More often than not, the National Venture Capital Association finds itself playing defense on the public policy front. In this regard, we are regularly put in the position to advocate against ill-conceived proposals that threaten to harm entrepreneurship and innovation in the United States.
Every day we strive to stop legislators, regulators and standard setters from making policy choices that are problematic to the venture capital economic growth engine. And while there is no shortage of troubling policies to be addressed this year, there also exists a set of policies that the NVCA is very much for as it relates to maintaining U.S. competitiveness. Here, we get to play offense, and the opportunities abound for the venture capital community to partner with the government in the name of progress and innovation.
As the global economic leader, our position has always been challenged by countries nipping at our heels. These threats are becoming more real as several factors are converging to create a viable scenario in which our competitive position could erode over the next decade. Discretionary dollars available for basic research are limited as other national priorities, such as the war in Iraq and social security reform, take precedence. On the education front, foreign doctoral students matriculating in the U.S. are either being sent home or are choosing to return post graduation because visas are not readily available. At grade levels, U.S. schoolchildren continue to be less interested in math and sciences. While today these issues may appear less urgent than others, ignoring them will produce dire consequences come 2020 when we will face a drought of human capital and, subsequently, a void of innovation on our own soil.
We can be aggressive on several fronts to protect our global position.
Jump Start Basic R&D
Our leadership in industries such as computers and telecommunications can be attributed to decisions made 30 years ago when the government poured precious federal dollars into basic research and development in these areas. That funding not only helped to jump start the research process, but it also attracted talent to these sectors, creating exponential value. The recent doubling in the National Institute of Health budget has resulted in similar advances. Yet basic R&D funding is a discretionary budget item and government attention to this area has been waning. We must fight for every dollar.
Help Small Businesses
The most successful U.S. companies-the largest creators of economic value-started small. And while venture capital plays a critical role in the funding and nurturing of these emerging companies, the industry cannot fully support every startup worthy of financial backing. Yet, together with the government, we can cover a great deal of ground. Federal programs, such as the Small Business Investment Company initiative, which fund industry sectors and geographical regions outside the traditional venture capital arena, are worthy of support. The continuation of the Small Business Innovative Research grants to young companies is also critical. Even those businesses that receive venture capital must be considered for these monies as they are equally as deserving of federal dollars and, in many cases, can bring life-saving technologies to market faster with these grants.
Retain Best & Brightest
The outsourcing of high-tech U.S. jobs is a reflection of a deeper rooted problem: We are not developing enough leaders in math, science and engineering, and those that come to this country to be educated in these areas are now leaving in droves. The latter issue comes down, in large part, to immigration reform. The government understands the problem-recently instituting a stopgap measure allowing 20,000 more graduate students to apply for H-1b Visas when the 2005 cap was already reached in October of 2004. This issue will only become more prevalent as the technology community rebounds from the recession and the demand for a skilled workforce increases. In an era when we must be highly vigilant about whom we let into our country, we must be careful not to close our doors to honorable, leading thinkers who can innovate here in the U.S.
We must continue to feed our industry with new ideas, fresh talent and small companies that will grow and contribute to the U.S. economic engine. Just as our economy will wane without healthy venture investment, venture capital, in turn, would wither without government support of the pro-active programs that feed us. The game is ours to lose.
Mark Heesen is President of the National Venture Capital Association. He may be reached at firstname.lastname@example.org.