NewsWire--SEPTEMBER 24, 1996

TOPIC: Reengineering, Equity Capital, Working Capital

SOURCE: "The Upsizing of America," by Peter Lynch, Wall Street Journal, September 20, 1996, A14.

SYNOPSIS: The article discusses what Peter Lynch calls "upsizing" (as opposed to downsizing) in the United States. Upsizing is the net creation of new jobs in new companies founded by entrepreneurs. Lynch argues that reports on the impact of reengineering and downsizing are overstated because they do not give proper credit to entrepreneurs for the large increase in net jobs in the U.S. He compares changes in employment opportunities in the U.S. to those in Europe and argues that conditions in the U.S. have lead to better employment opportunities than in Europe. The article offers an opportunity to discuss reengineering, downsizing, and how financial markets impact employment opportunities.

DISCUSSION QUESTIONS:

1. What is upsizing, and how does it differ from downsizing?

2. What are the implications of upsizing and downsizing for U.S. workers and society?

3. Briefly discuss how the following four elements lead to higher job creation in the U.S. than in Europe: 1) entrepreneurs, 2) commercial banks looking for loans, 3) large pools of venture capital, and 4) outstanding capital markets.