In his plan for winning the future, President Obama called upon the private sector to help the American economy grow by “out-innovating, out-educating, and out-building our competitors.” The CEOs, university presidents, entrepreneurs, foundations, non-profits, and federal officials involved in the Startup America Partnership are trying to make that plan a reality.
On Monday, the Obama Administration, together with the Kauffman Foundation and the Case Foundation as well as a host of major technology companies – among them, Google, Hewlett Packard, Intel, and Facebook – announced a new partnership called Startup America that will help entrepreneurs finance and commercialize innovative ideas, start new businesses, and create jobs.
Startup America is not the first major public-private partnership of the Obama years; rather, it’s become a hallmark of the administration’s way of doing policymaking. The more than twenty major companies that have signed on to Startup America have agreed to invest in an array of programs that have three major goals:
- “Education: Expanding high-impact entrepreneurship education programs to more high schools, community colleges, and universities, reaching thousands of additional students.
- Commercialization: Clearing the path to market for primary research in more universities, through a combination of regional ecosystem development, faculty engagement, and streamlined technology licensing.
- Acceleration: Replicating successful entrepreneurship accelerator programs in more cities and universities, by recruiting more experienced mentors to support more startups.”
Technology innovation accounts for between 50 percent and 85 percent of all economic growth in this century. The initiatives enacted under Startup America will bring private capital to bear on innovation and business creation at a critical time when the nation’s job growth still lags behind corporate profitability. Small, innovative businesses and startups are among the brighter spots in a dark recession. Research conducted by the Kaufman Foundation finds that small businesses and startups are more recession-proof than larger firms, experiencing fewer layoffs even in tough times.
According to the Kauffman Foundation, 40 percent of our GDP this year comes from companies that did not exist in 1980. More striking is the fact that nearly all net job creation in the economy comes from firms that are less than five years old. A recent report went so far as to say that startup companies are “almost solely the drivers of job growth.” As a result, “effective policy to promote employment growth must include a central consideration for startup firms.”