Use business incubators to create jobs and stop unemployment problem | IndyStar.com | The Indianapolis Star

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Rachel A. Smith

Assistant professor of finance, University of Indianapolis

Two solutions to decreasing unemployment are reducing uncertainty and creating business environments that promote innovation and entrepreneurship.

A primary reason why U.S. unemployment remains high is the lack of new business investment and business startups by entrepreneurs. The two primary reasons are businesses' reduced access to capital due to stricter bank lending standards and uncertainty surrounding expanding government policies.

Policies such as increased health-care costs, stricter environmental and financial regulations, and potentially higher taxes increase uncertainty of future costs and stunt entrepreneurship and innovation. Uncertainty feeds the vicious cycle of reduced consumer spending, which leads to reduced business hiring.

The role of government is to create an environment that encourages private innovation and entrepreneurship. This could include minimizing restrictive regulations and reducing government spending and the deficit, which could allow a decrease in business tax rates. This could also include partnerships in which government, academic institutions or economic development organizations provide funding to support nonprofit business incubators, such as the Flagship Enterprise Center in Anderson.

These business incubators assist start-up companies with technical support, obtaining financing, office space and business consulting, which allow them to become self-sufficient and create jobs. This will replace jobs that have been permanently lost due to global competition, new technologies and increased efficiency. To learn more about business incubators, visit the National Business Incubation Association website at www.nbia.org.

via indystar.com

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