ClintonKaine and Entrepreneurship (Blog Post)
|Title||ClintonKaine and Entrepreneurship (Blog Post)|
|© edegan.com, 2016|
Democratic nominees Hillary Clinton and Tim Kaine have records of supporting entrepreneurship and small business through legislation. Their campaign policy proposals intend to decrease Clinton's support of entrepreneurship has been demonstrated through her past legislative actions regulation and taxes for small business while increasing them for large corporations. Both candidates support amendments to the Affordable Care Act that aim to make it easier for small businesses to offer healthcare coverage to their employees. Clinton's Entrepreneurship Record Clinton’s legislative record demonstrates her interest in entrepreneurship. In 2004, she sponsored Senate Bill 2591: Entrepreneurial Incubators Development Act of 2004, but it was not enacted. The bill aimed to provide federal funding for small businesses to cover legal, intellectual property, technology, and strategic-planning costs. In total, she sponsored 2 and co-sponsored 23 pieces of legislation directly related to entrepreneurship. During her time as Secretary of State, she spearheaded the newly-created Global Entrepreneurship Program which used USAID funds to identify, support, and fund entrepreneurs in Egypt and Indonesia. VP pick Tim Kaine also has a record in this field, founding Virginia’s Entrepreneurship Investment Authority while governor, and supporting entrepreneurship visas and tax credits while in the Senate. He also a co-sponsor of the Start-up Act and the Small Business Tax Credit Act, both of which are currently before the 114th Congress. How Would Clinton Promote Entrepreneurship? Clinton’s jobs-creation policy calls for the creation of “entrepreneurship and innovation clusters like Silicon Valley across the country” by increasing access to capital and facilitating technology transfer. This policy, if implemented competitively, could be very good for American entrepreneurship. However, government money is sometimes invested in startups that are unlikely to succeed, which leads to a “crowding-out” effect. The National Bureau of Economic Research has documented this effect in Canada. A returns-focused strategy for distributing funds, rather than just shelling out money, may bring success. Clinton also plans to increase tech literacy by providing every household with a high-speed internet connection and ensuring that every student receives a computer science education. The Telegraph cites an increase in tech literacy as a main factor in Sweden's rise to becoming an innovation powerhouse. Strong computer skills have been linked to entrepreneurship all throughout Scandinavia. An increase in tech literacy through this plan could provide long-term benefits to the United States. Millennials and recent college graduates comprise an important part of high-tech workers Clinton's policies support entrepreneurship indirectly by emphasizing affordable education interested in entrepreneurship, but student debt may be making them less willing to start their own businesses. Research from Penn State found that an increase in student debt results in a decrease in new small businesses. In a county-by-county study, every standard deviation of student debt correlated with a decrease of 70 new small businesses per county, a decline of approximately 14.4%. Clinton proposes "allowing young entrepreneurs to defer their federal student loans for up to three years, so they can get their ventures off the ground and help drive the innovation economy." Through her policies, social entrepreneurs and those who started businesses in distressed communities would be eligible for up to $17,500 in loan forgiveness. What Would a Clinton|Kaine Presidency Mean for Entrepreneurship? Entrepreneurs cite access to capital as their biggest barrier to growth. Clinton suggests that her plan would make more capital accessible for entrepreneurs by reducing the effects of student debt and increasing federal funding for entrepreneurship investment. Her policies prioritize universal internet access, high levels of computer science education, and societal tech-savviness; all of these are assets for generating entrepreneurship. Clinton's proposals seem likely to benefits entrepreneurs, but these ideas must become more than just empty promises. Implementation must ensure that government-sponsored venture capital remains competitive and focuses on firm success rather than firm funding. Entrepreneurship is a crucial driver of economic growth, but it does not get attention that other policy areas such as trade receive. The Clinton-Kaine proposals inspire confidence that policymakers may finally be headed in the right direction.