October is National Women’s Small Business Month, a time to acknowledge and encourage the talented female entrepreneurs who are driving growth and innovation in the American economy.
Engine's Statement on Trump's Decision to End DACA
Engine Statement on President Trump’s ‘Buy American, Hire American’ Executive Order
Yesterday, President Donald Trump signed an executive order reiterating the Administration’s policy to buy American and hire American. The ‘Hire American’ side of the Executive Order directs federal agencies to evaluate the various programs that allow foreign workers to enter the United States, with a particular focus on the H-1B visa program.
Engine Statement on Ninth Circuit Ruling on Immigration Ban
Today, the U.S. Court of Appeals for the 9th Circuit ruled against President Trump’s executive order banning the citizens of seven countries and refugees from entering the U.S., maintaining a lower court’s freeze on the order. As a result, immigrants and refugees who were previously barred from the country under Trump’s EO can continue to enter the U.S.
More than 200 Startups & Investors Push Back Against Immigration Executive Orders
Today, more than 200 startups and investors from across the country joined Engine and the National Venture Capital Association (NVCA) in sending a letter to President Trump opposing his Executive Orders on immigration—both the immigration ban EO signed on January 27th and the draft EO that would roll back existing worker visa and parole programs.
Engine Statement on Immigration Executive Order
The startup community is deeply troubled by the Administration’s decision to limit the movement of immigrants—including lawful visa holders—into the U.S. on the basis of religion and country of origin—a move that came with no forewarning and has engendered uncertainty for many people, including employees at America’s startups. The executive order is both morally and economically misguided, and sets a dangerous precedent that signals to the rest of the world that America is no longer open for innovation.
Our Take on the Final International Entrepreneur Rule
On Friday, the White House released an advance copy of its final International Entrepreneur Rule, which will allow qualifying foreign entrepreneurs to build their startups in the U.S. The final rule will be published in the Federal Register today and will become effective on July 17, 2017.
2016 Year in Review: Talent + Diversity
Conversations about talent and diversity were once again at the forefront in 2016, with a heated Presidential election, bold actions by the Obama Administration around immigration and computer science education, and efforts by major tech players to diversify their workforces. The tech community and policymakers continued to search for solutions, and while 2016 didn’t unearth a silver bullet for fixing tech’s workforce and diversity issues, significant progress was made.
Startup News Digest 12/23/16
A Big Year for Startup Policy in 2016. The Startup News Digest will be taking a hiatus over the holidays, but you can still get your startup policy fill on our blog. Yesterday, we began publishing Year in Review posts on some of 2016’s most notable debates in tech and entrepreneurship. Watch this space for reports on capital access, intellectual property, net neutrality, emerging technologies, and more over the coming days. Thanks for all of your support in 2016, and we’ll catch you in the new year!
Training the Next Generation of Tech Talent
Computer Science (CS) Education Week is an annual initiative that aims to get kids excited about computer science and inspire interest in technology careers—an effort that is more important now than ever. It’s no secret that demand for computer science professionals has skyrocketed in recent years. Virtually every industry has an increasing need for STEM workers, especially those with a background in computer science and coding. And yet, there is a growing gap in the availability of these skilled individuals. There are currently over 500,000 open computing jobs nationwide, but last year, only 42,969 computer science students graduated into the workforce. In fact, there are fewer students graduating with degrees in computer science today than there were ten years ago. Our workforce is woefully unprepared to meet the growing demand for IT professionals.
Engine Applauds International Entrepreneur Rule, Recommends Additional Improvements
At Engine, we’ve seen firsthand some of the extraordinary contributions that immigrant entrepreneurs have made to the startup economy. One-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. Moreover, immigrant entrepreneurs started, in whole or in part, some of the most important technology companies of our time, including Google, Intel, Yahoo!, eBay, and WhatsApp. In fact, the United States was home to almost 2.9 million foreign entrepreneurs who generated $65.5 billion in business income in 2014.
Engine Statement on USCIS’ Proposed International Entrepreneur Rule
The startup community has been fighting for years for reforms that would allow the world’s brightest innovators to start and scale their companies here in the United States. Engine welcomes the Department of Homeland Security’s International Entrepreneur proposal, which will allow talented foreign-born entrepreneurs to build their companies in the U.S., in turn creating jobs and driving economic transformation. Today’s announcement is an important step towards making our immigration system work for the 21st century innovation economy.
Republicans Release Their Party Platform
As the Republican National Convention kicked off this Monday, the GOP also released the final draft of their party’s platform. The platform, which was written with input from the party’s base sourced via www.platform.gop, included generous mentions of issues important to the startup community.
Tech Companies Take Stock of the Brexit
As the dust settles from last week’s stunning Brexit vote, the broader tech community, which staunchly supported remaining a part of the European Union (EU), is taking stock of the potential repercussions of the decision. While the United Kingdom (UK) and the EU still have to negotiate the exact terms of the deal (assuming the British can cobble together a new government committed to the Brexit), uncertainty surrounds several key issues important to the tech community.
Veterans Sign Letter Supporting Greater Entrepreneur Training
Over the past year, Engine has teamed up with veterans working in the tech industry and several Veterans Service Organizations to understand how government can better support transitioning servicemembers interested in careers in technology. Whether as entrepreneurs, managers, or engineers, it’s clear that given the proper training and support, veterans have the talent, resolve, and discipline to thrive in the tech workforce.
It's Time We Empower Veterans with Entrepreneurial Skills
By the end of the year, over one million veterans will have transitioned from the military to civilian life since 2011, settling into communities across the country and charting new career paths for themselves. For some veterans, pursuing the educational opportunities covered by the GI Bill will be their logical next step.
What's Missing in the Conversation about Immigration Reform
Since the earliest days of this election cycle, the 2016 presidential candidates have been sparring about immigrants and immigration reform. Both Democrats and Republicans agree that the country’s immigration policies are among the most important issues the next administration will need to tackle (and hopefully with the support of Congress). Yet, as enormous and all-encompassing as our country’s immigration problems are, only a narrow portion of them have been discussed by the candidates.
Diversifying Tech Caucus Hosts First 2016 Briefing on African Americans in Tech
The Diversifying Tech Caucus, the bipartisan, bicameral caucus that Engine helped establish last year, held its first briefing of 2016 earlier this week. The Capitol room was packed with over 70 congressional staffers who heard from a panel of tech workers, leaders, and entrepreneurs about African American participation in the tech workforce. The numbers aren't great, with African Americans making up just 6 percent of STEM workers, a dismal 2 percent of employees at major Silicon Valley firms, and an even smaller percentage of venture-backed startups. Yet, many efforts, from private industry as well as non-profit organizations, are underway to the bolster the participation and leadership of blacks in tech.
Startup Priorities in the President’s Budget Request
On Tuesday, President Obama sent his final budget request to Congress and it amounted to a whopping $4.1 trillion. In reality, the President’s budget request is typically little more than legally mandated political theater. It’s an opportunity for Democrats and Republicans to rally their bases and duke it out over fiscal strategy and funding priorities. This year’s budget request will likely go largely unfulfilled by the Republican-led Congress. In fact, it was declared “dead on arrival” by Republican lawmakers, and, in an unprecedented move, House and Senate Budget Committee leadership have elected to forgo hearings on the request entirely.
Still, if nothing more than a wish list, the President’s budget lays the groundwork for future policies and, this year in particular, represents a roadmap for the next Administration to espouse or eschew. There are a number of proposals in the President’s request worth highlighting—policies and programs that, if championed by Congress, would support innovation and entrepreneurship.
Investing in Tomorrow’s Workforce
One of the startup community’s most persistent challenges is accessing a pipeline of skilled talent in order to both help startups grow and create news ones. While the Obama Administration has been an unwavering champion of immigration reform to bolster the country’s pool of high-skilled workers, immigration represents only part of the solution (and unfortunately, neither high-skilled immigration reform nor comprehensive reform appears to be going anywhere for the time being). The other piece is ensuring that we are training tomorrow’s entrepreneurs and tech workers here in America.
The President’s budget request includes $4 billion for improved computer science education through its recently announced Computer Science for All initiative. The funding would support states’ efforts to expand CS programming and focuses largely on training teachers and expanding access to quality instructional materials. The Administration has also called on local leaders, educators, and the tech industry to get involved in expanding CS education.
The budget also proposes creating two new funds: a $75 million American Technical Training Fund, which would provide competitive grants to support evidence-based, tuition-free job training programs in high-demand fields, and a $2 billion Apprenticeship Fund, which would build on the Administration’s successful American Apprenticeship Initiative strategy and aim to spur new innovations in apprenticeship.
Finally, the budget proposes creating more than 50 new “Talent Hot Spots” that would “prioritize a sector and make a commitment to recruit and train the workforce to help local businesses grow and thrive, attract more jobs from overseas, and fuel the talent needs of entrepreneurs.” The Administration estimates that this program could create a pipeline of more than half a million skilled workers in just five years, talent that could feed entrepreneurial growth.
Expanding Broadband Access
Earlier this year, the Federal Communications Commission reported that there are still 34 million Americans (or about 10 percent of the country) who lack access to broadband at sufficient speeds. Startups depend on a healthy and competitive broadband market, and it is essential that federal policies encourage connectivity. The President’s budget request includes continued investments in existing federal programs that support the expansion of high-speed broadband to all Americans. Additionally, the budget request calls for future spectrum auctioning, which will allow for more internet service providers to participate in the mobile broadband market.
Promoting Innovation
Federal investments in research and development can help spur innovation in the private sector and the creation of new companies. The President’s budget includes $152 billion in funding for research and development, an increase over last year’s request. Much of this investment is targeted for innovative technologies such as Big Data services, supercomputing, robotics, and nanotechnology. The budget also includes $4 billion for autonomous vehicle R&D, representing an unprecedented level of investment by the federal government in this new market and a huge win for proponents of this growing technology.
Making the Tax Code Work for Startups
Finally, the budget request includes a number of proposals that would streamline and improve tax benefits for startups and entrepreneurs. The President proposes simplifying the existing Research and Experimentation (R&E) tax credit. Last year, the R&E credit was modified to allow small companies to claim it against payroll taxes, instead of income taxes. This made it available to startups, many of which could not claim the credit previously due to a lack of taxable revenue. Still, the process of applying for the credit remains complex and difficult to navigate for startups. The President’s budget proposes simplifying the credit’s formula, making it easier for startups to take advantage of.
The Administration also proposes quadrupling the amount of startup expenses (things like legal fees, office supplies, or recruiting costs) that entrepreneurs can deduct from their federal income taxes, increasing the deduction from $5,000 to $20,000. This will make it less costly to start a business and allow innovators to put more money back into their startup more quickly.
Looking Forward
The frustrating truth is that most of the President’s budget proposal won’t receive Congressional consideration. However, we hope that future policymakers can coalesce around some of the proposals outlined above, which represent reasonable policies that would encourage the growth of startups that drive our economic success and are responsible for all net new job growth in the United States. Finding common ground in today’s political climate is difficult, but it is essential to ensuring that America remains a place where the ideas of the future can grow and thrive.
Startup News Digest: 1/15/2016
Our weekly take on some of the biggest stories in startup and tech policy.
Obama’s Final SOTU. President Obama addressed Congress Tuesday evening in his seventh and final State of the Union, which included a few nods to the tech industry and startups, too. He remarked on some upcoming proposals from the White House, including a push to bring computer science education to more schools. The president also spoke of the country's rich history of innovation, as well as the challenges workers face in the new technology-driven economy. "In this new economy, workers and start-ups and small businesses need more of a voice, not less. The rules should work for them."
Encryption Debate Continues. A new bill was introduced in the New York State Assembly this week that would essentially disable strong encryption on all smartphones sold in the state. If passed, it would be the first state law requiring a “backdoor” for encrypted technologies—something that is not only constitutionally questionable, but also not technically feasible without undermining the security of the system as a whole. The tech industry has been pushing back against these “backdoors” at all levels of government. Just last week at a counterterrorism discussion between high-level federal officials and tech leaders, Apple CEO Tim Cook called on the administration to issue a statement defending the use of unbreakable encryption. The White House has yet to take an official position on encryption.
New Regs and Report for Ride-Sharing in NYC. The New York City Council will soon introduce new legislation regulating for-hire vehicles, the Wall Street Journal reported last week. The proposed legislation would require for-hire vehicle services such as Uber and Lyft to make their cars more accessible to the disabled, among other regulations that may address surge pricing. These new laws could be introduced as soon as next week, following today’s release of the highly anticipated traffic congestion report from the Mayor's office. The study, which examines the impact of new ride-sharing services on the city’s traffic, was commissioned by New York City Mayor Bill de Blasio last summer after proposals to cap the number of for-hire vehicles were defeated. We’ve just started digging into it, but among other things, it claims “For-hire vehicles are a vital part” of the city’s transportation mix and does not blame any one company for local congestion. We’ll be watching whether the report’s findings will influence the city council’s new legislation.
Big News for Autonomous Vehicles. 2016 is shaping up to be the year of the autonomous vehicle. At last week’s Consumer Electronics Show, a number of automakers announced their forays into this rising market. Then, on Thursday the Obama Administration unveiled plans to include $4 billion for autonomous vehicle R&D in the proposed 2017 budget. The Administration also promised to issue regulatory guidance for companies around compliance with safety standards within six months. The federal government has remained relatively hands off in this new market, but the Administration’s announcement this week represents a new level of involvement and a huge win for proponents of this growing technology.
The Size of the Sharing Economy. The results are in. A recent and first-of-its-kind poll conducted this fall found 44 percent of American adults have participated in the sharing and on-demand economy—that's over 90 million people who've booked a room on Airbnb, hopped in an Uber, or ordered groceries from Instacart. The poll also found that 22 percent of American adults have offered goods or services through these new platforms in exchange for income. And despite a spate of recent lawsuits over worker classification, the vast majority of these workers describe their experiences as positive.
The State of Computer Science. Code.org, a national organization dedicated to expanding computer science education, published its 2015 report, revealing K-12 student enrollment in computer sciences courses is growing nationwide. Today, 25 percent of U.S. schools teach computer science and programming and several major school districts including New York and Chicago have made recent pledges to the subject in every school. Computer science is also the fastest-growing AP course of the past decade.
Americans Online. Last week, the Federal Communications Commission released updated numbers on broadband access in the U.S. While the percentage of Americans with access to advanced broadband has improved over the past year, there are still 34 million Americans (or about 10 percent of the country) who lack access to broadband at sufficient speeds. While this report suggests improvements in the broadband ecosystem, more needs to be done to connect the 34 million currently cut off from broadband opportunity.
