Conventional wisdom often says the business community will thrive absent government intervention, but a report released Thursday tries to debunk that wisdom. The National Commission on Entrepreneurship (NCOE) analysis finds a direct link between economic growth and public policy.
Sen. John Kerry, D-Mass., praised the report, saying that he hopes it will foster a new way of thinking about the relationship between business and government. The notion that government is at odds with industry "creates a huge amount of resistance" to policies that could stimulate the economy and investment," he said, and perhaps the report will help change that attitude.
Growth in the American economy can be attributed to "a complex mixture of public policies that, intentionally or not, contributed basic ingredients for developing the American formula for growth through entrepreneurship," the report says.
The report identified five key ingredients that helped spark growth: allowing universities and federal labs to license new technologies for commercial use; creating financial markets; establishing dependable infrastructure, such as transportation and communications, that enables commerce; investing in technically talented people by funding university research and student aid; and adopting favorable tax policies for things like employee stock-ownership plans.
The report also cites the creation of strong accounting standards and oversight bodies, such as the Financial Accounting Standards Board and the tech-heavy Nasdaq stock market, as conducive to investment. For example, under New York Stock Exchange rules, companies like Intel, Sun Microsystems and America Online would not have been able to go public, the report says; the creation of Nasdaq made those public launches possible.
The favorable policies were the result of lawmakers addressing other priorities, but they had the unwitting effect of sparking entrepreneurship, NCOE Executive Director Patrick von Bargen said. Now, he said, the goal is to get policymakers to examine how policies unrelated to entrepreneurship still could stimulate economic growth.
NCOE has set an "action agenda" and will push lawmakers to institutionalize structures in the executive and legislative branches to monitor economic progress and track the effect of legislation on entrepreneurs. The commission also wants the government to collect data that accurately reflects entrepreneurial activity.
The report also calls for the government to take "bold steps required to build out the next phase of critical physical infrastructure: broadband deployment." In addition, NCOE is seeking increased research and development in the physical sciences, incentives for universities to transfer new technologies they have researched to found companies, and incentives for colleges to train technologically and scientifically savvy students.
Kerry called on small-business leaders to push the government to make the right decisions that will spark investment and economic recovery. Small business has the potential "to make revolutions in the economy," he said.