SMALL CONTINUES TO GROW. WHY THAT IS? 

An earlier column pointed out that large is starting to shrink fast. Now there is more evidence that small can do better, with fewer resources, than large corporations with seemingly greater advantages. What is happening?

Companies in North America with 20 or fewer employees, or partners, shareholders, task force participants or whatever, are now providing 90 percent of all new jobs. The only advantage large companies currently seem to offer is that they are providing the workplace with large numbers of potential employees from their laid-off former workers.

Let's look around. In Columbia, not exactly the haven of capitalism, the workforce is surging ahead. From 7.8 million in 1980 to 13.6 million by the year 2,000. As the result of low farm prices and backyard terrorists, large numbers of people have moved to cities. The country now has 1.2 million "micro-businesses", companies with less than $27,000 in assets and fewer than 10 employees.

Most of them only have one employee, the owner. They account for 55 percent of all new jobs and 25 percent of the country's entire GNP.

The Columbian government has recognized the trend. They are lending $33.5 million to train 144,000 micro-entrepreneurs and 35,000 worthy small businesses. Public services in Columbia are using small-scale contractors to reduce the high costs of state-run operations. Such operators now maintain 20,000 kilometres of highways, not exactly four-lane freeways, but it's a start and does total 75 percent of all their roads.

Cali, Columbia, better known for its drug trade but even before that Fundacion Carvajal (named after the family who donated a large percentage of shares in their successful publishing business) had expanded to about 100 towns. It worked so well that the InterAmerican Development Bank lent them another $500,000. Then both Swiss and Japanese organizations added their backing. Their tortilla version of cut and paste desktop publishing works.

Fundacion Carvajal enables entrepreneurs to learn business success, through classes in accounting, marketing and distribution. Students pay $80 for 72 evening hours of study. Those that finish can apply for loans at low rates to continue and expand their businesses. They learn to keep overhead low -- most operate out of their homes -and be as flexible as rubber.

By the end of 1991 Carvajal had created 12,500 businesses in the marketplace in Cali and another 7,500 in the rest of the country, creating 50,000 new jobs. The foundation continues to train 2,000 more workers a year and helps such specialists as metal and leather workers and shopkeepers to pool skills in local knowledge co-ops. One loan of $120 turned into a leather shoe exporting business that today boasts 18 full-time employees. They are now even paying taxes! Since the program started, 70,000 micro-entrepreneurs have undergone training, and 17,500 have received loans averaging $4,500 each. The loan default portfolio has only one percent bad debts. Our banks should be so lucky with their loans to large companies.

As a result of the successes of Fundacion Carvajal graduates, similar programs have now taken root in 13 additional Latin American countries. Apparently they all want to get on Pinnacle, the CNN television show on business.

What shocked traditional bankers in both North and South America was the now-proven fact that a micro-business in Latin America can create a job for $1,000 while it costs $25,000 to develop a job for a large corporation in the same area. A study of such a process might today find a similar result in North America.

In North America we have lost the excitement of "making it big". We have grown fat and lazy, like the Romans before the hordes of Hannibal crashed through the gates of the city. There are now five billion people outside North America who want to taste that chocolate cake and live the good life. They will not be denied, even if they have to work for $1 a day. Somebody will see those advantages and give them a chance. Can we match it?

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