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America’s New Business Plan: Opportunity

A LEVEL PLAYING FIELD AND LESS RED TAPE

Policymakers should make life easier for entrepreneurs by doing away with burdensome regulations and requirements, as well as by using their influence to lift up and support people in all communities who take the risk of starting a business. This approach requires a change of mindset for policymakers at all levels and a commitment to leveling the playing field between new and established businesses. New enterprises are difficult enough to get off the ground; government shouldn’t make it more complicated.

Unfortunately, government red tape, the outsized influence of established businesses, and market concentration too often conspire to block entrepreneurs from fulfilling their dreams of starting or growing their businesses. Many entrepreneurs encounter a confusing web of existing and outdated regulations, ordinances, and permits. And unlike established business (particularly big businesses), entrepreneurs lack the means to hire teams of consultants and attorneys to navigate these complicated systems. In fact, more than 50% of entrepreneurs report having experienced difficulty navigating the paperwork required to start a business. Entrepreneurs must also increasingly compete against established firms that dominate entire industries. More than one in four independent business owners and one-third of retailers believe mergers in their industries are “creating an unfair playing field.”

Economic development policies should also be overhauled. Billions of dollars are spent annually by state and local governments to attract existing businesses to relocate to their state or city, but comparatively few dollars are spent on supporting new, homegrown businesses. Unsurprisingly, 80% of entrepreneurs believe government prioritizes large corporations over small businesses.

What can government do?