The Path to Job Creation is a Distinctly Human Experience
Attributing human qualities to everything from animals to inanimate objectives to corporations seems like a pervasive trend these days. We eat honest food, watch dogs in business suits do funny tricks on YouTube, and adjudicate that corporations are people.
For now, let’s take the food off the table and put the animal back in the doghouse. Let’s talk about humanizing corporations. This isn’t about politics. I’ll leave that to the pros in Washington, D.C. At the risk of stating the obvious, business has been hunkered down for an awful long time. It was understandable in the thick of the economic crisis several years ago. And I’m not saying the situation is completely rosy anywhere, or that some sectors aren’t in a deep crisis still. What I’m thinking about is the obligation companies have to make this better—for the people who need it most.
I spoke recently with Andrew J. Sherman, senior partner at Jones Day, who helped author a white paper that suggests large corporations could create jobs by loaning cash to small and mid-size companies. Netted out, the reasoning behind the white paper is simple. Smaller companies are engines of job creation. U.S.-based corporations are sitting on $2 trillion in cash. Find a way to bring the two together and it’s a win-win.
Sherman is pretty smart guy. He teaches at Georgetown University, and has written 23 books on business growth, notably how to use intangible assets. That’s important because the crux of the problem is that small and mid-size businesses in today’s services-based, technology oriented world don’t have the tangible assets that banks traditionally require to secure loans. Their greatest assets are the brain power of their founders and the unrealized intellectual property of their innovations. Minus tangible assets like expensive equipment or huge manufacturing plants, they are effectively locked out of capital markets. Think of what could happen if these companies had access to a loan fund of pooled monies from the corporations that can afford it.
Small and mid-size companies could build their businesses. In doing so, they’d hire more people who would produce more innovative products and services that improve people’s lives. Meantime, large corporations would be able to put unused cash assets to work. In taking action that benefits everyone, corporations would also be living up to some of their legally defined qualities. After all, the ability to creatively solve complex problems is a uniquely human trait.