New state models for nurturing entrepreneurship emerge

Right to Start is a nonprofit, nonpartisan organization dedicated to expanding entrepreneurial opportunity through grassroots mobilization and advocacy. Founded in 2020, Right to Start currently operates in 28 states and Washington, DC.

Founder Victor Huang shared statistics highlighting the economic benefits of entrepreneurship as well as the barriers to starting a new business.

• Virtually all job growth in the economy comes from new businesses.
• New business is a leading indicator of GDP growth.
• For every 1% increase in entrepreneurial activity in a state, poverty decreases by 2%.
• The rate of new business creation in America has fallen by nearly half over 40 years.
• 81% of entrepreneurs say their government favors big businesses over them, and 69% say their government doesn’t care about them.
• Starting a business in the United States is much more expensive than in the UK, China, Australia, Brazil, Canada, Sweden, India, South Korea or France.
• 62% of Americans have a dream business in mind. 41% would start their own business within six months if they could. However, less than 2% actually start a business.

“The voices of everyday entrepreneurs are ignored in American policymaking,” Huang explains. “The people who work the hardest have the least amount of time, energy, or money to engage with the system and make their voices heard. So we have to do something to lift their voices and ensure that the voices of everyday entrepreneurs are actually heard in American policymaking…Everyone deserves a level playing field when it comes to being an entrepreneur and starting and building a company.”

Jason Grill, Right to Start’s chief government relations officer, shared survey data showing that policies that make it easier to start and grow new businesses have broad bipartisan support among voters. “These are issues that unite politicians, they are issues that unite citizens,” Grill said. Grill outlined the policy priorities Right to Start will advocate for in state legislatures across the country as a package of reforms based on a classic Right to Start Act. The creation of an Office of Entrepreneurship is one of the first steps Right to Start recommends. These agencies serve as dedicated liaisons for entrepreneurs, coordinating policies such as reducing bureaucracy, streamlining government processes, expanding access to government contracts, and tracking data on startups.

“They live and breathe entrepreneurial issues, startup issues in their state,” Grill said of the offices. He cited several states that have approved parts of bipartisan “right to start a business” bills, saying more than 40 bills have been introduced in 15 states, with more expected.

Grill summarized his policy recommendations on the “right to start” as follows:

• 5% to Start: Dedicate a small portion of current funding (5% of government contracts, workforce development funds, and economic development funds) to new entrepreneurs and startups.
• Zero Barriers: Reduce or eliminate registration costs and fees for new businesses.
• Reduce or eliminate occupational licensing burdens and permits for businesses.
• It offers tax breaks to start-ups during the crucial first five years of existence.

Pennsylvania’s Office of Change and Opportunity Launches

Steve DeTore, executive deputy secretary for policy and planning for Pennsylvania Governor Josh Shapiro, briefed attendees on progress in promoting entrepreneurship in the state.

When Governor Shapiro takes office in 2023, he issued an executive order creating the Office of Change and Opportunity. The office is designed as a “one-stop shop” to “move government at the speed of business.” The office will be tasked with accomplishing a number of goals and implementing economic development projects and programs, including:

• Eliminates complicated procedures.
• Encourage out-of-state businesses to expand within the state.
• It will expedite permit reviews and approvals for major incentive programs, rather than companies having to rely on multiple agencies to obtain permits, approvals and funding.
• Launching the PA SITES program to help more sites become “shovel ready” to attract and retain more businesses.
• It provides funding for the “Main Street Matters” program, which supports entrepreneurs, small businesses and commercial districts.
• Create and launch the Pennsylvania Regional Economic Competitiveness Challenge.

“The Shapiro Administration’s new economic development strategy from a startup and entrepreneur perspective aims to increase the total number of startups in high-growth industries by 1,100 over the next decade, which will increase the percentage of startups in these industries from 6.6% to 10%,” DeTore explained. “This strategy will make Pennsylvania more competitive and prosperous; it will enable innovators to become entrepreneurs and new discoveries to help people and businesses succeed.”

Nevada Entrepreneurship Agency Identifies Opportunity

With bipartisan support, Nevada adopted a Right to Start a Business law in July 2023, advancing one of Governor Lombard’s top priorities. “Governor Lombard was clear in her State of the State address in January 2023 that Nevada should be the most entrepreneur-friendly state in the country, so passing this bill was right in line with the new Administration’s priorities,” said Kirsten Heise, Strategic Program Director for the Nevada Governor’s Office of Economic Development (GOED).

Nevada’s Right to Start law, the first of its kind in the nation, established a dedicated Office of Entrepreneurship within GOED, led by Director Kyeema Peart. The new office’s mission aligns with GOED’s goals under Governor Lombard’s three-year plan to position Nevada as a “vibrant, innovative and connected state” and diversify the state’s economy.

Peart explained how the Office of Entrepreneurship (OE) works with a variety of other programs and agencies designed to support economic growth. As in Pennsylvania, a primary focus is cutting red tape. Provisions in Governor Lombard’s executive order “create an opportunity to dig a little deeper into the business licensing, occupational licensing and other regulatory frameworks that impede business formation and growth,” Peart said. Peart’s department is also focused on data collection so the state can get an accurate picture of small business activity.

Statewide community engagement is integral to OE’s three-phase approach, which includes community consultation, data assessment, and in-depth community surveys. The approach is designed to ensure opportunities reach historically underserved communities, including African Americans, Hispanic Americans, veterans, women, tribal members, immigrants, and seniors. “The Legislature wanted to ensure that all of these operators can be effective in historically underserved communities,” Peart explained. “So we’re emphasizing the review of some of these underrepresented groups… We’re also expanding to people who may be able to take advantage of the resources and assets available to them, but may not know about them.” how To access it:

OE’s efforts are aimed at ensuring that all specific stakeholder groups – entrepreneurs, investors, established businesses, government agencies and the university system – are “active contributing players in a healthy Nevada entrepreneurial ecosystem,” Peart summarized.

Through the consultation process, rural and urban participants identified common issues that needed to be addressed at the community level to grow and sustain new businesses.

• Further support from elected officials, senior advocates and the community.
• Reduce the burden of government portals, licenses and fees.
• More trackable information, education and resource sharing.
• Strengthening infrastructure and community supports, including housing and child care.
• Making grants and loans more available to small businesses.

NGA is pleased to feature Governor Shapiro and Governor Lombardo’s efforts as a model for supporting entrepreneurs. If your state or region is interested in sharing best practices or following-up events or projects on entrepreneurship as an economic development strategy, please reach out to us. Meanwhile, Right to Start reiterates our continued support for state efforts in this area.

NGA Contact: Sally Rude, Jack Porter

Starting rights: Jason Grill, Victor Huang