At the Global Entrepreneurship Summit last summer, President Barack Obama announced that the United States government raised $1 billion for entrepreneurs in Africa. He said something that really stuck with me to this group of entrepreneurs, that they embody this idea that "there are no limits to the human imagination; that ingenuity can overcome what is and create what needs to be."
He added that, "Entrepreneurship brings down barriers between communities and cultures and builds bridges that help us take on common challenges together. Because one thing that entrepreneurs understand is, is that you don't have to look a certain way, or be of a certain faith, or have a certain last name in order to have a good idea."
What a great message to convey to a group of smart, ambitious individuals, who will be responsible for bringing jobs to their communities, making a local and possibly global economic impact, and most importantly changing lives in all kinds of ways.
This is the kind of message our leaders--local, state and federal--should be delivering to the hungry entrepreneurs with a vision and it got me thinking of several ways our leaders can encourage entrepreneurship.
It starts with culture. Risk-taking is critical to innovation, and to create a culture of innovation, leaders need to convey that failure isn't defining. In fact, failure is a part of life, and to avoid it would be to avoid progress.
Our world's largest, most impressive tech companies know this. Amazon, for example, has employed a rule that when an employee goes to his or her manager with a great idea for a new way of doing things, the manager must say "yes." If the manager wants to say no, he or she has to write a two-page thesis explaining why it's a bad idea. A policy like this encourages employees to speak up when they have an idea that they believe is game-changing. And yes, Amazon is taking a risk in having this type of policy, but there's also enormous potential for improvement.
Federal leaders can learn from such a strategy by encouraging entrepreneurs to pitch their ideas in spite of fear of being rejected. Hosting a Demo Day like the White House has, for example, sets a great example for encouraging entrepreneurial risk.
Then it's policy. There are many ways a government can be pro-business. Easing taxation on SMBs and SMEs and investors, like they have in the U.K., is a huge growth stimulant. Knocking down crowdfunding barriers, so that startups can receive funding from investors who aren't accredited, is another effective strategy. And bankruptcy laws should be designed to protect entrepreneurs who fail, allowing them to move on and pursue new ventures.
Regulatory hurdles that stymie innovation should be minimized. A 2013 survey by the National Federation of Independent Business revealed that government regulation and red tape affected more than 22 percent of small-business owners, up from eight percent back in 2008. Too much regulation is what drives aspiring founders back to the corporate world.
Today, nearly 40 percent of U.S. jobs require a government license versus about five percent in the 1950s. This affects entrepreneurs in every industry. On the state level, it's imperative for leaders to ease these regulations if they want to attract top-tier talent. Some governors, like Florida's Rick Scott and Texas' Greg Abbott, recognize how vital entrepreneurs are to their economies and have gone out of their way to make the business environment alluring for startups. Scott has even bashed other states' taxation and regulatory policies in an attempt to drive business to his state, a level of competition that I applaud. Let's keep that heat on!
Lastly, look to the future. Policymakers need to think about the pipeline for entrepreneurship through organizations that nurture the development of startups and funding for university programs dedicated to entrepreneurship. One such organization is The National Advisory Council on Innovation & Entrepreneurship (NACIE), which has a number of initiatives to create a skilled and competitive future workforce.
As you can see, leaders need to create an entire ecosystem for entrepreneurs to succeed. With a multifaceted approach, the movers and shakers will be able to shape our world for the better.