As the ‘engine’ of American business activity, and as a leading indicator of broad employment trends, small business hiring is painting a bleak jobs picture in the US.

Some points of reference:

Jobs outlook for small businesses may be getting bleaker

A payroll services firm says employers with no more than 19 workers made fewer hires in July than in any month since October. Those companies usually drive the unemployment rate down.

“Small-business hiring is right at the heart of it because small businesses usually are the engine of job creation in the U.S.,” said John Challenger, president of the employment consulting firm Challenger, Gray & Christmas. “It’s small businesses that drive the unemployment rate down, and if the small businesses are faltering, that suggests that the risks of recession are growing.”

Dark clouds hang over U.S. small businesses: survey

“Small business owners entered 2010 the same way they left 2009 — depressed,” the group said, noting its Small Business Optimism Index reading for January was still below the 90 mark, the dividing line between positive and negative outlooks.

Small Business Optimism Index Improves in April

“The gains are a step in the right direction, but they are not enough to signal a solid recovery is in place,” said William Dunkelberg, NFIB chief economist.  “Owners are feeling a little better about things, but not enough to turn them into concrete action.”

At Small Businesses, Hiring Still Drags

William Dunkelberg, chief economist for the NFIB, says more small businesses aren’t hiring because demand for their goods and services isn’t yet strong enough for them to justify bringing new talent on board. “If you don’t have any sales, you don’t need to hire anybody,” he says.

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More from Davidowitz (on Wall St):

More from Davidowitz (on the bailouts):

Go here to see the original: Battling back after business drops

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Instead, companies must wholeheartedly support an innovative culture before staff will start popping out interesting ideas. Standing behind workers with a bayonet ordering them to innovate won’t work. The following list includes 15 ways company management can kill the innovative spirit:

1. Shifting priorities, lack of clear vision, low commitment and ownership by senior management
2. Short-term thinking
3. Responsibility for innovative thinking  delegated to a specific person or group
4. Bureaucracy, hierarchy, politics
5. Micromanagement
6. Fear (or punishment) of failure
7. Rewards not aligned with achieving innovation
8. Fear of criticizing existing processes or products
9. Poor understanding of customers; lack of focus on customer needs
10. Workload inhibits creativity; lack of time to develop new ideas
11. Failure to anticipate 1: crisis management instead of prevention
12. Failure to anticipate 2: focus on past successes instead of future challenges
13. Unfriendly idea management and facilitation: closed mindedness, bureaucratic forms and documentation, pointless debate
14. An over-reliance on data, evidence and analysis to support idea development
15. Low commitment to new ideas / high commitment to incumbent ideas, regardless of success rate

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