The Concept

The current economic crisis has a great deal to do with the changing face of industry across the United States and the world, for that matter. Regions of the country that were built upon the success of certain industries are now seeing entire communities destroyed because of the diminishing or loss of those industries. How do we determine what new industries should arise to replenish the market? How do you predict the rise of the computer industry, the Internet, and the mobile communications industry? How do you know where the next Microsoft, Walmart, or Starbucks lies? The answer is that you don’t. You let the market determine it, but you seed the process.

The Investment in American Ingenuity Act (IAIA) is a program that would seed 1,000,000 new start-up businesses across the United States by directly awarding seed grants of up to $100,000 to qualifying ventures. This program is targeted specifically for brand new start-up ventures. This is not to prop up current companies, but to create new ones. In essence, this is equivalent of angel investment for start-up ventures. A recent study of a cohort of 648 companies started in 1999 and tracked through 2005 showed that 34% of business start-ups were successful after 10 years (Curtin). Even if we can get only 20% to survive and succeed we would have 200,000 new businesses operating across the country. If only 10% of those became very successful, then we would have 20,000 major ventures created. If, in turn, these successful new businesses hired an average of 100 people, then 2,000,000 jobs would be created.

These new business will come from every conceivable corner of the market. They will hire people, they will purchase goods and services from other business entities, and they will pay taxes at local, state, and federal levels. There would be no need for the government to hold equity positions in any of the new enterprises, because the direct and indirect benefits would add the gross national product. The revenue from the grants will go into banks immediately thus providing a boost to that sector indirectly. Most importantly, this will establish a sense of creation in the country while affirming America’s commitment to its people and its industry. This is not an investment in “big business” nor unchecked government bloat. This is investment of “America into Americans” and the belief that the innovative spirit is what can truly shape our future.

Here are some examples of start-up companies that could be formed from this action:

1. Someone could start a daycare by obtaining proper licenses, leasing appropriate space, hiring three workers, purchasing necessary equipment, and operate for over a year and a half with $100,000. This is not factoring in the revenue generated by actually operating the business.

2. A research and development firm could hire technical talent, design, simulate, prototype, and analyze a new communications technology over six months to one year while researching the market in preparation for raising major investment capital.

3. A viable fast-food franchise could be purchased and staffed over the first year.

4. A real estate venture could be launched to purchase, renovate and re-sell or rent foreclosed homes.

5. A business could use the IAIA grant to obtain matching funds from state or local government, or be used as collateral for a larger funding source.

6. Series of IAIA awardees in similar market spaces could pool their resources together to form larger, stronger business enterprises.

The point is that innovative Americans will find a way to be successful if we let them.


(c) 2009 Chance M. Glenn, Sr. (next Implementation)