Washington, D.C.— Today, the House Small Business Committee Subcommittee on Innovation, Entrepreneurship, and Workforce Development, led by Chairman Jason Crow (D-CO), held a hearing focused on reversing the decades-long trend of declining entrepreneurship in the United States. The hearing examined policy options to incentivize new business creation and ultimately drive equitable economic recovery.
“We are staring down an entrepreneurship crisis in the country that has the potential to significantly delay our recovery. Moreover, this decline in business start-ups also can lower productivity, decrease the creation of new technologies, and slow the overall rate of job growth,” said Chairman Crow. “I think we can all agree that this scenario of economic stagnation is unacceptable. Instead, we need our economy operating at maximum strength, and Congress should consider how we can help reverse the decline in entrepreneurship.”
In recent years, business creation has declined to the point where firms are exiting the market faster than they are being started. Experts attribute this drop in entrepreneurship to various factors, including a tight lending environment, high levels of student loan debt, and increasing consolidation of business ownership. Lower levels of business start-ups can reduce productivity, decrease the creation of new technologies, and slow the overall pace of job growth.
The hearing allowed lawmakers to examine proposals to increase entrepreneurship as the nation works toward recovery form the COVID crisis. One such proposal was the bipartisan Next Generation Entrepreneurship Corps Act (Next Gen), introduced by Chairman Crow. The bill seeks to increase entrepreneurial inclusivity and business creation in distressed regions. Next Gen would create an annual national business proposal contest to select fellows to start and run businesses across the country. The selected fellows would receive a $120,000 two-year stipend for living and start-up costs in addition to health benefits.
“We have the potential to help ensure an equitable recovery and create millions of good-paying jobs by supporting entrepreneurs and creating an economic environment where they can thrive,” said Chairman Crow. “The Next Generation Entrepreneur Corps Act would help train the next generation of small business owners, provide them with funding and resources they need, and specifically target those in historically underserved communities. Today’s hearing showed that we need innovative solutions like these to reverse the decline in entrepreneurship and help our economy recover.”
The hearing also gave entrepreneurial development experts and small business owners the chance to testify on solutions to increase entrepreneurship and job creation.
“Economic growth is driven by productivity gains, which are driven by innovation – which comes disproportionately from new businesses,” said John R. Dearie, President of Center for American Entrepreneurship. “Revitalizing American entrepreneurship, therefore, is the essential pathway to faster economic growth and job creation. And that necessary revitalization requires changes in public policy.”
“We have a collective opportunity to support emerging entrepreneurs and to invest in programs that bridge resources across communities. President Biden has said that The American Jobs Plan is not about returning to the way things were, but rather that it is time to ‘build back better than ever,’” said Dr. J.D. LaRock, President and Chief Executive Officer of Network for Teaching Entrepreneurship. “ARP calls for the creation of a ‘national network of small business incubators and innovation hubs,’ including ‘hubs to support the growth of entrepreneurship in communities of color and underserved communities’. The Next Generation Entrepreneur Corps should be included in The American Jobs Plan.”
“The Next Generation Entrepreneurship Corps Act has the ability to be a catalyst for distressed communities. At Mi Casa what we see historically are the hurdles and obstacles presented to these community members – we work hand in hand with participants to remove barriers to success,” said Denyse Airheart, Business Pathways Director of Mi Casa Resource Center in Denver, CO. “A program like this has the ability to ignite economic development within distressed communities that continue to see brain drain. Therefore, creating places where individuals can reinvest, hire local and make a local, national and in some cases global change.”