Donald Fry: Small business is where innovation lives

When I think of small businesses, I think of basements. That’s because the history of innovation and economic success in the U.S., and Maryland as well, has been shaped by so many businesses that began small – in basements, small shops or labs, and even barns.

General Electric traces its early growth to a Massachusetts barn in 1900. American aviation sprung from the Wright Brothers’ work during the late 1800s in their Ohio bicycle shop.

Locally, a major Maryland-based division of biotech giant Becton Dickinson was launched in 1935 in a Baltimore basement lab.

Baltimore’s Under Armour began in 1995 when its founder, Kevin Plank, worked in his grandmother’s basement on an idea he had for a drier, lighter tee shirt.

You get my point about small business. That’s why Governor Martin O’Malley has the right idea in focusing on initiatives to nurture small businesses in Maryland. His agenda for strengthening small businesses that includes streamlining the small business loan approval process and expanding access to business credit through a state loan-guarantee agency.

The governor also proposes a $3,000 tax credit for every unemployed worker any business hires and is seeking legislation to provide businesses relief from skyrocketing rates they must pay to the state’s Unemployment Insurance Trust Fund.

A major measure of any business climate is how government nurtures small businesses, which nationally employ more than half of the U.S. workforce. In Maryland, 60 percent of private-sector jobs are created by small businesses.

It’s smart for government to invest in fostering the development of small businesses because that’s where American innovation lives.

The recession has reminded all of us – in the private sector and in government – of a basic economic principle: government doesn’t create jobs. Businesses do.

Our leaders in Annapolis who are looking for a way out of the recession would do well to keep that in mind.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland, and he first aired this commentary on WYPR on January 26.