American entrepreneurship could face the same fate as American manufacturing — that is, mass migration to foreign markets — if policy makers fail to enact legislation to reform immigration, improve access to capital and streamline the public-offering process, according to Steve Case, one of the country’s leading proponents of entrepreneurship.
Case’s assessment of why lawmakers fail to protect the country’s reputation as the premier destination to start a business aren’t so much that they don’t appreciate the importance of fostering new companies or that they don’t agree on what to do to stimulate entrepreneurship.
The reason, he asserts, will simply be “the politics of it all.”
“They understand it’s strategically important and they understand what the policies should be,” Case told the Economic Club of Washington on Thursday. “But can we get it done in a highly charged political environment, when people are so focused on the election? If it doesn’t get done, that’s why — it would be that we couldn’t figure out a way to come together and get it done despite its importance, and that would be a big mistake for our country.”
The chief executive of investment firm Revolution, who currently serves on President Obama’s Council on Jobs and Competitiveness and heads the public-private Startup America Partnership, pointed to several policies that need to be reformed quickly in order to halt an already growing trend of entrepreneurs looking outside the United States when launching new businesses.
Case first denounced current immigration restrictions that send highly skilled immigrants back to their home countries, where they then build businesses, create jobs and compete against American companies. He also underlined the importance of improving access to capital by allowing entrepreneurs to tap into modern financing alternatives like online crowd-funding platforms.
Later, Case, who co-founded America Online (the first technology IPO), urged lawmakers to reduce the regulatory costs of going public in an effort to help more firms jump into the markets more quickly, which has traditionally proven healthy for the overall economy.
“The cost and hassle of going public has resulted in companies going public later or often being sold and never going public, which is a problem because most of the job creation comes after companies go public,” he said.
A number of bills meant to boost entrepreneurship have been proposed in recent months, including the AGREE Act introduced by Sens. Chris Coons (D-Del.) and Marco Rubio (R-Fla.) as well as the president’s overarching Startup America Legislative Agenda. Each of them, Case says, includes measures that would address some or all of those three key policy problems, and he urged Congress to work together and, if necessary, pass legislation that takes bits and pieces from each proposal.
Case says elected officials “almost universally” recognize that entrepreneurship must be a priority, especially as they search for ways to catalyze the sluggish economic recovery. Moreover, he says leaders on both sides of the aisle agree on somewhere between 80 percent and 90 percent of the details of the proposed legislation.
But time is of the essence, as political gridlock and the looming election threaten to derail attempts to make the United States more inviting for entrepreneurs.
“Now is the time for everybody to step up,” Case said. “I think there is an opportunity in the next month or two to pass this proposal and get it signed by the president, but as it gets closer to November, I think the odds go down. It’s time to recognize the importance of getting something done.”
Otherwise, the United States may soon lose its entrepreneurial stronghold much the same way it lost its competitive edge in manufacturing.
“Other nations are stepping up their game, no question about it, and people looking at this should be very nervous,” he said. “Somehow, manufacturing basically lost a whole sector through outsourcing. Maybe we were asleep at the wheel, but we can’t be asleep at the wheel now and lose entrepreneurship and these high-growth companies to other nations.”