Book: Where The Jobs Are
Posted on 11 July, 2016 by Brad Feld, a managing director at Foundry Group
Comment by VC Brad Feld on how the US can generate jobs through startups.
A few weeks ago I had lunch with John Dearie to discuss a new non-profit he has started called The Center for American Entrepreneurship. Several friends and people I respect a lot are on the board, including Lucy Sanders (NCWIT), Troy Henikoff (Techstars Chicago), Bob Litan (Brookings Institute), Rebecca Lovell (Seattle’s Office of Economic Development), Monisha Merchant (formerly Senator Bennet’s Economic Advisor), Jonathan Ortmans (Global Entrepreneurship Network), Jason Seats (Techstars), Dane Stangler (Kauffman Foundation), and Vivek Wadhwa (Stanford).
When I know, work with, and respect more than 50% of the board of a new non-profit, I pay attention. I’m glad I did – the conversation with John was stimulating. He has a vision and the experience to create a non-partisan organization to engage and educate people, especially policymakers in government, regarding the critical importance of entrepreneurs and startups to innovation, economic growth, and job creation.
While that might sound like a mouthful, I’ve been railing against the limitations of the way our government thinks about entrepreneurship for a decade. I’ve had a number of meetings over the years with the Small Business Administration (SBA) whose name says it all. I’ve often encouraged them to rename themselves the High Growth Entrepreneurship Administration, or even to create a separate organization, or split the SBA in two, or, in a fit of libertarianism, eliminate the SBA altogether. But, I know that none of that is going to happen because of a number of factors, including the fundamental lack of understanding in government about the difference between small business and high growth entrepreneurial businesses. Oh, and inertia.
Over the last few years, I’ve been exploring the idea that we really have two types of small businesses: local businesses and startup businesses. Both are important, but they have very different needs and contribute to the fabric of our economy in very different ways. As John and I were talking, he slid his book, Where The Jobs Are: Entrepreneurship and the Soul of the American Economy, across the table to me. I turned the pages and then over the weekend I read it while laying on the couch after a run.
It’s a great book that every policy maker in government at any level should read. It’s the first book I’ve seen that lays out an effective set of policy recommendations, with substantiation, for the startup society that we are living in. Against the backdrop of total government confusion about economic growth dynamics, combined with endless shallow rhetoric about what to do, I found it to be refreshingly optimistic.
While The Center For American Entrepreneurship website has a series of pages describing the issues and solutions to them, I didn’t find a crisp summary of the book on the web. So I decided to create an outline of the policies and the recommendations. They follow. If you disagree with any, or have any to add, please toss them in the comments as I evolve this as a list of “ways government can help startup communities.”
“Not Enough People with the Skills We Need”
- Incentivize STEM Education
- Launch a Curriculum-Focused Dialogue Between Business and Education
- Launch an Education Reform Dialogue Among America’s Educators
- Incentivize Experienced Talent to Consider Joining Growing Startups
“Our Immigration Policies Are Insane”
- Eliminate the Cap on H-1B Visas
- Award “Graduation” Green Cards
- Create a “High-Skill Immigrant” Green Card
- Create a “Startup Visa”
- Create CitizenCorps
“Not All Good Ideas Get Funded Anymore”
- Make the SBA More Entrepreneur-Friendly
- Incentivize the Formation and Commitment of Angel Capital
- Fix Venture Capital by Fixing the IPO Market
- Cultivate the Formation of Viable New Businesses
- Increase Startups Access to Capital
- Enhance the Science and Technology Capacity of the U.S. Workforce
“Regulations Are Killing Us”
- Devise a Preferential Regulatory Framework for New Business
- Require Third-Party Review of All Proposed Regulations
- Create a Regulatory Improvement Commission
- Rank States’ Regulatory Environment
“Tax Payments Can Be the Difference between Survival and Failure”
- Establish a Preferential Tax Framework for New Businesses
- Allow Cash Method of Accounting for the First Five Years
- Allow 100 Percent Expensing of Business Investment for the First Five Years
- Pass the Startup Innovation Credit Act
“There’s Too Much Uncertainty – and It’s Washington’s Fault
- Gradually But Significantly Reduce the Federal Budget Deficit and National Debt
- Enact Comprehensive Competitiveness-Enhancing Tax Reform
- Increase the Research and Development Tax Credit – and Make It Permanent
- Return Federal Funding of R&D to 2 Percent of GDP
- Jump-Start America’s Trade Agenda
- Negotiate a U.S.-China Free Trade Agreement
- Combine and Modernize Unemployment Insurance and Trade Adjustment Assistance
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