So – The Obama administration has come to the conclusion – backed by credible, recent economic research, that job creation is not driven by small businesses but instead by new businesses. The research proves that many small businesses remain small, but new businesses are often funded for growth and if successful can evolve to be meaningful employers and an engine for job creation. Funny – I thought most jobs were created by corner delis in NYC.
In response to this research and possibly to the polls which suggest that job creation is issue #1 among voters, the Obama administration announced the roll-out of “Start-up America” yesterday with much fanfare. Steve Case of AOL fame and Carl Schramm of Kaufman Institute will be leading this program. There is some suggestion that significant dollars will flow toward innovation and that there may even be dollars available to match private investment dollars in start-ups. So far though, it appears that the announcement precedes much of the detail. A visit to the website of the program provides little detail as to what is being planned or how the program will roll-out.
Structured appropriately, Start-up America could have a real impact on innovation and job creation in the short and long term. Structured poorly, the program could set an already shaky venture capital industry back a decade. Some of the things that I hope the administration and the new program leadership keep in mind:
Two early signs that this Start-up America program may be well conceived is the involvement of Kaufman – a true advocate of the entrepreneur as well as the early and growing involvement by tech corporations, many of which got their start as venture funded entrepreneurial businesses and whose involvement in the program includes meaningful financial commitments to support entrepreneurs. If great ideas and great entrepreneurs get the bulk of the dollars and focus of Start-up America, then capital to support later stages of growth will follow. Successfully run, this program is a bet on the American entrepreneur and the spirit which has driven success in this country since it was founded. Poorly run, this is another government subsidy crowding out private dollars in the early stage venture sectors. Let’s hope that the early signs are on target with where this program is headed. Done right, this program will be good for entrepreneurs, good for the venture industry, and good for job creation.
Of course, the next initiative – Retrain America – will be required to supply the people qualified to work at the jobs created should Start-up America be successful.