Monday, October 24, 2011

Small businesses boost economy?

http://www.newyorker.com/talk/financial/2011/10/31/111031ta_talk_surowiecki

In society today, most consumers would rather shop at a big chain store rather than shopping at a local one. I will say that there are people who prefer small public markets rather than big chain stores. But the majority I think would rather shop at a walmart or target. The same also goes for businesses. Me personally I would rather have a franchise or well known business handle my problems than a local one. The New York Times article is stating that even though small business lead to jobs they do not help the economy at all. "One can see this by looking at the track record of the world’s economies. The developed countries with the highest percentage of workers employed by small businesses include Greece, Portugal, Spain, and Italy—that is, the four countries whose economic woes are wreaking such havoc on financial markets. Meanwhile, the countries with the lowest percentage of workers employed by small businesses are Germany, Sweden, Denmark, and the U.S.—some of the strongest economies in the world.small businesses are, on the whole, less productive than big businesses, and though they do create most jobs, they also destroy most jobs, since, while starting a business is easy, keeping it going is hard. This is true around the world. A recent study by the World Bank that looked at ninety-nine developing countries found that large firms had significantly higher productivity growth"

Small businesses may seem like a helpful tool to solve this economic problem but in reality their cause is ineffective and even detrimental in our achievement of economic stability.


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