State of Innovation

Patents and Innovation Economics

WSJ: Big Business Creates Jobs Too

According to the Wall Street Journal Article Big Business Creates Jobs Too, “ignoring the important role that big business plays in job creation is a short-sighted mistake.”  The author also states

It is actually within large companies that an entrepreneur can find, already in existence, much of what it takes to insure a venture’s success. This includes the capital required to fund startup costs, the marketing presence to create a near-instant reach to customers, and the standing required to gain trust of both vendors and customers.

While it is true that large companies innovate, on a per employee basis they are much less innovative see SBA report on point.  In addition, the reason for our economic woes are not that the government has failed implement policies that support large companies, but that it has implemented polices that inhibit technology start-ups.  Only technological innovation results in real per capita increase income.  The Wall Street Journal article is misleading at best.

Unfortunately, since 2000 we have passed a number of laws and regulations that are killing innovation in the US.  The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital.  All three of the pillars have been under attack since 2000.  Our patent laws have been weakened reducing the value of intellectual capital.  Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups.  The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation, explains these problems in more detail.

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January 8, 2010 - Posted by | -Economics, Innovation | , , , , ,

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