The National Dialogue on Entrepreneurship offers a couple of examples of Washington's increased interest in entrepreneurship in our economy. While this may at first sound like good news, I am concerned that over time it may lead to increased meddling by bureaucrats in D.C. in the entrepreneurial process.
First is a story on an update of President Bush's recommendation for a major update of federal economic development policy under the Strengthening America's Communities Initiative (SACI):
An advisory committee released a report last week...offering recommendations for new Commerce Secretary Carlos Gutierrez....Specific recommendations include: increasing technical assistance funding for innovation-based strategy development; requiring long-term, innovation-based, regional and community development strategies as a prerequisite for follow-on federal assistance; the replacement of entitlement grants with performance-based challenge grants within 10 years; and, to create effective forums for propagation and sharing of best practices in economic and community development. The program will consolidate dozens of existing federally funded programs.
While consolidation may make sense on the surface, I see in our future a large agency trying to guide and shape entrepreneurial behavior in our economy. When power is centralized in government, more control is soon to follow.
The second example comes from an update on the House of Representatives Committee on Science. The committee framed its discussions around entrepreneurship and innovation in a rather narrow manner. There was strong representation of large entities who innovate, but no apparent representation by entrepreneurs. The witnesses included the Chairman of Cisco and a Vice President of IBM. While innovation by large entities is a good thing and needed in our economy, it is not entrepreneurship in my understanding of the concept.
IBM and Cisco and huge public companies. Entrepreneurship, in the definition I think works best, involves private ownership. This example demonstrates the next rule of Washington. When money starts flowing toward a certain priority, big business will find a way to get a prime spot at the front of the line.
Of course Cisco and IBM testify that they need more federal money to be innovative. What a surprise....
All real entrepreneurs need to create businesses and jobs (as we know from almost all of the research on this topic) is less government involvement and a fairer and simpler tax system. But, in Washington they will define supporting entrepreneurship as creating a new agency and pumping millions and millions of dollars into corporate welfare to public companies.
