One of the nation’s most respected startup and entrepreneurship research organizations last week issued a series of public policy recommendations that the group believes Congress could implement in order to accelerate the formation and growth of new companies and help reinvigorate the American economy.
Not surprisingly, many of the group’s suggestions mirror the policy prescriptions the U.S. Chamber of Commerce has championed for years.
The Kauffman Foundation -- more specifically, E.J. Reedy, Kauffman’s director of research and policy -- outlined the core components of pro-entrepreneurship policy during a hearing last week in the House of Representatives. His suggestions are based on extensive research his organization has conducted over the last few decades on the interaction between federal rulemaking and entrepreneurship.
America’s entrepreneurs, Reedy told lawmakers, “create economic opportunity for themselves and others.” As such, “entrepreneurship should be at the heart of any plan that seeks to spur economic growth and job creation,” he added.
The U.S. Chamber couldn’t agree more. Here are some of Kauffman’s top policy prescriptions and how they align with the U.S. Chamber’s agenda.
Embrace Regulatory Evolution
Reedy’s take: “Research suggests that the layering of regulation atop regulation can, over time, create rigidities that overwhelm and burden young firms. Technological innovation occurs at an ever-increasing pace and regulation must keep up.
“That means regulatory bodies need to be nimble in order to respond and adapt to new innovations and business models created by entrepreneurs. Policy ought to be formulated so these innovations are not suffocated, but rather given an opportunity to compete. Often, that means updating or getting rid of old regulation as much as it does enacting new rules.”
Chamber’s take: “It's time to restore accountability, transparency, public participation, and efficiency to our regulatory system and our government, and to unleash the power of businesses large and small to create jobs and growth without unjustified, unnecessary, and overly burdensome rules. This is what our government reform agenda is all about--and it begins by modernizing what has become a virtual fourth branch of the American government--the regulatory branch,” Chamber CEO and President Tom Donohue said during a joint committee hearing in December.
Reedy’s take: “Immigrant entrepreneurs make jobs for Americans. Immigrants are more than twice as likely to become entrepreneurs as native-born Americans. Our research suggests that changes to immigration law, including the creation of a visa for immigrant entrepreneurs, can boost economic growth and job creation.”
Chamber’s take: “The depth and breadth of immigrant entrepreneurs extend across the spectrum of enterprises, including neighborhood, growth, and transnational businesses. Expansion of employment-based visas would allow companies’ access to high-potential foreign individuals who are graduates of U.S. universities. Businesses, cities, and states across the country should support changes in visa policy and work to develop partnerships with immigrant entrepreneurs to create jobs and strengthen the economy,” researchers wrote in a study conducted by the U.S. Chamber of Commerce and the American Immigration Council.
Enable Innovators to Create New Technologies
Reedy’s take: At its best, intellectual property law facilitates innovation. Yet, firms can use patents and other forms of intellectual property in inefficient and anti-competitive ways that make incremental or follow-on innovation by others a more challenging and costly process. Research suggests that intellectual property law should be balanced so as to maximize incentives for innovation.
Chamber’s take: “IP is an incentive for innovations that enhance and improve our lives,” Donohue wrote in a statement late last year. “When artists, inventors, or scientists have assurances that their works will be protected and rewarded thanks to IP rights, they are more inclined or able to produce.”
“All the stakeholders must unite behind efforts to advance commonsense reforms, strengthen IP at home and abroad, punish those who undermine IP rights, and educate the public on its significance,” he later added.