How does it work?

The federal government sets aside funding to infuse start-up seed capital for the bank. Upon formation, the government will leverage private capital and invite proposals from American entrepreneurs in line with important national innovation priorities. The National Innovation Bank will enable entrepreneurs to access the capital, resources, and mentorship to unleash the full potential of their next generation innovations that will re-charge the American economy.

How much capital will it raise?

The government will contribute $15B from non-committed stimulus funding and then leverage up to $100B through the sale of federal “innovation” bonds or other devices.

What are the investment guidelines?

The National Innovation Bank will appoint an “Investment council” made up of experts from academia, the private sector, and government. The NIB will outline investment areas in line with national priorities, including clean-tech, bio-tech, national broadband expansion, and web tech.

How can everyone get involved in re-starting America?

The bank will solicit proposals from bright American innovators and entrepreneurs for early seed capital, mid-stage investing, or late-stage scaling to fund ground-breaking initiatives. These investment packages would include incubator subsidies, access to resources, and advisory support from the “Investment council”. Americans can invest in “innovation bonds” across the three asset classes of early-stage, mid-stage, or late-stage companies, with appropriately scaled risk-return rates. In addition, investors can track progress against transparent reporting metrics. Together, we can re-start the American economy.

What role can states play?

Each state will be invited to provide matching investments for innovators selected by the National Innovation Bank. In addition, states can set up special “incubator incentives” to provide start-up space, public-private resources, and mentorship to cultivate businesses. In doing so, the National Innovation Bank will not only fuel entrepreneurship and growth nationally, but will be an engine for states to develop regional innovation clusters, similar to Silicon Valley.

Similar to how government-funded medical research leads to huge innovation and jobs in the pharmaceutical industry, open source software serves as the foundation for entire industries… yet it receives virtually no funding. Just imagine the infrastructure that could be built for such a small government investment.

We could use something like “github”:http://github.com/ to allocate the funds based on how many people use the project or via peer ratings.

Why do we need to think differently?

If we’re serious about jump starting our economy, then we need to reboot the conventional economic thinking coming from Washington. From 1995-2005, over 25% of technology companies founded in the US had a key immigrant founder. In 2005 alone, those companies generated $52B in sales and employed nearly half a million people, mostly Americans. The immigrants that comprise 12% of our population earn a staggering 47% of the nation’s science and technology PhDs and pioneer new innovations by filing for 24% of US patents. From Google to Ebay, immigration has been good for New York City, good for America, and is critical to our future economic prosperity.

How can we enact innovative reforms to boost American entrepreneurship?

However, for years, Washington policy has shown immigrant entrepreneurs the door instead of providing them the resources to start the next Google here in the US. In fact, right now over 50% of immigrants returning to India or China hold advanced degrees. Our current work-visa system is outdated, counter-productive and sorely in need of reform. By enacting smart reform, we will both protect existing American jobs while also encouraging immigrant entrepreneurship that will create more domestic jobs. Today’s H1-B (for immigrant workers) and EB-5 work visas (for immigrant investors) for immigrants are too limited in scope and too narrowly defined. I propose eliminating the cap on H-1B visas and doubling the cap on EB-5 visas to 20,000 per year. In addition, I will fight for the immediate passage of the “Start-up visa” program which keeps immigrant entrepreneurs, who commit to hire American workers and generate domestic sales, right here in the United States.

Computer Science and Applied Math will continue to be the tools of innovation and value creation. Let’s point some of our education budget to creating more scholarships in this area and insure New York and the United States remain strong in the 21st Century.

I took a big risk two years ago. I quit a stable job to start my own business. What I didn’t realize was how difficult it would be to get decent health insurance once I was self-employed. New York is better than most states, with our large freelance community, but making a decision about the type of health care I could get was very simply defined by what I could afford as an individual. What I could afford ended up being a basic scheme from a health insurance provider who my doctor once accepted but soon dropped because in her words, “My practice can’t survive on the rates they are paying.” Wouldn’t it be great if there was a pool insurance I could buy into at a “reasonable” rate as a registered entrepreneur? Wouldn’t it be nice if I could spend less time worried about my health coverage (and praying I don’t get REALLY sick) and more time creating innovative ideas for my business and for New York? I think so. :)

Currently our federal taxation of financial instruments creates perverse incentives – dividends and capital gains are taxed, which takes a bite out of the income generated by prudent investment (buying and holding profitable companies), while speculation is rewarded.

Replacing the dividend tax (at least on US companies) with a per-share transaction fee on stock sales (of say, $.05 per share sold) would strongly discourage speculation, make investing less volatile and safer for amateur investors (luring new investment), and drive up the value of dividend-paying stocks. This change could also be structured to raise more $$ for the federal government, reducing the deficit.

With cap-and-trade, the emission of carbon would be limited, and market forces would be harnessed to drive low-carbon innovations. Barring the disproving of anthropogenic global warming (not likely), green technology is our future—our choice is to import it or to create it at home. We could tax carbon directly and use the proceeds to subsidize clean tech, but cap-and-trade would both be more effective in limiting emissions, and be more efficient in developing low-carbon technology, since the development of this technology would be shaped by the free market, not by bureaucrats. Most essentially, technologies developed under cap-and-trade would be much more likely to be viable in the international market, since they would represent the most cost-efficient reductions in carbon emissions.

One of the most anti-competitive political sentiments of today is that of “protectionism.” Unfortunately, protectionist policy also leads to serious misconceptions of economic change.

Rather than try to protect existing jobs in America from the outsourcing phenomenon (a futile objective), government should be incentivizing foreign investment in the U.S. and small- and medium-sized American businesses to transact overseas.

Financial and accounting regulatory reform must therefore become looser for foreign companies, even as it becomes tighter for U.S. ones. Knee-jerk accounting reforms such as Sarbanes-Oxley must be prevented from happening. Tax credits should be awarded to SME’s which effectively export goods and services to overseas markets.

Currently, immigration could be a much bigger force for economic growth than it is. However, pointless debates over saving American jobs prevent it from being so. Government should have a clear program for putting immigrants with foreign languages to work in playing a crucial role in developing U.S.-global enterprises. One way to achieve this is to give immigrants whose first language is anything other than English and who start a U.S.-domiciled enterprise tax credits and/or substantial reductions for the first 5 years of operation.

Use some of the money that has been allocated to the SBA — which small businesses have difficulty getting access to because of the complexity of the application process and demanding collateralization requirements — to give all small businesses (less than 100 employees) a breark (3-6 months) from payroll taxes. This would be an effective capital infusion for small businesses, allowing them to use these funds for new jobs and capital purchases, both of which stimulate economic growth.

Before 1960, more than 95% of clothing sold in the United States, was produced in the United States. After NAFTA and several other sweeping changes only 4% of clothing purchased in the United States was made here.

Many ask the question, can clothing still be made in the developed world? My response is yes.

Of course we cannot compete using the same tactics as countries that have few labor rights and cultures so poor any work is acceptable. We can compete with great ideas, executed better than anywhere else.

We need to support businesses that make products in innovative and sustainable ways as much as we support the creation of software and web-based companies.

I do not suppose we will revisit the days of traditional shirt factories, now a relic of the fading New York garment district. For one, we must imagine a new way to design and manufacture the stuff we wear and love.

It is important that we support the creation of companies that use technology to create tangible products, which can be in themselves, solutions to our economic and environmental challenges.

Need a user-friendly online portal that provides both public and private sector information for entrepreneurs, including information on:
1) local meetups
2) local watering holes
3) government grants, loans, incubators, subsidies
4) data centers, servers, labs
5) engineers, managers
6) investors and venture capital
7) mentors, angels
8) city training
etc.

Right now, this information is scattered over the web. Just be aggregating it real-time, the city can provide an invaluable map for new entrepreneurs.

When I started my small business in New York, it cost me a small fortune. In other states and cities, becoming an entrepreneur is practically free. If New York State won’t change it’s burdensome fees and filing process, perhaps Congress can help entrepreneurs in NY and other business-unfriendly states by offering a tax credit for state and local start-up costs. It would a small expense to the Treasury, and a huge help to entrepreneurs.