s more promising industry sectors—have moved to China, where financial support is more readily available.Bank lending. In contrast to large businesses, which can turn to capital markets for funding, many small businesses are dependent on banks for financing. Although the worst of the 2008–09 credit crunch is behind us, many small businesses still find it difficult to obtain bank loans. Community banks, a key source of small business financing, have been hard hit by losses in commercial real estate, which have limited their lending capacity. Further, many small business owners who historically would have used real estate assets as collateral for expansion loans can no longer do so because of declines in real estate prices. In addition, small businesses that have, in the past, used credit cards to purchase equipment and supplies have been hindered by reductions in credit limits.AuthorsMartin Neil BailyBernard L. Schwartz Chair in Economic Policy DevelopmentSenior Fellow -Economic Studies, Center on Regulation and MarketsKaren DynanFormer Brookings ExpertDouglas J. ElliottFormer Brookings ExpertOverall economic conditionsThe high degree of uncertainty currently surrounding the economic and financing climate may have prompted many entrepreneurs and would-be entrepreneurs to hold off on growth plans. Despite their reputation as high-flying risk-takers, good entrepreneurs take only calculated risks, where the benefits outweigh the dangers. Uncertainties about the future trajectory of the economy merely increase risk without raising potential rewards.Government policiesGovernment policies affect the climate for small businesses in many ways. For example, small businesses face substantial hurdles when entering the complicated world of federal grants and contracts. At the state level, severe budget shortfalls mean that even well-designed initiatives to boost small businesses may founder.The Small Business Administration (SBA) assists the full continuum of small businesses through a variety of means. These include: an $80 billion loan guarantee portfolio; specialized counseling and training centers; specialized business development programs targeting the socially and economically disadvantaged; oversight to ensure that at least 23 percent of federal government contracts go to small businesses (with certain preferences for minority and women-owned businesses); and the Small Business Innovation Research and Small Business Investment Companies programs.The Obama administration is attempting to broaden support for small businesses by bringing the SBA into multi-agency initiatives that tackle common problems. For example, the Departments of Energy, Commerce, Housing and Urban Development, Education, and Labor, along with the National Science Foundation and the SBA, are supporting a five-year, nearly $130 million Energy Regional Innovation Cluster.Strength of “social capital”Through the 1990s, the United States was a worldwide leader in fostering innovation and entrepreneurship and reaped the reward of employment growth. Current international comparisons suggest that we are now closer to tenth place among some 70 nations in our ability to support innovation. Much of what has kept our nation from remaining in the top spot appears to relate to insufficient cultural support for entrepreneurship.Strong social networks in specific geographic regions appear to substantially bolster the growth of innovative businesses. These networks are built around entrepreneurial dealmakers who serve as the nodes of the network, forming connections among researchers, entrepreneurs and investors. Unfortunately, many regions and industries lack strong networks.Access to decision-making information. Entrepreneurs need an array of information and advice about how to tackle the problems that arise at different stages in business development. The SBA reports that companies that have taken advantage of their long-term counseling programs, for example, have higher growth than companies that have not.Opportunity for all. Social networks are self-selecting, and some people have to work extra hard to gain entry to a region’s network of entrepreneurs. While various organizations exist to help women and people of color access entrepreneurial skills and information, these efforts may not suffice. Under-representation of any group presumably would filter out a number of potential high-growth companies.Workforce issuesA long-time strength of the American workforce, worker mobility has declined. This trend has been attributed in part to an aging population and in part to the current difficulty people have in selling their homes. Businesses report difficulty finding employees with the right training, especially at the technician level, where straightforward vocational training could help.Global competitionIncreasing global competition for good projects, entrepreneurs and capital is a positive trend from an international perspective, but runs counter to the national goal of promoting rapid growth in U.S. industry and employment. Today, many entrepreneurs can choose among starting a business here, in their home country, or even in a third, more hospitable nation. At the same time, current U.S. immigration policy hinders entrepreneurs from coming here to launch their companies. A recent report from The Brookings- Duke Immigration Policy Roundtable concluded that “educated workers with the knowledge and skills to innovate are critical” to the United States and recommended increasing the annual number of skilled visas.POLICY GOALS FOR SMALL BUSINESSMeasuring ResultsMore work is needed to identify key policy goals and priorities related to small business success. Critically, what would constitute “improvement” in public policy regarding small business employment, and how would we measure it? Clearly, increasing the total number of jobs created each year (by both small and large businesses, net of job destruction) would be a positive outcome, all else being equal. Another potential goal would be improving the “quality” of the jobs created, as measured by average compensation or by job creation in new industries or geographic areas where unemployment is high. Creating “good jobs” that bring generous compensation would seem to be always desirable, but this outcome could conflict with other social goals, for example, if the jobs created required skills out of the reach of groups that are traditionally difficult to employ.Slowing job destruction could be as important as increasing the creation of new jobs, but discouraging layoffs without increasing performance would do more harm than good. The trick is to raise the quality of marginal firms so that their improved performance allows them to retain employees they would otherwise have to let go.A final key factor in setting policy goals that would support small businesses is measuring the cost to taxpayers of the initiatives that flow from the goals. This includes the subsidy cost contained in the federal budget, as well as costs and tradeoffs in society at large.Changing Key PoliciesSmall businesses face both short-run and long-run challenges. With regard to the former, many small businesses have been hard hit by the recession and appear to be lagging behind larger businesses in their recovery. The cyclical struggles of this sector in part reflect the dependence of many small firms on the still-strained banking system for their financing; they also reflect the high toll that our extremely soft labor markets have taken on demand for Main Street goods and services. Thus, government policies aimed at broadly bolstering the recovery and further strengthening the financial system will yield important benefits to small businesses.The government, in conjunction with the private sector, can also take steps that will foster an economic environment that is supportive of entrepreneurship and economic growth over the long run. Specific policy steps that might help small businesses (and, in many cases, large businesses) include:Improve access to public and private capital. Implementing serious financial reform will reduce the likelihood that we will see a repeat of the recent credit cycle that has been so problematic for the small business sector. When credit market disruptions do occur, policymakers should be attentive to whether temporary expansions of the SBA loan guarantee program are needed to sustain lending to creditworthy borrowers. The SBA should also consider expanding the points of access to its loan programs through an expansion of its lending partners. Finally, the SBA (or a similar entity) might encourage venture capital funds to broaden their investments beyond familiar areas by systematically bringing these investors together with entrepreneurs from neglected geographic regions and business sectors.Reexamine corporate tax policy. More thinking is needed about whether provisions in our tax code discourage small business development in a way that is harmful to the broader economy and that places the United States at a relative disadvantage internationally. For example, Congress might consider whether it would be beneficial, on net, to lower employment taxes as a way of spurring hiring at businesses with high-growth potential. In addition, some analysts believe there would be gains from increasing tax credits for research and development and further lowering taxes on capital equipment. A design priority in all cases should be simplicity, as complicated rules can limit take-up among smaller firms that do not have extensive accounting or legal expertise.Promote education and research. Entrepreneurs report difficulty in finding workers with the skills they need for manufacturing, technology and other jobs that do not require four-year college degrees. Access to such educational opportunities, including tailored vocational training, should be affordable and ubiquitous.At the university level, improvements are needed in the way academic research is brought to the commercial market. Continued public and private support for basic research might be wise, particularly if we are in a trough between waves of innovation, as some analysts believe. The large investments by the National Science Foundation, National Institutes of Health, Defense Advanced Research Projects Agency, and other ambitious public and private programs laid the groundwork for many of the high-growth businesses of today. It may be worth exploring whether support for research in “softer” areas than the sciences might do an equal or better job of inspiring innovations.Rethink immigration policy. A reconsideration of limits on H1-B visas might help entrepreneurs struggling with shortages of workers with particular skills. In addition, current immigration policy discourages immigrants who want to establish entrepreneurial businesses in America. Any efforts to expand immigration are frequently perceived as “taking jobs away from Americans,” but studies have shown that new businesses create jobs for Americans.Explore ways to foster “innovation-friendly” environments. Some regions of the United States clearly do a better job of encouraging innovation. Silicon Valley is the classic example, but there may be as many as 40 such clusters scattered around the country. While clusters often arise organically, typically near major universities, some states have made an explicit commitment to innovation and entrepreneurship. Examples include the Massachusetts Technology Collaborative and California’s Biological Technologies Initiative, involving community colleges statewide. Federal, state and local policymakers should keep a keen eye on ways of adapting best practices from these initiatives as information becomes available about which elements are most effective.Strengthen government counseling programs. The SBA might do more to expand and tailor its already successful growth counseling programs to better meet the needs of both Main Street and potential high-growth businesses, as well as firms at different developmental stages. Any effort to expand small businesses’ opportunities for federal grants and contracts should be accompanied by significant streamlining of the application process.i hope that could be help