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A bill that would have eased some regulations for startups failed this session. But should lawmakers still act to make it easier for new companies to launch?
The Indiana Economic Development Association members are on the front line of economic policymaking in our state. And after years of advocating for improvements to our economic climate, we are pleased that Indiana has nearly the perfect environment for entrepreneurship; we provide an affordable, friendly state for entrepreneurs and innovators to start their own businesses.
But is this enough? Well, it depends on whom you ask.
Imagine you are working with a small, early-stage company with less than five years in business. You have a breakthrough product you want to launch that will revolutionize your industry, and you start by exploring the federal and state regulations you need to follow.
Quickly, you are overburdened by the bureaucratic systems and approvals needed to launch. You spend a large percentage of your limited startup capital hiring legal experts and industry specialists. You hit roadblocks as your resources—both time and capital—are dwindling. Exasperated, you give up on your dream because of the cost burden, and your small company cannot compete with larger, better-resourced firms in the same industry.
You would not be alone. According to Right to Start, a national not-for-profit fighting to expand entrepreneurial opportunity for all, we need a collective effort at both the federal and state levels to reduce costly regulatory burdens for startup firms. They report:
◗ Sixty-two percent of Americans have a dream business in mind, and 41% would start it in six months if they could. But less than 2% actually do.
◗ People of color have struggled to build intergenerational wealth because of systemic barriers to starting and growing businesses.
◗ Rural America has seen a 44% decline in entrepreneurship since 1995.
But Indiana might be jumping on the Right to Start bandwagon. While overall our climate favors entrepreneurs, Hoosier legislators and executives can do more to foster successful entrepreneurial ambitions. House Bill 1165, authored by Rep. Jake Teshka, R-Bremen, would have assisted young companies by awarding 5% of state contracts to businesses that have been in operation less than five years and whose principal place of business is in Indiana. Additionally, 5% of workforce development fundings would have been used to support organizations or programs for individuals starting new businesses or businesses that have been established within the last five years.
Passage of HB 1165 would be a great start to reducing state regulatory burdens and creating opportunities. More would still need to be done, though, as the vast majority of the red tape encountered by startup and early-stage ventures are with local (city and county) processes. But we need to start somewhere.
Media attention celebrates the larger, mega deals that have been materializing as of late. The economic development practitioners in our state are proud of our contributions to these successes, but we also support the ambitions of HB 1165 in order to establish right-to-start options to diversify Indiana’s economy and help build wealth for Hoosiers.•
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Dant Chesser is the Indiana Economic Development Association’s legislative committee co-chair. Send comments to ibjedit@ibj.com.
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