FOR IMMEDIATE RELEASE: January 31, 2019
WASHINGTON, D.C. – John R. Dearie, President of the Center for American Entrepreneurship, today issued the following statement regarding the re-introduction by Senator Jerry Moran (R-KS) of the Startup Act – bipartisan legislation intended to encourage and facilitate the creation, survival, and growth of new American businesses:
“The Center for American Entrepreneurship (CAE) applauds the re-introduction of the Startup Act, important legislation that addresses one of the most urgent policy challenges confronting the nation – a significant and prolonged decline in American entrepreneurship.
Repeated research has demonstrated that startups are disproportionately responsible for the innovations that drive economic growth, and account for virtually all net new job creation. Alarmingly, recent research has also demonstrated that the engine of innovation, growth, and job creation is breaking down.
According to Census Bureau data, from 2000 to 2006 an average of 510,000 new businesses were launched in the United States each year. Since 2009, however, annual new business formation has dropped to about 400,000 – meaning that the United States currently faces a startup deficit of about 100,000 new firms each year.
In addition, research by economists Robert Litan and Ian Hathaway has shown that the number of new businesses as a percentage of all businesses has fallen near a 40-year low – and that this decline is occurring in all 50 states and across a broad range of industry sectors.
Given the critical role that startups play as the principal source of innovation, productivity gains, economic growth, and job creation, such circumstances amount to nothing short of a national emergency. Reversing the decline in American entrepreneurship requires changes in public policy on a number of critical issue fronts.
The Startup Act delivers many of those necessary policy changes. The Act would accelerate the commercialization of university research that can lead to new ventures, review and improve the regulatory processes at the federal, state, and local levels, and modernize and significantly expand a critical Economic Development Administration (EDA) program to promote innovation and spur economic growth. The legislation also creates both Entrepreneur and STEM visas for highly-educated individuals so they can remain in the United States legally to promote new ideas, launch new businesses, and create American jobs.
CAE thanks Senator Jerry Moran (R-KS) for his steadfast leadership on behalf of America’s entrepreneurs, as well as Senator Roy Blunt (R-MO), Senator Amy Klobuchar (D-MN), and Senator Mark Warner (D-VA) for co-sponsoring the legislation. We look forward to working with the Senators, their Congressional colleagues, and the Administration to see the Startup Act enacted into law.”