Wednesday, March 5, 2014

Irony

From the pages of this week's C&EN, member of the ACS Board of Directors Pat Confalone on innovation and entrepreneurship:
...A key finding of the ACS Presidential Task Force report “Innovation, Chemistry, and Jobs” (www.acs.org/creatingjobs) was that start-ups and small to medium-sized companies create about 3 million jobs per year, in contrast to the 2.5 million that are lost in large companies. It’s clear that the role of the entrepreneur in job creation is not only essential but also has been the key to robust economic growth, even in times of recession. In the middle of the deep downturn of 1973–74, the following companies were start-ups: FedEx, Microsoft, Oracle, and Southwest Airlines....
Does anyone else find it ironic that an essay on the glory of startups and small companies was written by someone who's spent a 40+ year career in corporate America (Roche, DuPont, BMS, DuPont)? 

13 comments:

  1. Not entirely related, but happened upon this from 1995: http://www.nytimes.com/1995/07/04/science/supply-exceeds-demand-for-phd-s-in-many-science-fields.html

    "By increasing research funding, Dr. Massy said, "the whole system will be expanding and people will get the kinds of jobs they were trained for."

    So we'll all be fine!

    How many times has the ACS made the determination thatsmall companies create jobs in the past 20 years?

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  2. Bring the MoviesMarch 5, 2014 at 1:19 PM

    Sure, they make jobs, which is good. But the chances are you will lose it in 4 years. I lost mine at a start up within 6 months.

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    1. That's the truth! The only thing you can do to insulate yourself from it is to move to a high density area. Where, when you loose your job, you can find another fast.

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  3. Barry Ritholtz posted some fresh analysis from the census bureau that suggests smaller firms are- else equal- job destroyers

    http://www.ritholtz.com/blog/2014/03/the-pattern-of-job-creation-and-destruction-by-firm-age-and-size/

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  4. Uh, survivorship bias? How many small businesses sputtered and failed during the early 70s?

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  5. Kodak employed ~150,000 employees at one time. Shortly after it filed for bankruptcy a little company that allowed photo sharing was sold for $1+ billion. That company had about 15 employees. Innovation does not necessarily lead to lots of new jobs even as the employment prospects of 10,000's are being crushed in the industries being displaced by innovative technology.

    Most small employers are mom and pop operations who hire the minimum number of employees at the lowest salary necessary to make the hire. Such jobs get clobbered in bad times and are hyper sensitive to the price of labor and regulations. They seldom have employee benefits of consequence and tend to be metastable jobs at best. For capital intensive, regulated industries like energy, drugs and chemicals, small is not an advantage and seldom economically viable except to make a quick buck for the investors as they pass the trash to some unsophisticated investor.

    I have worked in extremely large companies and tiny companies. The former gave me a big headache; the latter a nervous breakdown. Looking back, I will take the headaches any day.

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  6. @5:59 I have big headaches a lot at my large employer. It is easy to believe the grass is greener when you do not have the benefit of experiencing both. I always thought small companies were wonderful places where 'pure' science wasn't bogged down in corporate processes and complacency. It is easy to dream, as I don't have the courage to leave for a tiny company.

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  7. The link "www.acs.org/creatingjobs" has two videos on this task force study, when it was presented back in 2010 (this is awfully old news). In the second video, they have the CEO of Boulder Scientific (a small specialty chemical maker, mostly organometallics) as an example of an entrepreneur. About 2/3s of the way through this video, he says that his company started in 1961, and that they would not be able to start up the company in today's environment due to all the regulatory demands on chemical businesses.
    The panel basically ignores this nugget of truth.

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    1. Well regulatory demands are probably what keeps the US from turning into toxic dump. Let us not forget that "freedom" = american corporate culture doing what the hell it wants to turn back the clock into some Dickens-esque paradise where the Jacob Marley's of this world charge Tiny Tim for his crutches and call it the American Dream of Healthcare.

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    2. Seriously. We've had enough recent major chemical spills in the US (North Carolina, West Virginia twice, plant explosions in Texas) that I'm going to err on the side of more regulation rather than less. The chemical industry needs to prove itself capable of managing its own safety needs before we can cut them loose in the name of "creating jobs."

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    3. Wouldn't a small, start-up company by definition only be able to create a small amount of waste? Isn't a "major" spill produced by a company that has "major" facilities?

      Treating every two-man operation like it's Dow and burying it under red tape isn't going to help anyone.

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  8. Start ups and small companies? Isn't that what large corporations eat to keep their profit margins increasing without having to trouble with investing smartly in internal R&D? It must be really good at start ups, the people that work at them get so upset when they are acquired!

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  9. I am Anon from March 5 who posted the prior comment about the cost of regulatory compliance on small chemical businesses. I did not mean to imply that we should do away with regulations. I am in complete agreement with others above that these measures are necessary for ensuring worker and public safety.
    I was referring to the comments of the Boulder Scientific CEO in the second ACS website video, who mentioned the cost of OSHA and local permit regulations. Though he did not say that we should do away with these regulations, he did accurately point out that it does cost some money to be compliant with the rules. It was disconcerting to see the other panel members ignore him, almost to the point of being disrespectful. He was the only panel member who has run a small business and he was the only one who was not spouting off platitude after platitude, al la Sir Confalone de DuPont de Nemours.

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