3.9.13 Moran and Warner SXSW

Washington loves to talk about jobs, despite their scarcity since 2008. Four years of “jobless recovery” have led lawmakers to carry on with well-intentioned, but misguided determination to create jobs and return to pre-recession employment levels. But for all the chatter, there’s been a gross lack of dialogue with the people and companies whose success drives employment growth — new businesses. It’s time for a serious recalibration of how Congress perceives and talks about our nation’s economic policy goals.

Economists describe job growth as a byproduct of economic expansion, but too many behave as if jobs are inherently good and ought to be the primary objective of our economic policies. I disagree. Milton Friedman highlighted the foolishness of this thinking with a story about a Chinese economic planner. As the tale goes, the Chinese bureaucrat bragged that the government “created” many jobs at construction sites by replacing bulldozers and backhoes with shovels and laborers. Friedman responded by saying the central planner could “create” even more jobs by replacing the shovels with spoons.

In America, I’m afraid this jobs-for-jobs’-sake mentality has permeated lawmakers of both parties. For Congress to pass laws that promote the more appropriate objective of economic growth, lawmakers must stop talking about jobs as if they are a crop that can be harvested before planting any seeds. We ought to instead focus on fertilizing the soil of innovation and protecting our emerging economic seedlings. This is where startups and entrepreneurs come in.

Research just published by Engine and the Kauffman Foundation suggests that formation of new high-tech and information technology businesses are on the rise and the seeds of economic growth are being planted. Data also show that these startup businesses are forming in communities across the country, beyond the areas that have traditionally driven economic growth. As these young companies grow, they hire rapidly and represent the majority of net job creation in the United States.

The success of emerging startups across America is the focus of the 2013 film “Silicon Prairie: America’s New Internet Economy.” The Engine/Kauffman Foundation report echoes the stories of the film’s featured entrepreneurs who explain how the Internet and technological advancement have enabled high-tech firms to take root in areas such as Omaha, Boulder, Kansas City, and Des Moines. It comes as no surprise that innovative new products and significant high-tech job growth are emerging in the same regions.

Unfortunately, too few in Washington are paying attention to these stories. That can change this month, as more than a dozen lawmakers from both parties participate in Startup Day Across America. This event offers the chance to meet the people behind a startup and get to know the little engines of economic growth that now pepper states across the map.

I plan to visit with the entrepreneurs and innovators in Kansas City’s growing Startup Village. Building personal relationships with entrepreneurs can be especially important to policymakers because a conversation can offer insights into the health of our economy that cannot be combed from raw data. This is something I first experienced at events like South by Southwest (SXSW) and the Consumer Electronics Show (CES). But in the new-economy, one no longer needs to travel to Silicon Valley, Las Vegas, or Austin to meet those on the front lines of economic growth.

From these conversations come a better understanding of the challenges emerging businesses face: an arcane tax code, a burdensome regulatory environment, limited access to capital, and a global battle for talent. For those asking, “Where are the jobs?” much can be answered by getting to know the people most likely to hire, what type of positions they’re looking to fill, and which benchmarks a company must reach before doing so.

While listening to the needs and challenges of small businesses is nothing new for lawmakers, these firms are — by definition — new and young. Many have emerged in the post-crisis, Internet-driven world where the rules and tools have changed dramatically. While there already exists a core group within Congress engaged with startup-specific issues, there is room for growth in our ranks. It is encouraging to see Startup Day Across America attracting new interest. By encouraging more dialogue between Congress and the startup community, Washington can be better equipped to pursue effective pro-growth policies that will benefit all Americans.

Our country’s entrepreneurial spirit has long been a pillar of our economic success. Startups are in the process of pulling this nation from an economic pit and pushing toward new levels of technological advancement in the process. With their success come increases in wealth, efficiencies, employment and opportunity across America. A startup-considerate Congress is apt to produce the smarter policies our country needs and Washington has long been looking for. On Startup Day, we can begin that with an introduction and a handshake.