The United Nations has finally noticed that entrepreneurial economic activity is sweeping the globe. UN?s Commission on the Private Sector and Development issued its report, Unleashing Entrepreneurship: Making Business Work for the Poor, in which the primary recommendation is, you guessed it, break down barriers created by governmental bureaucracy and get out of the way.
The report states that "the private sector can alleviate poverty by contributing to economic growth, job creation and poor people?s income?Small and medium enterprises can be engines of job creation.? The agenda put forth in this report is consistent with most of the others dealing with both domestic and international economic development.
In the public arena, the study advocates the reform of laws and regulations that inhibit entrepreneurial economic activity. Barriers are created by laws that are designed with large corporations in mind. These laws often place much higher costs per employee for smaller ventures. Also, they are often found to be unnecessary or at least easy to simplify to better address the situation of small and medium enterprises. Barriers are also created from attempts to protect entrepreneurs from their own actions. This report, like so many others, recommends that entrepreneurs be supported with education, but once that is provided, let markets work. If a business begins to fail due to poor execution, changing conditions, or whatever the cause, let it fail. No one is helped by government interference in this process.
Public policy should be directed toward the creation of a support system for entrepreneurs that includes financing, education and training, and basic services. Anything beyond this will hurt the entrepreneurial development in an economic system.
The report suggests that the private sector, and not the public sector, should take the lead in supporting the development of promising markets within an economy. The private sector can be an effective and efficient means of moving resources into promising market segments. Governmental attempts to plan economic development at this micro level rarely succeed, and never work as well as when the private sector is allowed to do what it does best: recognize and exploit opportunities in the market.
There is indeed hope when a body with the history of favoring much more socialistic economic planning, such as the United Nations, begins to recognize the power of free enterprise. It will be interesting to watch and see if this report is embraced by the United Nations and put into practice. My fear is that there are too many in power who stand to lose too much of their power through the implementation of such an agenda to let it be implemented as it has been proposed by this Commission.
Thanks to the National Dialogue for Entrepreneurship for highlighting this report.
