Different Perspectives on Entrepreneurship Under an Obama Administration

Lynne Kiesling

Several commentaries over the past few days have discussed the intersection of an Obama administration and entrepreneurship. One that does so directly is Bret Swanson’s opinion piece in Friday’s Wall Street Journal, which casts President-elect Obama as an entrepreneur himself. Importantly, and correctly in my opinion, Swanson highlights the emergent, bottom-up nature of his campaign support, made possible by modern communications technology. The logical question is whether he can apply insights from that success to his administration’s economic policies:

The only way a president can maximize economic growth is to unleash diffuse networks of entrepreneurs. As economist Bob Litan of the Kauffman Foundation says, “Government can’t compel growth.” …

Mr. Obama should throw away his tax-regulate-and-centralize white papers. Instead, he should follow his campaign playbook and trust the networked masses. The best way to harness their power is to undo the reins.

Earlier in the week in Forbes, Joel Kotkin invoked Richard Florida’s “creative class” category to analyze Obama’s support from “the so-called ‘creative class’ of Silicon Valley, Hollywood and the younger, go-go set in the financial world.” In some places in his analysis Kotkin widens the category of “creative” to include post-industrial technology entrepreneurs, although he does not do so consistently throughout the piece. He argues that

The biggest difference between the creative class and the old business types isn’t on cultural issues–few traditional CEOs embraced the religious right’s agenda–but on environmental policy. Executives at places like Apple, as well as opportunistic investment firms, have become enthusiastic jihadis in the war against climate change. Conveniently, their companies don’t tend to be huge energy consumers and, if they make products, do so in largely unregulated facilities in China or elsewhere in the developing world. And youthful financial firms looking for the next “bubble” could benefit hugely from mandates for more solar, wind and other alternative fuels.

Finally, entrepreneur and maverick-in-many-ways Mark Cuban criticizes President-elect Obama for not having an entrepreneur on his economic advisory team; he advises President-elect Obama to talk to people who do start-ups:

Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business.

Without it, the rules of unintended consequences of any economic policy could hit you in the mouth in ways you never expected. Things like forcing companies from being taxpayers to the underground cash economy, or forcing new hires to be independent contractors to avoid having to pay their insurance or higher matching social security amounts. Your current group has no one with 100pct of their networth on the line. I promise you that the possibility of losing it all will provide a completely different perspective than any of the “knowledge” the esteemed, learned members of his current advisory team offer.

One thought on “Different Perspectives on Entrepreneurship Under an Obama Administration

  1. I’ve been trying to understand why “the creative class” is Democratic, and I think Kotkin’s insight is spot on. Also, these startups are in many ways “post-economic”. They find their angel investor, develop a product that is often software or something on the internet (so no messy factories or other physical things to deal with), and (hope to?) cash out long before the product makes a profit.

    Thus, their goofy economic and environmental ideas don’t really ever clash with their working lives.

    And, truth be told, nobody in Silicon Valley is old enough to have ever paid pre-Reagan, confiscatory tax rates anyway. Maybe they’ll change their tune when they’re getting hit with margina tax rates over 60% (higher federal rates, increased SS taxes, etc.)

Comments are closed.