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Valiant Lowitz

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Why It's Time to Rev Up America's Innovation Engine

Posted: 02/27/2013 4:47 pm

Our government's support for American entrepreneurs used to be like an oversized Chevrolet Silverado: rock solid. But lately partisan bickering has changed that image to more of a 1998 Ford Taurus, a car for people who have given up on their dreams.

Hey Congress: Enough of this ridiculous arguing! Americans need Congress to rev up the engines of economic growth and push new, comprehensive legislation supporting entrepreneurs out of the starting gate today.

Why is this especially pertinent? On Feb. 20, a new version of the Startup Act 2.0 (Startup Act 3.0) act was introduced in the House and Senate, continuing the mission of boosting the economic recovery through greater support for bold entrepreneurs in America.

The proposed bill facilitates visas for foreign-born founders who raise $100,000 for a new business that hires at least two employees within one year. It also revamps taxes to drive investments in new business, accelerates the commercialization of public-research that leads to new ventures and attempts to improve the overall regulatory process.

What's the likelihood of Startup 3.0 passing the Congress? Given the demise of Startup 2.0, the odds are certainly against it. But let it be known to all who place politics before the well-being of America: Pass this bill now.

Empowering entrepreneurial activity is critical to the vitality of the U.S. economy and to our ability to compete in an increasingly globalized world. Entrepreneurs drive energy and innovation, fueling America's economic engine and driving job creation.

With the right support, new entrepreneurs have the potential to transform entire sectors of the economy and create millions of jobs with a simple idea. In fact, research reported by Bloomberg shows "while employment at start-ups accounts for just 3 percent of the workforce, hiring by these firms represents 20 percent of total job creation."

While few may consider the role of government in such a purely private-sector realm, there are many concrete ways the public and private sectors can work together to strengthen American entrepreneurs and build a stronger infrastructure for competitive start-ups to operate within.

By creating room for foreign-born entrepreneurs to stay in America, the government is helping to increase America's access to talent from around the world; providing incentives for investors to put capital into start-ups helps new businesses make the leap from three employees to 30 and beyond; and freeing up untapped resources from online crowdfunding allows new businesses to invest in the future of America. And that's just the tip of the iceberg.

Yes, the JOBS Act passed in 2012 addressed funding and securities regulations issues, but the two pieces most crucial to the start-up community have yet to be outlined by the SEC leaving the bill in a legal (useless) limbo.

Having worked with a number of start-ups in both B2B and B2C sectors (shout out to Iorio's Gelateria in Ann Arbor, best gelato this side of Italy), I know firsthand the power of these businesses to not only create new jobs, but also empower a new generation of young people to go out and start businesses themselves.

As our national dialogue begins to once again coalesce around government's role in the economy and job creation, the debate surrounding entrepreneurship in America has entered a crucial phase -- one which could either make or break America's role as a driver of innovation and opportunity in the world.

So again I say to Congress: The time for action is now. Let's get America's innovation engine running again.

 

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