State of Biz: Optimism Down, Competition Up

Today, it seems, was a good time for Portfolio.com to release the findings of a new survey by The Business Journals charting the attitudes of small- and mid-sized business owners. Turns out, several other studies are coming to light that help to validate what we're reporting—namely that while business owners are reporting being slightly better off this year, they're still deeply concerned about the rising costs of doing business and they're skeptical that the United States will ever be as competitive economically as it once was.

First, comes this report from Wells Fargo saying that after two quarters where small business owners reported feeling a dose of optimism, a degree of pessimism has seeped in. The Wells Fargo/Gallup Small Business Index showed a decline of 12 points, which puts the index at a score of zero—effectively saying that this audience is neutral when it comes to its feelings.

Up second is a story in Marketwatch, which talks about a little-noticed report from the International Monetary Fund earlier this month that offered a stark forecast: China’s economy will surpass that of the United States in real terms in 2016.

Writing in Marketwatch, Brett Arends comes to the conclusion that many SMB owners told The Business Journals—the United States just won't be able to do what it used to do.

This is more than a statistical story. It is the end of the Age of America. As a bond strategist in Europe told me two weeks ago, “We are witnessing the end of America’s economic hegemony.”

We have lived in a world dominated by the U.S. for so long that there is no longer anyone alive who remembers anything else. America overtook Great Britain as the world’s leading economic power in the 1890s and never looked back.

Taken together, these reports should offer a wake-up call to entrepreneurs and SMB owners. We're certainly not out of the woods economically, and American competitors are upping their game. But more than before, that just means U.S. business needs to be innovative, forward-thinking and entrepreneurial.

Get more business intelligence from Portfolio.com:

• Attitude Adjustment: American small businesses hold a dim view when asked if the nation will regain its economic-powerhouse status, a new survey finds.
• Wiring the Conversation: An advisory council lists eight things the Federal Communications Commission can do in the short term to spur broadband and advance a more wireless nation.
• Thing Outside the Lines: Frank Gehry never lets straight walls get in his way. Get this transformational approach by asking the right questions.