Introduction

An Investment in American Ingenuity

A concept to transform the U.S. economy by direct investment into the innovative spirit of America

Dr. Chance M. Glenn, Sr.

Director – The William G. McGowan Center
Rochester Institute of Technology
Rochester, New York USA

November 2009

Abstract

This article describes a plan to invest $100B into the innovative, entrepreneurial heart of America. We describe how the Investment in American Ingenuity Act (IAIA) would provide seed funding for 1,000,000 start-up companies across America. The new industries, that the market demands, would sprout up by this process. New jobs, the flow of capital, and the revitalization of commerce would result from this action. We discuss the conceptual framework of the IAIA and how it would be implemented.

Background

The recent bank bailout, the auto industry bailout, and the CARS (so called “Cash for Clunkers”) program all targeted specific industries in an effort to either stave off catastrophic economic events that were about to occur, or to revive a struggling market (Goldman). The CARS program has demonstrated some success after a frenzy of activity that has seen $2.878 billion distributed and over 690,000 vehicles exchanged (including 450,000 SUVs and light trucks) since the program started in July of this year (Evarts). It is contestable as the whether either of the bailouts would be considered successful, or even useful for that matter. However, the CARS program’s initial success is instructive because of the targeted nature of it. Recently, Ford Motors announced a third quarter profit of $997M (Welch). It is yet to be seen if this program will indeed jumpstart the auto industry, but there is no argument that America responded to it. There have already been reports, however, that the cost to taxpayers is estimated to be about $24,000 per vehicle, and as well as costing about ten times the average price that it takes to remove one ton of carbon dioxide from the atmosphere (Knittel).

No one tends to argue the statement that entrepreneurship fuels America’s workforce, yet there has been little or no direct investment into new business start-ups by the federal government. There are a number of programs supported by the Small Business Administration that are designed to support small businesses and start-ups, but nothing at the scale needed, given the present economic crisis. The Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs have operated for years, however they are targeted to research and high tech enterprises only, and well established companies, of considerable size, have the most success winning these highly competitive grants (Wessner). State and local governments attempt to foster the creation and growth of new businesses with a smorgasbord of programs such as incubators, tax credits, low interest loans, and competitive grants. If innovation is truly the fuel that runs America’s engines, then it is time to refill the tank.

(c) 2009 Chance M. Glenn, Sr.

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