Hey DC! You’ve heard of the App Economy — Take 3 Steps To Grow It

Over the past several years, we have witnessed an innovation revolution through the “App Economy,” with thousands of companies creating software apps for everything from education to healthcare. It has never been easier to start a software-powered business that can level — or even disrupt — the playing field.

Eighteen months ago, I co-founded my third education innovation organization, Lear(R)n, committed to figuring out which education technology is best for students and teachers (and their organizations’ budgets). As a former educator and administrator, working with colleagues to identify which technology provides the highest impact on outcomes for the money is a calling. And, already, over 10,000 educators and dozens of institutions trust our evidence-based edtech management platform, LearnTrials.com, to improve product differentiation for teachers, outcomes for students, and the budgets of districts, states and universities.

And, it’s no wonder. The #AppEconomy can be overwhelming, in any sector. In education alone, $8 billion is spent by schools on software in United States K-12, growing 20% per year. Our LearnTrials discovery engine differentiates across over 4,000 digital curricular apps and software tools. Realizing that 95% of paid licenses for those education technologies are under-utilized makes it hard to ignore that improving utilization of effective technology represents a massive budget savings opportunity for cash-strapped school districts as they modernize and personalize learning.

The growth of LearnTrials is just one example of thousands of small businesses enabled by the explosive growth of the App Economy. But it’s not all cocktails and kudos.

Despite how easy it has become to start a software-powered business in the current climate, the same can’t be said for growing the business — along with creating all of the net-new jobs in the US. The reality is the policies one must adhere to when building a fundamentally sound, high-growth company slows job creation in every state in the union. And then there are the unintended consequences of far-reaching regulations that are enacted, at a pace that simply cannot keep up with our modern economy.

I have spoken with nearly 200 founders and CEOs around the Research Triangle of North Carolina, where our company is one of many garnering investment ($1.2bn raised in 2015, Forbes), creating jobs, competing for talent and contributing to a vibrant community. These leaders and their businesses have a growing impact on both our local economy AND the global challenges effecting society. Three key themes emerged that those founders would like to share with DC policymakers: immigration and visa reform; hiring and workforce training; and tweaking the investment and reward incentives to create more jobs.

Three key themes emerged that those founders would like to share with DC policymakers: immigration and visa reform; hiring and workforce training; and tweaking the investment and reward incentives to create more jobs.
  1. Let’s start with the state of immigration and visa reform — an issue that has been heavily debated in our nation’s capital and has yet to be resolved. As it stands, there are too few visas available. Only the largest companies are able to secure and afford the few that are available. Within 10 miles of our office in North Carolina, we have three R1 universities and over a dozen other post-secondary institutions that attract and educate thousands of foreign-born students every year, after which we send them back home or to countries willing to compete for their talent. We are pushing talent out the door, while we have more jobs than can be filled. Ironically, our creativity, innovation and technical training is fueling growth in countries with whom we compete in the 21st century global economy. In order to ensure that large and small businesses alike are able to grow, policymakers need to recognize the economic imperative to reform the process.
  2. Small businesses are responsible for creating all of the net-new jobs in the market, and we compete for “A+” talent. We’re glad to compete — offering different opportunities than more established industry behemoths — but we often lose to larger companies for reasons beyond our control. Our company is surrounded by great, established companies like AT&T, Red Hat, Citrix, Fidelity, IBM, MetLife and many others, as well as literally thousands of small- and medium-sized businesses. We need to be able to incentivize highly qualified, experienced and technical talent — either through tax incentives or waivers — to join higher-risk, high-growth companies in their early stages in order to maintain and grow the diverse group of companies that we have seen explode over the past few years. This is especially true for companies like ours, outside of Silicon Valley, where speculative capital is more prudent and it is not as culturally normative for experienced talent to take the risks inherent in joining startups. These policies will also have a multiplicative long-term economic benefit, as growing small business create more jobs and economic activity in areas across the country.
  3. The final point emphasized by innovative founders of all ages is the need to tweak the investment and reward incentives, especially for those who are taking significant risk and long term salary cuts in order to create jobs. We need to bring back the R&D and investment tax credits, and provide 3 years of taxable income credits for early employees of new companies. We also need to shorten the founder capital gains waiver restriction from 5 years to 3. Five years is not only antiquated, but is counter to growth goals in the modern market. If we don’t have a proper founder incentive structure and remove penalties for investments in innovation, how do we expect entrepreneurs to keep taking risks, creating jobs and generating the broader tax base that fuels local economies across the country?

The bottom line is that these policy issues affect small businesses, regardless of politics or geography. As we’ve seen over the past few years, the App Economy is here to stay and is growing small and large businesses across the country, but in order to realize the full potential, we need to update policies that impede job creation. By effecting thoughtful policy change, one of the most exciting economies in the 21st century will continue to grow and thrive.


This article is shared in conjunction with remarks made at the US Congress in Washington, D.C. (Special thanks to the Council for Entrepreneurial Development and HQ Raleigh in supporting founders and helping gather insights. Additionally, AT&T and the AT&T Aspire team provide great support for growing companies like ours.)

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