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100,000+ Layoffs in Financial Services YTD... A Good Thing for Innovation?
The best and brightest minds in the country have been investing their human capital into financial services because that's where the big money has been for so long. People that would have been innovating in industries like technology, life sciences, and energy have not been. And that could all change now.
Year-to-date, over 100,000 jobs in the financial services industry have been lost, and that number will most likely grow in the coming months. But that doesn't have to be a bad thing. Americans will have to sacrifice and work hard to pull out of this mess. Reigning in the Fed's policy to encourage credit and discourage debt would be a great place to start. Reigning in waste in both government and industry is another rat-hole that needs to be spring-cleaned.
And getting back to our roots of making it easy, easy, easy to start new businesses is another place where we need to get to work (Right now, it's easier to start a company in Communist China than California. If you had the choice, where would you invest? That's one of the reasons we're losing jobs overseas, by the way).
In any given population about 10% of the people are entrepreneurial. 10% of 100,000 is 10,000, so 10,000 entrepreneurial employees have been laid off. And these aren't just run-of-the mill employees that are losing their jobs. These are the best and brightest of America's universities. They are the creme of the creme. (And in the case of investment banking firms, a much higher percentage of entrepreneurs are drawn to these companies than the 10% figure above, so perhaps my 10,000 number is too conservative).
In any case, I'm very interested to see how this all turns out. Maybe several thousand of those who have been laid off will start new ventures. Maybe they'll join new ventures. Or maybe they'll come to work in bigger companies and help them innovate. In any case, these entrepreneurial problem-solvers can be a great help to the economy as they leave financial services. But the number need not be big if the quality and stamina of the individual is high enough.
How many awesome people did it take to start Google? 2. What about Apple? 2. Microsoft? 2. Maybe the next Bill Gates, Paul Allen, Steve Wozniak, Steve Jobs, Larry Page or Sergey Brin is holding a pink slip from Lehman Brothers in his hands, and maybe he's about to create 1,000 new jobs and help to write another chapter in America's tech history. What do you think?
