The Steve Jobs Act: Why It's Time to Invest in Entrepreneurs

With Obama's package stalled in the Senate, the Apple founder's death reminds us we need a stimulus for vision and innovation

Steve Jobs mini memorial - AP Photo:Nam Y. Huh - banner.jpg

The American Jobs Act is dead. It's time for the "Steve Jobs Act."

In the wake of the Senate's blocking of his jobs package last week, President Obama took to the road to campaign for passage of smaller chunks of his plan. While Congress should do just that, this piecemeal approach highlights a deficiency at the heart of Obama's plan: it is a series of good ideas disconnected from any big idea.

True, Americans struggling to put food on the table and pay the mortgage are not looking for grand notions; they need the kind of immediate relief Obama's proposals would provide. However, an America struggling to find its way in a bewildering, humbling world needs something more -- a sense of larger purpose and direction.

Start-Up NationThe eulogies and encomiums delivered to Apple founder Steve Jobs seemed to capture some of this longing. They were celebrations of greatness and vision in a middling, small moment. At the end of a decade that saw Iraq, Katrina, and Lehman Brothers become watchwords of American weakness, they were paeans to someone who believed, with Thomas Paine, that we had it "in our power to begin the world over again." But, perhaps most of all, in a floundering economy, they spoke to a sense that it is entrepreneurs and innovators -- and not merely infrastructure spending and payroll tax cuts -- that are needed to rebuild the engine of economic growth.

The facts back up this assumption. Research from the Kauffman Foundation has demonstrated that new and young companies, those under the age of five, are responsible for all net job creation over the past generation. It is the entrepreneurs who start these businesses -- and not the business tycoons courted by both parties -- that are the true "job creators." But while Republicans focus on tax cuts and regulatory relief for large corporations and Democrats look to keep teachers and police officers in their jobs, it is these entrepreneurs -- the next generation's Steve Jobses -- who are being overlooked.

This has real consequences. At the heart of our jobs crisis is an ongoing entrepreneurial recession. Over the past three years, the number of new business being started has fallen by a quarter. The number of new companies with employees in 2009 was at its lowest level since 1992. Since the year 2000, the number of jobs created by startups has been sliding consistently to the point that in 2010 there were about half the number of jobs created by these new companies as there were a decade earlier.

While no set of government programs can create the revolutionary zeal needed to launch and lead a company such as Apple, we do need a set of policies to encourage and aid innovators as they turn their ideas into new, high-growth, job-creating companies -- the "Steve Jobs Act." In a Washington that worked, these ideas would be embraced by both parties. Such a measure would include elements from President Obama's plan such as aid to small businesses and reform of the unemployment insurance system to allow for more flexibility for potential entrepreneurs. And it would build on the emerging bipartisan consensus that certain regulations such as the accounting requirements in the Sarbanes-Oxley reforms have a disproportionate impact on young firms ill-equipped to handle the onerous burdens.

Yet the "Steve Jobs Act" would go much further. It would make healthcare and retirement benefits more universal, personalized, affordable and portable so that entrepreneurs have a greater ability to strike out on their own. With the knowledge that companies such as Nike, Intel, FedEx, and, yes, Apple Computers all started out with the benefit of government loans, it would create a National Innovation Bank to invest in companies with a potentially high rate of return in job creation. It would open the doors of legal immigration to hard-charging, determined new Americans like those who came through Ellis Island a century ago and like the Syrian immigrant who was Steve Jobs' biological father. And it would make sure our public schools put a greater emphasis not only on science and mathematics, but on the creative problem solving skills that are at the heart of the entrepreneurial drive.

As much as anything else, the "Steve Jobs Act" would give Americans a sense of direction about our economy. Despite the rhetoric out of Washington, America's economic future lies neither in competing with off-shore tax havens over the lowest corporate tax rates nor with authoritarian dictatorships such as China to produce high-speed bullet trains. It lies in doubling down on what has historically made America an exceptional economy: an entrepreneurial culture, a willingness to dare greatly, an openness to new ideas, the ability to tap talent that other countries' castes would overlook. If we want to create jobs and recreate a strong American economy, this is where we should focus our energies. It might not mean an iPod in every pot, but it would help innovators get their tinkers out of their garages and into our lives.

Image credit: Nam Y. Huh/AP