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The Policy Dialogue on Entrepreneurship Informs and connects thought leaders looking to understand policies that help entrepreneurs start companies, create jobs and strengthen the economy. Sign up to receive our weekly update!
I have always liked the story of the CEO who sends two shoe salesmen to Africa. When they report back, one says “Bad news, they don’t wear shoes here”. The other reports excitedly “Wonderful news boss, they have no shoes”.
Ahead of the Senate Finance Committee’s long-awaited vote on its health care bill, I thought it would be helpful to once more comment on its effect on our entrepreneurs. The status quo in healthcare undermines entrepreneurship: small businesses are paying a higher cost to offer health insurance to their employees because of the smaller size of their workforce and the lack of competition in the small group market. Some entrepreneurs are dropping this benefit entirely not because they don’t want to provide insurance to their employees, but because the survival of their startups requires it. According to one estimate, 52 percent of workers in businesses with less than 50 employees were uninsured or underinsured during 2007. Even worse, many potential entrepreneurs and the talent they need to launch their ventures feel trapped in jobs that offer affordable health coverage for themselves and their families.
The Doing Business 2010 report highlighted how the financial crisis has prompted governments to act in areas where regulatory reform may be more difficult and require more time. The report states that in times of recession, “the more quickly the assets of nonviable firms can be freed up, the easier it is to remobilize those assets.” While the U.S. remained ranked 4th in the 2010 ease of doing business list compared to its 2009 rank, other countries have implemented several reforms that improved their ranking. How has the EU fared?
If you have ever been around somebody trying to start or grow a business, you know that entrepreneurs don’t have time for much else, especially not for going to Washington to help keep policymakers up to date on how to encourage high growth entrepreneurship in America—not hurt it.
Last week, I participated in the NASVF Annual Conference in Oklahoma City where experts discussed again how to ensure that credit crunches do not negatively impact start-up performance. The good news is that those gathering at this conference started from a common appreciation that entrepreneurship cannot be on the sidelines of economic and financial policy.
Youth unemployment rates are soaring worldwide. That rate recently reached 15% in the UK, a record 25.5% in the U.S., and much higher numbers in other countries where economic growth and opportunity have long failed to keep pace with the growing number of young people entering the labor force. However, youth unemployment rates don’t have to translate into catastrophe for that generation and those it sustains. The very victims of the situation might actually benefit from it if policymakers can incentivize them to follow their dreams. In the U.S. alone, four in ten young people ages 8 to 21 have or would like to start their own business someday. These two statistics spell opportunity to me.
In the past few months, we have highlighted through articles and factsheets how public policy can make the path easier for entrepreneurship and innovation. With the Policy Dialogue on Entrepreneurship, we hope to emphasize not only how policies can foster entrepreneurs, but also how entrepreneurship can directly be part of the answer to so many public challenges.
Before the August congressional recess, key Senators anticipated that an immigration reform bill will be ready for the Senate to consider this fall. Given that congressional action on immigration could start soon, it is time again to highlight why the U.S. needs a smart immigration reform that considers high-skilled immigrants’ contributions to the economy.
Last week, I highlighted the need for a smart regulation framework that doesn’t inhibit entrepreneurship. Today, I would like talk about liability litigation in more specificity. All businesses should be concerned about the inherent risk of bringing a new product or service to the market. However, entrepreneurship can suffer if liability litigation is pursued in ways that create too much uncertainty.
As with any politically loaded term, any attempt at honest discussion of ‘regulation’ risks getting caught up in a web of assumptions and intellectual shortcuts. One common fallacy is to put government regulation (e.g. patent laws, health care, tax compliance regulations, etc.) on one end of a continuum in which innovation and entrepreneurship are the opposite policy preference. However, a new approach seems to be emerging in innovation discussions: that the freedom to innovate is not governed by how much or how little regulation innovators face, but how smart it is.
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