One Way The New Administration Can Fuel American Entrepreneurship
Invest In Distressed Communities
The last bill President Obama signed before the transition of power will preserve a program that ensures it will be respected and help the government attract promising innovators to public service. Introduced in the Senate by U.S. Sens. Mark R. Warner (D-VA), James Lankford (R-OK), and Cory Booker (D-NJ), the Presidential Innovations Fellows (PIF) program will gradually but firmly establish a trail for government to attract experienced tech entrepreneurs to public service.
“This program provides an opportunity for this country’s top talent to bring their diverse and innovative experience to the federal workforce, without displacing change-makers within government. As a former telecommunications executive, I know how difficult and bureaucratic it can be for government to adapt to new changes in technology, productivity, and data management.” — Senator Mark Warner
The lasting impact of this bill will be felt in the new administration and for decades to come. The PIF program is but one of many ways to encourage and promote the development of innovation amongst the private and public sectors. But what about bringing those innovations to the people and towns that will be most likely affected by public policies?
Enabling more immigrants to launch startups in the U.S. and championing a more diverse set of entrepreneurs are highly important for the state of our economy. However, investing in distressed communities may be the most probable under the new administration.
Fear and growing economic anxiety were some of the determining factors that led to the results on election day. Economic instability is felt throughout the country and understandably helped tip the swing counties in Trump’s favor. According to the Economic Innovation Group’s (EIG) Distressed Communities Index, “ 50 million Americans are living in distressed communities. In the most distressed 10 percent of zip codes, communities lost 13 percent of jobs and saw more than one in 10 businesses close.” One reason the distressed communities are struggling to survive is that they haven’t adapted to technological advancements due to underinvestment.
The geographic landscape emerging from the recent recession led to operating equipment such as machinery, processes in factories and other applications with minimal or reduced human intervention. Venture capital activity is, to a very great degree, highly concentrated. 77.6% of venture capital goes to three states — California, New York, and Massachusetts. However, 75% of Fortune 500 companies are in the other 47 states. With the right amount of investment, the distressed communities, including the Rust Belt, have the greatest potential to become high collision environments. Although the market is currently bending towards re-urbanization in dense cities, there may be an opportunity for large industrial centers to attract entrepreneurship back to their respective communities.
“ Working in coordination with government and investors, entrepreneurs can revive urban markets block by block.” — Steve Glickman, Executive Director, Economic Innovation Group
As the EIG states, “ U.S. investors currently hold an estimated $2.3 trillion in unrealized capital gains — a significant untapped resource for economic development.” By tapping into the trillions of inactive capital to invest in an improved structure for education, workforce training and the incentivization of entrepreneurship, overlooked communities can be brought to the future. A few VC’s are publicly committed to investing in Middle America, but more could be done to increase startups’ access to capital such as tax breaks and other incentives. It should also be known that the expanse between Silicon Valley and New York City cannot succeed without the implementation of strong entrepreneurial networks and startup ecosystems in place.
Looking forward, it’s imperative that the new administration integrates tech innovation into public policy. Supporting legislation that encourages investment in distressed communities will spur job growth, foster more opportunities for entrepreneurship and create a lasting impact for generations.
