In address to Congress, Victor Hwang urges action on entrepreneurship deficit

Tapping into his own entrepreneurial story, the Ewing Marion Kauffman Foundation’s vice president of entrepreneurship testified before Congress on cutting obstacles to starting a business.

Before the U.S. House Small Business Committee, Victor Hwang joined an expert panel of entrepreneurs and researchers to discuss common struggles entrepreneurs face, possible solutions and emerging trends. As Republican and Democratic committee members occasionally traded barbs on the cause of a slow-growing small business economy, panelists tapped into their experience and what they’re hearing from their own constituencies.

Hwang said that America is suffering from an entrepreneurship deficit, which erodes quality of life and national competitiveness. He believes that this deficit is connected to many of the nation’s biggest challenges, including rising inequality. Despite these challenges, Hwang is optimistic. Citing data from the Kauffman Foundation’s recent report, the Main Street Entrepreneurship Index, entrepreneurship is finally back on the rise, as indicated by new business creation, growth and local small business activity.

“Our founder, Ewing Kauffman, believed that individuals have a fundamental right to take an idea they have and turn that into a business reality,” Hwang said. “To be an entrepreneur, it shouldn’t matter your race, your gender, or where you live. You should be able to do it quickly, inexpensively, without confusion, and without barriers imposed by others.”

Today, 80.2 percent of American entrepreneurs are white and 64.5 percent are male. Hwang said if minorities started businesses at the same rate as non-minorities, the United States would have more than one million additional employer businesses and as many as 9.5 million more jobs.

“Fewer startups mean a lower quality of life for all Americans,” Hwang said. “And when we think of entrepreneurs, we have to think of those on the bottom — not just those at the top.”

In addition to diversity challenges, Hwang said there’s is a lack of entrepreneurial activity in rural areas and that the nature of technology makes it harder to create jobs. He stressed the importance of education reform and building interconnected communities, glued together by trust.

To break down these barriers and close the entrepreneurship deficit, the Kauffman Foundation announced the launch of its Zero Barrier Challenge.

“The Zero Barriers to Startup Challenge is a collaborative, nationwide effort to identify barriers, big and small, that get in the way of new business creation,” Hwang said before the committee. “The Kauffman Foundation will team up with entrepreneurs, policymakers, and others nationwide to identify the key barriers to starting a business and then work together to identify and design solutions.”

To learn more about the Kauffman Foundation’s annual trip to Washington D.C., check out CEO Wendy Guillies’ address from Thursday morning.