Yesterday I wrote about the distinction between empowering innovation that creates jobs and economic growth and efficiency innovation which improves profits but destroys jobs and does little for growth. At the end of the post I wrote a little about what we might do to encourage more empowering innovation and today I’m going to add some more to that.
For better of for worse most of the actions fall to government (some of these I wrote about yesterday):
- Use the tax code to incentivise investment in long term risky companies (i.e. the sort that develop empowering innovations).
- tax breaks for individuals who invest in qualifying startups and hold those investments for a minimum time (like the EIS scheme in the UK)
- reduce capital gains tax for assets held for a long period
- give capital gains tax breaks to entrepreneurs
- Support the venture capital system with direct investmemt into funds
- Maintain high quality infrastructure, particularly high speed broadband and wireless
- Update the patent system to no longer impede entrepreneurs
- Teach coding and entrepreneurship more widely in schools and universities
- Resist pressure from large corporates seeking to preserve the old way of doing things in areas like copyright and privacy
- Encourage government procurement from SMEs
- Allow startups employees to trade employment protection for equity
- Give open access to government data
- Publicise startup successes, and the successes of pro-innovation schemes
- Encourage the development of startup hubs
- Make it easier for ambitious entrepreneurs to get visas to work in your country
- Make it easier for qualifying startups to get visas for their startups
- Publicly encourage entrepreneurs
- Make helping startups a central tenet of government policy generally
For those of us outside government the important thing is to realise the importance of empowering innovation and make it happen. Many of you are already doing this. The other thing is to encourage ecosystem development by being as helpful as possible to entrepreneurs and others looking to make or encourage empowering innovations. This isn’t a zero sum game.