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Entrepreneurial development of corporations that provide
sustained employment opportunities to the citizens in most
countries, are started on research which may have undergone concept
validation experimental work performed by somebody
else. The overall process in synopsis is consistent with the
role of the entrepreneur as generally understood. However, given
the level of unemployment around the world and the cost of business
entities development, many developing nations do not have the
venture financing base to under the development of business entities
that would provide sustained employment opportunities for the
nation-citizens.
Obviously then a nation committed to developing environment that
provides sustained employment to her citizens must resort to and
adopt economic policies based the Keynesian Economic Theories.
In essence, the theories of John Maynard Keynes have at
their roots the economic concept of "aggregate demand": Growing an
economy using government spending to create jobs. The government
implements "projects" like ambitious
Transportation Infrastructure, that in addition to
providing long term benefit - in and of themselves - also help the
economy in that as workers - engaged on the construction of the
infrastructure - spend the salaries and wages paid to them, goods and
services are transferred resulting in increased economic activity
and growth.
By the Keynesian Theories, the government of any nation,
more so developing nations, may in fact place herself simultaneously in the position of
venture capitalist as well as the visionaries or entrepreneurs: Fund certain
critical ventures as were the Venture Capitalists, Undertake the
venture development as the entrepreneur and accordingly staff these ventures with the
available and best qualified staffs, and have them develop the product-lines as well as the
marketing and sales operations and thereby grow such ventures
into viable venture-entities.
Subsequently, the government that subscribes to a capitalist
system must then completely divest herself of these corporations,
soon after the ventures becomes fully functional business-entities
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by having investment banks securitize the entities and offer the
securities to the general public. The general public in this
case ordinarily is comprised of both foreign as well as citizens
investors.
Nations concerned with developing business entities for the ownership of
foreigners even can even control the ownership distribution through
the implementation of multi-class stock ownership structure, of course, by
making the stock offering in
at least two-class stock ownership structure, say, Class-A is
reserved for the citizens only and is 51% of the corporation while
Class-B is for everybody.
The end result evidently is
that, not only will the government have created employment for its
citizens, not only will she have also facilitated capital circulation
within the country through the salaries and wages payments together with the
consequential creation of grass-root economies, but she will have at
the same time increased the investment pool of funds by whatever
applicable ratio she realized. Interestingly, the government can turn
around and repeat the same process again and again. Equally
noteworthy is that the nation also benefits financially. Very often, for such corporation the
value runs somewhere between 15 - 25 times the net profit weighted
over 5 years, and as such often yielding about 34.5:1 up to 100:1 on
the Capital Investment based on a normalized amount of $1.00 in the
evaluation as being referenced as the basis in the ratio, though
that the amount is normalized may have been implicit. This value of
return on the investment is particularly informative, when analyzed
within the context of two tier repeat investment by the government.
Effectively, for an initial invested capital in the Stage
I of the Program of $1.00, then upon the successful development of
the venture into a corporation, the net-worth would be of a value
between $34.50 and $100.00 [ on normalized basis], excluding the
contributions due to technology configuration, and assuming the
Keynesian Investment Program is based on proven but almost obsolete technologies; and by obsolete
here is meant no longer under Intellectual Property Rights
protection. In order to be conservative, let the net-worth of the
business entity be
assumed as the lower amount of $34.00 -- dispensing with the
$0.50 as spent in miscellaneous expenses.
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Remarkably, because the government
completely divests herself of all equity in the corporation(s), all
of this value is expected to be and is recovered as liquid after the
public offering. The entire value then becomes available to the government
for re-investment in the Stage II.
Now in the Stage II of the Program, the government invests all $34,
in effect supporting 34 new venture still basing the investment on
the normalized capital-investments of $1.00. Now then at the end of
the Stage II each of the corporations returns yet again a
net-worth of $34.5. Clearly by the end of Stage II, the government
will have created 35 corporations, and generated at least 34:(34:1)
or $34(34.00) or $1156.00 liquid returns for each dollar budgeted
into the projects.
further, under the government program, there will be created 35
corporations that can employ, say, 500 people per corporation or
17,500 employees who are otherwise unemployed.
Clearly this
off-the-cuff analysis shows that the approach of government program can
easier solve the massive unemployment problem we currently have and
also resolve the credible leadership issue, we have been addressing,
because the government program should rapidly recreate the middle class
that currently is virtually non-existent. |
