The Obama Administration took a step toward spurring job creation when the President laid out the American Jobs Act in a national speech to Congress. This bill, and other recommendations, can serve as important starting points. But in a nation in need of progress, how do we turn thoughtful plans into real growth?
One step is to ask those who are already doing it. Prior to the President's speech, Ernst & Young LLP conducted a series of roundtables with leading entrepreneurs across the country to get their perspective on how government can enable entrepreneurial high-growth companies to do what they do best: build, hire, scale up and repeat.
We turned to this group -- winners of the 25-year-old Ernst & Young Entrepreneur of the Year awards program -- because they have continued to help their companies grow and have created thousands of jobs, even during the worst of the economic downturn. In fact, since 2008, U.S. Entrepreneur of the Year winners have generated double-digit revenue and employment growth during a period when overall U.S. employment fell by 5.1 percent.
The President made it clear that any meaningful economic recovery will require dedication from both government and business, but cannot be driven solely by either. We agree, as do America's top entrepreneurs. In fact, recent polls show that more than half of responding entrepreneurs feel more responsible for the overall state of the economy today than when they first launched their businesses. These are the nation's economic heroes -- dedicated people who are a critical factor in the resilience of the U.S. economy. Even in an environment of doubt, they are prepared to take the risk of investing to grow their companies -- and that growth equals more jobs.
What specific recommendations would the President have heard during our conversations with entrepreneurs? Here are a few:
Reduce volatility. Government should consider a moratorium on high- impact policy and regulatory changes until employment is stabilized. High-growth entrepreneurs need Washington to run the government and legislate efficiently. Entrepreneurs find it very difficult to project the costs of doing business in the U.S. because regulations change quickly or remain in a holding pattern. This volatility and uncertainty increase risk for entrepreneurial companies, their boards of directors and their capital providers. The result is inertia.
Do more to facilitate access to financing. Access to operating and expansion capital continues to be a challenge for many high-growth entrepreneurs and their start-up counterparts. Government should investigate ways to make more money directly available to high-growth companies as well as to accelerate the process of providing loan guarantees. Government should also explore tax incentives for private investors to provide debt and equity financing to high-growth companies.
Make government bidding and funding processes more responsive to the needs of high-growth companies. High-growth companies face more significant hurdles than large companies when pursuing government business opportunities and grants. Frequent turnover of agency decision-makers creates a difficult environment for smaller companies looking to sustain relationships, and the paperwork is resource-intensive. A more equitable approach for high-growth businesses would help level the playing field for government contracts.
Ease work visa requirements for foreign students and provide incentives for them to work here. The U.S. educational system is insufficiently responsive to the needs of business, a situation that will take time to improve. In the meantime, government should facilitate the hiring of students from other countries who have graduated from U.S. universities.
Unemployment is the gravest problem the United States is facing. This nation was built on entrepreneurship, innovation and a confident focus on "what's next." Unemployment and under-employment stifle these qualities. For the U.S. to create jobs on a sustainable basis, we must do more to foster a predictable, forward-focused economic environment for entrepreneurs. Those naturally inclined to innovate must feel the government has their backs if they're ever going to make the jump from idea to start-up to big business. This requires more regulatory clarity and intelligent tax policies.
Mr. President, debt reduction and short-term tax incentives - especially those to encourage growth and hiring - are positive steps. By fostering an environment in which our most creative business leaders can feel secure and confident, government will encourage entrepreneurs to continue to invest and grow.
Make it possible for American entrepreneurs to do more of what they do best: create jobs, generate economic activity in our communities, keep America competitive and drive innovation. When they grow, we all win.