- June 20, 2018
- Posted by: matt
- Category: Blog
Last week, the DC-based Hamilton Project released a number of studies looking at the state of entrepreneurship and business dynamism in the US.Â The core analysis took a deep dive into why US business dynamism is declining.Â Startup rates and firm survival rates are down, and job growth from new firms is also declining.Â Â The researchers point to decreased competition as a core causal factor:Â industry consolidation (especially in formerly small business intensive sectors like retail) and a growth in occupational licensing are among the many factors that make it harder for new firms to start and to gain market traction.Â Â The study also offers a number of small scale recommendations related to occupational licensing as possible means to address these market barriers.Â Â The project also suggests a bigger idea as well—A federalÂ Main Street FundÂ that could make as much as $5 billion available for state investments in entrepreneurs and small businesses.Â Â The fund would be managed by the US Economic Development Administration, with funds provided to states based on population, demographics, and economic activity.Â Â It would also include penalties for states that created major new incentive programs–it is designed to generate new funding tools that support home-grown businesses and prevent inter-state battles for corporate relocations.
As a long time advocate for home grown business development and a critic of many tax incentive programs, I’m pleased to see ideas such as the Main Street Fund get some public attention.Â While I question the political feasibility of this idea,Â I like the concept of a data-driven fund that helps fund innovations in entrepreneurial support programs while also discouraging “the war between the states” for corporate headquarters and other facilities.Â This is a debate worth having!