With the new administration about to take the reins in Washington, it’s time revisit where entrepreneurship stands. This is particularly important in light of the fact that President-elect Trump’s victory was due, in part, to supporters who feel left behind by the current economy.
Startups are responsible for nearly all of the net new job creation in the U.S., not to mention countless innovations that change the way we live and work. And yet, despite all the coverage of startups in the media and the never-ending techno-optimism of Silicon Valley, the hard truth is that entrepreneurship in America is on the decline. Indeed, it has been falling for decades. Between 1978 and 2012, the number of companies less than one-year-old declined as a share of all business by 44%. The consequences are enormous, as it impacts jobs, growth, and tax revenues. And the areas hardest hit are the places in the middle of the country, some of the very places where people feel left behind by globalization and digitization.
Yet over the last few years, there are signs that entrepreneurial activity may be on the rebound. This past August, the Kauffman Foundation’s Annual Index of Startup Activity found that key measures of new business creation in the U.S. trended upward for the second year in a row. The rate of new entrepreneurs is up. More people are becoming entrepreneurs because they want to, not because they need to. And, among entrepreneurs, the gender gap is—finally—beginning to narrow.
Progress is being made in terms of place, as well. More regions are emerging with vibrant startup communities. We’ve seen this firsthand as we’ve traveled 6,000 miles by bus to visit 26 cities as part of our Rise Of The Rest initiative
Most of the credit for this resurgence of American entrepreneurship goes to the entrepreneurs themselves, who are often putting everything on the line to pursue their dreams—and create the startups and the jobs that strengthen our communities.
But credit should also go to President Obama, and the White House team—including Valerie Jarrett, Jeff Zients, Tom Kalil, and Doug Rand. They have made entrepreneurship a priority for this Administration. The fruits of their efforts are clear in the White House Fact Sheet: Celebrating President Obama’s Top 10 Actions to Advance Entrepreneurship, released today.
I personally had the honor of working with the President and his team on several of these initiatives.
In 2010, I was asked to co-chair the first-ever National Advisory Council on Innovation & Entrepreneurship, or NACIE. NACIE was charged with identifying and recommending solutions to issues critical to driving the innovation economy. Our group advised on a wide range of issues, including developing a skilled workforce and enhancing access to capital.
NACIE also recommended that the White House champion and celebrate entrepreneurship—which led to President Obama launching the Startup America Partnership in 2011. The President asked me to chair this public/private partnership, and I toured the country to see firsthand the challenges entrepreneurs face in starting and scaling businesses. The partnership helped to mobilize community leaders to promote startup ecosystems and built a network of more than 13,000 startups nationwide.
President Obama also asked me to join his President’s Council on Jobs and Competitiveness. I chaired the subcommittee focused on entrepreneurship, working with Sheryl Sandberg of Facebook and John Doerr of Kleiner Perkins Caufield & Byers on getting capital flowing to more entrepreneurs, in more places, more quickly. We worked on a series of recommendations that included an IPO on-ramp to make it simpler and less costly for emerging growth companies to go public, ways to make it easier for entrepreneurs to seek new investors, and provisions that would make it possible for entrepreneurs to raise money via crowdfunding. The resulting Jumpstart Our Business Startups Act (also known as the JOBS Act) is a rare example of bipartisan legislation that prioritized entrepreneurship and economic growth over politics.
More recently, I was honored to be named as Presidential Ambassador for Global Entrepreneurship. The PAGE initiative was launched in 2014 as a collaboration between American entrepreneurs, the White House, the Department of Commerce, and the Department of State.
I have long preferred policy over politics. For nearly three decades, I have tried to focus on building bipartisan coalitions that could produce real and meaningful change—initially to help commercialize the Internet, and more recently to accelerate innovation and entrepreneurship.
As today’s report highlights, the Obama White House leaves a great legacy of promoting entrepreneurial growth. But we are still not where we need to be. We need immigration reform, including a Startup Visa, so that those who are educated in the U.S. can choose to start their businesses here. We need more efforts to catalyze the Rise of the Rest, helping cities outside of the coastal tech hubs produce strong startup ecosystems that spur innovation and the jobs that come with it. And we need to continue to push for a more inclusive economy, so everybody, everywhere has a real shot at the American Dream.
I’m grateful to have had the opportunity to play a role in supporting President Obama’s focus on entrepreneurship. Considerable progress has been made, but there is, to be sure, much work still to be done. I am hopeful President-elect Trump, an entrepreneur and CEO himself, will build on the efforts of the Obama administration, and take the important next steps to ensure that the U.S. remains the most innovative and entrepreneurial nation in the world.