“America Without Entrepreneurs: The Consequences of Dwindling Startup Activity” is the topic this morning for a Senate Committee On Small Business and Entrepreneurship hearing. The June 29 hearing, which starts at 10:00 am ET, can be viewed live online.
The committee will hear from witnesses including Dane Stangler, Vice President of Research & Policy at Ewing Marion Kauffman Foundation, Donna Harris, Chief Executive Officer of 1776, and John Lettieri, Co-Founder of Economic Innovation Group, which was launched last year by several Silicon Valley entrepreneurs including Napster co-founder Sean Parker, EIG’s chairman.
Stangler will highlight reasons for optimism about the nation’s entrepreneurial future, including technological changes leading to entrepreneurship in new sectors. His recommendations to promote entrepreneurship will include streamlining government programs to support entrepreneurship, creating a startup visa for immigrant entrepreneurs and collecting new data to study entrepreneurship growth.
Harris, a serial entrepreneur and the former Managing Director of the Startup America Partnership, has written about the lack of access to capital for entrepreneurs in distressed areas and said that “Failure to adapt to the digital revolution has led to chronic underinvestment in workforce training and inadequate education systems.”
EIG’s research has identified an unprecedented collapse of startup growth in the economic recovery following the Great Recession, an intense concentration of entrepreneurship in a handful of super-performing counties, a generational decline in entrepreneurship among Millennials, a lower likelihood of high-growth startups succeeding, and growing dominance of incumbent firms.
Lettieri, who calls dwindling entrepreneurship the most problematic feature of “the decline of U.S. economic dynamism … the fundamental challenge of our time, shared his prepared testimony. “Nothing is more integral to our nation’s cultural or economic identity than entrepreneurship,” he says. “However, as a nation we now face many of the same challenges that cripple and calcify once-innovative businesses: growing risk aversion, slowing growth rates, and broader transformations that threaten our market position.”
He will recommend today that policymakers support entrepreneurship through fostering greater access to capital, new policy experimentation, evaluation of regulatory barriers to entry, and support of the need for better public data.
Lettieri will point to the bipartisan Investing in Opportunity Act as a way to provide market-driven incentives for increased investment in U.S. communities. Introduced in April by Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Rep. Pat Tiberi (R-OH) and Congressman Ron Kind(D-WI), the legislation is designed to revitalize economically distressed communities across the nation by incentivizing private investment with deferred capital gains tax payments. The program has been estimated to cost $20 million annually in tax deferments, but to spur some $15 billion in investment in distressed communities.
image: Distressed Communities Index from EIG
Follow Adrienne Burke @adajane