Startup Act for the States

During the third annual State pf Entrepreneurship event, 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, called for state and local government policy changes to foster entrepreneurship and accelerate economic growth. In his 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.

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.

Kauffman research shows 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.