Small Business Labs

Spending Economic Stimulus Money Wisely

I was in Washington DC this week and had the opportunity to meet with Rob Atkinson, President of the influential, non-partisan Information Technology & Innovation Foundation think tank. 

They recently released a report calling on Congress to craft a stimulus package that:

"not only gives a quick shot in the arm to the economy but at the same time also boosts investment that spurs productivity growth and innovation, especially in information technology, which has been the engine of U.S. economic growth for the past decade."

The report outlines 8 specific proposals that would provide economic stimulus in the short run and also boost investments in key technologies.  Atkinson used the term "Schumpeterian Keynesianism" to describe this approach.

Joseph Schumpeter (1183-1950) was a Czech born Harvard economist who argued that capitalism is in a constant state of change with new, innovative firms replacing existing firms.  Schumpeter called this process "creative destruction" and stressed the important roles entrepreneurship and innovation play in economic growth.

Atkinson's point is if we are going to use deficit government spending to stimulate the economy, lets spend the money on programs that spur innovation, entrepreneurship and long term economic growth.

I mentioned in a recent post that the recession had turned me into a Keynesian.  After talking to Atkinson and reading his report, I am now a Schumpeterian Keynesian. 

For more on this topic, visit ITIF's Innovation Economics site. 

 

In a Recession Most of Us are Keynesians

There is a wartime cliche that there are no atheists in foxholes. Somewhat similar, it appears that in a deep recession most of us are Keynesians. 

John Maynard Keynes (1883-1946) was a British economist and considered one of the fathers of macroeconomic theory.  

Probably best known for the quote "in the long run we're all dead", Keynes advocated government use of fiscal and monetary policy to intervene in and manage economies. 

We just elected a Keynesian president and in a post on the American Express Open Forum blog I covered President-elect's Obama's plans to stimulate the economy through infrastructure spending. 

I wrote this after hearing Clinton Labor Secretary and Obama advisor Robert Reich talk about using deficit spending to stimulate the economy (Reich is a brilliant speaker and well worth seeing if you have the chance).

And recently the St. Louis Federal Reserve Bank president spoke about the rebirth of fiscal policy and the growing use of direct government intervention in the economy. 

I've always leaned towards free markets and limiting government intervention in the economy.  But I'm convinced that government spending is required to restart the economy.  I'm also convinced that fiscal stimulus will provide many opportunities for small businesses.

Like others, the current economic turmoil has turned me into a Keynesian. 

The Artist as Entrepreneur

The New York Times article Transforming Art Into a More Lucrative Career Choice covers several trends driving the growth of successful artist-entrepreneurs. 

One of the trends covered is art schools increasingly adding business courses to their curriculum.  An example is the Ringling College of Art and Design, which has both majors and minors in "the business of art and design."  Great quote from Ringling Dean Larry Thompson:

      "I am committed to destroying the myth of the starving artist."

Another example is an Artistic Entrepreneurship class developed at the University of North Carolina. 

We've been researching artist entrepreneurs with a focus on identifying common business success factors that entrepreneurial artists share.  The NY Times article includes a reference to this research.

Over the next couple of months we will be posting on our research findings.