What is going to lift us out of this worldwide economic rut?  

Sure the governments are going to do what they think is best by stabilizing the banks and coordinating economic recovery activity. And some of what governments do will be useful.

My perspective, however, is that entrepreneurs and business innovators will lead us to economic growth? Why?

Individuals will take the risks to create wealth for themselves.  And by taking those risks, they will fuel job growth and innovation. The economic recovery will not just be lead by the US…but will also be lead by emerging economies that allow entrepreneurs to win.

Entrepreneurs have been key drivers of economic recovery in past recessions, says the Kauffman Foundation. In fact, since 1980, companies less than five years old have accounted for virtually all net new-job creation in the U.S.

In my dealings, I’m finding that entrepreneurs and business owners remain optimistic about their futures. They are frustrated that the angel community has “pulled in its horns.” And the common refrain from banks is that they will lend you money only if you have money. Despite these capital constraints, business owners are finding ways to keep their companies with tight expense controls and experimenting with new revenue channels.

For example, an established online lead generation company was experiencing shrinking margins due to rising PPC costs. While the firm was growing its SEO traffic they decided to try another revenue channel: affiliate/publisher programs. Revenues from this channel are growing and now making up 10% of all sales.

The economy will change for the better. Business owners who thrive in the current environment will see the value of their firms rise. Necessity is indeed the mother of invention…..and small business owners will and innovators will lead us to a new era of economic  prosperity.