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Commentary: Why we need Joe the plumber's dream

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  • Carl Schramm: Joe the plumber represents dream of many Americans
  • New businesses account for much economic growth, Schramm says
  • Policies need to be designed to encourage entrepreneurship, he says
  • Schramm: Survey shows people think it's harder to start a business now
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By Carl J. Schramm
Special to CNN
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Editor's Note: Carl Schramm is president and CEO of the Kauffman Foundation, a nonpartisan organization that focuses on the training and education of entrepreneurs and on promoting an environment that lowers the hurdles for their success. Schramm is the co-author of "Good Capitalism, Bad Capitalism."

Carl Schramm says it's crucial that we encourage Americans to start their own businesses.

KANSAS CITY, Missouri (CNN) -- What appeals to me most about Joe Wurzelbacher of Ohio -- better known today as "Joe the plumber" -- is his dream. He speaks for men and women we all know, who want to own their own business, who want to make a job, not take a job.

Joe wants to join the nearly 600,000 other Americans who launch their own companies each year. The proposed solutions to our current economic crisis (and it seems there's a new one almost every day) inevitably tilt toward the government as the answer.

Yet, today, more than ever, government is not the answer, and a recent telephone survey of 816 registered voters, sponsored by the Kauffman Foundation, shows that a majority of Americans agree. Do you support "Joe the plumber"

In the survey, which was conducted late last month, 70 percent of respondents said the success and health of the U.S. economy depends on the success of entrepreneurs. More than 60 percent said they had the most faith and confidence in the American people and the small business owner to guide the U.S. economy.

None of what America has achieved, or what we have given the world, could have happened had we not been first and foremost a nation that believed in entrepreneurs, a nation that could create wealth faster and with more predictability than any other place on Earth.

We create wealth by inventing -- automobiles, airplanes, air conditioners, personal computers and their operating systems, and, most recently, many of the leading Internet-based business models -- and then turning these inventions into viable products sold by American companies.

There are concrete risks if we veer from this tradition of deliberate risk-taking. Today, roughly one-third of our GDP growth is attributable to about 1,000 high-growth firms created every year. Even though there are fewer than 30,000 such firms, they account for nearly all the job growth in our economy. Whatever we do, we cannot afford to scare off those who would start these companies.

Yet that may be what's happening. Nearly half of our survey respondents reported seeing entrepreneurial opportunities in the current economy, but only a little more than one-quarter said they would consider seizing them within the next five years, down from 35 percent when we asked this question in December.

Seventy-one percent said that in today's economic climate, it has become more difficult to start a business. That's a statistic we should all worry about.

Here's why: If, instead of 1,000 new high-growth firms starting next year, we only start 500 or 250, the lost gain from this shortfall will never be retrieved.

Our tax regimes, our regulatory structures, our emerging view of risk and the obligations of individuals to commit to the market's success by advancing their own self-interest are all parts of the entrepreneurial ecosystem that is precious to our future.

They cannot be turned into blunt instruments that choke off entrepreneurs when the real target is the leadership of financial institutions. Congress and all policymakers need to be a bit more reflective and a little less reflexive.

That means focusing on the measures that will support and advance the success of entrepreneurs in America: building a more skilled workforce (especially in the areas of math, science and engineering), welcoming highly skilled immigrants, creating a more balanced system of intellectual property rights, reducing regulatory burden and unwarranted liability threats for small businesses, continuing to pursue open trading markets and reforming the employer-based health-care system.

Both politically and economically, the United States must treat entrepreneurship as its central comparative advantage. We must take that which we have perfected since our founding -- our economy's entrepreneurial ecosystem -- and exploit it for all it's worth.

We either nurture and support increasingly entrepreneurial activities in all aspects of American society -- and help export this perspective around the globe -- or run the very real risk of becoming progressively irrelevant on the world stage and suffering economically at home.

The most important people are not the politicians, nor the big businessmen, nor the bankers on Wall Street. They are important to our recovery but not central to it.

The most important people are average, everyday citizens, as they are the ones who overcome challenges to do what it is that entrepreneurs do: launch businesses, create jobs, and generate the wealth that will be more necessary than ever to purchase a future worth living.

In the end, the challenge for policymakers is not to create special programs that tilt the playing field in favor of entrepreneurs and against other types of businesses.

What's really needed is to create an environment where citizens from all walks of life -- spanning from plumbing to public relations to plastic surgery -- have the opportunity to become more entrepreneurial, as this will foster the dynamism and vitality that's at the heart of a vibrant, growing economy.

The opinions expressed in this commentary are solely those of Carl Schramm.

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