August 24, 2018

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Unlike College Football, There Are No Preseason Rankings In The Global Innovation Economy

By
Alex Burgos

This week, The Associated Press released its long-awaited preseason college football rankings.

While they provide plenty of fodder for football fans and analysts to debate until the season starts, the concept of preseason rankings is one of the oddest things about college sports when you consider that they are not assessments made based on actual performance on the field.  Instead, they are best guesses of what the teams’ future performance will look like based on their latest performance from last season, assumptions about the impact talent losses or gains will have, and programs’ reputations for maintaining a high standard of excellence over time. 

Of course, when the season finally kicks off, those preseason rankings matter less and less with each passing week.  Just like in business, real live competition reveals strengths and weaknesses, and the results do not lie.

In a similar vein, the global economy has its own rankings that rate the successes (and failures) of individuals, companies, industries, and entire nations.  One such ranking is the Bloomberg Innovation Index, which ranks countries based on their ability to foster a culture of entrepreneurship and innovation.  If innovation rankings like this offered a preseason version the way college football does, the U.S. would probably rank first every year on the basis of having the world’s largest economy for well over a half-century, assumptions that we will always produce the best and brightest workers in our schools and world class university system, and if nothing else, our reputation as the home of the most iconic tech companies on the planet.

Fortunately, there are no “preseason innovation rankings” like there are in college football.  If they did exist, we might be further lulled into a false sense of security and complacency by seeing the U.S. at number one year-in-and-year-out (something Alabama’s Nick Saban is — annoying for the rest of us who are not Crimson Tide fans — accustomed to by now and works hard to overcome each year).

Instead, the Bloomberg Innovation Index reflects reality — and a startling one at that.  For those of us accustomed to thinking of the U.S. as the world’s most dominant economy, the most recent ranking was jarring: it ranked the U.S. 11th overall, down two spots from number nine the previous year.

This should be a wake-up call for U.S. policymakers at every level and a call to action to renew and follow through on their commitment to work in a bipartisan manner to advance pro-innovation policies.  And this week’s release of The Associated Press’ preseason football rankings is a timely one considering it coincided with “Startup Week Across America,” a concerted campaign to promote America’s entrepreneurs and startups and encourage policymakers to adopt pro-startup policies.

Just like America’s college football teams will be putting in the work week in and week out to win on Saturday and keep climbing the rankings to be number one at the end of the season, our policymakers have to commit to doing the same.

To that end, we urge Congress to finish its work this year on the JOBS & Investor Confidence Act to provide a much-needed boost for entrepreneurs working to launch and grow businesses across the U.S. and build on the momentum from last year’s tax law.

A pro-startup trade agenda is also critical.  Before, companies had to grow and become big and established enterprises before they could even think about exporting.  Now, the internet and innovative technologies have made it possible for startups to sell abroad and become global companies on day one.  To ensure we continue fueling startup growth through internet-driven exports and digital trade, we urge the Trump Administration to finish negotiations on a new and modernized North American Free Trade Agreement (NAFTA) and help open markets for U.S. entrepreneurs.

On the regulatory front, we must recognize that while regulations affect all businesses, startups face disproportionate compliance burdens given their limited resources.  For them, every dollar of capital is treated as a scarce and precious resource.  If they are not investing it in growth, there needs to be a good reason.  We must commit to working with policymakers and regulators to ensure that onerous regulations rooted in the politics of convenience, a lack of data, or both, do not chill innovation and economic opportunity in the U.S.  For example, the recent Dynamex case in California, coupled with legislative inaction, threaten to stall the livelihoods of 57 million American workers who power our economy through independent work in the on-demand and sharing economy — a number that is growing fast as startups grow and new entrants emerge.  We should work towards a regulatory framework that ensures the growth of new business models while balancing worker and consumer protections fit for the changing nature of our economy.  Furthermore, as Congress and the Trump Administration work on federal privacy policy, it is important to take into account the challenges that startups and small businesses face in navigating such complex regulatory environments.

Just as important as a supportive regulatory environment is having a deep bench of potential employees to help young and promising businesses scale up.  Talent is the lifeblood of the U.S. innovation economy, and we must ensure investments in STEM and computer science education are being made now to help prepare our youngest students for the jobs of the future, while ensuring that our workers in the market now have access to training for the emerging and unfilled jobs of the new economy.  The recently enacted career and technical education law is a big step forward to equip people already in the workforce with the skills they need to seize today’s opportunities.

However, startup growth and fueling American innovation also depends on recruiting talented people and filling immediate critical labor shortages through a modernized immigration system.  This Startup Week Across America, we urge Congress and the Trump Administration to work together on this goal, which includes policies like the Immigration Innovation Act, ending per-country caps on the employment-based green card system, and preserving the International Entrepreneur Rule so our nation can recruit innovative startup leaders to create U.S. jobs.

Boosting our financial technology (fintech) startups is another key to advancing our nation’s global competitiveness.  Not only is the fintech industry solving problems that Americans face every day — such as helping people save money, plan smarter for retirement, select the right student loans, and get access to more credit options — it is helping businesses of all sizes reduce regulatory and compliance costs, improve efficiency, and make better financial decisions through data-driven insights.  In order to allow financial innovation to continue to flourish, we need to modernize our policies to accommodate these new technologies.  A recent U.S. Treasury Department report offers a forward-looking roadmap to unlocking more economic opportunity through fintech innovation.  And in Congress, Representatives Trey Hollingsworth, Alcee Hastings, Blaine Luetkemeyer, and Henry Cuellar have introduced legislation in the House that promotes partnerships between fintech companies and banks to responsibly expand access to credit for Americans in the small-dollar lending market.  Advancing these solutions will help more Americans take control over their financial futures and give our businesses a competitive edge abroad.

Unlike college football, there is no preseason in the global innovation race.  Every day counts and every day is a regular season game, where companies and entire nations go head-to-head and compete — and no one can hide from the results.  We already know where we stand; at 11th place in the Bloomberg Innovation Index, we have a lot of catching up to do.  If we are to reclaim our place as the world’s preeminent innovation leader, we must enact policies that put our nation’s startups in the best possible position to compete and win on the world stage.  That is what TechNet will be fighting for this fall.

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