The Big Story: Startup policy priorities for 2024 and how to get involved
This week, Engine released the 2024 Startup Policy Playbook, to help give members of the startup ecosystem—startup founders and employees, investors, and support organizations—an overview of the policy conversations happening this year and how they can get involved in amplifying the startup voice.
Startup founders are busy people. They’re running businesses, managing small teams, raising funds, and doing the actual work of building new and innovative things. It’s no wonder they’re not also constantly tracking and engaging in policymaking in D.C. But their perspective should be—and is—incredibly important as policymakers consider technology, Internet, and entrepreneurship policy. Policy impacts everything from how a startup can raise money, to whether a startup can hire the talent it needs, to when a startup can expand to global markets, and everything in between. Those conversations are happening whether or not startups are at the table, and startup voices would help guide policy debates towards productive outcomes.
Engine’s Startup Policy Playbook covers the main federal policy areas impacting the startup ecosystem—artificial intelligence, capital access, connectivity, platform issues, patents, privacy, talent, tax, trade, and how to advance equity in the ecosystem—and acts as a guide on the policymaking process providing ways for startups to get involved. Read the Playbook here, and email advocacy@engine.is if you’re interested in learning more and making your voice heard in D.C.
Policy Roundup:
House passes critical tax package with R&D expensing fix and child tax credit expansion. On Wednesday, the House of Representatives overwhelmingly passed bipartisan tax legislation that would ease burdens for startups and families. The $78 billion deal addresses key issues for the startup ecosystem by returning to immediate expensing for domestic R&D expenses and temporarily expanding the Child Tax Credit. Startups have encountered higher tax bills, leading to cash crunches and even layoffs as a result of the 2017 Tax Cuts and Jobs Act change recently taking effect requiring R&D expenses to be amortized. And the burdens of childcare costs continue to limit women pursuing entrepreneurship. This package is a double win for the startup ecosystem and Congress should continue to support—ideally permanently—solutions to R&D expensing and continued investment in child care so startups don’t face a similar predicament in a few years. The bill now moves to the Senate.
H-1B rule finalized with changes to the lottery selection process. The U.S. Citizenship and Immigration Services (USCIS) announced a rule this week modernizing the H-1B selection process in a way that will benefit startups. The rule creates a more equitable ‘beneficiary-centered’ selection process under which USCIS will select registrations by unique beneficiary as opposed to by individual registration. This shift is expected to create a more even playing field for competing businesses, including startups because beneficiaries can have multiple registrations submitted on their behalf. This final rule represents just a portion of last year’s proposed rule and does not include provisions that would create clarity for foreign founders of U.S.-based startups. Engine has consistently urged policymakers to broaden pathways for immigrant founders and talent, including through H-1B visa reform and by implementing a startup visa.
Senators target Section 230 in tense hearing. On Wednesday, the Senate Judiciary Committee held a hearing with top social media executives to discuss several measures to curtail or repeal Section 230, which senators say will combat child sex abuse material (CSAM) online. Internet services already take down and make millions of reports of possible CSAM to the authorities, a tiny fraction of which are acted upon. Rather than undermining foundational Internet policy—relied on by startups and many others besides the few platforms at the hearing—which will not punish perpetrators, policymakers should pass the Invest in Child Safety Act, which would put significant resources into law enforcement to combat heinous crimes like child exploitation.
Global coalition calls for continuation of critical digital trade policy. This week, Engine joined 175 organizations from 130 countries calling on World Trade Organization members to renew their commitment to not imposing customs duties on electronic transmissions, at their 13th Ministerial Conference later this month. That practice, often referred to as the e-Commerce Moratorium, is a critical digital trade policy benefitting startups by keeping barriers to trade low. Some countries are looking to end the moratorium either as a bargaining chip for their own priorities or to enable them to collect tariffs. Letting the moratorium expire would undermine startup growth and diminish global competitiveness.
Amicus brief outlines economic contributions of DACA recipients. On Thursday, Engine joined a group of 56 businesses and organizations in filing an amicus brief in the U.S. Court of Appeals for the Fifth Circuit in support of protecting the Deferred Action for Childhood Arrivals (DACA) program. The brief showcases the critical contributions DACA recipients make to the U.S. economy, including the startup ecosystem, both as founders and startup employees, boosting innovation throughout the country. Engine has repeatedly emphasized the positive impact of immigrants, including DACA recipients, on the U.S. startup ecosystem. It's crucial for Congress to pass legislation that provides a permanent pathway for DACA recipients, including startup founders and STEM talent, to remain in the U.S.
Startup Roundup:
#StartupsEverywhere: San Juan, Puerto Rico. PilotoMail is ushering in a new age for mailroom automation and virtual mailboxes. Founder and CEO Sofia Stolberg is focused on growing her business and is on a mission to strengthen the Puerto Rican startup ecosystem. We heard from her about challenges and successes in the Puerto Rican startup ecosystem, regulatory changes that impact her company, and her goals for the future.
