A Scary Economic Truth
Last week, I spoke with a entrpreneur I’ve known for a few years. He launched a data mining and services firm which today employs six full-time people. I asked how things were looking, and he replied that they were growing fast and could double in size this year.
I then asked how many jobs they might add and he replied, “Uh, probably none.”
Double revenue growth. Zero job growth.
How? The business is scalable and they built it that way.
And then it hit me – isn’t that what all entrepreneurs want? A business that minimizes expenses to maximize profitability? Why add staff – most companies’ largest expense – if you don’t have to? Why not build a business that requires as few people as possible?
With technology’s capabilities today (and increasing capabilities for tomorrow), more and more jobs will get squeezed. And it’s only being exacerbated by an educational system that isn’t keeping up, as explained in a recent New York Times column.
I wonder how well our new economy can simultaneously support the creation of companies and jobs like it used to.
Maybe it is indeed a great time to start a business. Maybe it will remain that way for a long time.