On Good.is the popular posts today include “15 Percent of Americans Are Now on Food Stamps”. I’ve visited the site twice this Monday, once just after the New York Stock Exchange started trading this morning, and now after the market close, as the story of our dismal economy’s enduring lifelessness makes headlines everywhere. In today’s more optimistic forenoon, I read Tim Fernholz’s “Hunting Gazelles: Figuring Out What Makes Companies—and Jobs—Grow”. Some of the points in that article bugged me then. They really irritate me now.
The post is an interview with scholar Tim Kane, who proposes that new jobs in the U.S. economy come from “gazelles,” quick-moving, fast-growing, young businesses. I don’t quibble with this entirely; I’ve seen how many Bay Area tech businesses seem desperate to hire enough people to support their rapid expansion (though–ahem–not desperate enough to modernize their hiring practices). Yet just after sharing convincing data about the remarkable contribution “gazelles” make to the employment rate, Kane veers into territory more familiar to subscribers to Reason than to Good.is:
There are real structural impediments to starting a firm…Labor regulations can make it difficult for entrepreneurs to even leave, and difficult for firms to hire more people.
The [Sarbanes-Oxley accounting law] is particularly galling because it seems like its[sic] killing off our IPO industry. Without an IPO or the promise of an IPO on the horizon, why start a tech company?
Alright, where to begin?
Let’s start here: one man’s regulation is another’s unemployment insurance, worker’s compensation, and minimum wage law. Your “structural impediment” is my workplace safety standard, whistleblower protection, and equal opportunity legislation. Think Sarbanes-Oxley is galling? Try having your retirement savings wiped out overnight by corporate fraud.
There’s a stubborn belief in the startup world that it’s 100% self-made, boot-strapped, that the “gazelles” broke away from the encumbrances of the herd and now thrive on the nourishing wild grasses of the entrepreneurial savannah. If this were so, why are there so few, if any, gazelles in places with fewer regulations? Why do tech bubbles form again and again here in the Bay Area?
You could re-read Richard Florida, or you could remember this:
“Gazelles” eat hay, not grass.
Meaning: “gazelles” rely on the infrastructure all of us provide. This isn’t just WiFi, Blue Bottle Coffee, and a spot on the CalTrain bike car. It’s also those “structural impediments” like environmental regulation (can you drink the water out of the tap?), public health initiatives (when’s the last time you worried about polio?), and anti-corruption laws (do you have to bribe someone to launch your product?).
Yes, it’s admirable to watch gazelles leap gracefully to such heights. But let’s not forget the haystacks we shore up to feed them.