Startups’ Short Term To-Do List for Biden Administration
TLDR: As we round out the second week of the Biden administration, the president is continuing to chart out the country’s long-term economic recovery from the pandemic. While President Joe Biden has already taken a number of positive early steps—including prioritizing vaccination efforts, rescinding harmful immigration orders issued by the previous administration, and advancing racial equity efforts—it is integral that the administration devote time during its first 100 days in office to support and strengthen America’s startup ecosystem across a range of policy areas.
What’s Happening This Week: While the White House lays out its priorities for the administration’s first 100 days in office, policymakers and federal officials should continue working to provide additional relief to the startup community. America’s startups are key drivers of job growth, putting millions to work in technology-related positions every year. But more is needed from the federal government to boost these startups and ensure that they are positioned to create long-term jobs once the pandemic has ended. Startup-centric support should extend beyond Paycheck Protection Program (PPP) loans and touch upon all facets of the startup ecosystem, including talent, intellectual property, and privacy.
Why it Matters to Startups: There are a number of steps that the administration can take in its first 100 days to support the startup ecosystem—particularly early-stage companies that have been affected by the economic uncertainty caused by the pandemic. Any pro-innovation policies that the administration pursues now will impact startup growth and success for years to come, so it’s critical that the White House works to strengthen and support the entrepreneurial community in the short term.
While the Biden administration has already rolled back some of the previous administration’s most harmful efforts to curb legal immigration—including for high-skilled workers under the H-1B program—there are still steps to be taken to ensure startups don’t continue to face talent shortages when trying to grow. With over half of America’s $1 billion startups founded at least in part by immigrants, welcoming skilled talent to the U.S. is integral for America’s economic recovery. The Biden administration should make every effort to boost immigrant entrepreneurship and roll back the previous administration’s efforts to limit legal avenues for immigration, including by reversing former President Trump’s public charge rule. President Biden should also rescind the Trump administration’s proposed removal of the International Entrepreneur Rule and begin to immediately implement the Obama-era effort so foreign entrepreneurs can build their startups in the U.S. and create American jobs.
But job creation isn’t the only problem. Millions of Americans across a variety of industries are out of work, and many of these industries could take years to rebound. At the same time, with stay-at-home orders and remote work and school, Americans are becoming more and more technology-dependent, and many current and new job openings require some STEM training that unemployed workers might not have. The Biden administration should work to create a national strategy to reskill workers and identify needed tools and programs to develop a more technology-enabled workforce—steps that are critical in ensuring that currently unemployed Americans can get back to work. Not only could enabling more STEM training ultimately result in new startup creation, but it also could help alleviate America’s STEM talent gap that hinders the growth of technology companies.
Federal efforts to strengthen the U.S. workforce and entrepreneurial activity should also address the systemic roadblocks that many underrepresented entrepreneurs face when launching their own businesses. While the Biden administration is making early efforts to address racial inequity across the U.S., more work is needed. Among other things, the White House should work to ensure that underrepresented founders have equitable access to capital and the resources needed to build and grow their ventures. And the Biden administration should take steps across multiple agencies—including the Small Business Administration—to identify barriers to capital access, innovation, and startup formation faced by underrepresented founders. It’s critical that the administration work to identify discrimination in federal lending, grant making, and contracting to ensure that underrepresented founders are getting equitable access. Ensuring underrepresented founders have the tools and resources they need to succeed will increase American innovation and embolden future generations of U.S. entrepreneurs.
To ensure that U.S. startups can effectively compete on a global scale, the Biden administration must also address pressing barriers to cross-border data flows. The Commerce Department should work quickly to restore certainty for startups that have users in Europe by renegotiating a key transatlantic data transfer deal. In 2020, the European Union’s highest court struck down Privacy Shield, an agreement that let U.S. companies store and process data from EU users in the U.S. The court—which cited concerns stemming from U.S. government surveillance and government access to data held by U.S. companies—also opened up other legal mechanisms from transatlantic data transfers to case-by-case scrutiny. These developments created uncertainty for smaller companies that currently, or plan to, operate in Europe, and the Biden administration should quickly work to negotiate a new agreement to take the place of Privacy Shield.
As the Biden administration continues to nominate officials to lead federal agencies which play a role in technology and small business policy, it should be guided by a commitment to supporting the nation’s startups. For example, as Engine outlined in a letter to President Biden and Vice President Harris, the ways in which startups interact with the patent system should guide the selection of the next USPTO director. The administration should choose someone with a demonstrated commitment to quality and balance, someone willing to engage diverse stakeholders, and someone that embodies the diversity we want to see in the nation’s innovation ecosystems.
The Biden administration should also move quickly to nominate someone to fill the Democratic vacancy at the Federal Communications Commission (FCC). Currently, the FCC has two Democratic commissioners and two Republican commissioners, which could lead to a deadlock and keep the agency from advancing key connectivity proposals, many of which are especially relevant during the ongoing pandemic. As a coalition of public interest groups wrote in a letter to the administration last week, “As infection rates rise, broadband remains for millions the only safe way to attend school, work remotely, communicate with loved ones, or visit a doctor.” An FCC with a Democratic majority may also work to reinstate strong net neutrality protections. Net neutrality protections are especially relevant to startups, which would not be able to compete if Internet service providers could charge websites and services for better, faster access to users.
Over the coming weeks and months, the Biden administration will have countless opportunities to signal its support for the U.S. startup ecosystem. But with the pandemic continuing to wreak havoc on the entrepreneurial community—and startups looking to policymakers and the White House to offer needed support—we hope the Biden administration will use its first 100 days in office to provide relief to startups, identify and alleviate barriers for underrepresented founders, and continue to advocate on behalf of the country’s hubs of innovation.
On the Horizon.
The Information is holding a two-day event, this Wednesday and Thursday, on the future of startups and lessons for next-generation disruptors.
The House Small Business Committee is holding a hearing this Thursday at 10 a.m. to discuss the “State of the Small Business Economy in the Era of COVID-19.”
