This week I am blogging about ideas from the three leading presidential candidates that should help entrepreneurs. I want to keep this non-partisan, so I am only mentioning one good policy from each of the candidates; and I am listing them in alphabetical order.
The Clinton for President web site explains, “Hillary would give tax credits to small businesses that provide health care to their workers to help defray their coverage costs.”
This is a good idea because failure to fix the health care problem handicaps our entrepreneurs. Academic research shows that men who work for others are three times as likely to have health insurance as men who work for themselves, and women who work for others are five times more likely than women who work for themselves to have health insurance.
Moreover, the employees in new companies are less likely to have health insurance than people working for large, established companies. According to preliminary data from the Kauffman Firm Survey, in 2004, only 23.2 percent of new businesses offered health insurance to their full time employees. According to the Kaiser Family Foundation, small businesses are much less likely to provide health insurance to their employees than large businesses.
The McCain for President web site says, McCain would “establish [a] permanent tax credit equal to 10 percent of wages spent on R&D.”
This is a good idea because small, start-up companies under invest in R&D because it is costly and uncertain. But successful R&D leads to the creation of products and services that help society (e.g., artificial skin; web browsers), as well as generate sustainable competitive advantages for companies. Moreover, start-ups in high tech industries are much more likely than those in low tech industries to create jobs and contribute to GDP growth.
The Obama for President web site says, “Obama will create a Clean Technologies Venture Capital Fund to fill a critical gap in U.S. technology development….The fund will partner with existing investment funds and our National Laboratories to ensure that promising technologies move beyond the lab and are commercialized in the U.S.”
This is a good idea because high tech businesses create more jobs and have higher growth than low tech businesses. Moreover, many good technologies with commercial potential are created in our national laboratories. (RFID is a good example; it was originally developed to keep track of nuclear weapons). Furthermore, venture capitalists are very good at identifying high potential companies so increasing the pool of venture capital going into clean technology will help us to further develop that technology.
If any of you have identified particular policies of the presidential candidates that would be good for entrepreneurs, I’d like to hear them. But let’s keep this non-partisan and avoid knocking anyone’s policies.
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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books, the latest of which is Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By. He is also a member of the Northcoast Angel Fund in the Cleveland area and is always interested in hearing about great start-ups. Take the entrepreneurship quiz.