Innovation is an important driver of the growth of any economy. In a turbulent economic environment, focusing on the small business economy is a smart move. As we look forward to next week's inauguration festivities, I want to encourage President Obama to make entrepreneurship and innovation the centerpiece of his second term in office. By fostering the next generation of innovators, our economy will continue to stabilize and actually has the opportunity to sustain the United States in our ultra-thin lead as a business leader among industrialized countries. Innovation is about creating value from ideas. What we need is a radically different approach to thinking about fostering innovation in America to improve the sustainability of our country's small businesses. Here are five suggestions for what President Obama should do for entrepreneurship and innovation in America
Make Entrepreneurship Cultural in America:
The World Entrepreneurship Forum (WEF) last fall declared a goal to create 500 million entrepreneurs by 2050 to eliminate the cycle of poverty worldwide. In order to accomplish this, children must be taught principles of financial literacy and entrepreneurship from age six, as they are being taught to read. Through experiential learning we can grow innovators. Nine out of 10 teachers believe experiential learning is effective in getting students interested in higher education and careers. There are plenty of good models that can be duplicated as we rethink our nation's public education system. Encourage corporate partners to pour resources into youth entrepreneurship programs such as Junior Achievement and NFTE Network for Teaching Entrepreneurship, and some lesser-known programs such as The Generation E Institute in Battle Creek and Candi Sparks who is leading the way with bilingual books and resources to teach business with her Can I have some money? Financial Literacy Series. We can empower parents, schools, and faith-based programs with resources to teach entrepreneurship as a government priority.
Make it Easier For Immigrants With American Educations to Stay in the U.S.:
We open our nation's colleges and universities to anyone from around the world to be educated here, and when they graduate, we make it impossible for them to secure a work visa to stay in our country to pursue their entrepreneurial dreams. This practice must end; it has caused an incredible brain drain and economic loss to our nation.
The Government Must Be The Leader in Fostering Innovation In The U.S.:
Look at the examples in China, Singapore, Brazil, Chile, and India for how to grow entrepreneurs. Since 2010, Start-Up Chile, a program sponsored by the Chilean Government, has forged to attract world-class early stage entrepreneurs to start their businesses in Chile. They provide a work visa for one-year, $40,000 in start-up capital, along with access to the most potent social and capital networks in the country. We could easily replicate and enhance a program like this in the U.S. Stop wasting resources on programs targeting small business owners that are not generating results. Create government sponsored business plan competitions, elevator pitch programs and invest in programs like Start-up Weekend.
Stop Focusing All the Resources on the 5 Percent of Business Owners:
Ninety-five percent of the 27 million small businesses in the U.S. will never gross over $1 million in revenue. Yet, most programs, even those targeting women and minorities, focus on nurturing and funding the next Facebook. If we focused on turning the $250,000 businesses into $1 million-plus revenue generators we would create more sustainable small businesses that would create millions of living wage jobs.
Don't Just Give Loans, Provide Technical Assistance Grants, Too:
Increase the funding by $30 billion more to alternative leaders who will be able to consider more than credit scores in loan criteria including CDC's, CDFI's and SBA micro lenders. Provide grants to lenders to provide 25 percent of the amount of any loan in the form of technical assistance to recipients. Most business owners have great ideas; they just don't know how to manage all aspects of their businesses.
According the WEF, the U.S. is the fourth easiest nation to start a business. Sweden, Switzerland, and Singapore are all ahead of us. Whatever priority innovation takes in President Obama's next term, to maintain our prominence as the world's strongest economy, it is clear to that we must do things differently.
Do you have any ideas for President Obama to foster innovation in the U.S.?
Melinda F. Emerson, known to many as SmallBizLady is America's #1 small business expert. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing to fulfill her mission to end small business failure. She writes a weekly column on social media for The New York Times. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog. Melinda is also the bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works and the ebook: How To Become A Social Media Ninja; 101 Ways to Dominate Your Competition Online.