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Third Time's A Charm? Startup Act 3.0 Introduced… This Time With An Infographic

from the maybe-maybe dept

Last year, we wrote about the importance of the Startup Act 2.0 in helping to create more jobs via startups (the creators of tons of new jobs in our economy), and now there’s a new version, the Startup Act 3.0. The Senate bill is truly “bipartisan” — sponsored by Senators Moran, Warner, Coons and Blunt. The key focus, as in the past, has been on solving the issue in which we are driving some of the best skilled tech workers to other countries to build companies, rather than bringing them to (or keeping them in) the US. Our visa policy for skilled workers has been flawed for way too long, and this takes us a step in a saner direction. With the President and both parties of Congress seemingly (finally) open to the idea of comprehensive immigration reform, hopefully something as basic as better immigration policies for skilled workers is no longer even remotely controversial. In fact, for the most part, it seems like a very large number of folks in Congress support such reforms. The issue that has tied it up in the past has been whether or not this needs to be its own thing, or if it needs to be tied to more comprehensive immigration reform. And, really, I would imagine that’s still the same stumbling block this time around, but with more appetite for that, hopefully the Startup Act 3.0 can be a part of all of that.

In terms of specifics, the bill would boost new visas for foreign-born entrepreneurs (these are people who create jobs, not take them from others) as well as for foreign graduates of US universities who have advanced degrees in science, technology, engineering and math. We train them, we might as well get the direct benefit of their work after they graduate. This is different than the issue of H-1B visas for skilled immigrants — which is also an important program, but one that has been abused too often by companies. In this case, the visas are for the individual, not the company, and it focuses strongly on immigrants who create companies and jobs. As with previous startup visa efforts, I do have one minor quibble, which is that the entrepreneur visas will require you to have raised at least $100,000 in outside investment (or for an investment business, have invested that much). That’s lower than we’ve seen in past proposals, but still seems to predicate the idea of doing a startup with raising outside capital. In this day and age, that’s less and less necessary for many types of companies. Similarly, they need to have hired 2 outside full time (non-family) employees, and by the end of four years, increased employment to at least five non-family employees. The bill is useful for many foreign born entrepreneurs, though I still would have liked to have seen a test for entrepreneurs who don’t want to raise money, but are building successful bootstrapped businesses.

The bill also has a few other provisions designed to help startups, including making permanent a 100% exemption on capital gains taxes for investments held for at least five years in “qualified small businesses” (i.e., a way to encourage long-term investing in small businesses) and creating an R&D tax credit (up to $250k) for startups less than five years old and with less than $5 million in annual revenue. Basically, small businesses get a tax credit for investing in research and development.

I’m also a bit concerned about section 8, which focuses on “accelerating commercialization of taxpayer-funded research.” This one basically provides grants and funding to universities to do more commercialization. In theory, this sounds good, but I worry about it in practice. Most universities have, unfortunately, decided that “commercialization” means getting lots of patents and then selling licenses. In other words, the push to “commercialize” university research hasn’t actually led to much commercialization — but rather an awful lot of universities turning into pseudo-patent trolls. The plan leaves open some of the details to the National Advisory Council on Innovation and Entrepreneurship. Hopefully, they recognize that merely pumping up patenting and “tech transfer offices” is not really about commercialization. In fact, a better way to encourage commercialization might be to make federally funded (i.e., taxpayer-funded) university research public domain, rather than patented. That would actually encourage more usage in industry.

Either way, there’s a lot of good stuff in the bill, and this time… they’ve even put out a snazzy infographic to go with the bill. How can it not pass after that?

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Comments on “Third Time's A Charm? Startup Act 3.0 Introduced… This Time With An Infographic”

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Ed C. says:

Not so simple

No one should argue that startups aren’t important to the economy. The problem however isn’t why we can’t attract foreigners to create them, it’s why can’t we attract Americans to create them? Well, watching one startup after another being gunned down in unjust patent and copyright suits doesn’t exactly inspire other would be entrepreneurs to take to the skies. Of course, that’s above and beyond the ridiculous tax code and other selectively enforced regulations favoring established companies with the capital clout to buy such favors. Like they pointed out, the US is not friendly towards startups.

As for the lack of graduates, seeing others in these fields getting their jobs off-shored doesn’t exactly inspire other would be specialist to take on student debt to enter these fields when they don’t see a long term ROI. Yet, in spite of this, we have too many unemployed graduates in these fields. That doesn’t add up at all. I’ve heard some blame the universities for not adequately preparing their students, but then, if that’s the case, how would bring foreign students into the same failing education system make the situation any better? Others say it’s because students these days aren’t motivated. Sure, I’ve seen many uninspired slackers in my college days, but there was NO shortage of smart and driven graduates in these fields either.

I have no problem with attracting the best and brightest into the STEM fields or creating startup, regardless of where they’re from, but luring starry eyed foreigners into the toxic system we have right now is, at best, a band-aid solution that does nothing to fix the chronic problems crippling this county.

Anonymous Coward says:

But how many Startups have been sued out of existence before even getting their feet off the ground due to bad patent and copyright law that has trolls ready to pounce on anything new that comes along? I think those laws should be fixed first. It may eliminate the need for any new laws.

And why are we interested in putting foreigners to work when we don’t even have enough jobs for our own?

Anonymous Coward says:

Without fixing the exclusion tools given to legacy players there will be no startup revolution and that means no jobs either.

Patents, copyright and to a certain degree trademarks are tools to freeze markets in place, allowing the legacy players to stay comfy without internal challenges. While in other parts of the world others have to actually work hard to get the rewards.

Who do you think will be more capable of facing difficult times, the guys who never face a challenge or the ones brutally exposed to free markets?

shane (profile) says:

What About Promotion and Training?

I get so tired of the pretense that we are short on people who are smart enough to do anything. We do not need to be encouraging people to COME here, and we really don’t NEED to do a lot of encouragement to keep people from leaving. What we NEED is for people to be allowed to learn to do things on the job. We need businesses that are not structured specifically to benefit only those at the top at the expense of all of the employees.

“We can’t find anyone to do this job!”

Train someone. d’uh? They’re not going to all up and leave the country. That’s nonsense.


Re: Re: What About Promotion and Training?

The proposed solutions to this alleged “problem” will likely not address any of the real problems. In all likelihood, they will just be a gift to large corporations. The end result will be more destruction of the US workforce and further discouragement of Americans to go into those fields.

Forget about “importing intelligent people”.

Cultivate what we have here already.

The US not startup friendly? Just who are you trying to kid? The US is a right of center country with one party that can’t wait to reinstate the Guilded Age.

Robber Baron wannabes don’t really need any more handouts.

shane (profile) says:

Re: Re: What About Promotion and Training?

There’s no such thing as “job creation”. Think about what you’re saying. The place where there’s not enough work to do is called “paradise”.

People with corporate interests have managed to use the government to put pretty much everything on the face of this earth under “ownership”. IP being owned is more or less the main topic of this blog, but land is also increasingly once again under the ownership of a tiny minority of people, and specifically any and all land that is useful for industry.

This oligopoly on the means of production (not to sound too overtly communist, because I am not, but…) is then used to shut people out of the economy unless they work for those who own it all. Yes, I am aware it is not ALL owned. I am also aware of the strategic advantage a small minority have though having come to own much of the most important things.

These people do not create jobs. They limit access and then drive down wages by refusing to ALLOW people to work.

We’ve had unemployment now in excess of 8% for how many years?

I sure wish folks would open their eyes and get mad at the right people. A good solid kick in the tooshey and these folks would fire up the old economy in a heartbeat. I’m not even talking about the kind of sustained pressure it would take for real reform. I’m just talking about taking the piss from the idiots STILL whining that the rich people who killed the economy to begin with need tax relief, and here the corporations are sitting on record levels of liquid cash, and the Fed has pumped so many bonds into the system that banks could loan money to bums for collecting bottle caps and still have money left over to lend to legitimate businesses.

That last was a touch of hyperbole, but only a touch.

Ed C. says:

Re: What About Promotion and Training?

Sadly, there are good reasons why many companies don’t train employees. Why bother putting in the investment when these new hires are going to take their new skills and hop over to a better position in 6-12 months? Companies don’t see the ROI. Sure, some do, and put up with attrition as a part of their business. I know people who worked in retail, call centers, and insurance. Turnover in these sectors is horrible.

Of course, this problem isn’t new, but the solution has been long forgotten–company loyalty. Loyalty is a two-way street, if they want employees to be loyal to them, they also have to me loyal to the employees. First, don’t give employees a reason to leave. Basically, treat them like people, not cattle or cogs in an industrial machine. Of course, that would require management to care about employees and their work environment rather than just themselves or the quarterlies. Companies also need to give employees good reasons to stay, especially the best ones. This isn’t as simple as keeping the coffee machine working and filled, or even firing an abusive manager who creates a toxic work environment. Giving positive incentives can cost money, and many companies just don’t want to spend the money to retain good employees. Instead, they seem to be more concerned about retaining their big investors than their top talent. They see them as bottom-line expenses to be minimized and the only incentive needed is the next paycheck.

john80224 (profile) says:

Has potential

My greater fear comes from the H-1b as you’ve mentioned. All in all, the start up act idea is among the better I’ve seen on the skilled immigration front. My only concern is how easily companies have been able to game the overall skill-immigration suite. I could very easily see Google laying off 1000 workers, half of whom make it to work as the “token citizens” in one of many micro-consultancies spawned by this bill that are really nothing more than visa-dependent outsourcer–possibly offshorer.

While I’m uncomfortable with the idea of government trying to determine what companies are more acceptable, I’m even more leery of letting yet another import program run unchecked.

Joe Blow says:

h-1b shills

The cheap labor shills are out in full force. They know it’s a hard sell trying to convince Americans to admit slave labor from the third world in the midst of high unemployment but this is how they make their living. Let’s examine some facts. This year the U.S. imported 85,000 foreign workers on h-1b visa’s during a period of time WHEN THE ENTIRE AMERICAN ECONOMY created 200,000 jobs. Since we need to create 125,000 jobs per month simply to keep up with population growth, it is not difficult to figure out why THERE ARE NO JOBS FOR AMERICANS. 2/3 of all jobs during the last four years have gone to immigrants (both legal and illegal).

Also, let’s dump the ridiculous “immigrant job creator” argument. No one disputes the fact that immigrants create jobs but there is a huge distinction between immigration and the h-1b visa. There have been ZERO jobs created by the h-1b slave visa because one has to be sponsored by a company to even get one of them. The immigrant job creators that the author is talking about usually came to the U.S. under the age of ten (think yahoo, google etc.). Enough lies. I would respect you traitors just a little more if you came out and told the truth. “We want h-1b workers because they will accept slave wages and if they complain, we’ll simply ship them back to the third world”.

That Anonymous Coward (profile) says:

One wonders if they are just trying to get more people into the debt bubble of higher education.
It is hard to run a startup when your being hounded on the phone to repay your student debt.

Much of America is blanketed in commercials for “technical” training that is supposed to get them a good paying job. These mostly seem to be focused on “assistant” style jobs or security guard with a glorified title. Meanwhile it seems that Americans aren’t seen as people who can innovate or create anything, we need people to come here and do the hard things for us. We are being groomed to be a country of just “workforce” and waiting for someone else to create the new thing for us to work at and create value for investors.

Anonymous Coward says:

Misleading info-graphic

The ‘degrees’ shortfall section of the info-graphic is misleading. It compares “degrees” to “advanced degrees”. I suspect that comparing apples to apples the number is much closer. I am also guessing this is not by accident. I think most STEM companies want to encourage an oversupply of advanced degrees so they can fill their degree spots for the same money.

shane (profile) says:

Re: Misleading info-graphic

The purpose of advanced degrees is to limit, not multiply, the number of people “qualified” for certain jobs. This is another part of the problem of listening to the wealthy when they tell you what we all “need”.

Again, if they really NEEDED advanced degree holders, they would pay for them. If education was too expensive, they would train in house.

What they NEED is cheap labor. There is nothing that can be done in this country that cannot be done cheaper in India or China. The reason is not because their people are willing to work harder for less money, although that is a true statement. They are. But the reason there are these labor hell holes is because of the exchange rates.

The only people they really need or want here are people to make their beds, wash their little toosheys, and install their media room electronics. Everything else can be done cheaper in terms of dollars elsewhere.

In reality, it costs as much or more in resources and man hours to do thins in China, and then you get to use a ton of fuel oil to get the stuff shipped here.


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