Can entrepreneurs lead us out of this crisis?

by Matthew E May

I agree with Tom Hayes and Michael Malone in their belief that "Entrepreneurs Can Lead Us Out of the Crisis." Why? Because entrepreneurs have the agility, flexibility, and grit to make change happen. Innovation is the chief tool of the entrepreneur. Hayes and Malone outline about a half dozen ways the new administration can help them. And those ways are by and large subtractive, a key element of elegance.


1. Kill Sarbanes-Oxley. It's massive, expensive, and sucks needed capital.

2. Remove the shackles on tax-free retirement money, or remove taxes on accounts intended to fund new ventures. (like a 529)

3. Eliminate payroll taxes. It's a burden, and stops the creation of new jobs.

4. Lower capital gains taxes on venture capital investments in early stage startups.

5. Help big business think small to return to an entrepreneurial mindset by providing an incentive to take risk and create new jobs. There's none of that in the stimulus package for large companies.

6. Seduce entrepreneurs. How? A presidential summit like Reagan's in 1982. Obama holds sway...he needs to aim it at small business.

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Matthew E. May is the author of "IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing." He is constantly searching for creative ideas and innovative solutions that are 'elegant' - a unique and elusive combination of unusual simplicity and surprising power.

Mandatory Excellence

There has been a debate in the United States over the last several years around whether or not the government should institute a program of mandatory government service like other countries in the world.

In most countries this takes the form of military service, but some allow work in other government capacities to satisfy the obligation.

The United States does have mandatory government service, it's called jury duty but it probably amounts to only a number of days over the course of a lifetime. In addition the government has implemented schemes to help address acute shortages. AmeriCorps was founded to help alleviate the shortage of teachers in the inner cities by forgiving some or all of participants college loans.

But I have never heard anyone pitch mandatory government service as an opportunity to create competitive advantage.

Instead, governments engage in repeated wealth transfers to consulting companies for consulting projects that too often don't translate into sustainable results. What would happen if a government instead harnessed what citizens were truly good at for long enough to affect real accountable results in service to their country?

I write this not to advocate mandatory government service, but to call attention to the fact that countries and regions are going to increasingly compete in order to preserve their standard of living, and that those without a public sector innovation strategy will lose out to those who find a way to continuously become more efficient.

After all, every government must collect tax dollars to operate, but the more efficient a government can be, the fewer tax dollars it needs to collect in order to provide basic services. The lower the resulting tax rate the more profitable companies can be and the more likely they will remain in or be attracted to locate in that country.

As a result, governments should look at all possibilities of improving their efficiency through government innovation. Innovation, after all, is not only a necessary or desirable goal for businesses but for governments and individuals as well.

Could an innovative mandatory government service program be one way to achieve competitive advantage?