Emerging Now: The Legislative Reform Movement for Entrepreneurs

It's time that entrepreneurs and small-business owners had advocates in government who appreciate the crucial role that new companies play in our society.

Despite America's political polarization, a bipartisan phenomenon has emerged that represents the greatest legislative reform movement for entrepreneurs in U.S. history. It is grounded in several key facts. First, young businesses create nearly all net job growth in America. Second, there was a massive surge in small-business startups during the pandemic. Third, Americans overwhelmingly want a fair opportunity to start and grow a business. 

The legislative reform movement is evidenced by the introduction so far in 2023 of 29 pieces of legislation in 13 state legislatures reflecting one or more policy recommendations of Right to Start, the national nonprofit organization that I lead, which champions entrepreneurship as a civic priority. In the two decades that I have personally spent supporting entrepreneurship and studying the history of entrepreneurship in America, I have seen nothing like this moment.  

The proposed policy recommendations include the creation of a statewide office of entrepreneurship; the tracking and encouragement of state government contracts going to new or young companies (five years old or less); and the waiving of first-year registration fees for new businesses. 

Over the past two years, 14 states have introduced related bills--Arizona, Arkansas, Florida, Hawaii, Indiana, Kansas, Maryland, Missouri, Nevada, New Mexico, North Carolina, Oklahoma, Texas, and West Virginia. Many bills have made significant progress with broad bipartisan support. Legislation passed through New Mexico's House of Representatives (by a vote of 54-1) and its Senate (32-4). Legislation has also passed the Senate in Arizona (16-12), Missouri (27-5), and Oklahoma (29-18). 

Legislative committees in three other states--Hawaii, Nevada, and West Virginia--have passed similar legislation, all with bipartisan support. Legislative hearings have been held in three other states: Indiana, Kansas, and Maryland.  

The bipartisan support reflects the results of a recent survey of American voters conducted for Right to Start by a bipartisan team of pollsters. Americans almost unanimously agree that "it is important to America's future that citizens have a fair opportunity to start and grow their own business": 94 percent agree, 2 percent disagree, and 4 percent are not sure. That near-unanimity crosses party lines with 95 percent of Republicans, 95 percent of Independents, and 92 percent of Democrats agreeing. Entrepreneurial dreams run deep in the American DNA.   

The movement suffered a setback recently when, despite overwhelming bipartisan support in the New Mexico state legislature for a bill to create a statewide Office of Entrepreneurship, Governor Michelle Lujan Grisham vetoed the legislation. She wrote that the Economic Development Department already "offers a range of supports and resources--including a certified business incubator program--for entrepreneurs" and that "New Mexico should focus on fostering entrepreneurship by strengthening and aligning the resources we already have." However, the bill would have gone further than current state efforts, including making the Office of Entrepreneurship a "point of contact" for new and young businesses in their interactions with state government and requiring an annual "Entrepreneur Impact Statement" detailing the extent to which new legislation hinders, supports, or otherwise affects entrepreneurs.  

Movements are not linear: They learn from setbacks and overcome them to achieve their goals. Several lessons are now clear for those who care about entrepreneurship. Here are just three.

First, this movement is young, but it is growing rapidly. The first bill was introduced only in 2021, and last year related legislation was introduced in just five states. In 2022, only one state legislature--Missouri's--progressed to full chamber votes. There, both the House and Senate approved the legislation but ran out of time in the session to reconcile similar-but-not-identical bills. In contrast, this year's legislative season has seen exponential growth. 

Second, despite the strong policy justification, the broader political environment still doesn't appreciate the crucial role that entrepreneurs play--and the strength of bipartisan voter support for entrepreneurial opportunity. The recent survey found that 43 percent of voters have thought about starting a new business, and voters of color are especially entrepreneurial. Consider: 54 percent of Black voters have thought about starting a business, as have 50 percent of Hispanic voters, compared with 40 percent of white voters. America is a nation of silent strivers. 

The barriers placed by governments in the way of entrepreneurs are detailed in Right to Start's "Field Guide for Policymakers." For instance, when American voters who have considered starting a business but did not were asked why, 53 percent said they could not afford government fees, and 49 percent said they found government requirements and forms confusing.

Third, the entrepreneurial community and its champions must raise our voices. Elected officials need to understand the crucial role of new and young businesses in the U.S. economy and the importance of removing barriers for all entrepreneurs. As we celebrate National Small Business Week, let's redouble our commitment for this year's state legislative sessions and for the upcoming presidential election cycle.  

America's voters are united in supporting entrepreneurship. Our elected officials should be, too.