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11.11

New Jobs Council Report Addresses Entrepreneurship, Promises 10,000 New Engineers A Year

By John R. Platt

The United States must invest in infrastructure, accelerate entrepreneurship, increase competitiveness and focus on developing the professionals the economy will need five to 10 years from now. That's the word from President Obama's Council on Jobs and Competitiveness, which released its latest on 10 October.

The interim report — Taking Action, Building Confidence: Five Common Sense Initiatives to Boost Jobs and Competitiveness — is the second from the Job Council since it was convened in January. It can be downloaded here.

The Jobs Council is chaired by General Electric CEO Jeffrey Immelt, who said through a spokesperson "The Council has avoided politics, and focused on producing common-sense proposals that should attract broad-based support."

As the report puts it, there is no "silver bullet" for creating more jobs in this country, but the Council suggests that its proposals "can meaningfully accelerate job creation over the next five years as part of the nation's overall jobs agenda."

Investing in Infrastructure and Energy

The new report's first suggestion is that the United States invest in "cutting-edge infrastructure and energy." Much of this has to do with roads and transportation, but the report also calls for the construction of new broadband networks to reach all Americans and creating new financing mechanisms to fund new energy projects, among other things.

A large portion of the Council's energy proposals have to do with supporting the transmission of fossil fuels, in no small part to protect the jobs already present in this sector. The Council also recommends improved financing opportunities to support private investment in clean energy technologies, including solar power.

Later in the report, the Council uses the example of a new power plant that required 46 regulatory reviews before it could be built (therefore delaying jobs) as a case study in simplifying regulation and streamlining project approval.

These recommendations may not go far enough, says Mauro Togneri, past chair of the IEEE-USA Entrepreneurial Activities Committee. "A lot of the issues dealing with financing and regulations are adversely affected by all special interests and their lobbying efforts that distort the legislative process and produce decisions based on other than facts and logic," he says. "Until we correct the problem, progress will be slow."

Nurturing "High-Growth Enterprises" and Speeding Patents

According to the Jobs Council, which cites statistics from the U.S. Department of Labor, all net new jobs created in the United States in the past three decades came from companies that were less than five years old at the time the jobs were created. But the current economic climate has slowed the creation of new companies and new jobs, costing the U.S. 1.8 million potential new jobs since 2007.

The Council suggests multiple tactics on this front, the first of which is attracting highly skilled immigrants to our shores. "Highly skilled immigrants create new jobs, they don't take jobs," according to the report. Recommendations to "win the global battle for talent" include granting automatic visas to foreign students who earn STEM degrees from U.S. universities; establishing a visa program for immigrant entrepreneurs (including the H1-B visa); and at least quadrupling the number of EB-5 visas for foreign entrepreneurs.

The council also recommends Congress eliminate capital gains taxes on investments of up to $25 million in private companies and reducing taxes for a company's first three years as ways to incentivize the creation of new businesses. For companies moving out of their start-up phase, the report recommends steps to make it easier for these firms to go public.

Terry Wong, current chair of IEEE-USA's Entrepreneurial Activities Committee, suggests a few additional ways to help these small startups: "Encourage or require experimental government purchasing for new startups and provide tax credit for commercial businesses that purchase from startups," he says. Wong also recommends providing student loan holidays for a set period for young entrepreneurs starting their own companies. Regarding funding, he says "crowd-sourcing of small ventures" should be allowed, which would support not just large but also small investors.

Togneri recommends the Council also look at the environment for exports from these young companies. "As technology-driven industrial growth is largely the result of entrepreneurs, incentives and help with exporting can help. Large multinationals have the infrastructure needed to play in the global markets, but small and medium-size companies generally do not. Initiatives by organizations such as the Export-Import Bank have begun. Exports growth is a fundamental component of any long-term job recovery."

The report also embraces the recent Patent Reform Act and recommends increasing Patent Office staff, allowing expedited reviews of "in-market" patents and trying to protect young companies from the "first-to-file" rule.

While this may sound good, Togneri argues that it might not actually benefit the young companies it is trying to protect. "The patent reform dubbed the 'America Invent act' is a prime example of legislation affected by other than logic and facts," he says. "While the report describes as a positive step, many are concerned that it weakens the patent system, thus favoring multinational companies with global market presence and strength while reducing the Intellectual property assets that startups, small and medium-size technology companies rely on to attract funding. This is particularly true of fast-moving technology where the key to success is fast market capture to benefit from the short life of the technology."

Developing Talent

The report indicates that training and education are critical to solving both today's jobs crisis and the future needs of the country. One of the most important aspects of this for the engineering community is the Council's call for 10,000 new engineering graduates each year, which it says is already being supported by a private-sector initiative to increase the number of engineering internships.

These internships are just one of the Council's recommendations and actions to increase retention in college and university engineering programs. They are also establishing a "Tech Standard of Excellence Seal" to recognize schools with high retention rates and say that some of the corporations that are already increasing their internship programs will also increase their college-related charitable spending on retention programs.

High-skilled immigration is, again, key in this set of recommendations, as is increasing healthcare workforce training and training workers for advanced manufacturing, starting with a pilot program in Minnesota.

For more information on this report and related recommendations, visit the Council on Jobs and Competitiveness online at www.jobs-council.com

John R. Platt is a freelance writer and entrepreneur, as well as a frequent contributor to Today's Engineer, Scientific American, Mother Nature Network and other publications.

Comments may be submitted to todaysengineer@ieee.org.