Supporting American entrepreneurship is a bipartisan goal

Want to keep the American economy growing? Instead of tax cuts, interest rate cuts, tariffs or tax breaks for established companies, communities should focus on helping entrepreneurs start more new businesses — because they account for nearly all net new job creation.

More important, we need to tap into the collective wisdom of millions of young people with big ideas to create the industries of the future.

This week, entrepreneurs across Kansas City, the nation and the world are gathering for Global Entrepreneurship Week. From the mom-and-pop restaurant owner to the health care technology innovator, these makers, doers and dreamers represent something deeply embedded in the American DNA. From the beginning, we were a startup nation, leveraging a culture of creativity, innovation and risk-taking to spawn great economic revolutions — in agriculture, industry, technology and service.

An entrepreneurial economy also helps build wealth in communities that have faced historical and systematic barriers, serving not only as an engine of job creation but also as a vehicle for the American dream.

We face a difficult reality, however: Founding and building a business have become harder and rarer in most of America. The creation of new businesses has been flatlining for the past 20 years, with the opportunity cost of lost potential and fewer jobs.

This entrepreneurial stagnation is found across the country. Ask entrepreneurs what the barriers are to starting and growing a business and you’ll hear consistent themes, and access to capital is one of the obstacles cited most often. In fact, more than 83% of people who start a business don’t receive a bank loan or venture capital. That means those without personal wealth or connections are left out of starting and growing a business.

But even high-growth startups don’t get a level playing field. Seventy-five percent of venture capital supports entrepreneurs in only three states: California, Massachusetts and New York. That leaves a huge swath of the United States without access to an important source of capital.

This challenge is not only geographic. Just 2% of venture capital goes to women-led firms, and a mere 1% to African American-led businesses. The unequal distribution of startup capital is a form of economic injustice.

Yet America remains a nation with vivid entrepreneurial dreams. More than 40% of young people say they would quit their job and start a business in the next six months if they could. More than 60% have a dream business in mind.

Entrepreneurs want government to take their side. Seventy-nine percent feel they do not have support from government to start their business; 66% agree government favors established businesses over new businesses; and 90% who hire employees require financing.

So, what’s to be done? With input from entrepreneurs, advocates and policymakers across the country, we’ve developed a set of bipartisan policy ideas — America’s New Business Plan — focused on creating new jobs and leveling the playing field for startups and small businesses.

The plan offers specific steps that policymakers can take today to ensure that the innovators who are denied access to entrepreneurship are given the tools they need to launch their businesses tomorrow.

Policies should support home-grown enterprises, not just established businesses. States should streamline the startup process, and the federal government should create a “startup visa” for job-creating immigrant entrepreneurs. We should reform non-compete agreements and occupational licensing to unlock more entrepreneurial activity.

Building ecosystems for entrepreneurs merits a national commitment to expand equal access to capital everywhere, including patient capital, catalyst grants and crowdfunding. There needs to be a greater flow of talent, including teaching entrepreneurial skills through real-world K-16 education systems and workforce training. You should not need an MBA to learn how to start a business. In fact, many of America’s most successful companies were founded by college dropouts, including many of the well-known tech giants such Apple, Microsoft and Facebook, as well as Whole Foods.

Policymakers can enable more Americans to take the risk of a new venture with student debt relief, portable health care and reach-back contributions to retirement savings.

And mayors, governors and presidents don’t have to wait to pass legislation. They can help entrepreneurs now, using their bully pulpits to make entrepreneurs a priority, cutting red tape and directing economic development agencies to support home-grown startups, not just Amazon and other giants from the outside.

Promoting entrepreneurship crosses political divides, both as a source of economic vitality and an instrument of social inclusion. It embodies a concern for the common good that transcends tired ideological debates. And it elevates a grand and enduring hope: that all Americans with entrepreneurial dreams have the right to give it their best shot.

Wendy Guillies is the president and CEO of the Ewing Marion Kauffman Foundation. America’s New Business Plan can be found at startusupnow.org.

This story was originally published November 21, 2019 at 5:00 AM with the headline "Supporting American entrepreneurship is a bipartisan goal."