Entrepreneurship is what powers this economy. It is imperative that we nurture our greatest asset as a nation in nurturing creativity, developing intellectual property and products with policies that create a more supportive environment for entrepreneurs and small businesses.
Earlier this week, The Kauffman Foundation presented a proposal to spur the U.S. economy and increase job creation by accelerating the growth of startups and young businesses. The Startup Act aims to focus the attention of citizens and policymakers on the central role that high-growth startups must play to assure continued U.S. economic strength.
The unveiling of the Startup Act follows Kauffman data released last week that found that while more firms than ever have been created each year since the last recession began, the numbers of new firms with employees continues to drop—and this is a trend that pre-dates the recession.
“A strong, sustained recovery and a higher rate of growth calls for a reversal of this trend,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “Achieving sustained economic growth will require more bold entrepreneurs who can launch and build new 21st century companies, a continuing stream of new ideas capable of being commercialized, fewer roadblocks to launch and grow these new enterprises and low-cost capital available to finance them. Simply put, the U.S. economy needs more high-growth startups.”
Specific changes in government policy that the Startup Act proposes include:
- Providing new firms with better access to early-stage financing, creating capital gains tax exemptions for long-held startup investments, providing tax incentives for startup operating capital, facilitating access to public markets, and allowing shareholders of companies with market cap below $1 billion to opt-in under the Sarbanes-Oxley Act.
- Accelerating the formation and commercialization of new ideas by creating differential patent fees to reduce the patent backlog and providing licensing freedom for academic innovators.
- Removing barriers to the formation and growth of businesses through the introduction of automatic 10-year sunsets for all major rules, establishing common-sense and cost-effective standards for regulations, and making assessments of state and local startup and business policies.
- Providing “Entrepreneurs’ visas” and green cards for those with degrees in science, technology, engineering and math.
For more on the Startup Act, view the full proposal.