Scratch Your Itch to Start a Business

Scratch Your Itch to Start a Business

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 President Barack Obama is traveling the country pitching a bold new plan to stimulate economic growth: He's urging Americans to generate jobs for themselves by becoming entrepreneurs.

It’s not a new concept, and it may be a hard sell for some, but the White House is hoping the redesigned initiative serves as a triumphant rallying call to encourage Americans to think, dream and move to action. The Obama administration calls it Startup America, an independent and private-sector led campaign to mobilize private sector commitments.

“Entrepreneurs embody the promise of America: the belief that if you have a good idea and are willing to work hard and see it through, you can succeed in this country,” Obama said at the White House. “And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs. That’s why we're launching Startup America, a national campaign to help win the future by knocking down barriers in the path of men and women in every corner of this country hoping to take a chance, follow a dream and start a business.”

The symbolism of Obama’s message is no coincidence. The president is under enormous pressure to stimulate job growth, and his senior advisors are working overtime to solicit ideas and reshape an agenda that has been repeatedly criticized by Republicans. And with a newly-elected GOP now controlling the House, Obama must begin to show some tangible results to keep the wolves away from the door.

There is some precedence for Obama’s new economic initiative: Countless numbers of Americans – including many black Americans – who have been laid off from their jobs are now starting small businesses, perhaps the businesses they’ve always dreamed of opening but never wanted to take the risk.

Until Obama can turn the economy around, he will continue to take heat from constituents for an unemployment rate that was dropping, but is now holding steady at 9 percent. The black unemployment rate, however, is a staggering 15.6 percent, and civil rights activists have called on Obama to address the black jobless rate directly.

One component of the new initiative is targeted specifically to young African-Americans and people of color. It’s called Teaching Entrepreneurship, a nonprofit that provides a first-class entrepreneurship education for at-risk high school students from low-income communities, and is launching new programs supporting young entrepreneurs and their teachers. Startup America will also include a mentoring program to pair young people interested in starting businesses with successful business leaders.

Obama isn’t going this road alone. He’s calling on business leaders – some who are critical of the administration’s economic policies – to step up and work closely with the White House.

“Startup America also represents a historic partnership with business leaders, investors, universities, foundations and non-profits, and we're urging others to join them in this effort,” Obama said. “For entrepreneurs speak to what's best about America, and in their drive and innovative spirit, in their willingness to take a risk on a bold idea, we can see the future. We can see how America will compete and win in the 21st century global economy.”

According to the White House, the president’s new budget will propose making permanent the elimination of capital gains taxes on key investments in small businesses, which was passed as a temporary provision in 2010 as part of the Small Business Jobs Act that Obama signed in September. The budget will also propose expanding the New Markets Tax Credit to encourage private sector investment in startups and small businesses operating in lower-income communities.

Not everyone is on board with the administration’s initiatives, and Obama does have his share of skeptics. Some economists argue that Obama’s economic recovery plan is flawed because employers haven't added enough jobs - and those that have been added are low-wage positions.

"Growth has been concentrated in mid-wage and lower-wage industries. By contrast, higher-wage industries showed weak growth and even net losses," Annette Bernhardt, policy co-director for the National Employment Project, told reporters. She said that growth has been far more unbalanced than during previous job recoveries.

Bernhardt's analysis of the first seven months of 2010 found that 76 percent of jobs created were in low- to mid-wage industries - those earning between $8.92 to $15 an hour, well below the national average hourly wage of $22.60.

White House aides dismiss the critics and are moving forward with their agenda without flinching. The president has rallied some heavyweights in business to support his vision. Steve Case, co-founder of AOL and chairman of the Case Foundation, will chair the partnership, and Carl Schramm, president and CEO of the Kauffman Foundation, will be a founding board member.

The president believes the concept for Startup America will spark an entrepreneurial spirit among the electorate that could generate new jobs all across the country.

But now comes the hard part for Obama: Waiting to see if it works.