Encouraging Venture Capitalism Key to Economic Growth

Dean C. Garfield photo

America's innovation ecosystem typically knows no kryptonite. With rare exception, even in times of economic peril, investment and innovation continue unabated, helping to power the nation forward. However, there are troubling signs of weakness that could signal real challenges to the nation's future fiscal stability.

Consider the following: Lost in the public reporting on record venture investing in the third quarter is less comforting and more significant data from the National Venture Capital Association that venture capitallow interest rates. What will happen to the deficit when interest rates jump, as they surely must?

Second, maintaining our innovation advantage and attractiveness for capital investment requires continued support for basic research and development. Discoveries in federal labs and universities remain the germination points for the breakthrough ideas that can be commercialized by entrepreneurs and venture investors. We should support policies that fund basic research across high-tech-based industries including life sciences, energy, and physical sciences. Programs such as the NIH grants and Small Business Innovative Research program fill the innovation pipeline and must receive robust federal support if America wants to continue to bring breakthrough technologies to market.

Third, the United States must continue to attract foreign-born scientists and entrepreneurs and must keep them here once established in this country! Continuing, through shortsighted and abusive immigration rules, to make it difficult for someone with a job to stay here is harming job-creation and the country's future. As countries like Brazil, China, and India became wealthier and more competitive, they are developing intellectual institutions and are doing their best to retain their smartest citizens. We need to invest in our human capital in a way that we used to generations ago. Foreign-born visionaries have molded our nation in the last century—Sergey Brin, Albert Einstein, and Jerry Yang are only a few with staggering contributions. Encouraging these entrepreneurs not only to study but to stay in the United States is critical to our future success.

As the president and members of Congress are well aware, job creation is imperative and foremost on voters' minds. Americans are looking for that spark that will allow us to see the exciting, groundbreaking innovation we experienced in the 1980s and '90s. If we embrace common-sense solutions to help ensure funding for innovation, sparked by reasonable tax reform, and keep foreign-born students and scientists in the United States, America will rebound strongly. The time is critical to make it a reality.

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