A better jobs program: invest in entrepreneurs

by Bruce Kasanoff on September 15, 2011

Let’s dream big for a few minutes. Imagine if the United States invested $50 billion in entrepreneurs, instead of fiddling with minor changes in payroll taxes and more construction projects that don’t create long-term jobs.

In 20 years, I’ve never heard an entrepreneur say she decided to hire more people because of a tax change. But I see incredible amounts of energy devoted to securing funding, finding more customers, and even chasing awards.

What if the government…

  • Matched the amount of money an entrepreneur’s friends and family invest in their company?
  • Provided two-year zero interest-free loans to any company with at least five employees willing to double the number of employees?
  • Provided interest-free loans to small companies who need to invest in technology to make their products and services smarter?
  • Funded innovation awards in every major industry? Such competitions might be open to any company with less than 250 employees, and the awards would recognize firms whose solutions solved chronic or pressing problems. To learn more about this approach, visit Innocentive.

In real life, government programs for small businesses are often underfunded. Also, “small business” is a deceptive term. Our economy is not going to be recharged by small companies. It’s going to be saved by entrepreneurial companies, some of which have one employee, while others have 5,000 or more.

I’m not arguing for $500 million grants to a single company, but rather for thousands of smaller investments in entrepreneurial firms. Such investments can not only save our economy, but also provide a real return back to taxpayers like you and me.

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