As Policymakers Turn the Heat up on Tech Policy, Startups Need a Seat at the Table
In a new Medium post, Engine announced the launch of our Startup Agenda 2021, which outlines the policy priorities of the U.S. startup community. The Startup Agenda 2021 covers a range of policy issues that include capital access, connectivity, intellectual property, privacy, and more. As we explain in our post below, there are startups in every state and congressional district across the country, and their perspective is especially critical if policymakers hope to craft rules and regulations that boost innovation and competition.
It's a new year, a new Congress, and a new administration, but the importance of supporting the U.S. startup ecosystem remains unchanged. Across the federal government, policymakers make a wide range of decisions that impact the ability for small, tech-enabled new companies to innovate and grow, especially during an economic downturn. That’s why Engine—a nonprofit that works with thousands of startups across the country to advocate for pro-startup policies—is releasing our Startup Agenda 2021 to help policymakers understand the policy issues that are critical to entrepreneurs.
Most pressing is economic recovery efforts in the wake of the ongoing pandemic. Startups already face unique challenges in the best economic conditions, and the pandemic has only created more financial uncertainty for most startups. Since early-stage companies are key drivers of job growth and a leading source of future paychecks in America, ensuring that the startup ecosystem has the support it needs to weather the current economic downturn should be a top priority for policymakers. When Engine conducted a survey of startups in our network late last year, 61 percent of respondents said the pandemic relief they received was not enough to support their business operations and that they needed more targeted relief—such as additional assistance beyond the Paycheck Protection Program, a dedicated startup fund, and improved tax benefits like an angel investor tax credit. While the last session of Congress and the early days of the Biden administration have prioritized relief for Americans and small businesses affected by the pandemic, policymakers must heed the specific needs and concerns of the startup community in order to provide these companies with the assistance they need to survive and create jobs and economic growth in the future.
Outside of the immediate issue of economic relief, the perspective of the startup community is a crucial voice in what can be the cacophonous chorus of current technology policy debates. We regularly see policymakers eager to craft new rules around concerns about the largest technology companies. From competition, to intellectual property to privacy—and everything in between—reactionary policymaking without considering the impact policy changes will have on small and new members of the vast U.S. technology industry will only make it harder for startups to attract funding, launch, and compete.
Take, for instance, the current debate over Section 230, a bedrock Internet law that provides Internet companies of all sizes with the liability limitations needed to host and moderate user content. While the law has been a scapegoat for policymakers unhappy about online content for years, the conversation has gotten even more contentious in recent weeks, as Democrats fault large social media companies for failing to remove harmful content and Republicans decry what they perceive to be a bias against conservative voices online. While most of the debate around Section 230 entirely misunderstands the legal and technical realities of free expression and content moderation online, it also dangerously boils the issue down to a handful of large companies. In reality, every company that hosts user-generated content—websites with comment sections, photo-sharing services, messaging apps, and more—relies on Section 230. And it’s the startups that will be least equipped to handle the unwieldy costs of litigation if Section 230’s liability limitations are removed or narrowed. Changing the law in response to the content moderation decision of one company will have widespread impacts on the Internet ecosystem as a whole.
Patent policy is another area where the startup perspective is especially valuable but unfortunately often misunderstood. Patent quality is essential to innovative startups—high-quality patents can be a valuable asset, while low-quality patents routinely stand in the way of innovation. Indeed, low-quality patents are often weaponized against startups, with so-called “patent trolls” or industry incumbents using weak patent claims to threaten emerging companies. Policymakers should not forget that many startups, innovators, and entrepreneurs only interact with the patent system when they are accused of infringing a low-quality patent. And those voices must have a seat at the table. Startups who have experienced abusive litigation are an essential part of the equation and policymakers should factor their perspectives into quality-driven decisionmaking.
And policymakers should think about the talent needs of American startups and the technology sector at large as we move into 2021. Ensuring that startups have access to skilled workers is critical for startup success. This means continuing to support STEM programs across all levels of education, bolstering the high-skilled immigration visa program to fill talent gaps in the technology industry, and looking at crafting a startup visa program to welcome talented entrepreneurs and job creators from across the globe. America’s startup ecosystem can thrive and grow with policies in place that nurture and welcome innovative talent.
Policymakers must look beyond the largest players in the technology sector and realize that their actions, even those in the name of promoting competition, can have a harmful effect on the startup community. Only by seeking out and listening to entrepreneurs will policymakers be able to craft policies that support long-term economic success and embolden the U.S. economy. And, after an especially challenging 2020, the startup community is eager to engage with policymakers further on important policy issues affecting the technology sector. Engine hopes that our Startup Agenda 2021 can serve as a jumping off point for policymakers who are eager to hear the startup community’s perspective on critical technology policy issues.
On the Horizon.
The Cato Institute is holding a virtual discussion at 4 p.m. ET this afternoon on the future of Section 230. The event will feature Engine Executive Director Kate Tummarello.
Axios is holding a virtual event at 12:30 p.m. ET tomorrow to discuss the social impact of data, as well as how data can be used to address equity concerns across the U.S.
