The Senate Committee on Small Business and Entrepreneurship held a roundtable discussion on fostering start-ups, called Perspectives from the Entrepreneurial Ecosystem: Creating Jobs and Growing Businesses Through Entrepreneurship.
Chairman Landrieu and Members of the Senate Committee on Small Business and Entrepreneurship, on behalf of the Young Entrepreneur Council, an organization comprising many of our nation’s most successful young entrepreneurs, and the #FixYoungAmerica movement, a solutions-based effort that aims to highlight proven solutions to youth unemployment, I’d like to thank you for inviting me to speak today about how to help our nation’s young people create much-needed jobs for Americans through entrepreneurship.
In the past year and a half, the Young Entrepreneur Council has been working diligently to mentor, train and develop young American entrepreneurs—because we strongly believe entrepreneurship is a viable, practical solution to youth un- and underemployment. I address you today on behalf of those young entrepreneurs, because they need your help in order to lead this country forward.
As a result, one in four young Americans moved back in with their parents after living on their own. Thirty-one percent postponed marriage or starting a family. And many would-be entrepreneurs are sidelined indefinitely due to student loan repayments and lack of cash flow.
Despite these harsh realities, youth entrepreneurship is ever-present, as demonstrated by the recent college graduate segment of the 2011 Young Entrepreneur Council/Buzz Marketing Group annual youth entrepreneurship survey—which found that 29 percent of recent grads are self-employed, up from 20 percent in 2010. Thirty percent started a business in college, up from 19 percent in 2010. Fourteen percent started a business as a result of being unemployed, and 35 percent have started a side business to earn extra income.
We believe that the bipartisanship displayed during the recent passage of the JOBS Act in Congress sends a strong message to all Americans, but especially to our youth, that their elected officials believe in US citizens’ ability to empower themselves to improve their economic situation. These are exactly the kind of proactive reforms YEC has been fighting for.
But I believe our elected representatives must be even bolder—in fact, I believe we owe it to our youngest entrepreneurs to be so bold. Millennials must be empowered to funnel their entrepreneurial energy into solving joblessness and economic malaise, or risk becoming a lost generation.
Members of the Committee, this is not an abstract endeavor. The YEC, along with partners like Junior Achievement, Babson College, Codecademy, Network for Teaching Entrepreneurship, National Association for Community College Entrepreneurship and Venture for America, have identified a handful of tried-and-true approaches that are already successfully fostering entrepreneurship education initiatives and youth business creation all over America.
Today, I want to address three specific areas that the YEC and our partners wish to call attention to: young veterans, young entrepreneurs in general, and the Startup Visa.
First, let’s talk about our veterans. While overall unemployment is a little over 8 percent, 29.1 percent of male veterans and 36.1 percent of female veterans ages eighteen to twenty-four were unemployed in 2011—compared to 17.6 and 14.5 percent, respectively, of nonveteran young men and women of the same age.
Veterans are hard-working, passionate risk takers who put the mission before the man—qualities that also describe successful entrepreneurs. Overall, they own about 2.4 million, or 9 percent, of all American businesses. When you count businesses in which they’re at least half-owners, those numbers rise—to 3.7 million businesses and 8.2 million employees. Given this, we must ask ourselves: Instead of only helping returning young vets seek jobs, why aren’t we doing even more to help them create jobs?
To do exactly that, we ask the Committee to consider including provisions from two important bills in your efforts to support entrepreneurship through new legislation. The first is the Veterans Entrepreneurial Transition (VET) Act of 2011, a game-changing bill (that’s gotten zero fanfare in the media) that would allow qualifying veterans to use GI Bill entitlements to start or purchase a business or franchise.
Then there’s the Help Veterans Own Franchises Act, first introduced in 2009 and then again in 2011 as part of the American Growth, Recovery, Empowerment and Entrepreneurship (AGREE) Act. It establishes a tax credit for qualified returning veterans to offset startup costs equal to 25 percent of franchise fees, up to $100,000. Direct economic output in the franchise sector is projected to grow 5 percent in 2012, and employment, 2.1 percent—and young Americans are clamoring to get on board.
Next, to address the needs of young entrepreneurs in general, my organization has co-authored the Youth Entrepreneurship Act (YEA) with Young Invincibles. YEA is a set of policy initiatives designed to support and foster young entrepreneurs, some of which were introduced by Rep. Cedric Richmond as part of the Microenterprise and Youth Entrepreneurship Act of 2011.
I’d like to highlight five of YEA’s common-sense provisions—provisions that we believe will accelerate the growing youth entrepreneurship movement:
Finally, more resources for entrepreneurship education are needed in general—in the 2011 YEC/Buzz Marketing Group survey, 88 percent of respondents said entrepreneurship education is vitally important given the new economy, but 74 percent of them had no access to entrepreneurship resources during their college years. When resources were available, most respondents felt they were inadequate. This is unacceptable; today, adaptability, creativity and financial literacy are core work skills in the new economy—and we face a shortfall of science, technology, engineering, and mathematics (STEM) graduates.
This growing shortfall, combined with current immigration policy, has led to more and more foreign-born entrepreneurs taking their revenue-positive companies off of US soil. The StartUp Visa Act of 2011 provides a solution that both creates jobs and helps increase US competitiveness. Notably, the StartUp Visa doesn’t just hand out visas—it’s conditional and employment-based. After two years, it requires visa-holders to have raised additional capital investment, demonstrate they are not a burden to taxpayers, and create new American jobs.
In doing so, the StartUp Visa accomplishes several things: it allows entrepreneurs to make key hires in instances where in-demand talent is otherwise lacking (enabling them to grow and hire faster), and it incentivizes immigrants who are educated and trained in the US to stay, build businesses and create new jobs. One of our YEC members is an immigrant from Colombia who has built multiple businesses in the US, generating millions of dollars in revenue and creating several dozen American jobs. But if he had not married an American citizen, his contribution to our economy would have been impossible under current immigration law.
If we agree that small businesses truly are the engine of job creation in America—as President Obama himself has said—then it’s imperative for us to spur youth entrepreneurship and to ensure the young employees of tomorrow are ready to compete in a global economy. The solutions we propose here represent the beginning of a much larger conversation about reform, but these areas represent some of the most challenging issues young entrepreneurs face right now.
Importantly, this is not about making life easier for Millennials, but rather about helping transition the young American workforce into a more entrepreneurial one capable of thriving in the new economy. We believe reforms like this are the key to initiating a paradigm shift away from the antiquated policies and mindset of yesteryear, so that when today’s young people become the 30-, 40-, and 50-something leaders of tomorrow, they will have the capacity and ability to lead America forward.
Today, the Young Entrepreneur Council, our partners, and the tens of thousands of young entrepreneurs we mentor are asking you to help us as we set out to do what’s right: Fix Young America. And on their behalf, I thank you for giving me the opportunity to discuss these vital issues and offer you achievable, practical solutions to resolve them.
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