Charles Darwin on Small Business Investment

Continuing with my mantra, "Principles of Evolutionary Biology and Business Strategy are the same", I'd like to look at the current state of small business in the US as it relates to our current economic slump.

Natural Law:

It's no surprise that the tallest man in the world lives in China. The shortest man in the world also lives in China. The natural law that applies is the larger a population, the greater its diversity. This is a good thing as this diversity is represented by varying traits within the population. And when the external environment changes, the larger and more diverse a population, the more likely some of its members will possess traits that will allow it to successfully compete and survive. Charles Darwin actually encouraged English cattlemen to increase their herd size to create greater diversity and ensure a healthier heard.

Business Application:

So how does this apply to the business world? The world has become so very small economically. Competition is off the charts creating the business equivalent of the meteorite impact that killed off the dinosaurs. And just as diversity can help assure success within a species,  so can it in the business world. What the US needs now, more than anything, is a whole lot more small businesses that will create diversity of thought and approaches.

Typically, governments attempt to grow businesses directly through targeted investments and job creation. This is an error. The very small number of politically motivated anyway group of people can't possibly possess the cognitive power of the US entrepreneurial population. What government needs to do is remove obstacles that block this unleashing of mental power. Business growth, business diversification and jobs will follow naturally. And beware of the cool business factor. Not all jobs in the future will be technology related jobs. Focusing on a single industry or job type will lead to lower diversity, less competitive power and fewer jobs. Remember the dot com bust?

So Uncle Sam, thanks for the SBA, good move. But let's focus a little more. Increase educational funding at all levels including SBA. Lower taxes. Reduce litigation. And for heaven's sake, ask local small businesses owners what would make their lives easier. This will create a diverse business base and, in turn, jobs. Not all will make it. But that's what evolution does, selects the best to survive.