The State of Entrepreneurship: State and Local Governments Hold the Key to Accelerating Economic Growth in 2012

Contact:
Ben Branham, 646-246-6147, benjamin.branham@edelman.com, Edelman
Barbara Pruitt, 816-932-1288, bpruitt@kauffman.org, Kauffman Foundation

The Kauffman Foundation releases two reports focusing on state policy recommendations to foster new company development and spur job creation

Nebraska and Delaware Governors share their visions for helping states advance entrepreneurship and innovation

(Washington, D.C.), Feb. 9, 2012 – With campaign season in full swing and the economy far from strong, Ewing Marion Kauffman Foundation interim president and CEO Benno C. Schmidt, along with National Governors Association (NGA) leaders Nebraska Governor Dave Heineman and Delaware Governor Jack Markell, today called for state and local government policy changes to foster entrepreneurship and accelerate economic growth. During the third annual Kauffman State of Entrepreneurship Address, titled "A Roadmap for State Growth," Schmidt focused on reducing state and local legal and regulatory barriers to startups and young companies, which play a significant role in U.S. new job creation.

In conjunction with this address, the Kauffman Foundation released two reports: "State Startup Act," which lays out an agenda for state-level policymakers to foster entrepreneurship, and "License to Grow," which showcases barriers to entrepreneurship imposed by state and local governments.

"An important challenge for policymakers at all levels of government is to create the conditions that enable an increase in the number of fast-growing job creators or to enhance the pace at which the most successful firms expand," said Robert Litan, vice president of research and policy at the Kauffman Foundation. "We need to foster new thinking about how to stimulate job creation."

"States are laboratories of experimentation and positive reform," said Heineman. "Now is the time for states to aggressively grow and foster the culture of innovation and entrepreneurship."

The State of Entrepreneurship event, held at the National Press Club in Washington, included remarks from Governor Heineman, chairman of the NGA, and convened a panel that included Heineman; Governor Markell, NGA vice-chair; Bill Aulet, managing director of the Trust Center for MIT Entrepreneurship; and Morris Kleiner, University of Minnesota professor and expert on occupational licensing issues.

Schmidt pointed to gridlock in Washington and Kauffman research showing that state and local laws and regulations affect entrepreneurs more than federal statutes as indicators that state- and local-level policymakers can have the greatest – and fastest – positive impact on spurring economic growth through innovation.

Recommendations discussed at the State of Entrepreneurship event include:

  • Reforming occupational licensing, which acts as a barrier to entry for entrepreneurs seeking to provide services to consumers at the state and local levels through new business models at lower cost and/or higher quality.
  • Allowing university faculty to retain licensing rights to the technologies they develop, without having to gain university approval, and/or to more rapidly move innovations from the laboratory to the marketplace.
  • Reducing state-level paperwork, time and effort required for firm formation.
  • Making state-level business shutdown and liability costs as low as possible, because not all new ventures succeed.

Video of today's address and panel discussion, which was webcast from the National Press Club in Washington, will be posted at www.kauffman.org/statestartups.