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An Alternative Economic Stimulus Plan

Mark Marich on July 06, 2010 Source: Policy Dialogue on Entrepreneurship

The Huffington Post recentlyfeatured a piece by Kauffman vice president and researcher Robert E. Litan entitled“Entrepreneurial Stimulus Package can Help U.S. Jobs Shortfall.”

Litan writes that the U.S.already has an alternative economic stimulus plan, one that does not require amassive federal bailout: to support entrepreneurship. Kauffman research hasshown that startup businesses create almost all new net jobs in the U.S., andmany of these startups result from university research that is commercialized.The federal government already spends about $90 billion each year fundinguniversity based research. So how can we encourage budding entrepreneurs atuniversities to turn their scientific research into real businesses and thusmore jobs? Litan gives three suggestions:

First, refocus the processof grant allocation to allow younger researchers a better chance of getting agrant. The current peer review system favors senior researchers over youngerones, but younger researchers are often more innovative and willing to goagainst the academic grain in pursuit of scientific truths.

Second, allow theintellectual licensing process to be driven by market forces, replacing the oldcentral university licensing offices with a new system that allows theresearchers themselves to take control of the licensing process and explore newlicensing options on their own.

Third, increase entrepreneurialeducation at the university level to ensure that faculty and students alikeknow how to turn their ideas into practical business plans.

This “entrepreneurialstimulus package” should also embrace an immigration policy that looksfavorably on foreign born students in our universities, giving them theopportunity to stay in the U.S. after graduation and start their ownbusinesses. Since a disproportionate amount of technology start-ups arepioneered by foreign born entrepreneurs, it seems counterintuitive that ourcurrent immigration policy sends so many students home immediately after theyreceive their diplomas instead of allowing them to create new businesses andadd new jobs here in the U.S.

While entrepreneurship is certainlynot a “fix all” for the American economy, increasing innovation and encouragingthe creation of new businesses and new jobs is certainly part of the solution.

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