Broad Appetite
Business /22 Sep 2017
09.22.17

Government Driven Entrepreneurship and Economic Equality

Government (and by government I mean the entire entity of the organization, not a specific party or person) and entrepreneurship do not go together. At least that is the common assumption, especially from the libertarian mindset. Entrepreneurship is the ultimate capitalist force, creating new wealth and opportunities based on hard work, risk, and sacrifice. Entrepreneurship succeeds when the market is open to disruption and value. Government seeks to set incredible control over an ever-encroaching percentage of our lives. Through regulations and licensing, government, as a whole, makes the entire business starting process expensive and slow. Ever growing government bureaucracy ensures that forces such as entrepreneurship and innovation are slowed and sometimes stalled. Government actions are hurting the growth of entrepreneurial startups such as Uber and Airbnb at the behest of taxi and hotel interest groups threatened by innovation and unwilling to adapt to disruption. Government is hurting the ability to hire employees because of payroll taxes and restrictive minimum wages. Government is making it harder to do business internationally because of trade barriers and protectionism.

So why then, would government and entrepreneurship work well together? Where is the synergy that could bring these two distinct and seemingly opposite forces together? Well for one thing, the 750 billion of our tax dollars being paid out in corporate and personal welfare. Another point being the levels of underemployment and unemployment existing in the country right now. How about the stagnant growth of wages while the cost of living skyrockets? How about the student loan, real estate, credit card, and car loan bubbles that are predicted to explode over the course of the next few years?

The economy needs to be jumpstarted. The economy needs a fresh infusion of new jobs, new wealth that is being created. Enter the power and opportunity of entrepreneurship. And this is how government can actually do something to help ignite the economy.

Government is not going to reduce the cost of business, nor will government remove regulations. Government giving up money is like my kids giving up candy and video games, something that happens in dreams but not in reality. Let’s not focus on government giving up money but better using our money to create opportunity and get the economy moving.

Currently America has cities in decay, millions of people unemployed or underemployed, government is paying out billions in welfare to people and corporations. Take those billions of dollars designated for welfare and use it to fund multiple incubators and co-working spaces across every city in every state in the country. Identify those buildings that are falling apart, in those falling apart cities and use the welfare money to transform those buildings into self-sustaining eco-systems of entrepreneurship. Invite/require all people receiving welfare to attend entrepreneurship-training programs. If they choose not to attend, they lose their welfare benefits. Upon completion of entrepreneurship training, those graduates are then able to use the co-working space provided by the government to develop their ideas into businesses. Each startup business receives a certain amount of seed money in the form of a loan, similar to Small Business Administration (SBA) loans. These loans would have to be paid back over a period of years after a grace period expires.

As the loans are paid back, these funds are then reinvested in additional training programs and incubators/co-working spaces. The benefit to the government is greater income creation and distribution, more people paying taxes and politicians that look great for creating economic prosperity. The benefit for people is a greater opportunity for wealth creation, ownership of their own lives, the ability to work with pride in pursuit of their passion, and not having to suffer the humiliation of collecting welfare.

And the types of startups created by an initiative such as this do not have to be Facebook like unicorns. The focus can be artisanal, vocational and trade style startups such as barbershops, bakeries, bookbinders, urban farmers, customized bike shops, or coffee roasters. The focus should not be to force innovation, technology or sustainability; it should be to help people take control of their lives.

Economic inequality is a hot button issue today for many valid reasons. As the gap between rich and poor continues to grow more expansive and as the middle class shrinks real solutions need to be explored. Government funding entrepreneurship does lack the romantic intellectual illusion of redistribution, making the rich pay their fair or blaming capitalism. What it does do, however, is present a legitimate solution that will help all parties create opportunity and prosperity.

Entrepreneurship is a force that can create incredible organic wealth and opportunity, not just for the founder of an organization. Entrepreneurship offers a ripple effect. I have a great idea and am able to obtain funding for it (something that is becoming harder to do as venture capital (VC) begins to dry up). I hire bright, motivated team members to work hard and grow this new business. As our organization becomes more successful and profitable, we hire more employees, creating more jobs. As success grows even larger, the original employees decide to take the ownership shares they were given in lieu of payment and cash out to the tune of millions, or possibly billions of dollars.

Given that they are most likely type A personalities they would not be content sitting on their wealth and watching “Judge Judy.” They invest their profits in new businesses. This creates more jobs and creates more wealth that is ultimately shared in some percentage with those founding employees. This cycle repeats time and time again creating new jobs and new wealth.

A popular right wing rumor is that government really wants to force absolute dependency on the largest number of people it can through welfare and restrictive regulations. It seems that way from time to time but I don’t want to go crazy with conspiracy theories and tin foil hats. No matter the intentions of government, people are out of work, frustrated at the lack of opportunities and people are being forced to depend upon a cold and heartless government or a cold and heartless corporation for their livelihood. A legitimate option to get people working again and creating economic, racial and gender equality is by embracing startup synergy.

There is precedent for government involvement in business. From the new deal to government contracts for the military and tech companies to the government sponsored entities such as Freddie Mac and Fannie Mae. Government has been involved in capitalism and helping create jobs or funding specific endeavors. These initiatives might not have worked out as well as one had hoped. Some of them might have even been part of the reason the economy crashed. That simply shows that political involvement should be as minimal as possible but it should still be there.

Americans have to pay their taxes; this reality is not going away. Since the taxes have to be paid, it would be nice to see them put to great use helping those struggling to create new businesses and opportunities for themselves and others.

America is supposed to be the land of opportunity, yet somewhere along the way that changed. Rather than create our own way we became dependent upon corporations and government for our living. The past ten years witnessed the effects of that. We need to return to that time when we could create our own opportunities. And it is time for a government “for, of and by” the people to help launch a new age of opportunity and prosperity.

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