Home / Entrepreneurship/ Tax incentives not always best way to stimulate growth

Tax incentives not always best way to stimulate growth


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 18 June 2014 00:00

Facebook

State tax incentives – often used to attract or retain existing businesses – aren’t always the best way to stimulate economic growth. According to a new Entrepreneurship Policy Digest released by the  US-basedKauffman Foundation, these programs, while sometimes economically justified, often overlook the businesses that create most new jobs – namely, new companies. The Policy Digest offers alternative strategies for states to either improve their existing incentive programs or boost job creation by fostering firm formation. “States spend tens of billions of dollars each year trying to entice businesses to locate within their borders, but these policies often miss the real job creators: new and young businesses,” said Jason Wiens, policy engagement manager at the Kauffman Foundation. “Alternative economic development strategies exist that focus on entrepreneurial growth without incurring costly tax incentives.” Culling ideas from Kauffman research and those developed at a recent Kauffman Foundation conference on state incentive programs, the Policy Digest offers the following strategies for how states can better foster entrepreneurship: Reexamine Licensing: Revisit requirements for professional and occupational licensing to spur entrepreneurial competition and new business creation. Welcome Immigrants: Create a welcome atmosphere for immigrants, who were significantly more likely than native-born workers to start businesses in 2013. Stress Human Capital and Resource Awareness: Focus on education to boost entrepreneurial activity and the creation of new businesses. College graduates with degrees in various disciplines, including the arts, are likely to contribute to business creation. Connect Entrepreneurs with Resources: Regions are strengthened when entrepreneurs connect with one another. Entrepreneurship support programs should facilitate network formation, peer learning and mentorships. Different types of entrepreneurs require different resources. Consider gaps in the local entrepreneurship community and how various programs can be connected to each other.

Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Soaring heights of NPLs in banking

Thursday, 27 June 2019

Capital inadequacy, political interference, abuse of power, wasteful and unproductive expenditure, corrupt deals, circumventions of regulatory directions, unscrupulous lending operations, imposed IMF and WB conditions for reforms, and window-dressed


New Land Policy: Ideal alternate development strategy, but accompanying policies needed

Thursday, 27 June 2019

It is reported that the Government has prepared a law to grant freehold possession of farm land held under lease from the Government. This may be a revision of the Land Development Ordinance (LDO) of 1935. This article proposes to discuss the pros a


Need for an education revolution: Future of our kids and the nation is at risk – Part II

Thursday, 27 June 2019

Lessons to be learnt from the Asian educational giants A journalist of New York Times requested Hideki Shirakawa, a Nobel laureate, to describe Japanese culture. He said, “Fundamentally, Japanese culture is based on rice farming. Rice cultivation r


Country’s reconciliation with English and Moragahakanda

Thursday, 27 June 2019

When the country received independence from British, it was blessed with an efficient administration, a high standard in education, and also sound foreign exchange reserves; the country was admired by other countries. The three major and several mino


Columnists More