The recession of the Carter years and early Reagan years ended because
of new computer technologies creating opportunities for start-up
businesses. We need something similar today. When I talk to people
about starting their own businesses, many of them do not do it because
of the cost of health care. I have an employee who desperately wants
to work for himself but he will not because his wife is in poor
health. Solve this problem and small businesses will greatly
increase.
The second part of the solution is something the govt has been doing
for over 20 years, the Small Business Innovative Research program that
provides early money for showing a technology to be feasible provided
the technology solves a govt problem. My own company got started with
this program and if it was done better, it could start many more
businesses. Phase I which lasts from 6-9 months provides up to
$100,000 to do proof of concept and Phase II provides up to $750,000
for two years to make prototypes. The govt gets royalty free use of
the technology. Every agency that has a research budget is required
to put 3% of that research budget into the SBIR program and it really
is limited to small business although small means less than 500
employees.
I suggest that the SBIR program be increased to 4% of R&D budgets and
that small business for the increased part be limited to less than 100
employees. Furthermore, I suggest that the people getting these
grants be made de-facto govt employees during the term of the grants
with the only benefits they get being access to health coverage that
is paid from the grant (the way it is currently done). This will mean
that pre-existing conditions will be covered.
Just like any other investor, the govt should get some ownership to
the technology developed, perhaps a stake in the start-up company that
could be sold after 5 years. Selling these rights could recoup much
of the money spent on the program.